Singapore is a small island city state which lies off the coast of the southern tip of the West Malaysia peninsular. Home to a population of 5 million people, Singapore is an economic power house within South East Asia (S.E.A). The flexible and preferential tax policy of the country has produced a conducive investment environment making the country a top destination for foreign direct investment making Singapore Asia’s top financial center. Nevertheless, the financial markets were largely off limits to the average resident in Singapore due to the large capital investment required. However with the debut of binary options in 2008 in the online retail trading sector, many Singaporeans have taken a keen interest in binary options trading. The vast improvement in internet technology and high ownership of smartphones has enabled the average Singaporean to access the financial markets straight from the palm of their hands. In addition, binary options are easy and very affordable to trade with. Their high returns have also made them a very attractive investment vehicle. Nevertheless because binary options in Singapore is a relatively new market innovation, there are concerns about the legitimacy of binary options trading in Singapore.
Best Brokers in Singapore
Given the strict regulatory oversight provided by MAS, the best brokers for Singaporeans are those who are registered and authorized by MAS. But given the lack of firms that are based locally, the next best option for Singaporean traders is to go for offshore brokers which are regulated. Although these companies are not regulated by MAS, it is unlikely that they will act fraudulently as the licensing authority in the broker’s home country will most likely be revoked should the license of the brokerage firm be involved in criminal activities overseas. To assist our readers in making their choice, we have compiled a list of brokers that are suited to the needs of the Singapore binary options traders.
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In Singapore, the main financial regulatory body that is responsible for regulating the financial industry is the Monetary Authority of Singapore (MAS). The MAS also act as the central bank of Singapore. Established in 1971, the MAS is empowered by the Monetary Authority of Singapore Act to regulate and supervise the banking and financial industry as well as implementing monetary policies. Its main mission is to promote sustainable economy growth in the country as well as ensuring developing Singapore into “a sound and progressive financial centre”.
The MAS tasks include:
- Acting as the government’s banker
- Conduct the country’s monetary policy
- Developing Singapore as a global financial center
- Issue currency
- Managing the country’s foreign reserve
- Supervising the payment system in the country
- Supervision of the financial industry and ensuring its integrity and stability
While MAS monitors the financial markets in Singapore strictly, this regulatory supervision is based on an existing legal framework. Unlike in Europe, UK and the U.S, binary options trading in Singapore is not as well regulated as other types of more established markets like the spot forex market. This is because binary options fall under a gray area and as such it is extremely difficult for a dedicated binary options broker to obtain a license to operate in Singapore. To date, there have only been a handful of online brokers that have managed to gain authorization from MAS to operate in Singapore. Hence, there is a scarcity of Singapore binary options brokers. But this has not stopped Singaporeans from signing up with offshore based binary options broker as there is no legal restricition to prevent a Singaporean from doing so.
While this has opened up a plethora of choices for Singapore binary options traders, the MAS has advised Singapore binary traders that by dealing with unregulated brokers outside of the country, they will lose access to the dispute resolution mechanism offered by MAS. Investors in Singapore are reminded by MAS to always conduct due diligence on the brokers that they want to sign up with before they open an account. To help investors check if the broker which they are signing up with is authorized, the MAS maintain a list of licensed brokers and “Investor Alert” of unauthorized financial services providers operating in the country.
Deposit methods available in Singapore
As a major tourist financial center in S.E.A, the payment infrastructure in Singapore is well established. All international credit and debit cards are accepted by businesses. In addition because of its large migrant workers population, the remittance industry also supports a wide range of remittance providers such as Western Union and MoneyGram. eWallets are also popular among Singaporeans as most of them holds an eWallet for making payments on online shopping websites. Given the large number of international banks that have established a presence in Singapore, bank wire transfer is also a widely available method of remitting funds overseas. In other words, Singaporeans have at their finger tips a wide range of payment methods which they can use to fund their trading accounts.
- Is it legal to trade binaries in Singapore?
Yes. Binary options trading in Singapore is legal as there is no legal framework to regulate the trading of binaries in the country.
- Are binaries regulated in Singapore?
No. Currently, binary trading is not regulated. However, brokers are not permitted to operate in Singapore without first obtaining a license from the Monetary Authority of Singapore.
- How to trade binaries in Singapore?
There are 2 ways for a Singaporean to trade binaries. The first way is to sign up with a local operator to open a trading account. The second method is to sign up with an offshore brokerage firm. Given the lack of choices of binary options brokers in Singapore, many Singaporeans have opted to sign up and open a trading account with firms which are regulated in Europe.