The Japanese Ministry of Finance has targeted two companies from the industry with a client warning. The firms in focus are binary options brokerage OptionBit and foreign exchange broker FBS.
According to the warning, none of the companies is possessing a license to operate in the country. Japanese authorities are strictly allowing only regulated firms to target residents and have been active in taking action to protect the public.
The international subsidiaries that are operating OptionBit and FBS are both identified to be registered in the St. Vincent and Grenadines, an offshore destination that is frequently used by unregulated brokers that target global clients.
The companies which the Japanese Ministry of Finance is highlighting as owner entities are Parallax Incorporated and Global View International Services.
Japan is one of the countries where unregulated binary options and forex fraud has been widely spread out by unlicensed companies. Local regulatory authorities have introduced special regulations for the binary options industry in order to reign in the adverse effects of the product on traders.
The minimum time frame for binary options is two hours and clients can close their positions at any point in time. The FFAJ is publishing monthly stats on the profitability of clients and has limited the number of binary options operators in the country to seven companies.
The product has been gradually losing popularity in the country with the Japanese binary options industry being in decline since the strict regulation came into force. Japanese authorities are also tightly regulating the retail forex market, where the maximum leverage for retail clients is limited to 1:25.
Source: Finance Magnates