The United Kingdom is one of the few countries around the world that embraces financial betting. Due to the exposure that most of the residents in the UK have to the gaming industry, binary options trading is merely seen as an extension of spread betting and so quickly became extremely popular. However the problem most UK binary traders face is the legitimacy of the binary brokers that they are trading with. How does a trader in UK discern a reliable binary broker from that of a scam? To help our readers in making the right choice, we have come up with a list of recommended platform providers in the UK that traders can open an account and start dealing with. These firms are shortlisted based on certain traits and qualities such as:
- Good Customer Service
- Reputable and Regulated
- Wide range of tradable assets and high payouts
Best Brokers in the UK
To avoid being scammed, binary traders should always trade with regulated platform providers. But because of the UK’s stand towards binary options, traders in the UK have a choice of trading with an operator that is regulated by the UK’s Gaming Commission or with one regulated by CySEC. To help our readers in the UK decide on their choice of broker, we have come with a list of recommended companies that have been closely vetted by us.
In the UK, trading of binaries is legal and regulated by the UK regulatory authorities not as a financial derivatives but rather it is classified under gaming legislation as “fixed odds betting” and hence regulated by the UK’s gaming commission. However the kind of legal protection accorded to binary traders under the gaming commission is entirely different from those offered by the financial regulators such the UK’s Financial Conduct Authority (FCA). This is due to the fact that gaming contracts are not legally enforceable in UK’s courts. In addition, the UK’s Gaming Commission lacks the resources to regulate binary operators in the UK effectively.
Nevertheless, there are also no legal restrictions that will prevent traders in UK from signing up with brokerage firms from other countries in the European Union such as Cyprus. In Cyprus, binary options trading activities are regulated as a financial derivative by the Cyprus Securities Exchange Commission (CySEC). Because the UK is still part of the European Union (just about), under the MiFID (passed by the European Parliament), Cyprus based brokers can “passport” their licenses and legally operate in other states within the Eurozone. In other words, firms from Cyprus are legally allowed to offer their services to traders based in the UK. The benefit of trading with a CySEC regulated broker is the fact that UK traders can now rest assured that their brokers are held to a higher standard of accountability. In addition, they will also have access to compensation under the Investors Compensation Scheme should their broker becomes unable to fulfill its contractual obligations due to insolvency.
It should be noted that the binary regulatory landscape is constantly evolving. There have been recent calls to the Financial Conduct Authority to take steps to regulate this type of trading under financial laws rather than gaming laws in order to give better protection to UK’s traders. While CySEC regulations do improve the standard of accountability among s brokerage firms, it is felt that the UK’s Financial Conduct Authority is able to offer far more superior regulatory oversight over online providers operating from within the UK.
Reducing Fraud among UK’s Binary Brokers
Obviously for traders in UK, it is more beneficial to them if their provider is regulated by the FCA as opposed to CySEC since the brokers are subjected to closer monitoring. A well regulated market is in turn less likely to face rampant fraudulent activities, as the brokerage firms are normally required to report their operational activities on a regular basis to the authorities. This leaves less room for the brokers to scam their clients. In addition with tighter regulatory oversight, binary options traders in the UK will have more confidence in their broker hence enabling them to divert their attention more towards trading rather than constantly worrying if their broker will run off with their money.
Deposit Methods Available In UK
With London as the financial center of Europe, traders in the UK have access to a wide selection of payment methods which they can use to deposit funds into their trading account. The most convenient method is by Credit/Debit cards since the funds deposited will be posted immediately to their trading accounts. Another alternative method which is popular among traders in the UK is depositing funds through eWallets. It should be noted that Skrill MoneyBookers’ headquarter is located in London hence providing traders in the UK an extra layer of confidence in getting their deposits funneled through eWallets processed quickly. With UK’s banking industry being well established, UK’s traders are also able to deposit funds through bank wire transfer, although this method is costlier than credit card or eWallet transfer.
- Is it legal to trade binaries in the UK?
Yes. It is legal to trade binaries in the UK.
- Are binaries regulated in the UK?
Yes. This trading type is regulated in the UK, either through the UK’s Gaming Commission or through CySEC authorized binary brokers.
- How to trade binaries in the UK?
To start trading in the UK, British residents can either choose to open a trading account that is incorporated in the UK or with a broker that is based in Cyprus.