The Brazilian Securities and Exchange Commission (CVM) has issued a warning to the public today against Cyprus-regulated broker IronFX. The watchdog informed traders that the firm is not licensed by the local authorities to acquire customers residing in Brazil.
The regulatory pronouncement was made today as a Declaratory Act published in the CVM Official Gazette. The Brazilian declaration also mandates the immediate suspension of any public offering of investment opportunities by IronFX in the forex market, directly or indirectly. As the watchdog specifically focuses on the access to the broker’s homepage (www.ironfx.com) and not to any Brazil specific site or landing page it will require IronFX to block access from all IPs in the country to comply.
IronFX is further warned that if it does not comply with the declaration , the company will be subject to the application of daily fine of R $ 1,000 ( about $285 USD) without prejudice to the responsibility for violations already committed before the publication of the Declaratory Act, with the imposition of the penalty applicable under the law. The very low daily fine does not seem as anything that can deter any company in a market as big as Brazil but IronFX does have an office in Sao Paulo and the watchdog might take legal actions to shut it down if the company does not comply.
This is not the first time that the international broker faced a similar situation in Latin America. In March 2014, IronFX has been accused of operating and promoting its products without proper authorization in Colombia, raising allegations from the Financial Supervisory Authority of Columbia (SFC), via an SFC manifest.