The Polish Financial Supervision Authority (KNF) said yesterday (Monday) that its review of how contracts for difference are offered remains active. The watchdog has not disclosed a timetable or possible measures.
For XTB, the regulatory question reaches the core of its earnings mix. Chief Executive Officer Omar Arnaout said in February that CFDs generate about 95% or more of revenue, although the broker wants to reduce that share to about 70% through products including spot crypto and equities.
"Work in this area continues. We will report the conclusions once it is complete," Jacek Barszczewski, KNF's communications director, told Polish financial news site Strefa Inwestorow.
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Review Has No Public Timetable
Barszczewski's response extends a regulatory thread that surfaced publicly in May. KNF Chairman Dariusz Adamski said then that the regulator was reviewing how domestic and cross-border firms offer CFDs, including how they test clients' knowledge, experience and understanding of risk.
Adamski said access to complex, high-risk instruments was too easy and should be restricted for investors who do not understand the risks. KNF has not since published a consultation paper, draft rule or implementation date.
The review follows a PLN 20 million (about $5.5 million) penalty imposed on XTB in March. KNF cited deficiencies in client knowledge assessments, target-market controls and risk disclosures.
The regulator said the conduct covered parts of 2022 and 2023. Its findings included the scoring of questionnaire answers and the identification of an appropriate target market for CFDs.
KNF also objected to a list highlighting high-performing clients. It said the presentation could give a misleading view of CFD risk and that commercial relationships with people on the list created conflicts of interest.
XTB requested reconsideration of the decision, which means the fine is not final. The appeal gives the broker a formal route to challenge KNF's findings while the wider review proceeds separately.
XTB Diverges From Its Benchmark and Peers
XTB shares closed 4.1% lower at PLN 169.18 on Monday. They traded at PLN 164.56 by late morning Tuesday, down another 2.7% and nearly 7% below Friday's close.
The WIG20 index declined 1.1% Monday and another 0.4% by the same Tuesday snapshot. Across the two sessions, XTB underperformed the Warsaw benchmark by about 5.2 percentage points.
The Monday move was not repeated by four listed European brokers. Plus500 gained 1.0%, IG Group rose 0.8%, CMC Markets advanced 4.4% and Swissquote added 1.0%.
Their businesses and regulatory exposures are not identical, although the divergence suggests the selloff was not a sector-wide move. Plus500, for example, is expanding round-the-clock trading beyond its traditional CFD business.
There is no direct evidence that Barszczewski's comment caused the decline. XTB had climbed 61.6% between July 1 and its August 12 close, which also left room for investors to take profits.
Spain Shows the Possible Reach of Intervention
Strefa Inwestorow reported that Spanish restrictions are among the solutions being examined. KNF has not publicly said it will adopt Spain's model, and Barszczewski's statement did not identify any preferred jurisdiction or measure.
Spain's National Securities Market Commission (CNMV) adopted a broader retail distribution regime in 2023. It restricts mass advertising, sponsorships and sales calls.
The Spanish rules also cover free or nominal-cost training, some incentives linked to CFD marketing and credit-card funding for these products.
Those rules go beyond the European Union's existing leverage caps, margin close-out requirements, negative balance protection and standardized risk warnings. The European Securities and Markets Authority (ESMA) also reminded firms this year that some perpetual futures fall under CFD restrictions.
For now, KNF has neither proposed Spain's measures nor set a timetable for finishing its review.
