XTB, a retail brokerage in Poland, continues to feel the pinch of the recently-implemented regulations from the European Securities and Markets Authority (ESMA), as the firm has reported a drop in revenues in the first quarter of 2019.

This Thursday, the Polish broker published its preliminary financial results for the first quarter of 2019. In the report, the company revealed a 4.4 percent or PLN 1.9 million ($492,851) decline in revenues quarter-on-quarter, as it fell from PLN 42.8 million in the final quarter of 2018 to PLN 40.9 million.

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As highlighted by the Polish firm, the product intervention measures from ESMA weighed heavily on the results for the first quarter, which contributed to lower volatility and customer engagement.

Currency Trading Falls in Q1 for XTB

Breaking down revenues in terms of instrument classes, revenues on contracts-for-difference (CFD) instruments based on currency pairs amounted to 1.1 percent of total revenues in the first quarter of this year. This is a significant drop from the same time period last year, as revenues for currency pairs contributed 29.2 percent to revenues.

Out of all the currency pairs, unsurprisingly, the EUR/USD currency pair was the most popular for XTB clients. According to the broker, this is because the pair had more predictable trends and the market moved within a limited price range. During the quarter, revenues generated from currency CFDs was PLN 433,000.

The biggest CFD class of instrument to contribute to revenues was CFDs based on stock indices. Overall, the instruments contributed a significant 89.3 percent to revenues, up from 57.5 percent a year earlier.

Revenues were particularly driven by demand for CFD instruments based on the German DAX stock index (DE30) and the US indices US500, US100 and US300, the statement said.

Looking at the full year, the report said: “The Management Board expects in 2019 operating expenses to be at a level comparable to that observed in 2018. The final level will depend on the variable remuneration elements paid to employees, the level of marketing expenditures and the impact of ESMA’s product intervention on the level of revenues generated by the Group.”