The end of binary bonuses and tournaments by CySEC

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News: The end of binary bonuses and tournaments by CySEC

We’ve mentioned this already a few weeks ago. CySEC wants to ban all bonuses. In fact they are talking about the same thing over and over. Cancel the bonuses, cancel the bonuses. But is seems that it is not that easy. As we’ve published in the article Pros and Cons of the bonuses, for newcomers the bonuses in the world of trading are surely very interesting and attractive. After all, it is money for free, right?

However, in reality this is not completely true. Each received bonus means the trader is committed to make a certain number of trades and unfortunately, they usually can’t withdraw the money before that.

Information of the new circular letter C194

CySEC has informed all regulated companies (not only to those focused on binary options but also forex brokers, etc.) new information regarding the bonuses and tournaments in the latest document called circular C194.

From now on, it will be prohibited to offer the customers (traders) any of the following bonuses:

  • Welcome bonus (including, for example, no deposit bonus)
  • Bonuses for meeting a certain trading volume
  • Bonuses for friend recommendation
  • Bonuses for verifying their personal information (phone numbers, addresses, etc.)
  • Bonuses for participating in webinars
  • Gifts in the form of iPads, phones, etc.
  • Prizes for winning a volume based tournament
  • and other bonuses described in the circular letter

I don’t think its fair!

I do understand. To give a bonus, which the trader, in the end, can’t withdraw could be considered as a manipulation. The same goes for the bonuses for volumes traded or risk-free trades. Bonuses for participating in the webinars are also complete nonsense.

I have nothing against the ban of all the above mentioned bonuses. It will be great. However, it seems strange to me to prohibit also the no deposit bonuses and even the tournaments.

I think that the no deposit bonuses are a great thing, so why to ban something, which is not conditioned by a deposit and thus there is no risk to the trader? I personally used this bonus offered by some brokers. They are so simple. You just have to register on the page, confirm your identity and get for example €50 on your account. The money you can use as you want. Then, if you meet the conditions (which does not include making a deposit), you can withdraw your money. Simple, isn’t it? To me, it’s not dangerous, or is it?

The tournaments will be banned. That is one of the things I also do not understand! The tournaments of IQ Option broker or Ayrex broker are a great way to get some extra dollars and to have fun at the same time. I see no reason, why these tournaments should be canceled. Everybody knows that when there are 1000 participants and only the first 10 will get a prize, it is not going to be very easy. What do you think about that? Let me know in comments.

More information about CySEC

Author

More about the author Step

I’ve wanted to build a business of some kind and earn money since I was in middle school. I wasn’t very successful though until my senior year in highschool, when I finally started to think about doing online business. Nowadays I profitably trade binary options full-time and thus gladly share my experiences with you. More posts by this author

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One Response to “News: The end of binary bonuses and tournaments by CySEC”

I believe when you get to that point where you can make withdrawals as you want then its okay so say one has been scammed. but then there is a solution.

More news from the CySEC – Bonuses and minute options

In the beginning of December last year (2020) we informed you that the broker IQ Option isn’t going to offer any more bonuses. That was an unexpected change for me, but I must admit that it was a good one. More information about this change can be found here: IQ Option Isn’t Going To Give Out Any More Bonus

As I also mentioned in my last article, the change should soon affect all regulated brokers. Let’s take a look at other binary options brokers. Do you think they stopped offering bonuses as well?

Mini-test: Do brokers offer bonuses?

Although I didn’t notice that a lot of the brokers had made any changes, the opposite is true. The bonus offers disappeared from the homepages of their websites. To be sure I wrote to few customer support agents and I got the following responses:

We don’t offer bonuses anymore, because of the new regulation. (Customer support of TopOption)

Although lately I am very disappointed by the behavior of TopOption and we had to exclude this broker from our list of recommended brokers, the broker really stops offering their bonuses. Good job. What about the other brokers?

Actually the FCA banned bonus in September last year so it’s already been quite some time since we have stopped promoting bonuses. (Customer support of ETX Capital )

I didn’t know that and it is very interesting! Even other brokers, such is IQ Option and StockPair, don’t offer any bonuses. Great! It seems that the regulations are being taken seriously. �� The only broker still offering bonuses, is eXbino. It is probably because this broker is not fully regulated. The only licenses that this broker has are EG Montenegro and CySEC platform license, but not a company licence. We will see, how the situation continues.

Other changes proposed by CySEC

CySEC also came with a proposal for five other changes, which still have to pass the approval process. The process ends on March 3 this year. What changes are we talking about? Continue reading.

  1. Full ban on binary options with expiration time less than 300 seconds (5 minutes).
  2. Fixed strike price.
  3. Displaying the transaction results in real time.
  4. Obligation to provide the possibility to end any trade at any time during before its expiration time.
  5. Strictly accurate quotation of prices.

What does it mean? Let’s go through it. I guess that the ban on short-term binary options is perfectly clear, so we don’t have to lose time explaining that.

Regarding the fixed strike price, I am not 100% sure what do they mean. The most probable is, that the platforms must provide to traders strike prices which can change only once for a period of time. Some strike prices provides traders greater benefits than others. That is why they are probably valued differently. The best examples of these options are ladder options – they are my favorites but not everybody understands them.

The possibility to end the trades – fortunately this is already implemented by many brokers, for example highlow.net or IQ Option broker. Unfortunately it is still not possible to sell the option right before its expiration time and CySEC wants to change that. This possibility I saw for the first time at TopOption a long time ago, in 2020, when I started to be interested at binary options.

Regarding the last paragraph (Strictly accurate quotation of prices) I think it is very important. So far the brokers could quote more or less any price they wanted. But if CySEC say, that all brokers have to quote just one server, and then all brokers should have exactly the same prices at the same time. This would be great. This should be working even now, but the reality is a little different and the price always varies by a few pips.

We’ll see what happens. Anyway it is nice to see that CySEC really works.

How to sell your options at IQ Option?

The following video shows how you can sell options at IQ Option whether it’s at a profit, or loss.

More information on regulations of CySEC

  • News: Regulations in the world of binary options
  • News: No to non-regulated brokers!
  • News: The end of binary bonuses and tournaments by CySEC
  • More news from the CySEC – Bonuses and minute options
  • The Cyprus Securities and Exchange Commission (CySEC)
  • Even stockpair had to comply with CySEC’s intervention
  • Brokers fulfill CySEC requirements
  • CySEC tightens the rules for binary options trades
  • Regulations Of Binary Options Brokers
  • The entire official document regarding these changes

Author

More about the author J. Pro

Unlike Stephen (the other author) I have been thinking mainly about online business lately. I wasn’t very successfull with dropshipping on Amazon and other ways of making money online, and I’d only earn a few hundreds of dollars in years. But then binary options caught my attention with it’s simplicity. Now I’m glad it did because it really is worth it. More posts by this author

CySEC Rules on Bonuses

April 21, 2020 10:34 am

UPDATE, December 2020: CySEC regulated brokers can no longer provide binary options bonuses!

CySEC, the biggest regulator for binary options brokers has issued a new circular explaining the ambiguities that they noticed when checking trading benefits – so called bonuses granting by brokers under their authority. Binary bonuses that are awarded carry terms and conditions of use and this is why CySEC is trying to clarify the proper conduct since it seems some of the CIFs they regulated misused this as a way to trick customers and lock their funds.

CySEC noted that granting these bonuses does not follow the intent of the Investment Services and Activities and Regulated Markets Law of 2007, as in force and Directives DI144-2007-01 of 2020 for the authorization and operating conditions of CIFs. CIFs are Cypriot Investment Firms – all brokers regulated by CySEC. It seems brokers sometimes do not inform traders properly of all conditions and terms that apply when accepting such trading benefits.

It has been observed that the trading benefit conditions are not explained, or are not sufficiently explained, to the client in a clear and understandable way.

So, binary brokers have the obligation to explain as clearly as possible, with simple examples, so that customers understand, how bonuses work and what conditions apply. They should mainly focus on the withdrawal rules after the bonus was awarded and explain the application of these rules to any profits that are won by using bonus money.

Also, CySEC check revealed

Granting trading benefit to all clients without exemption and without their consent/acceptance.

The rules are clear – brokers can extend bonuses to clients who satisfy a set of criteria defined by the ‘appropriateness test’ (where applicable) as it is provided under article 36(1)(c) and (d) of the Investment Services and Activities and Regulated Markets Law. Also, client’s consent must be obtained in written form before the bonus is granted.

Conditions that are set for the bonus withdrawals should include sufficient time to reach the turnover rules so that traders do not feel pressure to place many/high trades in short amount of time just to satisfy the conditions. Also, binary brokers should take care that they do not modify rules and conditions for the bonus without notifying the client first. When changing rules, CIF must enable traders to choose if they want to keep the benefit or give it up.

Also, it is crucial that all profits and losses created by using clients’ funds are allocated to clients. In no case may the broker keep the profits. Before handling these allocations, clients must be notified. Also, clients must at all times know what is available for withdrawal and what is not, due to terms and conditions of the bonus. CySEC also warns that withdrawal charges should not be excessive.

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