24option profits from forex pivot amid new ESMA regulations

New ESMA regulations have had a deep impact across Europe, and especially in Cyprus, where trading is particularly popular. But those that are well prepared for changes are already positioned to capture new opportunities

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Although 24option started out in the binary market, the company quickly realised that regulators were targeting the field, and so it refocused its efforts on forex and CFDs instead

In March, the European Securities and Markets Authority (ESMA) rolled out a series of significant regulatory changes, including a ban on the sale of binary options to retail investors and greater restrictions on contracts for differences (CFDs). Consequently, the industry in Cyprus – a major player in the European trading scene – has felt the impact.

Small trading outfits are now seeking opportunities to either consolidate or sell part of their operations. Meanwhile, according to Marios Chailis, Vice President of Marketing at 24option, there has been a great deal of uncertainty, as some firms simply cannot afford to shift their operations to full compliance while maintaining a sustainable business.

Well-established and larger businesses, on the other hand, are seeing this transition as the key to unlocking new opportunities in the long term. These firms are better positioned to support themselves and provide services to their clients in a way that is fully compliant and sustainable.

Among these more established operators is 24option, a subsidiary of the Rodeler Group, which was established in 2012. Although 24option started out in the binary market, the company quickly realised that regulators were targeting the field, and so it refocused its efforts on forex and CFDs instead. European CEO spoke to Chailis to find out how 24option is dealing with the new regulations while maintaining client satisfaction.

Why is it so important for trading platforms to be proactive when adapting to regulatory shifts?
Regulators do not announce things out of the blue. The moment we realised they had negative views of certain products – or of the way they were marketed – we wanted to ensure that we did not find ourselves burdened with a product that was no longer relevant in a new regulatory environment.

So we decided to be proactive and react early. We gave up the binary business – despite being one of the pioneers in that industry – as we knew it did not sit well with regulators.

Has 24option’s decision to expand globally created any challenges?
To be honest, our expansion efforts haven’t really created many challenges. We have a very confident compliance team – as well as a lot of in-house experts, both in legal and financial matters – structuring everything.

Even though 24option pivoted its entire product offering from binary options to forex and CFD less than a year ago, it has grown extensively over the past few months

Also, compliance is not the only thing that has changed recently. There have been changes to almost everything – from the storage of data to online advertising platforms – and most of it transpired at the same time. We have been working extensively with our product, compliance and legal teams to make sure that we satisfy every one of these requirements.

What have been 24option’s biggest achievements so far?

I would say having the ability to identify shifts, react in time and pivot our business. We welcome the introduction of regulations that set uniform requirements across the market in order to protect clients and, at the same time, increase trader confidence. Fortunately, our shareholders recognised that change needed to happen and they embraced it.

Even though we pivoted our entire product offering from binary options to forex and CFD less than a year ago, we have grown extensively over the past few months. We’ve been very successful in attracting new clients, even though we’ve only been a major player in these respective industries for a short time.

How do you ensure your trading platform is accessible to both new traders and experienced professionals?
Ensuring that traders are increasingly informed and confident is something that we take very seriously. As such, I think there is a lot more we can do in terms of education, which is why I’m currently negotiating with content providers to supply more material to our clients.

Further, I want our website to be interactive and to offer people more opportunities to learn by granting them greater access to trading seminars, webinars and online videos – anything that can help with trading activities.

It’s true that experienced traders usually ask for things that are more technical, while less experienced traders are after fundamental aspects, like the concept of trading platforms and how markets work. As such, we work with various partners to create content that caters specifically to each group.

Trading opportunities can arise rapidly. How does 24option connect traders with the right options as quickly as possible?
There are different tools out there that notify people of market movements, so we try to provide our investors with as many as possible. We offer news and economic calendars, and we try to give traders as much information as they require. As a regulated broker, we don’t actually offer advice or tell people what to trade, but we still want to ensure that once people decide to trade with us, they can access their accounts and our trading platform wherever they are.

Cyprus has become the place to be if you want to succeed in the trading industry

We’ve put a lot of emphasis on our mobile app, which allows investors to open and close trades from anywhere with an internet connection. We ensure that our web-based trading platform is truly user friendly and provides all the information and charts that traders are usually looking for.

There are a lot of expert advisors out there too, so we don’t limit our traders; investors can access any third-party system that will help them. We are very supportive of our traders, offering them all the tools they need 24/7.

As a trading platform that has pivoted fairly recently, how does 24option convince users of its reliability?
Although we have pivoted recently, the company has a long history in the industry and we are still regulated to the same high standards as before. The fact that we have been around for a long time, and that we are prominent in our market, makes people feel confident when working with us.

We’ve been active in the industry for quite a while, so we’ve never had an issue convincing traders to trust us. There are a lot of other companies out there, but we try to emphasise our long history and regulatory standards to ensure people make the right choice when selecting a broker.

Why is Cyprus such an attractive destination for forex brokers?
I think initially Cyprus was attractive because it was a part of the EU and the entry point to establish a firm was a lot lower than the alternatives – like London, for example. So in terms of pure cost, a lot of brokers chose Cyprus.

As the number of brokers has increased, however, Cyprus has created an environment in which the industry can thrive. Support companies have moved here – in fact, an entire industry has been developed – creating a positive feedback loop. Once it became clear that this was a growing market, more and more companies began to relocate here, so now a number of industry events are held in Cyprus. It has become the place to be if you want to succeed in the trading industry.

Aside from the old-school established financial centres that are mainly associated with the banking system – such as London, New York and Hong Kong – Cyprus is very attractive, particularly for the newer, tech-friendly and online trading firms. People now migrate from all over the world to work in this industry and share knowledge.

What are Rodeler Group’s plans for the future?
Our plan is to continue growing and penetrating new markets. We are in the process of reviewing a number of jurisdictions where we are planning to establish licensed entities.

We believe regulation to be a very strong part of the industry’s future, so we want to make sure that we are compliant in as many different markets as possible. Additionally, we are always looking to improve and expand our product offering, while customer satisfaction and loyalty remain as essential as ever.