Overseas binary options brokers targeted by Japanese watchdog

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binary options brokers targeted by Japanese watchdog

The regulatory structure for binary options is heading into its second year of existence and it appears that non-Japanese firms are attracting the unwanted attention of local authorities, due to a recorded recent surge in cases of traders complaining of being solicited by overseas binary option brokers. These brokers do not have the necessary regulatory permission to market their services in Japan and are often using aggressive marketing techniques, such as promising huge bonuses and payouts, in order to attract Japanese traders into becoming their clients.

In view of this development, one of the national competent Japanese authorities, namely the National Consumer Affairs Center (NCAC) issued a warning recently, through which it cautions traders regarding the services offered by overseas providers of binary options, spurred also by the fact that it has itself experienced over the summer period a sharp increase in the number of requests and complaints it has received by consumers regarding the issue of binary options trading.

The NCAC it its warning to the public points out inter alia that although a company may have a registration and license for its operations in a non-Japanese jurisdiction, in case it wants to provide binary options trading in Japan, it must also be registered with the Japanese Financial Services Agency (JFSA), which is the national regulator of Japan. Therefore, the NCAC urges all traders to check with the JFSA website whether a broker is registered with them and is licensed to provide financial services in Japan.

Because Japan is a rapidly expanding market for the binary options industry and a very attractive location for brokers, both domestic and foreign seeking legitimate ways to earn a piece of the pie, despite the rules regulating the market in Japan being markedly tougher and stricter that those elsewhere. These rules also include idiosyncrasies that are found almost exclusively in Japan such as the prohibition of trading binary options of short expiry times, of less than one hour. Moreover, the Japanese authorities are expressly against the granting of bonuses and other incentives directly linked to account opening or deposits as these tend to hamper and obstruct the judgment and free will of prospective traders.

Following the introduction of revised rules on binary options trading in Japan in 2013, most serious players in the industry who wish to establish and maintain their position in the Japanese market have proceeded in making the necessary provisions in their operations in order to be able to comply with Japanese rules and fully take into account the Japanese peculiarities and idiosyncrasies in order to be able to offer products and services which are tailor-made to the needs and requirements of the Japanese authorities and the Japanese traders.

1 COMMENT

  1. Hi, I got scammed and sucked into a binary options broker citrades. They claim they’re based out of the uk, are the allowed to solicit me as a us citizen? Are there any actions I can take to rectify the situation? What’s your thoughts on a credit card chargeback? Are you familiar with citrades? I got sucked In through auto trading binary.com

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