Poland’s law changes concerning FX brokerages to come into force on April 29, 2017
To operate as a brokerage in Poland, a company should either have authorization as an investment firm or as an investment firm agent from Poland’s regulators.
FinanceFeeds has been monitoring closely the legal changes that are set to affect Poland’s investment firms, as the Polish Financial Supervision Authority (PFSA, or KNF) is seeking to enhance investor protection and tackle the activities of unregulated companies.
Today, the KNF posted an update on its website regarding the legal amendments. The announcement says that the changes will take effect as of April 29, 2017.
The biggest change concerns the Act on Trading in Financial Instruments and specifically aims at halting the activities of unregulated entities that offer investment services to Polish residents. The amendment stipulates that to operate as a brokerage, a company should either have authorization as an investment company in Poland or as an investment company agent in Poland. This rule is set to bring to a halt the activities of entities that offer investment services on behalf of companies registered overseas and that do not have a registered branch in Poland.
The Polish regulator also hopes that the new requirement will bring to an end the practices of aggressive Forex marketing, which are often exercised by unregulated entities. The changes are also expected to terminate the activities of entities providing misleading information to newbie traders.
The law envisages fines for those who continue to offer financial instruments related services without having the proper authorization.
As indicated in previous FinanceFeeds’ reports, the Polish financial regulator will create a special online tool that will enable the swift blocking of access to websites of unauthorized firms.
Via the law changes, Poland now joins a growing number of European countries that seek to curtail activities of unregulated online trading companies. The Dutch regulator is considering a ban on advertising of “harmful financial products”, like binary options and high-leverage CFDs. Recent law changes in France already include such a ban but its effects are far from obvious at this point.
