Forex, CFDs and Foreign Exchange
Analysis of the boundaries between foreign exchange transactions, international payment services and derivatives offerings.
Foreign exchange transactions for international payments and transfers are not the same as investment offerings in Forex or contracts for difference, known as CFDs. These may involve derivatives subject to the jurisdiction of the CVM. Authorization to operate in foreign exchange or to provide international payment services does not constitute authorization to distribute investments. Likewise, registering a platform abroad does not replace compliance with Brazilian rules when its activities reach the domestic market.
The legal assessment considers who offers the product, how the public is approached, where the contracting takes place and which participants receive or move funds. It examines the regularity of the intermediation, advertising restrictions and the foreign exchange obligations related to financial flows. The work may point to limitations on, or the unfeasibility of, a particular offering model. The analysis of eFX and cross-border payments is conducted separately from the assessment of derivatives distribution, avoiding improper regulatory equivalences.
Our work
- Distinction between foreign exchange, eFX and derivatives
- Analysis of offerings and intermediation directed at Brazil
- Review of contracts and international flows
Does a foreign license authorize soliciting clients in Brazil for CFDs?
It does not replace Brazilian requirements. Offerings and intermediation directed at the Brazilian market must be examined in light of CVM rules and the specific circumstances.
Editorial review: