IG Group, one of the most popular stock-brokers in the world, has established robust restrictions for binary options after the effective entry of the French law Sapin 2. Binary options will remain available to former clients but will not be open to new ones.
Binary options are considered similar to gambling, too dangerous for the inexperienced, and high-risk even for those with years of experience in online Forex.
Every country in which they are popular is rallying to try to ban them or limit them.
With world-wide legislation that is all moving in the same direction, at IG Group they have decided to give up, even if only partially, a product that they might recall in the future.
They had called it Sprint, and it had yielded around £15 million of annual turnover for broker companies.
It will remain active for those who were already using it before the company’s change of course.
Officially the IG Group’s binary options will not be completely cancelled because they are to be considered trustworthy and low-risk and are very popular among clients.
IG Group and binary options
IG Group, with its head office in London, is one of the longest-running and most popular stock-brokers.
It began in 1974 with bets on gold whilst today it is a foreign exchange broker present in 15 countries.
New policies on binary options are mainly related to marketing. The IG Group will no longer allow advertising for those websites that contain binary options.
In a letter written to its affiliated members, IG Group explained that it had stepped back from this product to safeguard its own clients and it asked all those intending to maintain a web address containing the name “binary”, to remove potential banners referring to IG.
In the case of single pages (and not the whole site) it has requested the removal of links to IG from those particular pages.
In short, it has indicated that, once it has cleared as much as is required, it will not pay future commission on the traffic coming from sites or pages focused on the binary product.
As a consequence of this, it has withdrawn all targetted advertising and has specified that it will no longer receive traffic from websites or internet pages with content regarding options.
Regarding trade it will announce the binary actions with an exception made for those who already use them and for those countries in which these products have particular licenses, namely the United States and Japan.
The entire sector is trying to defend itself from misleading advertising for high-risk products.
The reputation of binary products has been ruined by enormous amounts of swindlers who until now have worked in relatively undisturbed circles.
By putting a halt to the bombardment of misleading information on binary options they are trying to limit its audience and make sure that only those fully aware of the risks can invest.
The Law Sapin 2
The decision of IG Group follows the effective entry of the new French ruling this January on the banning of advertising in the sector, inserted in the law entitled “Sapin II”.
It is now prohibited to advertise Forex, binary options and CFD (Contract for Difference), that is to say all those products considered of high financial risk.
The products themselves are not prohibited but must no longer be made to look attractive to investors.
Created in order to create complete transparency in investments, the law prohibits advertising, through any electronic means, of any high-risk online investment product with a high incentive.
The Financial Conduct Authority of the United Kingdom (FCA), has even more drastic proposals against binary options.
If you have been a victim of fraud linked generally to Forex, or particularly to binary options, please do not hesitate to contact us.
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Calogero Boccadutri is the Managing Partner of Boccadutri International Law Firm.
He has trial experience in Forex, Personal Injury and Administrative litigation.
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