Poland’s financial regulatory body, the Polish Financial Supervision Authority (KNF), is following in the footsteps of several other European regulators, making the ban on binary options permanent from next month.
The KNF’s binary options ban will consist of a “prohibition on the marketing, distribution or sale of binary options to retail investors,” according to a press release.
The move comes as the watchdog exercises expanded powers to crack down on products it sees as damaging to domestic traders. The new measures will go into effect a week from the date of publication, namely on July 2, 2019.
The regulator stated said that it was concerned with how these inherently high-risk speculative products are offered to retail investors.
FBS Has Added New Pharma Stocks with Intense Growth RatesGo to article >>
“Taking into account the characteristics of binary options, the PFSA considered them as speculative instruments, similar in their construction to betting and gambling. This means that investing in them is burdened with a very high risk of incurring losses by retail clients,” it said.
Game over for binary options in Europe
The KNF said the prohibition would apply to brokers operation in and from Poland, and thus goes further by including both local dealers and those operating under the European passport regime.
The new rules created by the KNF are similar to those taken by the Dutch and UK financial regulators which have already rolled out a permanent ban on retail selling of binary options in the last two months, while similar measures are underway in other countries. The UK FCA, however, went one step ahead of its European counterpart by applying the new rules to securitized binary options as well, which were excluded from the ESMA prohibition.
These restrictions were supposed to be temporary, but an increasing number of European decided that the best way forward was rolling out a permanent ban, as binary options were seen merely gambling products dressed up as financial instruments.