Israel Soon Expected to Ban Marketing of Binary Options Abroad
5th of January 2017
Yesterday, the ISA (Israeli Securities Authority), the Justice Department, and the State Comptroller sat before a parliamentary oversight body, the State Control Committee, to answer questions regarding the way these authorities are handling international binary options marketing.
Israel has in the past been treated to a spirited media campaign strongly opposed to binary options trading. Consequently, all parties in the meeting were of the opinion that the industry is more trouble than it’s worth, with most players feeling that it should be done away with altogether.
This singular way of thinking was evident during the meeting. Already, the country has made it illegal for Israeli citizens to engage in binary options trading. This has clearly not changed.
So, generally speaking, things are not looking good for international binary options companies using Israel as their base of operations as they market their products abroad. All suggestions pointed to the fact that as far as Israel was concerned, binary options trading is most unwelcome, even if it is limited to international firms marketing their products to overseas clients.
As a matter of fact, the only point of contention during the meeting was with regard to the approach the country should take when dealing with binary options companies marketing their products abroad from within Israel.
While some parties argued that ISA should come up with laws that should further curtail the activities of the firms marketing binary options abroad, others felt that the current law had already made the practice illegal.
In the latter scenario, it was suggested that all that remained was for the police to conduct a crackdown and shut down such operations and put those running them in handcuffs.
But the ISA feels that creating new laws would give the financial authority the power to stop international marketing of binary options products from Israel, a responsibility which lies in the hands of the justice department.
The current ISA chair, Prof. Shmuel, made this argument. He was also equivocal in his opposition to the presence of the industry in the country in any form, a view openly held by all parties in the meeting.
He argued that the current laws did not give him the mandate to take action against companies that market their binary options products to international clients. Prof. Shmuel pointed out that the present legislation only illegalized marketing of binary options to Israeli citizens.
The justice department, though opposed to marketing of binary options abroad, took a more cautionary stance even as it admitted that the ISA needed new laws to deal with the industry.
Such laws had the potential to rub other regulators the wrong way by overstepping their mandate and affecting the industry in other jurisdictions; the justice department representative argued.
But when the State Control Committee expressed how earnest it was in its resolve to get the law passed, the representative was obliged to admit that the law could be drafted within a couple of weeks. In fact, Karin Elharar, the committee head, suggested that another meeting be held in February with the main agenda of ensuring that the draft law had been prepared.
How it All Started
Israel is of the opinion that binary options trading is a form of gambling, which makes the industry ‘toxic’ and capable of damaging its financial system’s reputation.
Beginning in early last year, the country took drastic moves to rid itself of the industry, including introducing laws banning its citizens from trading in binary options and legislations illegalizing the marketing of binary options products to Israelis.
All that remains of the industry within Israel are technology development services, international marketing operations, and support services for international clients. And these too are on their way out if the tone of this recent meeting is anything to go by.