Is my broker / money safe - basic due diligence

Magos said:
Baby steps then.

Alpari are offering Binary Options: http://www.alpari.com/accounts/binary-options-account

Can they do it without FCA approval?
Click to expand...

OK, lets both back up and calm down, fair enough?
I have got quite heated as well, so you aren't totally to blame.
There have been several multinics with vested interests
posting objections to content like this or similar, hence my stance.
Now thats clear, I will explain your above point.

A UK / USA registered firm like Alpari or IGindex do not have to be registered to offer
binaries.
They just happen to be registered as their other products require it.
If someone wants to trade binaries, I would suggest they go down that route.
Ideally they are best left alone:
http://www.forbes.com/sites/investor/2010/07/27/dont-gamble-on-binary-options/

A standalone binary broker offering no other products, does not need to
be regulated by any financial services body as its classed as gambling globally.
 
That cools things down a bit!

Some jurisdictions require Binary Options to be regulated and some not! Cyprus started to fine people for example!

The big problem here is that they hold client funds! if they do not some-sort comply with AML of whoever gives them the bank account then they are committing a fraught (most cases companies say they hold companies funds instead of client funds!).

Binaries are binaries - up and down; are they gambling? this is still subjective (gray area).
 
CySEC, who are useless? come-on they are in EU

Anyway: General question have you ever worked in a broker or binary option provider?
 
Magos said:
That cools things down a bit!

Some jurisdictions require Binary Options to be regulated and some not! Cyprus started to fine people for example!

The big problem here is that they hold client funds! if they do not some-sort comply with AML of whoever gives them the bank account then they are committing a fraught (most cases companies say they hold companies funds instead of client funds!).

Binaries are binaries - up and down; are they gambling? this is still subjective (gray area).
Click to expand...

Yeah no worries, had a few heated run ins with dodgy brokers on here,
hence why I got a bit spirited :LOL:

Currently, as far as I'm aware, binary only regulation is still entirely voluntary.
Although the FCA have recently registered a binary only broker.
Its slowly edging away from no regulation.

However, client funds is another issue entirely.
All these outfits are classed as bookmakers, which they are - not exchange traded.
Even in the UK, it may surprise a lot of people to know that the
FCA client money regulations do not apply to bookmakers:
http://www.fca.org.uk/firms/firm-types/intermediaries/client-money
http://www.bookiebusters.net/features/safe_money.html
Thats in the UK, in other jurisdictions, its even worse...

So basically, unless a binary broker is FCA, or NFA registered, I wouldn't touch them.
 
Magos said:
Even if the broker is unregulated he can be trustworthy!

Do not forget that all brokers reside somewhere, and as a client you always have the right to send your email or complains to the regulator of where he is residing - this will cause him similar problems to a regulated one.

The financial bodies make sure that all brokers are fair, they just need to know about it.
Click to expand...

If the broker is registered with the FCA then you have their protection should things go wrong. If the broker is not regulated then that's a clear indication that they are an illegal operation.
 
when and if you end running your own broker client funds are the biggest milestone (regulated or not)!
Depending on your morality of course.
 
Magos said:
when and if you end running your own broker client funds are the biggest milestone (regulated or not)!
Depending on your morality of course.
Click to expand...

Yes agree entirely.
Thats the problem though.
Most binaries are not actually brokers, but bookmakers.
Until that changes and binaries are classed as a financial services product,
and not a gambling product, this issue will remain.
Unless they are voluntarily registered with the FCA / NFA.
 
Magos said:
CySEC, who are useless? come-on they are in EU

Anyway: General question have you ever worked in a broker or binary option provider?
Click to expand...

Mate, CySEC sucks. I think you're working for any binary options firms. I dealt with CySEC and they are useless. Those companies are registered with CYSEC all are from Israel. They couldn't manage to get a license here in UK or France or Italy. They know they have to cheat with innocent people with some cover, that's why they choose Cyprus and CySEC. Who really care about Cyprus in EU? Stop this Binary Options business.
 
Liquid validity said:
However, client funds is another issue entirely.
All these outfits are classed as bookmakers, which they are - not exchange traded.
Even in the UK, it may surprise a lot of people to know that the
FCA client money regulations do not apply to bookmakers:
http://www.fca.org.uk/firms/firm-types/intermediaries/client-money
http://www.bookiebusters.net/features/safe_money.html
Thats in the UK, in other jurisdictions, its even worse...
Click to expand...

True , but sometimes binary bets and spread bets or CFDs are offered in the same account e.g : IG , so in that case if IG went bust your money is protected by the FSCS up to a limit , however as i understand if you have a dispute with IG regarding a binary bet you cant complain to the financial ombudsman .
 
reply

Not working for a binary option provider in Cyprus sorry to disappoint you!

yellowfloyd said:
Mate, CySEC sucks. I think you're working for any binary options firms. I dealt with CySEC and they are useless. Those companies are registered with CYSEC all are from Israel. They couldn't manage to get a license here in UK or France or Italy. They know they have to cheat with innocent people with some cover, that's why they choose Cyprus and CySEC. Who really care about Cyprus in EU? Stop this Binary Options business.
Click to expand...
 
tar said:
True , but sometimes binary bets and spread bets or CFDs are offered in the same account e.g : IG , so in that case if IG went bust your money is protected by the FSCS up to a limit , however as i understand if you have a dispute with IG regarding a binary bet you cant complain to the financial ombudsman .
Click to expand...

Agree, I've already mentioned passive satellite FCA regulation of binaries with brokers already registered for other products:
http://www.trade2win.com/boards/new...y-safe-basic-due-diligence-3.html#post2189568
 
I actually wanted to use FXdirekt as an example of regulation gone wrong and to some extend I still think this is the case because German BaFin waited way to long to close them down.

However, I stopped following this case when they finally did in December 2012, but it seems BaFin picked up pace afterwards and were quite fast to open insolvency proceedings and to declare an event of default, which allowed the compensation scheme to act. Investors have been compensated by now, but only if the held their funds in a currency of an EU member state - people who held their funds in e.g. USD didn't get a dime. It's always worth reading the fine print, I guess.

http://www.e-d-w.de/en/FXdirekt-Stand.html#teil_2
 
Given the recent fun games of the past 5 or so years, and having (hopefully) a better understanding of how our monetary system works, I dont trust anything! My broker gets the minimum amount of margin i need to trade the size I want. I dont want them to have a penny more than is required should they go MFG.
 
darktone said:
Given the recent fun games of the past 5 or so years, and having (hopefully) a better understanding of how our monetary system works, I dont trust anything! My broker gets the minimum amount of margin i need to trade the size I want. I dont want them to have a penny more than is required should they go MFG.
Click to expand...
Completely agree, that is the best safeguard.
The purpose of this thread was never to suggest regulated
brokers are perfectly safe.

All regulation really means is the broker is more likely
to be financially stable and you are more likely to get some money back if they collapse.
Its just about increasing the security of your funds, there are no guarantees with anything.

Whereas with an unregulated broker, they are less likely to be financially stable
in terms of operating capital and there is zero chance of getting anything
back should they fold or disappear.
 
Liquid validity said:
Completely agree, that is the best safeguard.
The purpose of this thread was never to suggest regulated
brokers are perfectly safe.
Click to expand...
Comprende. Sorry if my comment came across a bit punchy. Defo wasnt my intention. Not to well atm (manflu), bit spaced.

Cheers
DT
 
darktone said:
Comprende. Sorry if my comment came across a bit punchy. Defo wasnt my intention. Not to well atm (manflu), bit spaced.

Cheers
DT
Click to expand...
I didn't take it that way, no worries.
Far from it, I was just emphasising and fleshing out the initial point
you made, which I entirely agree with.
 
Great stuff

Thanks so much for this great information. I'm fairly new to Forex and it was comforting to read your round up facts. I must admit there has been so much bad press of late about brokers that I am afraid sometimes to give anyone my money. So I'm glad you suggested doing the proper due diligence and research. That's really importatn. Thanks again. Pedro
 
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