Legislation and your responsibility
Who may legally recommend securities
3 min
In most serious jurisdictions, telling other people what securities to buy or sell — for pay, or as a business — is a regulated activity. It is not a free-for-all, and the rules exist to protect the public from exactly the conflicts and frauds described earlier in this track.
The general principle
Around the world, financial regulators draw a line between:
- Sharing a personal opinion in casual conversation, and
- Holding yourself out as a professional who recommends investments to others.
The second almost always requires registration, qualification and ongoing supervision by the regulator. Doing it without authorisation is, in many countries, an offence — and following an unauthorised "advisor" exposes you to people who answer to no one.
Why this matters to a signal follower
If the person selling you signals is legally required to be registered and is not, two things are true at once: they are breaking the rules, and you have no regulatory protection when it goes wrong — no recourse, no oversight, no compensation scheme. The legal status of the person on the other end is part of your risk assessment, not a technicality.
The next lessons look at how Brazil draws these lines, then at other jurisdictions in general terms.
This content is for educational and informational purposes only and is not investment, financial, tax or legal advice. Trading and investing carry risk, including the possible loss of capital. Any performance shown by third-party tools is hypothetical and not a promise of future results. Do your own research and consider professional advice before making any decision.