Bonus deposit is now illegal
CySEC and ESMA prohibits brokers from providing deposit bonus :
The Cyprus Securities and Exchange Commission (CySEC), which regulates and gonerns majority of the Binary Options Brokers has released a circular which prohibits Brokers from offering deposit bonus to traders. Clients had to fulfil to some strict bonus conditions which included trading 30-40 times the value of the bonus in order to be able to withdraw the funds. Many traders lost their money trying to achieve huge trading volume after availing bonus.
The Cyprus Securities and Exchange Commission (CySEC) has finally banned the brokers form providing Bonus vide circular C168.
The “Deposit bonus” was a tool used by brokers to promote and attract customers. It used to varry from 10% to 100 % of the deposit amount and some times even more than that. If the client deposits $1,000, the broker will add up to $1,000 the client’s account as a BONUS.But there was usually a catch – the client only gets to withdraw money after receiving a bonus (beyond the amount which the client actually deposited) after achieving certain volume of trading which is usually 30-40 times of the bonus deposit. A client who has availed $1,000 bonus has to achieve trade volume of $40,000 to be eligible for fund withdrawal.
The ads used by many brokers often don’t not disclose properly (or at all) the restrictions on receiving a bonus.
CySEC has been receiving large number of client complaints centered around deposit bonuses. It has has finally issued the circular banning the Bonus deposits.
The European Securities Markets Authority (ESMA) had also issued a similar notification restricting the use of bonuses by retail forex and binary options brokerages.