Binary Options Trading in Spain
Spain may not be recognized as a leading financial trading hub in Europe, but the country certainly gained some prominence a few years ago when the country’s banking system went into a tail spin. This caught the attention of the Spanish financial market regulator, and swift moves were made to ensure that investors in the financial markets did not suffer the same fate as many investors in the real estate market bubble.
Regulation of binary options online has become a complicated issue. This is because on one hand, there is the MiFID protocol which is supposed to break down boundaries and allow for assimilation of various markets in Europe. On the other hand, there are individual countries trying to control what happens in the financial markets within their borders, even when these actions may contradict the spirit of MiFID. Spain is one of those countries that was faced with this conflict. This is why the Spanish regulator has been more careful in its approach to binary options online.
So what is going on in terms of regulation of binary options online in Spain? The lack of clear-cut regulation as well as the overriding influence of MiFID led to a situation where Spanish binary options online was dominated by brokers from outside Spain and within Europe. Majority of the brokers targeting Spanish traders are CySEC-regulated brokers and unfortunately, many unregulated entities as well.
Spain has had its fair share of binary options online scams. Many of these occurred when there was no clear-cut policy on considering binary options online as financial assets worthy of regulation, which opened the door to many a trader getting scammed. Now that regulation of binary options online is being taken more serious across the world, the Spanish regulator has also decided to step up its game in this regard.
TOP BROKERS IN SPAIN
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The financial markets in Spain are regulated by the Comison National del Mercado de Valores, or the CNMV. Also known as the National Securities Market Commission in English, the CNMV has come up with new guidelines to determine how binary options online should be offered to Spanish citizens. The CNMV also puts out lots of information to people trading binary options online in Spain about the structure of the binary options online market and any inherent risks therein.
In March 2017, the CNMV drew up new regulations regarding the conduct of binary options online in Spain. These new rules, which also cover the forex market and other derivative instruments, are as follows:
According to the new rules, the following now apply:
- All binary options online brokers who wish to offer their products Spanish citizens will be required to put up disclaimers expressly warning all retail investors about the risk element of binary options online products.
- All traders wishing to trade binary options online must be subjected to a special evaluation to test the knowledge of such traders on the risk element inherent in trading binary options online.
- Any traders that do not pass the evaluation must provide a handwritten, oral or typewritten statement to attest to their understanding that they wish to continue, even though they are not considered suitable candidates by the CNMV for binary options online trading.
Currency Pairs & Spread
Spain uses the Euro as its national currency. Therefore, it is expected that Spanish traders will be familiar with the trading of Euro-based currency pairs and other assets of European origin, including the trading of stocks of local companies such as Banco Santander as well as the local stock index (IBEX35).
The binary options online platforms used by binary options online brokers in Spain are predominantly of the turnkey variety, made by companies such as SpotOption, Tradologic and Tech Financials.
Bonuses are only awarded by unregulated brokers operating from Eastern Europe and other non-European binary options online brokers such as those operating in Vanuatu, Seychelles and Belize. CySEC-regulated broker are prohibited from awarding bonuses.
Deposit and Withdrawal Options
The following channels of transaction are available to Spanish binary options online traders.
- Bank wires: The SEPA bank wire system avails Spanish traders the opportunity to transfer money to the European binary options online brokers using the bank transfer system. It is safe and secure, but with a delay factor.
- Credit/debit cards: Spanish banks offer bank cards to their customers, and these can be used to make deposits and withdrawals. Many banks offer the MasterCard and VISA brands of cards, which can be used on many binary options online platforms.
- Digital wallets: Skrill and Neteller offer channels by which other e-wallets such as VISA’s V.me digital wallet, Sofort, QuickPay and others can be used for deposits and withdrawals.
- Some CySEC-regulated brokers are now taking Bitcoin as a deposit method.
Legality & Regulations
CNMV seems to be taking a more level-headed approach to the issue of the legality of binary options online. CNMV seems to favour consumer education as a better approach to reducing the incidence of binary options online scams. That is why it has invested heavily in a website that provides several investor warnings, tips as well as a database of regulated brokers.
So binary options online is legal in Spain, but brokers offering the product have to ensure that they offer it to informed clients or at least, get a legal coverage by getting CNMV-disqualified clients to make the required declaration already described above.
Here are the frequently asked questions that most traders have about the conduct of binary options online in Spain.
- Is it legal to trade binary options online in Spain?
Binary option trading is legal in Spain, but brokers are required by the CNMV to make the necessary disclaimer declarations on their websites.
- Are binary options online a regulated financial product in Spain?
Yes, binary options online are regulated in Spain by the Comison National del Mercado de Valores, or the CNMV (English name: National Securities Market Commission).
- Is it safe to trade binary options online in Spain?
Trading binary options online in Spain is relatively safe, thanks to the efforts of the CNMV and its partnership with other regulators such as CySEC.
- As a Spanish citizen, am I allowed to trade binary options online with offshore brokers?
Cross-border trading of binary options online is permitted by CNMV, if the brokers involved comply with the regulations set out in terms of the disclaimer declarations.
- How do I check the status of a binary options online broker?
The CNMV provides a database of regulated brokers. This list includes CNMV-regulated and CySEC-regulated brokers. There is also a blacklist of unregulated brokers with scam reports against them.
Best Binary Options Brokers in Spain
The following list showcases brokers who comply with CNMV regulations and can therefore offer binary options online to Spanish traders. Here is out list of best binary options online brokers in Spain.
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The CNMV maintains an internal search engine on the CNMV Public Warnings page. This is where traders can run a quick search on whether the brokers they want to use are regulated or not. This list also showcases blacklisted brokers.
The CNMV approach seems to be going down well with many brokerage firms because it is perceived as an approach which sees brokers as partners and not adversaries. Time will tell if the CNMV can resist some of the variant views of fellow European regulators in France, Belgium and Netherlands and continue with its tolerant stance on binary options online.