Cyprus is one of the largest Islands in the Mediterranean Sea. It is home to over 1.14 million people. In 2012-2013 Cyprus was often in the news as a result of the Cypriot financial crisis which saw its inhabitants rushing to the banks for fear of losing their deposits. This came as a knock on effect to the Global Economic Crisis which began in 2007 in the US as the subprime mortgage crisis. In 2009 Cyprus went into a state of recession as it saw its economy shrink by 1.67%, which in turn greatly affected its unemployment rates.
In 2013 the European Commission (EC) the Central Bank of Europe (ECB) and the International Monetary Fund (IMF) provided the troubled Island with a $10 billion bailout in exchange for Cyprus closing its second largest retail bank, the Cyprus Popular Bank, otherwise known as the Laiki Bank. Many depositors in the bank as well as in the Bank of Cyprus lost their uninsured deposits. Of those that lost their deposits, many were internationals such as wealthy Russians that were using the banks of Cypus as a tax haven.
Cyprus until 2008 had been a major global banking sector due to its perks of being an offshore jurisdiction. In 2001 CySEC was created to regulate the banking industry in Cyprus.
Best Binary Options Broker in Cyprus
In order to choose the best binary options brokers Cyprus has to offer, the investor must carry out a certain amount of research. There are many regulated binary options brokers in Cyprus and not all are created equal. It is definitely worth speaking to several companies in order to determine how quickly and efficiently they respond. Here we have done the legwork for you and highlighted some of the best Cyprus binary options brokers.
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The Cyprus Securities Exchange Commission (CySEC) was set up to provide a rigid framework for the local banking centre and in particular by 2012 for those binary options brokers based in Cyprus to offer regulated trading to their clients across the Eurozone.
In 2012 CySEC announced it would reclassify the trading of binary options to financial instruments. Many binary options brokers at that time were based out of Cyprus and they suddenly had to become authorised by the CySEC regulator. When Cyprus joined the European Union in 2004 it instantly became a member of Mifid (Markets in Financial Instruments Directive) which meant that brokers that fell under CySEC could now passport their services across the whole of the Eurozone.
Binary options for the first time became a regulated trading vehicle in the over the counter trading market. This allowed traders and those brokers with integrity to work within a highly regulated framework.
While the popularity of regulation for binary options is spreading across the globe with the FCA in the UK, ASIC in Australia, BaFin in Germany, the FMA and FSMA all pushing this trading type in to the mainstream market, it is CySEC which is seen as the leader of binary options regulation.
The CysEC regulation can be seen as the gold standard for brokers and it gives binary options traders confidence in knowing that the broker they are trading with is safe and secure. In order for brokers to gain membership into CySEC they must fulfil certain criteria which include showing enough capitalization to cover their market exposure. Indeed even in the eventuality of the broker becoming insolvent the investor is protected by the Investor Compensation Fund which covers the investor’s deposit up to 20,000 EUR.
CySEC continues to enhance its oversight by making changes within the industry and implementing an ever-toughening stance on the brokers. Its powers include the ability to revoke membership and to impose fines on those brokers not keeping to the stringent regulatory requirements. It calls for an increased transparency in operation by the brokers, it also sets requirements such as the need for brokers to keep the clients’ funds segregated from the firms accounts and sets a bar for the way brokers market to new and existing clients.
Deposit Methods Available In Cyprus
As a major banking centre Cyprus binary options brokers tend to accept all major credit and debit cards like MasterCard, VISA, JCB, Diners and American Express. There are of course many local and international banks located in the Republic of Cyprus and in the capital Nicosia, which allow wire transfers and other remittance services, which means moving money into and out of Cyprus is relatively simple and fast. E-wallets or electronic wallets are also commonly accepted by binary options brokers in Cyprus. This is often the fastest and cheapest way to deposit accounts in Cyprus based Binary options brokers.
As a hub for offshore banking Cyprus is technologically and financially advanced in terms of the banking services on offer.
- Is it legal to trade binaries in Cyprus?
As a major banking centre, Cyprus has always welcomed international investments from external sources. This can be seen no less than by the high percentage of deposits in Cyprus banks which are from non-domiciles. Cyprus as a leading regulator of Forex and binary options trading also welcomes the trade from this area of the financial markets as long as the broker is a member of their local regulator CySEC. This also permits the broker to offer their trading services across the entire Eurozone
- Are binaries regulated in Cyprus?
More and more binary options companies are basing themselves out of the Island of Cyprus, as it is relatively easy and low cost to get regulated in this region. Meanwhile the regulation is seen as a leading one which protects the interests of the traders and those brokers with integrity are happy to take the steps necessary to get regulated in this region.
- How to trade binaries in Cyprus?
A trader must first open a trading account with a local broker. In order to do this he must send documents to prove his identity. This includes all the documents required under KYC Know Your Customer. This usually means sending utility bills for proof of address, ID card or passport and a scan of your payment method eg. Credit card.
The CySEC regulatory requirements in Cyprus are stringent and this goes a long way in reassuring those traders that would like to place deposits with these brokers. CySEC is seen as the leading regulator for binary options brokers and their tight requirements deeply protect the interests of the traders that work with the locally regulated brokers.