Is it legal to trade binary options in New Zealand?
It is legal to trade binary options in New Zealand. The New Zealand government defines the status of and recognizes this trading option. This is beneficial to their citizens as the regulations are very clear. In order for regulators to be able to update regulations when required, they are regularly provided with date on new trends in this financial market. Brokers are also made aware of their duties through legislation and traders’ rights are protected when trading binary options.
The Financial Markets Authority (FMA) is the regulatory body in New Zealand and it enforces the Financial Markets Conduct Act. It uses a customer-oriented approach to both provide market transparency and protect customers. Although restrictions are tight, it allows traders to still have enough investment options available in order to diversify their portfolios.
For brokers to be licensed, they need to comply with specific requirements and procedures. Broker must for example have staff and a physical location in New Zealand in order to provide services and needs to segregate the company’s and customers’’ funds. It is mandatory to comply with these rules of conduct and the FMA regularly publishes special reports regarding regulations and warnings.