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Brazil's CVM warns of forex brokers OctaFX, Forexent

Oct 12 2017
By
Jonathan Smith

The Brazilian Securities Commission (Comissão de Valores Mobiliários – CVM), has warned against two unregulated forex brokers OctaFX and Forexent.


 

According to the publication, neither of them is authorized to provide services on trading in securities in Brazil.


 

OctaFX is an offshore forex broker based in Saint Vincent and the Grenadines. It used to be regulated by UK's Financial Conduct Authority (FCA), but not anymore. It is not regulated by SVG's Financial Services Authority, either. Our check revealed that the site octafx.co.uk, which was of the FCA-regulated entity, now redirects to octafx.com of the SVG company.


 

The case with Forexent is a bit more complicated. It is owned by the company G44 Forexent International FZC, which is registered in the UAE. It, however, does not seem to be properly regulated. The broker offers money management trading accounts of the PAMM type and claims to be a partner of Swissquote and the Dubai-based CFMerchants. Swissquote is a well-established, reliable and properly regulated broker, however CFMerchants does not appear to be regulated neither by the Dubai Financial Services Authority, nor by any other regulator.


 

Generally, investing through PAMM accounts is fairly risky, especially with an unregulated company like Forexent.


 

The regulation of the forex industry and the financial markets in Brazil is carried out by two entities: the Central Bank of Brazil and the Brazilian Securities Commission. The c-bank is responsible for the regulation requirements and overseeing the activities of the local banks. On the other hand, the CVM is responsible for ensuring the proper functioning of over-the-counter financial markets and exchanges, the protection of securities holders and consumers against fraud. The CVM is also has the jurisdiction to investigate and punish irregularities on the market.


 

Despite being an attractive market, due to the tight regulation, there are only a handful of licensed forex brokers operating in Brazil, one of them being Saxo Bank. There are also licensed commercial banks offering such services.
 

TAGS: brazil  cvm  warning  octafx  forexent 
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