The Israeli government on Sunday adopted a draft law banning the country's firms from selling binary options to clients abroad, after widespread complaints of fraud.

The move comes a year after authorities in Israel banned the sale of binary options to Israeli citizens.

The draft law is to be submitted to the Knesset, or parliament, where it must pass three readings.

The bill also bans the sale by Israeli firms of financial products if the trader carrying out the transaction is not licenced in the country where the client lives.

The chairman of the Israel Securities Authority, Shmuel Hauser, said the sale of binary options was causing huge economic harm to people around the world, and "encouraging anti-Semitism".

Avishai Mandelblit, a government legal adviser, welcomed the adoption of the draft law saying, it was targeting "criminal acts".

Israel has had the lion's share of companies doing brisk business selling binary options, with 15,000 employees handling hundreds of millions of dollars.

In the past few years, binary options have become very popular, allowing investors to buy and sell online in the way of gamblers, betting on currency fluctuations, commodities or shares.

Transactions are usually short-term, and investors sometimes only have minutes to decide, for example, if the price of the dollar against the euro will go up or down.