14. A particular feature of binary options acting as a significant driver of potential detrimental consequences and exacerbating the disparity between returns for investors and the risk of loss is the conflict of interest that exists between many providers of binary options and their clients. However, some firms provide binary options that are fully hedged against market risk throughout their terms. Where such hedging activity relates to the provision of a binary option and is carried out by the provider or by another entity in the provider's group, and if no profit or loss is made on the binary option by any of the group entities other than previously disclosed commissions, transaction fees and related charges, the conflict of interest between the provider and client is significantly reduced. In particular, the net profit derived from the binary option is not substantially determined by whether it pays out or not. Hedged providers are not incentivised to misreport underlying prices or to speculate against the client.