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This stems from the fact that they do not have a clear grasp on how the Eurozone market even works. The MiFID was designed to increase consumer protection as well as to integrate the various financial markets into a single market. It should be duly noted that Cyprus is in full compliance of the MiFID, under the Investment Services and Activities and Regulated Markets Law 144(I) of 2007.
We need to consider that binary options are a recent financial innovation so there is little to no legal framework with which regulators can work.