Binary Options Trading in Italy
Italy may not be known for financial market activity, but indications are that the wave of binary options trading in the country is on the increase. This increase has definitely caught the attention of the country’s financial market regulators. So what does Italy’s CONSOB say about the binary options market, and how are Italian traders coping with the environment there?
Italy’s financial markets are regulated by the National Commission for Companies and the Stock Exchange (CONSOB). Unlike what obtains in many countries where the regulators seem to have defined rules for other markets but are notoriously silent on binary options, CONSOB has a well-defined binary options policy.
Recommended Binary Brokers in Italy
Binary options in Italy are offered by the following categories of companies:
- Investment firms or banks located in the EU, which operate a primary office in Italy under regulation from their home countries as part of MiFID.
- EU or non-EU investment firms or banks, which have branch offices in Italy.
The binary options market in Italy has also witnessed an explosion of many unregulated entities. These unlicensed brokers have mushroomed all over the country, offering online binary options trading without any form of licensing from CONSOB or any other country regulator. These are the entities that CONSOB is mostly worried about, and has stated this clearly under its guidelines. CONSOB has a dispute resolution mechanism in place, which includes the Arbitrator for Financial Disputes (AFD), an agency which is responsible for resolving trader-broker disputes in forex and binary options. CONSOB is presently unable to facilitate such disputes in cases where the brokerage firms are located outside Italy and without an Italian physical presence.
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The regulation of binary options in Italy is conducted by CONSOB. CONSOB requires all binary options brokers in Italy to be regulated and licensed by CONSOB. While CONSOB also recognizes the presence of brokers in Italy who are carrying licenses from their home countries, CONSOB prefers a situation where such companies obtain a license for their Italian offices, while restricting advertising from their offshore offices, irrespective of whether they come from the main branch or not.
Currency Pairs & Spread
Most binary options offered to Italian traders from offshore brokers offer various currency contracts which pair the Euro with the US Dollar, British Pound, Yen and Australian Dollar. As Italy now uses the Euro and not the defunct Italian Lira, traders can focus their attention on Euro-based assets.
These assets are not usually listed with bid/offer prices, so the spread for these assets is presently unknown. However, the bid and ask prices are used by the brokers in considering the payouts for each successful/losing trade.
Most Italian binary options traders do their business with offshore companies. Therefore, a mix of proprietary and turnkey trading platforms will be encountered.
Italian traders tend to get bonuses when they trade binary options with brokers that are not located in Cyprus and Malta.
Deposit and Withdrawal Options
What deposits and withdrawal are available to binary options traders in Italy?
Binary options brokers offering services to Italy citizens realize that it is essential that these traders have ease of transactions whenever they want to make deposits into their trading accounts or effect withdrawals. The following transaction methods are available to these traders:
- Bank wires: Italian binary options traders can use their bank accounts to perform transactions. Since there are no local binary options brokers, these transactions are international in nature.
- Digital wallets: Italian binary options traders can make use of several digital walleyts such as those of Skrill, Neteller, WebMoney as well as GiroPay. Others include the use of PaySafe Card and Qiwi.
- Card Options: Local credit cards in Italy, linked to bank accounts can also be used to make deposits and withdrawals, subject to approval for each individual binary options broker.
Legality & Regulations
What are the legal considerations and regulatory conditions attached to the conduct of the brokerage and trading of binary options in the Italy? Binary options in Italy are regulated by CONSOB. CONSOB has moved to block access to websites of certain offshore binary options brokers, using court orders it obtained in 2013. However, this seems not to have worked much as new brokerages keep springing up by the day.
CONSOB now focuses mainly on issuing investor warnings about specific binary options brokers, as a means of controlling the patronage of unregulated brokerages.
Here are the frequently asked questions that most users may have about what the binary options industry in Italy looks like.
- Are binary options legal in Italy?
Answer: Trading binary options with binary options brokers in Italy carrying a CONSOB license is considered legal in Italy. Trading with offshore brokers is considered illegal. However, CONSOB has maintained it has little power of enforcement over offshore brokers, so trading with offshore brokers by Italian traders has continued unabated.
- Is it safe to trade binary options in Italy?
Answer: It is presently not very safe to trade binary options in Italy. A large chunk of the brokerage market is dominated by unregulated, offshore brokers, over whom CONSOB has no enforcement jurisdiction. Traders involved with such brokers also have no means of interventionist action from the Financial Disputes Arbitrator (FDA).
- As an Italian citizen, am I allowed to trade binary options with offshore brokers?
Answer: CONSOB frowns at this practice, but it is still continuing.
- How do I check the status of a binary options broker?
CONSOB issues periodic warnings against offshore brokers who have evidence of misconduct against them, as well as unregulated brokers. These warnings are published periodically on the CONSON website. CONSOB’s institutional website also features a “Warning for Investors” webpage, which features reports from CONSOB and foreign regulators on sharp practices by blacklisted brokers. CONSOB also maintains a list of brokers that are regulated and licensed to offer financial products in Italy.
- What is the FDA?
Answer: The Financial Disputes Arbitrator (FDA) is a service which has been setup to resolve disputes between Italian traders and local, regulated brokers in all financial markets. Only disputes involving CONSOB-licensed brokers can be brought to the FDA for settlement.
Best Binary Options Brokers in Italy
Binary options brokers in Italy operate in a difficult environment. CONSOB expects all binary options brokers, be they home-grown or offshore broker branches, to obtain a CONSOB licensed. Given the economic situation in Italy and the cost of doing business in Italy when compared to Cyprus, this is indeed a tall order. However, we have managed to get you some binary options brokers to do business with. These are:
CONSOB’s stance on binary options has been criticized in several quarters. Many industry watchers are of the opinion that instead of working against the entire industry, CONSOB should have liaised with the regulated players in the industry to stamp out the bad eggs. Given the self-confession by the agency on the handicaps it faces in combating cases of binary options fraud, it remains to be seen how effective CONSOB’s targeting of binary options providers will be.