We hope to gain more traction from US brokers as this progresses. The Japanese products are aligned with the US options, the only difference is that Japan still allows brokers to be market makers.On discussing whether other regulatory jurisdictions may follow the United States in restricting binary options trading to exchanges, Mr Rosenblum considers this very unlikely: I dont think other jurisdictions will do the same as the United States because the regulatory structure is completely different. In America, every trade must go through an exchange, and market making by individual binary options companies is illegal. I do not see any reason for the EU or Japan to act on this basis. We do see something happening in Japan at the moment whereby the time windows in which an option can be executed will be restricted, but market making is still legal.For this reason, as a technology company, we built our offering to appeal to the Japanese market, where binary options trading is very popular. We have made developments to our offering which are in accordance with the new regulations effective July 17, when we will announce and present the product to the brokers.Finally, when considering the value of going into America with an exchange-compatible system, Mr Rosenblum concluded: For us, the exchange environment is interesting. Not only will the software and trading experience be different for those who have not operated in America before, but the brokers themselves will also have to adapt, it will be different. Adaptability is the key to survival.Mr Beinart explained to Forex Magnates: The choices that stand are that binary options companies can either become an exchange and compete with us, or they can become a broker and act as an agent on the exchange for their clients in a similar way to how it works in the stock market.When asked whether a sudden dramatic interest in NADEX could come about due to it being an established venue that can facilitate legal entry into the US market for so many binary options brands, and with the software companies already looking at compatibility, Mr Beinart considers the potential change in operating method to be not an easy task: The only legal way to operate in the US is to come to NADEX, as off-exchange binary options are illegal.I sincerely hope that the companies which want to offer these products will come to us. Whether they will or not I do not know, as this would requires dramatic change in their business model said Mr Beinart. The US model is that if you are providing services to retail investors, everything must be exchange listed.According to Mr Beinart, there is an opportunity for binary options software providers to offer a solution that is US compatible. They can then concentrate on marketing and then direct order flow to exchange. There is room for this, but it will require a very different business model to be adopted he said.When a contract settles on an exchange, the settlement process is transparent Mr Beinart explains. It is a contract, with member A on one side, member B on the other. If someone questions the prices, a report can be sent to the client along with the calculation. We are required by the CFTC to make sure that we are transparent and that our settlement prices have a formula with which we can demonstrate how we arrived at that figure.Functionality differs from that of off-exchange binary options in terms of the trading experience offered to clients insofar as that placing trades through an exchange allows traders to close positions before the market settles. A lot of up/down binaries dont allow this, as a fixed option with a fixed expiry time is often provided. This difference makes the exchange traded option a real trading product. If you see the price move, you can sell at any time Mr Beinart explained.NADEX is an open exchange which can accommodate individual members who wish to set themselves up as market makers. If someone thinks they are a really good trader, they can become a member of the exchange and trade individually, or even set up as a market maker said Mr Beinart.This entails being at the exchange at certain times, providing a two-sided market which is of benefit to the market maker because it makes the fees lower than if an occasional trader. We are required to provide an even playing field. If you want to be a market maker, you can. Business is conducted on an equal access basis.The dialog within the industry appears to indicate that the options available to the management teams of companies in this sector are indeed binary either abide by the law and restrict service to certain jursdictions only, or the method in which these instruments can be traded must evolve to meet the needs of the ever toughening international regulatory structure.Is it possible to use a non-USA based exchange Like an exchange in the EU, HK, Japan, etc Futures brokers can offer this for futures contracts and I think options as well. This may be another way to comply with USA regulations demanding exchange-traded options to retail clients.Finance Magnates is a global B2B provider of multi-asset trading news, research and events with special focus on electronic trading, banking, and investing.Copyright 2015 Finance Magnates Ltd. All rights reserved. For more information, read our terms and conditionsIn the world of binary options, a client to broker match is often the most vital. While new traders often assume that all trading platforms are the same, it just isnt true. Some brokers are tailor made to larger investors, some to beginners, and some are to be avoid altogether.