Binary options set to be run by UK financial authorities
Financial betting in the UK could soon come under the remit of financial rather than gambling regulation under new government proposals.
At present, binary options - fixed-odds bets on financial markets - are regulated as gambling transactions, however the government plans to consult on amending the Regulated Activities Order 2001 to take such products out of the scope of the Gambling Act 2005 and regulate them as financial products.
This would bring binary options within the remit of the Financial Conduct Authority (FCA), in line with standard European practice.
A spokesman for the UK Gambling Commission (UKGC) said: “For most existing licensed gambling operators this will have little or no impact on their business.
“Binary options account for less than 1% of the Gambling Commission-regulated online gambling market. Operators who offer binary options alongside more traditional betting products will merely find this part of their activity regulated by the FCA.”
The enactment of the Gambling (Licensing and Advertising) Act 2014 meant that operators offering binary options from overseas jurisdictions were told they were required to get operating licences from UKGC when the act comes into force later this year.
However, the UKGC said that in view of the consultation, the 2014 Act will not be commenced for the purposes of binary options.
The spokesman added: “This is to avoid relevant operators having to make applications and pay fees that might later prove unnecessary.
“The effect of this is that operators will not, for the time being, require a gambling operating licence to offer binary options, and no application to the Gambling Commission to do so will be necessary until further notice.”
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