Binary Options trading is one of the most exciting trading systems globally. Under the federal securities laws, for a binary firm to be valid and legally offer trading services, it needs to be registered with the SEC. For example, if some offer the binary options contract as security, remember it is not offered or sold without a deposit. Exceptions do exist sometimes. When the options firm is not registered, the sale of the binary options or offering trading services would be deemed illegal.
When offering binary options as security-based swaps, there might be additional requirements. Sometimes, binary options trading firms often operate without any valid registration form. Suppose the firm decides to offer one among the investors worldwide or a particular country.
In that case, it is crucial first to register it with the SEC as a broker-dealer when the options firm should register with the SEC to buy or sell securities or allows receiving transaction-based compensation and commissions.
To check if a firm has registration with SEC, you can use the FINRA Broker Check platform. Specific platforms operate as an unregistered security exchange. They match orders in securities of multiple buyers and sellers using non-discretionary methods in such cases.
However, there are cases where the brokers registered with a trading system do not have a license to register as an exchange. You should, thus, keep checking all the broker platforms before investing
anything significant with them.
The lack of compliance with the laws has jeopardized many scammers trading mechanisms. Suppose a trader purchases any firm’s options that don’t have any license by the financial regulatory authorities. In that case, they might not have the full benefit of the SEC’s safeguard mechanisms.
They might end up losing their money permanently and would not have a method or way to retrieve it back. Hence it is always suggested to trade with only legitimate brokers who hold a valid license. Till then, stay safe with your money and invest wisely.