Spain is regarded as a powerhouse in the European financial markets. Proof of this is easily seen in the wake of the banking crisis that enveloped the country 2 years ago, pressurizing the Euro and threatening to destabilize the financial system there. Top 3 Spanish Binary Options Brokers: When it comes to binary options trading, the state of regulation in the Eurozone has been nothing short of nebulous. The European financial system has been described by many experts as not being perfect, since it was an amalgam of several financial systems operating within several countries that were not on the same financial pedestal.

Some of these issues have been seen in the issue of regulation of financial markets, especially the new ones like binary options for which no definitive regulatory status has been developed in many Eurozone countries. Binary options is still considered as a form of gambling in many countries in Europe, and regulation has thus been left to the regulatory authorities that oversee the gambling industry. Many regulators in the financial system still do not want to squarely face the issue of whether binary options are a financial derivative product or simply a gambling product.

Spain is one of those countries which lack a clear-cut regulatory policy on the binary options market.

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Regulation of the financial markets in Spain is provided by the Comision Nacional del Mercado de Valores CNMV , also known as the Spanish Securities Market Commission. This regulator is described as an investment sector regulator.

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So does CNMV regard binary options in Spain as an investment sector financial product worthy of its regulation, or as a form of gambling which is outside is purview? The answer is not clear, and CNMV has done no favours as it does not even mention binary options in its website.

An agency does not just wake up and assume the responsibility of regulation without enabling laws that back up the action. This is what empowers a regulator to oversee and if possible, sanction or even prosecute offenders. There can be no offence without a law, as the breaking of a law is what constitutes an offence.

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The scope of what any law covers provides the framework for operation of an agency enforcing such laws. When it comes to regulation of financial markets, we draw an example from the US binary options market which is the global standard for regulation of this market.

The law setting up the US Securities and Exchange Commission SEC as well as the Commodities and Futures Trading Commission CFTC expressly state that any financial firm which offers instruments that are regulated by these bodies in their parent markets, SEC for stocks and CFTC for commodities and futures markets must be regulated by these agencies.

This cleared up any ambiguities over the regulation of the binary options market. Since , newer financial products of which binary options is one, have been developed. The law therefore did not make a provision for specific regulation of the binary options market by CNMV, but rather only allowed it to conduct regulation according to the rules set out in MiFID.

So the question is: Technically and legally speaking, it is not illegal to trade binary options in Spain, and any firms offering binary options in Spain that have a MiFID license are not in contravention of any laws because the present legal framework actually allows them to operate without regulation by CNMV.

CNMV is therefore bound to recognize these firms, but only if they have a MiFID license. In other words, the financial system in the European Union is regarded as one, irrespective of which member state that traders live in, and financial investment firms are therefore required to obtain a MiFID license, which then allows them to do business with Spanish citizens without penalty from CNMV.

In the light of the information provided above, we can therefore see that traders of binary options in Spain are not only free to trade binary options, but they can actually do this at brokers which have been licensed in other countries within the Eurozone carrying the MiFID license. However, to increase their protection level, they need to do this with brokers located in countries where some local regulation is also carried out in addition to MiFID.

The lack of a centralized body responsible for MiFID enforcement across the entire Eurozone member states is one loophole that scam brokers always look for to perpetrate their nefarious activities. It is very important to accurately verify the licensing status of any broker which claims to have a MiFID regulation. It is very likely that Spain will be forced to empower CNMV to locally regulate binary options brokers within its own borders.

However, while we wait for this to happen, Spanish traders will have to make do with other MiFID regulated brokers which accept clients from Spain. In addition, traders should also look at these platforms to see which ones have the product offerings that they will be interested in.

At the same time, such traders should monitor events in the industry to know if the CNMV will come up with new regulations regarding binary options just the way Malta, Japan and Cyprus came up with theirs. Contact Us Sitemap Affiliate Program Trading in financial instruments carries a high level of risk to your capital with the possibility of losing more than your initial investment.

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Broker Info Bonus US Traders Open Account Assets: Understanding Regulation An agency does not just wake up and assume the responsibility of regulation without enabling laws that back up the action.

Status of Binary Options Trading in Spain So the question is: So what is the current status of binary options trading in Spain?

Binary options are not locally regulated by the CNMV in Spain.

This is because of the absence of an enabling law that empowers CNMV to locally regulate this market. Binary options trading in Spain is not illegal. Operating as a binary options brokerage in Spain with a MiFID license but without a CNMV license is also legal. It is unclear if the CNMV has the power to sanction or prosecute errant brokerage firms in cases of market infraction. There are countries within the European Union which have empowered local regulators to regulate the binary options market in addition to MiFID regulation.

Cyprus is one of those countries. Therefore, it may be safer to trade binary options with brokers situated in such countries so that there is a ready local framework for handling cases of market infractions when they occur.

Implications for Binary Options Traders in Spain In the light of the information provided above, we can therefore see that traders of binary options in Spain are not only free to trade binary options, but they can actually do this at brokers which have been licensed in other countries within the Eurozone carrying the MiFID license.

The Future of Binary Options Regulation in Spain It is very likely that Spain will be forced to empower CNMV to locally regulate binary options brokers within its own borders. Practice Trading at eToro Now! Best Forex Brokers Binary Options Course Binary Options Strategies Forex Trading Course Forex Strategies Course Technical Analysis Course.

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