CyprusWhat Makes Cyprus the Most Favored Destination for Brokers?
In the past decade or so, Cyprus has grown up to be the biggest hub of financial trading brokers in the world.
While this is being seen as a welcome change in terms of economic up rise in Cyprus, the world sees it with an eye of caution considering the abundance of scams and fraudulent activities which seems to chew out the attractiveness out of the trading industry.
So what really makes Cyprus the most favored destination for binary options brokers?
Low Taxes + Friendly Environment for the Financial Sector
Cyprus is seen as a heartthrob for many companies out there in the European Union, which is mainly because of the incredibly low corporate tax rate (when compared to other members of the EU) of 10% flat. This is a major point of attraction for the brokers out there. Also, Cyprus doesn't have a very stringent regulatory requirement and this in return goes on to show how corporate friendly the nation is.
Also the Government of Cyprus has done all that it needs to boost the financial sector ever since it got split from the Soviet Union in 1991. This makes it easier for the broker houses to hire the best guys in the business without much hassle.
The Role of Cysec & Its Influence on Binary Options
With the rise in influx of brokerage firms, Cyprus stepped up its regulatory prowess with its own regulating body - The Cyprus Securities and Exchange Commission (CySEC) helps in exercising vigil over the brokers' activity and it also makes it mandatory to obtain a license from them apart from following some capital requirements. This gave rise to beginners specifically scouting for a CySEC regulated broker , who is likely to be pulled up when a trader fills out a complaint form, thereby guaranteeing investor protection.
The CySEC was born in 2012, post a major debt and unemployment crisis which rattled the fundamentals of Cyprus' economy, post which Cyprus promised to regulate the flow of currency across its brokerage firms. As a matter of fact, CySEC was the first regulating body of Cyprus to officially recognize binary options, which helped it to gain a lot of traction in the international trading markets as well. It would be fair enough to say that CySEC legitimized binary options and brought the limelight back to Cyprus again with a whole new focus, this time around.
Political Stability + MiFID Boost
This post would be incomplete if the efforts of the Government of Cyprus and its influence on the friendly environment for the flourish of brokers is ignored. The political stability in Cyprus has guaranteed a pretty decent economy post the debt crisis, commendable infrastructure in terms of telecommunication which has boosted the growth of the finance sector, coupled with the skilled workforce which is already in place.
The EU membership has been a blessing in disguise for the bloom of brokerage firms in Cyprus in the form of MiFID - Markets in Financial Instruments Directive. MiFID acts as a investment regulatory cell for all the 30 members of the European Economic Union. It offers the basic regulatory architecture which is to be followed by all countries in the Union. Firms which are actually under the radar in a MiFID member country are free to set up their establishments anywhere within the European Economic Union and with Cyprus being one of the members, it gives the freedom for Cyprus' brokers to put their expertise to sale to any aspiring trader residing within the EU. The trader is also shielded by the investor protection policy of the CySEC (if he is in Cyprus) and this guarantees utmost protection from scammer brokers on any day.