Of late we have been receiving questions from many affiliates asking us to elaborate on the issue of promoting forex or binary options in the US. The reason behind this being a piece of US legislation that most forex and binary options affiliates are not aware of. This legislation, refered to as the Dodd-Frank act has been making waves within the forex trading community.
So the question is whether it is safe or legal to promote forex or binary options in the US.
What is the Dodd-Frank Act?
The Dodd-Frank act has been in the making for over a year.. The Dodd-Frank act makes it illegal for US residents to trade on forex or binary options brokers that are not regulated/licensed by CFTC or NFA, two leading financial regulatory authorities. Besides the above, the Dodd-Frank act has also made major changes to the way spot metals are transacted and lays some criteria for Introducing brokers as well. Read a more detailed article about the Dodd-Frank act.
Why am I still being told the contrary?
It has come to our attention that there are yet still a few rogue brokers, especially in the binary options trading arena that do not take the Dodd-Frank act seriously. The implications for this can turn out to be quite disastrous sooner or later as and when the US authorities will being to crackdown on such rogue brokers. While it might not affect the forex or binary options affiliate, the outcome of the above could result in various factors such as your affiliate commissions not being cleared at the very least.
I still get US traffic, what should I do?
There is no harm in getting US traffic to your forex or binary options affiliate website as long as you clearly mention that the forex broker or binary options trading platform that you are promoting does not accept US based traders. Some of the brokers also have IP tracking that automatically blocks US based accounts from signing up. The problem only lays with the forex brokers or binary options trading platforms that ignore the legislation.
Are there any forex brokers that CAN accept US traders?
There are quite a few forex brokers as well as binary options trading platforms that are regulated by the US financial governing bodies. Some of them include FXCM, Forex.com, Interbank FX and Nadex for binary options. There aren’t that many to be honest and this is due to the strict procedures put in place and furthermore some of the brokers don’t offer a affiliate program in the first place.
If not US traffic, what else?
Don’t get disheartened by the above legislation. Besides the US there are lots of other markets that are yet to be untapped. Markets such as French, Italian, Japanese are hotbeds for binary options trading. And if you aren’t yet promoting to those markets then it is time to do so. From a forex perspective, Europe is a massive markets and forex affiliates have the choice to pick and choose the markets they wish to promote to. Given the number of regional markets just within Europe, a good regional strategy can go a long way to establish yourself a good forex affiliate business model.