One of biggest Polish retail banks, Bank Zachodni WBK, today informed clients that its brokerage arm has made a business decision to cease current operations in the field of OTC instruments (Forex / CFD). A remarkable move, as a month ago the Polish retail Forex broker HFT Brokers decided to leave the domestic foreign exchange market.
This news was announced today by DM BZ WBK, the brokerage division of WBK Bank, through a note to its clients, stating that the decision to discontinue brokerage services in the OTC derivatives has been taken as the company wants to focus on more attractive business lines.
Back in 2012, DM BZ WBK had launched its first FX product line through offering the MT4 platform to retail clients based on Integral’s ECN technology.
In today’s client’s note, DM BZ WBK informed its traders that they will be able to open CFDs transactions on forex, indices and commodities instruments only until the end of this year. At this point, clients will be only able to close existing positions up until January 20, 2017. If the clients don’t manage to close their open positions by the specified date, all open positions will be automatically closed at the available prices and the funds will be transferred to the client’s account.
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Impact of increased regulatory requirements
The move unveiled today highlights how the foreign exchange brokers in Poland are examining ways to incorporate increased regulatory demands without abandoning the whole footprint in the domestic market.
Whilst the closure of DM BZ WBK operations appears not to be driven by any regulatory matter, the suddenness of the decision is a point of interest. However, the firm clarified the matter by attributing the decision to plans to empower its brokerage services provided to the regulated markets.
More specifically, DM BZ WBK will bank on its gowning business on the Warsaw Stock Exchange, where its share of retail customers’ turnover was recently on the uptick, as well as on foreign markets, which offer greater investment opportunities, according to the company’s statement.
Under revised plans made public on Wednesday, in addition to the equity investment, the company will provide its clients with enhanced access to trade ETFs, instruments that reflect the behavior of underlying instruments such as indices, currency or commodity.
Poland witnessed a surge in banks offering FX platforms to retail and institutional investors in the last years, with FX business has been growing as an alternative investment product.