French AMF Slaps €300K Fine on Polish Broker XTB
- The broker is yet to decide if it wants to appeal against the decision.
The Sanctions Commission of the French financial markets regulator, the Autorite des Marches Financiers (AMF), has issued a warning against X-Trade Brokers (XTB) and also imposed a penalty of EUR 300,000 on the broker for breaches of its professional obligations in France.
XTB is a Poland-headquartered broker and operates in France by passporting its Polish license. According to the regulator’s announcement, the breaches were made under the activity of XTB’s French branch between November 2013 and February 2020.
Major Breaches
The Commission penalized the broker for three major breaches: shortcomings in service promotion, lapses in customer experience questionnaire, and for not disclosing a technical incident on the Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term.
According to the Commission, the broker disregarded promotional restrictions by distributing certain commercial banners to non-professional clients. In addition, the broker failed to include proper risk disclosure of CFDs trading on several Google ads.
Moreover, the Commission found that the questionnaires related to its French customers’ trading knowledge and experience were incomplete. It detailed that the calculation algorithm associated with this questionnaire could not determine if the customer had sufficient knowledge to understand the risks of margin trading.
On top of that, the broker made incorrect client categorization changes, thus violating the restrictive measures imposed by the European Securities and Markets Authority (ESMA) and AMF for the marketing, sale and distribution of CFDs.
Additionally, the Commission found contradictions with the general conditions of XTB France. The broker failed to inform its French clients about a technical incident that impacted the proper Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term of orders.
However, the Polish broker has the right to appeal against the penalty imposed by AMF Sanctions Commission.
"XTB would like to emphasize that it has implemented a fully open communication policy by making every effort to provide reliable and transparent information to the AMF during the entire control process," XTB wrote in a statement shared with Finance Magnates. "XTB has received the official information from the AMF and is currently analyzing the regulator’s decision in order to determine future steps in this matter."
Meanwhile, the Polish counterpart of the AMF recently added Dublin-based Avatrade to its warning list, stating that the broker is ‘not registered in Poland’.
The Sanctions Commission of the French financial markets regulator, the Autorite des Marches Financiers (AMF), has issued a warning against X-Trade Brokers (XTB) and also imposed a penalty of EUR 300,000 on the broker for breaches of its professional obligations in France.
XTB is a Poland-headquartered broker and operates in France by passporting its Polish license. According to the regulator’s announcement, the breaches were made under the activity of XTB’s French branch between November 2013 and February 2020.
Major Breaches
The Commission penalized the broker for three major breaches: shortcomings in service promotion, lapses in customer experience questionnaire, and for not disclosing a technical incident on the Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term.
According to the Commission, the broker disregarded promotional restrictions by distributing certain commercial banners to non-professional clients. In addition, the broker failed to include proper risk disclosure of CFDs trading on several Google ads.
Moreover, the Commission found that the questionnaires related to its French customers’ trading knowledge and experience were incomplete. It detailed that the calculation algorithm associated with this questionnaire could not determine if the customer had sufficient knowledge to understand the risks of margin trading.
On top of that, the broker made incorrect client categorization changes, thus violating the restrictive measures imposed by the European Securities and Markets Authority (ESMA) and AMF for the marketing, sale and distribution of CFDs.
Additionally, the Commission found contradictions with the general conditions of XTB France. The broker failed to inform its French clients about a technical incident that impacted the proper Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term of orders.
However, the Polish broker has the right to appeal against the penalty imposed by AMF Sanctions Commission.
"XTB would like to emphasize that it has implemented a fully open communication policy by making every effort to provide reliable and transparent information to the AMF during the entire control process," XTB wrote in a statement shared with Finance Magnates. "XTB has received the official information from the AMF and is currently analyzing the regulator’s decision in order to determine future steps in this matter."
Meanwhile, the Polish counterpart of the AMF recently added Dublin-based Avatrade to its warning list, stating that the broker is ‘not registered in Poland’.