OptionRally’s 3-month Suspension Has Been Lifted
19th of October 2017
OptionRally Financial Services Ltd., a binary Options broker, had its license suspended in July this year, following a number of internal and external faults, linked to both the company’s and its clients’ funds, and the capital adequacy ratio, making for 3 major strikes. The measure was triggered as a result of violating the Investment Services and Activities and Regulated Markets Law of 2007, after several fines preceding it.
Cyprus Securities and Exchange Commission (CySEC) inflicted the ban on July 13th, seeing as OptionRally was suspected of:
– Breaking sections 28 (1) and 18 (2) of the Investment Services and Activities and Regulated Markets Law, referring to protecting the clients’ funds.
– Violating the article 92 (1) of the EU regulation system 575/2013, referring to the capital adequacy ratio.
– Breaking section 67 of the Investment Services and Activities and Regulated Markets Law, referring to the company’s own internal funds.
Another factor that influenced this decision was the fact that OptionRally’s funds were lower in value than the sum of the company’s capital requirements, leading CySEC to conclude that foul play was involved. Such violations could have affected the security and the interests of the company’s clients and the suspension was aiming at minimizing or avoiding the damages.
During the suspension, the Binary Options broker was prohibited from:
– Indulging any business activities
– Taking in any new clients
– Receiving or executing any orders from clients, regarding any type of financial trades
– Executing any investments, of any nature, in both Cyprus and abroad
– Using marketing techniques for self-advertising purposes (on a side note, it had to publish the information regarding its CIF license being suspended on all its websites)
– Refusing to fully refund their clients, if the clients asked for it
– Refusing to cease clients’ contract services, if the clients asked for it
Following the punitive measure, the Cypriot regulator declared that OptionRally has since adopted a series of compliance measures and that the ban is no longer necessary. The decision to lift the ban was adopted on October 2, 2017 and it allowed the Binary Options broker to resume its activity in full.
Binary Options market under assault
This measure has been seen as one of many affecting the Binary Options market, after a series of fines and regulatory measures being enforced on several brokers over the last years, due to various violations or suspicions.
It doesn’t help that many brokers have either closed their activities or lost a lot of their client database, because of to-the-edge-of-the-law practices, as well as due to a negative reputation of their products and services.
Brokers like OptionRally have faced serious backlash in the past and many have failed to regain their influence since.
OptionRally Financial Services Ltd. functional again
It is still unclear how these measures will affect the broker’s image or functionality over the next period, but signs of weaknesses have been identified in the recent couple of years. After laying off more than 120 employees in July 2016 and another batch of 20 in December the same year, right after the €138,000 fine coming from CySEC, the Binary Options broker was forced to withdraw its forces from Israel almost completely.
How things will evolve over the next period for OptionRally is uncertain.