By Yael Warman

If you’ve opened a binary options account and spoken with someone from the brokerage, chances are you’ve had some sales person using a name way more exotic than their own, claiming to be in a place way more exotic than the one they are really in, call you repeatedly trying to pressure you into making a deposit and putting it on a winning opportunity.

That has been the MO of call centers for years, but as CySEC, the Cypriot regulatory body in charge of setting up and enforcing regulatory guidelines for the financial sector, becomes stricter, the day of the “boiler” room binary options brokerage are coming to an end.

CySEC is in charge of setting up and enforcing regulation to ensure investors’ safety and because Cyprus is a member of the European Union, its regulatory measures impact operators and investors throughout the entire EU. CySEC had in the past been known for its lax approach to enforcement, but during the past two years, the regulator has cracked down on brokerages, imposing fines and entering into settlements for amounts never seen before. In its latest wave of regulatory changes, it is the binary options sector that has been at the center of it all.

According to the Cyprus Securities & Exchange Commission’s latest circular, binary options’ sales personnel will be required to obtain the necessary skills and knowledge in order to assist customers and the IFs will be expected to obtain specific training. The activities allowed to be performed by binary options brokerages is now limited to the provision of information regarding the brokerage’s services, proposed investment strategies, technology and assistance with account opening. As for conducting repeated and high pressure phone calls to clients, the regulator is cracking down on those brokerages who engage in this common practice. CySEC is also setting up guidelines forbidding the use of code names, a practice commonly used to ensure the sales person’s anonymity. Probably the most impacting change in regulation is the stipulation that call centers must be located within the EU, or else IFs will be required to maintain no less than €1,000,000 from their own funds in order to cover risk.

These new requirements, although will most certainly impose severe challenges on brokerages in terms of additional capital and operation procedures, will ultimately benefit the entire industry and the brokerages who are willing and able to operate within a more transparent and high quality field as the reputation of the industry will rise and more investors decide to consider binary options as a viable investment.

About the Author:

Yael Warman is a creative writer with a strong background in marketing and advertising. Yael has been a writer for over 10 years and has worked for clients in various industries as well as her own companies and is currently the Content Manager at Leverate.