Parliamentary committee from Israel approves a bill to ban firms from selling 'binary option' bets

An Israeli parliamentary committee approved on Monday a bill to ban locally-based firms from selling “binary option” bets overseas through online trading, clearing a final hurdle before market regulators are given authority to begin a broad crackdown.

[caption id=“attachment_3472818” align=“alignleft” width=“380”] Representational image. Reuters[/caption]

Binary options involve placing a bet on whether the value of a financial asset - a currency, commodity or stock - will rise or fall in a fixed time frame, sometimes as short as a minute.

Israeli regulators say they have received many complaints globally regarding losses suffered by binary option traders. Israel had already banned the domestic sale of binary options last year, the first country to do so.

The proposed amendment to the country’s securities law, which will now be sent for a final vote in parliament, authorises the Israel Security Authority to go after groups selling their service abroad as well.

It was not clear when the final vote would take place since lawmakers are currently in summer recess.

A Reuters special report published in September shed light on the rapid rise of the industry in Israel. London-based lawyers said hundreds of their clients were duped out of vast sums of money by some Israeli firms. More than 100 operators are estimated to be based in Israel, a technology hub.