Regulation is a big deal among binary options brokers as well as traders and should always be considered when choosing a broker. Uruguay has made binary options a “matter of national interest”. Those are the very words used, not once but several times, throughout the language of Law 15,921 of the Commercial Code Of The Oriental Republic Of Uruguay. This is my fancy and formal way of saying that Uruguay, one of the most thriving economies of South America, has legalized and regulated binary options. The law implements the creation and use of Free Trade Zones that lawmakers feel are beneficial to the well-being of Uruguay and in the interest of international economic integration. Rest assured, I have thoroughly read the law, which I found to be very straightforward, in order to understand exactly what this means for Uruguay and for binary options trading.
What Is The Uruguay Free Trade Zone
On the 17th of December, 1987 the Senate and Chamber of Representatives, in a meeting of the General Assembly, passed law 15,921 effectively creating the Free Trade Zone system and paving the way for legal and regulated binary options in Uruguay. The purpose of the zones are for the promotion and development of trade and business of all kinds in the country. The Assembly thought it so important they deemed it a “matter of national interest”. The zones are areas of publicly or privately held lands where businesses can operate exempt from taxes in a manner that encourages trade with foreign countries while providing economic opportunities to Uruguayan nationals. The zones are meant solely for the purposes of doing business, they are not residential and very few people save security personnel are allowed to live there.
What does this mean for binary options and binary options traders? A lot actually. First, the zones are administered, through the Free Trade Zone Bureau, by the Ministry of Finance. This means that binary options brokers are subject to the oversight and regulation of that entity. Second, the zones and the FTZ Bureau are subject to a 5 person advisory board comprised of appointed and elected officials whose job is to assure the zones are being used in a way that is in effect “beneficial” to Uruguay and promotes international economic integration.
Binary Options Regulation
There are a couple of key areas of the law that are of particular interest to me and the binary options industry. First is Article 2 which defines what and why the trades zones are being created. Basically it says that the FTZ’s are for the purpose of all types of activities industrial, trading or services, in order for businesses operating within to receive tax exemptions and other benefits. Within the article the specific purposes including all types of services not restricted by national law and other activities that may prove beneficial such as trading, investment and banking.
Article 10 describes how business can set up inside an FTZ. They must prove, through and application process, that the business is not only feasible but also in the interests of the economy and the country. Not only that they must be in line with the goal of international economic integration. The application must include plans outlining how the business operates before it can be approved. Businesses that do not comply with the requirements of their application can be fined up to 12.5 million Uruguyan Pesos among other penalties. This is because allowing the operation of a binary options scam is not in the economic interest of Uruguay.
In Chapter 6, Article 38 the law describes how financial transactions are to be handled within the zones. It says that there shall be total freedom for all securities, local and foreign currency and precious metals for any reason for the purposes of holding, trading, circulating, converting and transacting financial operations. This article pretty much sums up why binary options are legal in the Uruguay Free Trade Zone.
Binary Options In Uruguay
The government of Uruguay has declared through its actions and legislation that binary options are legal in their country. Not only that they have declared that binary options are in the interests of Uruguay and of economic interest for the country. They have created a place for us to trade and provided a framework for the brokers to work within so long as they do not interfere with Uruguayan economic or international development.
The first broker to make use of the FTZ for binary options trading is EmpireOptions. This is a unique broker for more reasons than being based in Uruguay. EmpireOptions is built on the SpotOption platform but remains an independent business free of the SpotOption whitle label network and operated under the laws and jurisdiction of the Uruguay Ministry of Finance, and the Free Trade Zone system. One benefit of Uruguay regulation over CySEC is that it allows US traders.
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