However, other online binary options companies began to spring up. Companies who could produce platforms that could be customized as a turnkey solution for different brokers began to come into the marketplace.Companies who had the money soon found out that with as little as 25,000 to 30,000, the turnkey platforms complete with a backend solution and payment integration with multiple processors could be acquired, and a binary options brokerage operation could be setup without the necessary financial backbone to support settlement of withdrawal transactions. It was not long before all manner of problems came up. WhyThe regulatory requirements for binary options brokers will differ from one region to the other. Generally speaking, regulatory protocols in forex, options, futures and the stock markets require brokers to have a minimum capital base to be able to cater to transactions. For the binary options market, these have not been clearly defined except for brokerages operating in the UK under the FCA, US under the CFTC and Australia under the ASIC. For binary options brokers operating in Malta, it is required that brokers meet a minimum financial capital base, and this has been set at 730,000 Euros. It is also mandatory that all funds that constitute the trading capital of traders be kept in a separate account from those which the brokerage company uses in their day-to-day operations, so as to forestall any detrimental effects to traders funds in the event of bankruptcy. In the UK, segregation of traders funds has been an inviolable part of the regulatory deal, with firms mandated to report compliance to this rule on a monthly basis.These regulatory requirements are recent events, as brokers in the binary options market in jurisdictions all around Europe and Asia were hitherto unregulated. With the resultant unbridled entry into the market of many brokerages which were nothing more than bucket shops, many traders were taken to the cleaners when withdrawal request overwhelmed unregulated brokers who were neither adequately capitalized nor were traders funds segregated. The internet was riddled with complaints of unpaid withdrawal requests from all over the world. Subsequent warnings by the CFTC concerning online binary options trading served to create more tension.With confidence in the binary options market dropping fast, some regulatory agencies located in countries where most of the complaints were coming from decided to act swiftly to prevent the contagion from spreading to other markets. The Cyprus Securities and Exchange Commission (CySEC) took the pioneering step of classifying binary options as a financial derivative market worthy of regulation and issued a circular in mid 2012 mandating all binary options operators in Cyprus to fulfill regulatory requirements or face severe sanctions. As if waiting for a cue to act, other regulatory agencies in Japan, Malta soon followed suit, making sweeping changes that enforced the regulation of binary options brokerage activity in their respective countries.Two years down the road, it is now clear that regulated binary options is now the norm and not the exception. Traders no longer have to endure financial loss to brokers who are not regulated. An unregulated broker is a scam operation waiting to prey on unsuspecting traders. In order to protect the teeming public and indeed our esteemed readers, we now give you a list of regulated binary options brokers, who can now be classified as the world best binary options brokers.The transfer of binary options from the oversight of the Malta Lottery and Gaming Commission (where a binary options trade was hitherto recognized as a bet) to the Malta Financial Services Authority (MFSA) in accordance with the revised European Union MiFID guidelines 2004/39/EC, set the stage for the recognition of binary options as a financial instrument to be regulated.After the Financial Services Authority (FSA) and FFAJ in Japan announced sweeping changes to the regulatory structure of the binary options market as well as what types of trades binary options brokerages can offer clients, not many companies have been able to comply with the new regime. As such, we have just one brokerage as having been confirmed as compliant with the new regulatory structure of binary options in Japan: FXTFs HighLow binary options brand.However, MarketPulse is about to launch its new FFAJ-compliant platform, while platform makers Tradologic and SpotOption have incorporated the new trade types into their platform to make them compliant with the new guidelines set out by the FFAJ. It is therefore hoped that many turnkey partners will tap into the new way of trading as far as binary options in Japan is concerned. SpotOption now offers Ladder options, while Tradologic has launched its Binarix 100 platform.In the United States, two forms of binary options trading exist and the laws are very clear on what companies are approved to offer trading in each form. There are two regulated online binary options exchanges. For a long time, the North American Derivatives Exchange (NADEX) used to have a monopoly in the market. NADEX is regulated by the CFTC. Recently however, Cantor Fitzgerald LP launched Cantor Exchange, offering forex binary options on the EURUSD, GBPUSD and USDJPY. The other form of binary options trading is exchange-based, and is performed on the floor of the Chicago Mercantile Exchange, owned the CME Group. Brokers who are members of the CME will offer the listed binary contracts such as the CME Hurricane Index Binary option.Australias regulatory watchdog is the Australian Securities Investment Commission.
