CySEC Reminds Cyprus CIFs of Amended Forex Regulations in Poland

Current laws allow Polish authorities to slap a fine of up to $1.26 million on firms operating in the country

In a circular to its regulated investment firms (CIFs), the Cyprus Securities and Exchange Commission (CySEC) drew the attention of firms that provide investment services in Poland towards the changes to Polish laws regarding firms that are allowed to operate in the country.

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Poland’s financial regulatory body, the Polish Financial Supervision Authority (KNF), recently announced another tranche of regulation reforms pertaining to investment firms offering brokerage services in the country’s forex market. The modified provisions entered into force as of April 29, 2017.

According to the regulatory update, the only legitimate entities to operate brokerage activities will be KNF-authorised investment firms or an agent of such regulated entities, which is often a broker acting for and on behalf of the investment firm.

The KNF’s tightening also covers activities involving acquisition of retail clients, including information provided through marketing channels. The only exception allowing entities other than the approved operators to perform such activities is when the product information is offered to a broad group of prospective clients on an undefined basis.

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The KNF said that it noted increased activity of unregulated affiliates residing in the country, who attracted customers to offshore forex brokers using aggressive marketing tactics.

According to the amended provisions of the act: “Whoever, without the required authorization or authorization contained in separate regulations or otherwise authorized by the law to operate in trade in financial instruments, is subject to a fine of up to PLN 5,000,000.”

Current laws allow Polish authorities to slap a similar fine on companies that are providing financial services in the country unlawfully, up to PLN 5 million ($1.26 million). The KNF is proposing doubling the maximum fine and criminalizing such activities.

 

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