Binary Options in the UK
The UK is one of the most important markets for the binary options industry. There is an increasing amount of traders based in the UK, and UK based traders are growing at a greater pace than the industry average. However there are still many potential traders in the UK who are not sure about the industry, its status in the country and how profits from binary options trading are taxed in the UK. Since we are not tax specialists, we will approach the issue of the status of the industry, and the issue of reliability in binary options.
Binary Options UK Regulation
First and foremost, binary options trading is legal in the UK. After establishing that, the most important consideration to understand what the status of a given industry is in the UK, is to check regulatory measures. In general, UK regulations of financial services and brokers, falls under MiFID, which is the European Union law that provides for harmonized financial regulation between all member nations. This means that regulatory work done by any MiFID compliant body in Europe, is automatically legal in every MiFID compliant market in Europe.
In the UK, the regulatory bodies responsible for financial institutions are the FSA and the FCA. Any binary options broker regulated by either, is legal in the UK. Since the UK is a party to the MiFID, then any binary options broker regulated in the UK, can automatically solicit customers in other countries that are MiFID signatories, legally. The opposite is also true. Once a broker is regulated by any regulatory body in a MiFID signatory country, it can legally solicit customers in the UK.
Traders looking for binary options brokers in the UK, could legally trade with any broker regulated by CySEC for example, which is the regulatory body in Cyprus. Most of the binary options brokers in Europe are regulated by CySEC. Still, many traders in Europe trade via brokers that are not regulated or are currently in the process of compliance with CySEC or any other European equivalent. Lack of regulation doesn’t necessarily mean that the broker is illegal in the UK, or that it is otherwise unreliable.
To make sure that you chose a trustworthy broker, which complies with binary options law in the UK, please make sure you do the following:
- Read the reviews about the broker before you open an account
- Once you chose your broker, make sure that it offers its services in the UK
- Read about the broker’s policies and make sure you know them well
Many of the binary options brokers that work with UK customers, will also offer a demo account for you to try their platform and get familiarized with binary options trading. They have staff available to you that understands the culture in the UK and the needs of the traders. To make it easier for you to find a binary options broker that is UK friendly, we have compiled the following list of reviews. Just click on any of them to read about them and start trading in accordance with the law in the UK!