According to information on the Japanese regulator’s website, the Kanto finance bureau today added JET Option to its warning list and cited that the binary options broker lacks registration in the country.
Binary options are treated as financial derivative instruments under the Japanese law. The “yes or no” bets were popular in the country for many years and also highly regulated. Further, the Japanese financial authority that regulates a monthly report, which aggregates the volumes of regulated Japanese operators, to show how the market is faring.
In addition, investors are able to check on the Japanese Financial Services Authority (JFSA) website to confirm if a company is registered and regulated in the country. Kanto’s list, however, features names of unauthorized investment services providers targeting Japanese investors.
As JET Option hasn’t obtained the necessary authorization in Japan, the country’s watchdog made it to the warning list. Of note, JET Option offers binary options with expiration times as short as 30 seconds. This type of bets isn’t legal in Japan and runs against local regulations which prohibit offering such short-term binary options.
Registration is required in principle
JET Option has either made solicitations or offered services online in Japan and/or in Japanese while not being permitted to do so. Japanese customers of these firms are not afforded the protections available to customers of firms properly licensed and regulated in the country.
The firms on may have regulation in other jurisdictions, but this is not sufficient as no such passports are recognized, and firms need to also obtain JFSA authorization to do business in Japan.
This was the case with some CySEC-regulated brokers, such as Infin Markets which is already a fully regulated brokerage in Cyprus. However, while the broker is regulated with the Cyprus Securities and Exchange Commission, it is not registered in Japan and does therefore not have the permission to conduct business in the country.
Finally, the agency noted that the information used in was obtained from solicitation materials, and therefore may be inaccurate.