Ever since the introduction of binary options, there have been a number of complaints from traders regarding the regulation of brokers that offer binary options. Even though there are a few binary option brokers that aren’t placed on the regulation agency list, most of the platforms are now required to follow the rules and guidelines provided by the CySEC regulation agency. By doing so they will be able to build trust with their clients and increase their confidence in the financial services provided.

The agency that is responsible for regulating all derivative market agencies is known as the Cyprus Securities and Exchange Commission (CySEC).

Similar to the U.S. Commodity Futures Trading Commission (CFTC), the CySEC oversees all matters that are in the derivative market and dispels any form of fraudulent activity. This process adapted by the CySEC has removed multiple brokers from the binary options market and left only a select number that are licensed to offer their financial services to traders.

How does this affect binary options traders?
Since there is only a handful of options platforms that have been granted licenses by the CySEC, traders that invest with these brokers have a solid guarantee that their money is protected and won’t be linked with any type of fraudulent activities.

There are still many binary option brokers that don’t have a license by the CySEC, but as a new trader, placing your hard-earned money into an account that isn’t regulated by any type of agency leaves a lot of doubt and mistrust surrounding the platform. Questions to ask yourself include:

Can I trust that the asset price on a platform and any associated charts are aligned?

Will I be able to withdraw my profits without hassle?

How secure is the money transfer process?

These are a few questions that all traders have when searching for a broker to invest with. Working with a platform that is regulated by the CySEC leaves no doubts or worries when it comes to securing your trading activities. It instills confidence in traders and also benefits the platform by increasing its popularity amongst traders and potential clients in the future.

Bottom Line
In order to protect traders from any scams and fraudulent activities, the CySEC is a regulation agency that awards licenses to only a few specific binary options brokers that are able to meet stringent requirements. It’s best to trade with a CySEC regulated broker to safeguard yourself from any type of financial issues associated with trading platforms.