24Option received an order to stop financial securities operations in Italy this week. According to the country’s securities regulator Consob, the company was banned from non-compliance with specific regulations.
Consob’s decision also prevents the Cyprus-based company from soliciting customers and providing investment services in the country.
The watchdog clarified that the broker violated Article 7-quarter, paragraph 4 of the Consolidated Law on Finance. IT also violated article 86 of Mifid2, which allows CONSOB to stop EU brokers from operating in the region.
Several investors complained to Consob, describing irregularities in their services related to Contracts for Differences (CFDs). 24Option also used financial instruments the regulator restricted against.
Prior to the restrictions given, the broker had been one of the largest and longest-running binary options brokers. They started focusing on CFDs and Forex markets in 2018.
24Option in 2016
Consob prohibited 24Option from trading in Italy last 2016. The company reportedly wasn’t able to comply with professional obligations, forced to cease accepting new clients.
Thus, according to the regulator, 24Option didn’t provide the correct information in the best interest of its customers. In compliance with Article 62 of MiFID, the regulator prohibited movements caused by negligence and dishonesty.
The ban took effect on August 1, 2016. The broker was only allowed to put existing clients on liquidity and withdrawal mode.
In response, 24Option took measures to remedy the situation by marketing trading products only available in France.
A year later, the online brokerage company left the binary options industry to pursue CFDs and Forex markets. The strategic shift outlined the broker’s focus on additional resources on compliance and updated registration.
The firm focused on marketing its new brand ambassador, Alpesh Patel, for partnership and education efforts. Patel is a renowned analyst and former columnist at the Financial Times and Bloomberg.