Binary Options Trading in Romania
Romania’s population of roughly 20 million people make it one of the largest investment destinations in Eastern Europe. Eastern Europe is fast becoming the preferred destination for brokers outside the EU to setup branches and target clients within the EU. This has had serious consequences for the local trading population.
Romania has recently been hit with a wave of binary options scams. According to the Times of Israel, many of the binary options brokers in Romania are actually extensions of several binary options companies that have been mentioned in alleged scams in Israel. This has led to a series of raids on the offices of many binary options brokers as authorities in Romania try to clean up the industry in this bubbling Eastern European country.
The financial markets in Romania are regulated by the Romanian National Securities Commission (CNMVR). The CNMVR’s mandate includes the regulation of the local stock market. However, the CNMVR does not regulate the binary options market, preferring instead to allow offshore brokers that are regulated within the EU to do business in the country.
Romania hosts a number of locally-based binary options brokers. The lack of regulatory oversight by the CNMVR opened the door to the influx of unregulated brokers into Romania. Many of these have been found to be branches of Israeli-based companies, implicated in the use of aggressive call centre-style marketing techniques to target Romanian and foreign traders. It is the nefarious activities of these unregulated entities that have finally caught the eye of regulators in Romania, leading to the raids and more than 130 arrests.
Some Romanian traders also trade with CySEC-regulated brokers. However, some unsavoury practices from some of these brokers have led Romanian industry experts to ask CySEC to do more in reigning in its brokers.
Recommended Binary Brokers in Romania
Currency Pairs & Spread
Romanian traders will be able to trade Euro-based currency assets as well as other assets found within the EU borders such as national stock indices and stocks of various companies.
Romanian binary options traders usually trade binary options on the platforms of binary options brokers located in EU jurisdictions such as Cyprus, or with local binary options brokers that are unregulated. Either way, the turnkey platforms are the popular trading platforms offered to traders by these brokers.
Romanian traders are usually awarded binary options bonuses by the local brokers. There is a lack of information among Romanian traders on the ban on bonuses by CySEC. Many of the local brokers offering bonuses misrepresent their locations and use this to mislead Romanian traders. Bonus awards leading to non-fulfilment of withdrawal requests has been one of the biggest problems faced by the local trading populace.
Deposit and Withdrawal Options
Romania has an advanced fintech industry which has promoted financial inclusion. Most of this has been powered by M-Pesa, a company which provides mobile payment and digital wallet services to Romanians, including Romanian binary options traders.
With this in mind, how do Romanian binary options traders transact on the platforms of offshore brokers?
- Cards: Romanian traders have access to bank cards which can be used for deposits and withdrawals. As much as possible, card details should not be used directly on the trading platforms until the identities and regulatory status of the brokers are confirmed. It is safer to deploy the cards on e-wallet platforms first before transfer of funds to the trading accounts.
- Romanian binary options traders can use the SEPA bank wire system to deposit and withdraw funds from their trading accounts.
- Romanian binary options traders can use digital wallets available across Europe such as WebMoney, Moneta, Sofort, GiroPay, Skrill, Neteller and Payza.
Legality & Regulations
What are the legal considerations and regulatory conditions attached to binary options in Romania?
- Binary options in Romania are presently not regulated. However, trading of binary options with EU-regulated brokers is permitted by the CNMVR.
- Trading of binary options is not restricted by the Romanian financial authorities.
- Romanian traders are increasingly trading with local binary options brokers who misrepresent their location. Several traders have reported being called up by brokers claiming to be in the UK or Cyprus to deposit funds, only for such monies to end up with companies implicated in binary options scams abroad.
Here are the frequently asked questions that most people have about trading binary options in Romania.
- Are binary options legal in Romania?
Answer: The trading of binary options is considered legal if done with EU-regulated entities.
- Is it safe to trade binary options in Romania?
Answer: It is not safe to trade binary options in Romania, as the market is dominated by scam brokers. However, attempts are being made to clean up the industry by arresting and prosecuting offenders. It is hoped that with time, the bad guys would be out and leave the industry clean and safe for genuine traders and operators to do business.
- As a Romanian citizen, am I allowed to trade binary options with offshore brokers?
Answer: Romania is a signatory to MiFID, which allows its traders to trade with offshore binary options brokers. However, this has been abused due to lack of effective regulation in the country.
- How do I know that the company I am dealing with is genuine?
Answer: Whenever called up by a broker, ask specifically for the license number and country where the broker claims to be regulated. If a number is provided, contact the regulator in that country (usually by phone or email) and clarify the information with them. This is an effective way of sifting out the genuine brokers from the fakes.
- Is it possible for binary options traders in Romania to transact on binary options platforms using PayPal?
Answer: PayPal does not provide support to top binary options brokers in Europe. Therefore, it is not possible for Romanian traders to deposit and withdraw with PayPal.
Best Binary Options Brokers in Romania
With the virtual absence of genuine local binary options brokers in Romania, Romanian traders are left with no other choice than to trade with regulated offshore brokers within the EU. The top binary options brokers for Romania are as follows:
Be wary of unregulated entities trying to use the identities of genuine brokers to get your money. Clarify all information with the relevant authorities.
It is hoped that the raids will clear out the bad guys from Romania’s binary options market, but the real issues remain unsolved. First, the bad guys are coming from other countries where binary options were banned. These companies have simply migrated to where the pasture is green. The solution, which is something many industry watchers have proposed, would be for regulators and genuine brokers to fashion out regulatory guidelines that would make it impossible for scam brokers to emerge. These regulations may have to be standardized across Europe to prevent migration of the crooked brokers from one haven to another.
Furthermore, Romania’s local regulator may need to take a more decisive look on strengthening its local binary options market and making it easier for genuine brokerages to emerge, while rooting out the bad guys.