The Brazil Securities Commission (CVM) Board rejected a revised proposal for a settlement undertaking (Termo de Compromisso) submitted by IQ Option LLC in Administrative Sanctioning Proceeding PAS 19957.006709/2021-81. The decision followed the Term of Commitment Committee’s conclusion that accepting the agreement would not be timely or convenient, including due to a renewed legal impediment identified by the CVM’s specialised federal attorney’s office and indications that the alleged irregular conduct may have continued. IQ Option, a foreign-incorporated entity, had previously had a settlement proposal rejected in November 2022 amid concerns over the seriousness of the alleged misconduct, signs of irregular offers to Brazilian residents and possible continuation even after a CVM stop order, and the relevance of the case for assessing the CVM’s extraterritorial competence. The March 2023 resubmission increased proposed amounts and included commitments on investor reimbursement and obtaining CVM-required authorisations and licences, but the legal barrier was again upheld and the committee cited, among other factors, Article 86 of CVM Resolution 45 and the lack of new elements to overturn the earlier reasoning. The proceeding, opened by the Superintendence of Market and Intermediaries Relations, examines alleged unauthorised public offering of securities intermediation services and securities (including derivatives) to Brazilian residents, distribution without authorisation and offer registration, and fundraising for investment with unjustified retention of invested amounts. With the settlement rejected, the allegations remain to be examined in the CVM Board’s merits judgment in the administrative sanctioning proceeding.

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