The Financial Conduct Authority (FCA) in the UK will make the temporary ban on binary options, which is in place for the past nine months, permanent on the 2nd of April, 2019.
A similar ban on binary options bets has been introduced by the European Securities and Markets Authority’s (ESMA) on 2nd of July, 2018. The European measure, however, is still temporary in nature and need to be extended every 6 months.
Another difference is that FCA extends its restrictions on the so called ‘securitised binary options’ that were excluded by ESMA.
“Binary options are gambling products dressed up as financial instruments. By confirming our ban today we are ensuring that investors don’t lose money from an inherently flawed product”, says Christopher Woolard, Executive Director of Strategy & Competition at the FCA.
FCA also warns that “UK consumers should continue to be alert for binary options investment scams and should only deal with financial services firms that are authorised by the FCA. As the sale of binary options to retail consumers is now prohibited, any firm offering binary options services to retail consumers is likely to be a scam.”
According to the authority the permanent ban on binary options could save retail investors in the UK up to 17 million GBP in losses each year.