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ARTICLE · 22 JULY 2015

MFSA Circular On Binary Options Trading

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Trading in binary options is considered to be a high risk practice and therefore the MFSA has issued a circular setting out additional conditions in this regard...

MaltaFinance and Banking
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Trading in binary options is considered to be a high risk practice and therefore the MFSA has issued a circular setting out additional conditions in this regard which complement those conditions set out for Investment Services Providers within the Investment Services Rules. The circular causes the conditions to apply to entities whose application is currently being processed. However, with regards to the shareholding structure conditions, the applicant has a period of one year within which to ensure he falls in line with this notice.

The first clarification provided in the circular is that a Category 3 Investment License is required to offer binary options. This also means that an operator is subject to a minimum initial capital requirement of €730,000. However, this does not preclude the MFSA from increasing this capital requirement on a case by case basis where it deems it necessary to do so.

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