What Were These Binary Options and Forex Brokers Thinking?

Forex Brokers

Forex Brokers

Last week the CFTC (Commodity Futures Trading Commission) arguably one of the most powerful agencies in the United States released its “Red List” of Binary Options and Forex Brokers that have been targeting clients from the US. The CFTC even setup a website that displays all of these Binary Options and Forex Brokers that have been unfortunate enough to make this list.  Most of these brokers look like they are unregulated or located in a jurisdiction like New Zealand where oversight is very limited. What is amazing is that some of these brokers even have disclaimers stating that U.S. citizens and residents are not allowed to open accounts. The question remains did the brokers go ahead and do this anyway and were there complaints from US account holders or is the CFTC targeting these brokers for some other reason.

If as suspected these brokers were accepting US clients what in the world were they thinking. They have now gotten on the radar of the CFTC which means they will most likely be looked at by other regulators as well. Wherever they are located they could run the risk of being deregistered. It is not like accepting US customers by offshore brokers hasn’t garnered attention in the past. One of the largest Binary Options Brokers Bank de Binary was actually charged by the CFTC for soliciting customers from the United States and acting as an unregulated Futures Commission Merchant. This was supposed to be the case that would teach the other brokers that US customers are off limits. It appears that the Binary Options and Forex Brokers that made the red list have a short memory.

Now European regulators have gotten in the act with their own lists of brokers that are their version of the red list. The most recent of these is the regulator from Belgium (FSMA) or the Financial Services and Markets Authority. This summer the French regulator (AMF) listed 74 brokers for targeting French citizens and not being properly regulated. Without question the CFTC and the European counterparts are working in conjunction to prevent these brokers from marketing to their jurisdictions and at the same time giving fair warning that future brokers should be properly registered and licensed should they decide to enter or target a particular market.


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