The Polish Financial Supervision Authority (KNF) has fined Warsaw-based brokerage XTB SA PLN 20 million (approximately $5.5 million) for violating MiFID II rules and investor protection regulations. The decision, issued on March 30, 2026, follows findings that XTB failed to properly assess client knowledge, define target groups, and disclose trading risks related to Contracts for Difference (CFDs).

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Misleading Information and Conflict of Interest

According to the KNF, between January 2022 and September 2023, XTB used client questionnaires that did not accurately evaluate experience with complex financial products. The firm also treated experience in simple instruments as sufficient for trading high-risk CFDs, which could expose inexperienced clients to heavy losses.

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The regulator also found that the broker provided incomplete or misleading information about CFD risks, preventing clients from making informed investment decisions.

In a Monday notice, translated to English, the regulator accused XTB of “failure to identify the target group in an appropriate and proportionate manner, taking into account the nature of the financial instrument and its complexity. The company determined the adequacy of risky and complex instruments, such as CFDs, based on clients' knowledge and experience in the field of simple instruments.”

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Additionally, its use of a “HOT list” of promoted instruments may have created a conflict of interest, as those instruments often carried wider spreads and generated higher income for the firm.

The KNF said the case shows the importance of strict compliance in marketing and selling complex financial instruments. It added that up to 80% of retail clients trading CFDs lose money, underscoring the need for accurate risk assessment and clear disclosures.

Risk Warnings and Strict Suitability Checks

Although Poland allows CFD trading, it subjects it to some of the most restrictive retail rules in Europe, reflecting EU‑level concerns about heavy losses on leveraged products.

Under the KNF’s 2019 product‑intervention decision, which mirrors ESMA ’s framework, retail traders face tight leverage caps, mandatory margin close‑out levels and negative balance protection, alongside a ban on monetary and non‑monetary incentives tied to CFD trading.

Firms must also display prominent, standardized risk warnings that spell out the share of retail clients who lose money on CFDs, making loss rates a visible part of the sales pitch rather than fine print.

On top of those product constraints, KNF layers MiFID II conduct‑of‑business rules that treat CFDs as high‑risk instruments requiring close scrutiny of who they are sold to and how.

Brokers have to carry out appropriateness and suitability checks, define and respect target markets for complex products and ensure that marketing and risk disclosures are clear, fair and not misleading, especially around leverage and the probability of rapid losses.