About a year and a half ago a new regulatory regime regulating
trading rings entered into force, requiring the operators of
trading rings to obtain a regulatory license as a pre-condition to
operating them, and prohibiting the operation of a trading ring
without such a license. As part of this regulatory regime, the Securities Authority – which is the
regulator of the trading rings – reached a decision not to
approve trading in binary options in trading rings due to the
characteristics of the binary options and the trading rings.
The Securities Authority holds the position, as outlined in a
formal paper dated March 1, 2015, that a trading ring that is
solely interacting with clients from outside Israel and does not
allow Israeli clients to access the trading ring, is not subject to
this regulatory regime, even if managed from Israel, partially or
exclusively. According to this stance, the operation of a trading
ring for binary options, where all of the clients are outside
Israel, is not regulated.
In order to expand the prohibition imposed by the Securities
Authority on binary options, to offering such options to clients
outside Israel, the chairman of the Securities Authority, Prof.
Shmuel Hauser, approached the Attorney General, with a request to
amend the legislation in force and to authorize the Securities
Authority to ban the marketing of binary options to clients outside
Israel. That is, the Securities Authority is seeking to broaden its
powers to activities which do not involve Israeli clients, solely
because the marketing efforts relating to these activities are
performed from within Israel.
It seems that this approach of the chairman of the Securities
Authority needs to be considered in light of a regulatory effort,
that manifests itself in other jurisdictions across the world,
including the likes of the Netherlands, Belgium and France, to
significantly reduce trading in binary options; whether due to the
manner in which these are classified by regulators or due to
various claims as to the manner in which the trading in binary
options is conducted and the marketing efforts associated with
It is difficult to provide an analysis of how this will unfold,
but there is no doubt that this stance of the Securities Authority,
as well as the trend of the regulatory treatment of binary options
in various jurisdictions across the world, does not bode well for
the stakeholders of the binary options industry.
Originally published on December 12, 2016
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Mergers, Acquisitions and Takeovers in Nigeria are governed by the Investments and Securities Act, the Securities and Exchange Rules and Regulations made pursuant to ISA, and the Companies and Allied Matters.
The success and growth of a Company depends largely on the quality and dedication of its Directors who are its alter ego.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).