The proposed prohibition of the provision of binary options services from within Israel has come a step closer to realization, financial and business news outlet Finance Magnates reported on Monday. A draft legislation passed the country legislature’s Reforms Committee by a unanimously positive vote yesterday.
Binary options and gambling are positioned as two very similar activities under the new legislative piece. During a Monday discussion preceding the vote on the bill, representatives for the Israel Securities Authority said that the provision of binary options services from within Israel is unacceptable and that lawmakers should make no compromise and ban the activity.
Here it is important to note that if and when the bill is enacted, it will only prohibit the provision of the services and not the development and distribution of binary options software. However, lawmakers have repeatedly pointed out that the line previously drawn between production and provision has gradually disappeared, hence the necessity for new regulations.
Israeli police representatives participated in the Monday discussions. They revealed that they are in talks with search engines, social media, credit card companies, and other involved parties to take part in the pending crackdown on binary options.
Police officers shared the general opinion that the actual issue was the fact that software companies have been transforming their business models to eventually become brokers. It was also pointed out during the Monday discussion that players transferring from online gambling to binary options had been what had spurred the above-mentioned trend of suppliers turning into brokers.
The Israeli Justice Department affirmed that statement. Department members also said that by supplying “fraudulent companies”, software developers were committing an offense. They also pointed out that the case is similar with gambling activities and that the proposed binary options ban actually does not come as anything new.
The Monday vote was the final hurdle before the bill is handed to the Knesset, known to be the Israeli legislature. If given a final approval and enacted as a law, the proposal would give the Israeli Securities Authority the power to intensify its crackdown on binary options firms that provide services of this type overseas. The provision of binary options services to Israel-based clients was prohibited with a separate legislative piece last year.
Technology providers will thus be forced to either change their business model in a manner that abides by local laws or to leave the country and find a refuge where they would be able to retain their combined operations.
The Israeli parliament is currently in its summer recess so it is yet to be announced when exactly the final vote on the bill will take place. It is also important to note that the proposed ban is only concerned with binary options and that CFD and forex trading will remain unaffected for now.