Malta Financial Services Authority

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What is Malta Financial Services Authority (MFSA) and How is Related to Binary Options?

 

The MFSA known as the Malta financial Services Authority is the only regulator for various financial services activities carried out in Malta. It used to regulate and supervise the trust and insurance business, credit and financial institutions, investments, etc.

 

The MFSA issue certain guidance notes and also monitors the local and international developments. It also works with relevant parties to do discussions on legislative matters. Besides this, it encourages higher standards of compliance and also runs a consumer affairs related unit.


The MFSA is now officially categorizing the binary options under the scope of markets working in Financial Instruments Directive (MiFID). Due to this step, the binary options firms could apply for regulatory supervision in Malta held under the Lotteries and Gaming Authority (LGA).

 

But, the main aim of this organization is to regulate the gaming industry and existing financial services providers in Malta, but a legitimate financial services supervisory body is needed to do all these things and the MFSA has signed an agreement to take this responsibility from LGA.


All the brokers who are licensed to sell binary options in Malta must have a minimum capital requirement of 730,000 euro and it will be subjected to on-site and off-site compliance. The MFSA has stated that binary options should be considered an instrument,  which is falling within the parameters of the second Schedule of the Investment Services Act.

 

All the companies which are currently licensed by the LGA or which submit an application will have to go through a license application procedure and a due diligence process to get licensed under MFSA.


The MFSA has been given a task to develop a comprehensive online trading regulatory framework. The rules and guidelines imposed by MFSA will focus to the trader safety, reliability of services and the responsible handling of trader assets.