Binary options are still relatively new and worldwide regulation has only started. This is one of the reasons why you have to be very careful when choosing your broker. Fortunately today there are already a lot of regulated binary options brokers and we recommend to trade only with them. By the way all the brokers in our best binary options brokers list are regulated.
Most of the brokers are based on Cyprus. The local government imposed a law that regulates binary options only in 2012 and brokers operating in this country started to get their licenses from the CySec at the beginning of this year.
So when we speak about binary options regulation, we are mainly talking about brokers with licenses from the CySec, which can be found in this list. But some of the brokers are registered with their parent company, such as CBAY Financial Services that operates one of the biggest brokers 24option. So it is not always straightforward to verify if a broker is regulated, but the best brokers provide the information about their licenses on their web sites.
And what does financial regulation means? In order to get a license, a broker must follow some rules. The most important from a trader’s point of view is that an independent regulatory body is overseeing the financial transactions, which means a certain protection of the customer.
Another advantage of trading with a regulated broker is that in case of problems you can complaint to the regulator, so somebody independent will look at your case.
When we consider binary options regulation, one broker really stands out – TopOption. Not only is this broker regulated through its parent company Safecap Investments by the CySeca, but it also hase licenses in 11 other EU countries: United Kingdom, France, Italy, Spain, Netherlands, Germany, Sweden, Denmark, Hungary, Slovakia and the Czech Republic.
Thanks to this TopOption is the most credible binary options broker at this time.