Even though binary options are getting more and more popular day by day, many people are still cautious about the brokers who help them transact the trade. Unless the binary option broker is well established, many people tend to avoid the new brokers. This puts new brokers like OptionRally at a big disadvantage when it comes to building up their business. The concerns about new binary brokers options is usually due to where they are located. Binary options brokers tend to be located in countries like Cyprus or the British Virgin islands (BVI) due to their favourable tax regimes. There is a presumption that these offshore tax havens lack any form of financial regulations governing their operations.
Regulations governing companies like OptionRally
Actually for companies like OptionRally registered in the BVI, they are subjected to regulations imposed by the BVI Financial Services Commission (BVIFSC). This is the financial regulatory body that ensure “…the relevant international standards and best conduct of business practices” are complied with. Therefore, many people have incorrectly assumed that BVI registered companies are not subjected to any form of financial regulations.
Another argument normally put forward by people who thinks negatively of BVI registered companies is the argument that BVI regulations are not as strict as those of the regulatory authorities in the United States (U.S). it is without a doubt that U.S. financial market is extremely well developed and has many regulations that are designed to protect the interest of financial investors. However, despite having so many regulations in the U.S designed to protect investors’ interest, the scale of financial improprieties that occurred in the U.S. is unrivalled around the world.
In the last decade alone, more monies had been lost through companies in the U.S than the whole world combined. We only need to look at the conduct of companies like Enron, Lehman Brothers and most recently MF Global to get a sense of the scale of financial fraud that had resulted in the U.S. financial market. We need to bear in mind that all these improprieties had occurred in one of the most regulated financial markets in the world. In this sense, the security and protection provided by tough financial regulations is overrated. If the people managing the companies are out to defraud their clients, then no amount of regulations can safeguard the client’s money. Hence, it is also important to assess the integrity of the people running the company rather than just basing one’s judgement on the regulatory environment that surrounds the company. Normally, we will find that small or medium sized operations like OptionRally are more concerned about what their clients think of them as they do not have the luxury of chasing clients away.
Operational History of OptionRally
In terms of operational history, as OptionRally was only recently established in late 2010, the company do not have a long operational history yet. However, if we were to factor in the fact that it operate through the internet, any negative feedbacks about the company would have quickly gone viral. This is one time where the lack of news is good news with regards to OptionRally as it suggest that the company is not out to scam anyone but is serious in building up a solid client base.