Regulation of binary option brokers using CySEC

Ted Capwell Updated:

What is CySEC regulation?

Not everyone knows, but binary options have been trading for many years. Many of us traded on different platforms and faced the problem of deception. Everyone has already encountered such a problem, which even participated in the forex market a little. The way out of this situation was the decision to develop appropriate directives that would secure the trader from losing the money invested by him. Many years have passed since the opening of the first broker of binary options and the release of the required number of regulatory acts in this area. The main regulator was CySEC.

About binary options CySEC regulation

What is CySEC?

CySEC is the Cyprus Securities and Exchange Commission (Cyprus Securities and Exchange Commission).

The creation of CySEC dates back to 2001. The main task of CySEC was the regulation of the Cyprus financial markets. In 2004, Cyprus received the membership of the European Union.

As a result of this integration, CySEC is committed to be part of one of the EU’s main directives on the markets for financial instruments. It wears the abbreviation MiFID. Most of the Forex brokers have been working with it for a long time. It provides all companies registered in Cyprus with access to European markets.

An interesting fact is the announcement on May 4, 2012. It refers to the official recognition by the CySEC Commission of binary options as a financial instrument.

What is the responsibility of CySEC

The duties of CySEC are:

  • Tracking of transactions carried out on the Cyprus Stock Exchange by companies with official registration, brokers by individuals who conduct trade on an individual basis and broker companies;
  • Tracking schemes for collective investment, companies that have a license to carry out their activities, providing investment services, as well as the regulation of companies of mutual investment funds and investment advisors;
  • Provision of licenses required for the operation of investment consultants, brokers and broker companies;
  • The imposition of sanctions and fines on investment advisers, individual brokers, brokerage firms and other actors that are subject to the law.

What does it mean?

Opening an account with a broker who operates under the regulation of the CySEC Commission implies control over your account. Under the regulation under such control, all your transactions on your trading account, including deposits, all information on the movement of money on the account, are included. The duties of the broker, which is governed by CySEC:

  • The broker must maintain customer services on a separate account, where all the customer’s cash operations will be performed. The broker has no right to use the client’s funds for his own needs. For a trader, with binary options, this guarantees the complete safety of his invested money and guarantees their return in the event of the company’s termination of the broker or failure to fulfill its obligations to him.
  • All brokers that are regulated with help must provide all data on their activities to the 3rd party. In turn, this will ensure the transparent operation of these entities.
  • The CySEC regulator obliges brokers to provide data on all their transactions to government agencies. This measure will allow you to secure your activity from unauthorized transactions on your account and will only allow you to control the funds in the account.

The CySEC license does not function on an ongoing basis. Every broker that received it will be regularly inspected by this commission. CySEC provides for a system of imposing fines and penalties. The most severe punishment is the deprivation of a license by a preliminary decision of the commission.

The main task of CySEC

The most important task of CySEC is to protect the interests of investors. In other words, it is the protection of the investment invested by the trader. It consists in providing security, security, preventing unauthorized access to funds without a trader’s statement. Exercising supervision over the lawful use of funds by the broker. Operations can be carried out only on your behalf and on your initiative.



“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”