Polish watchdog KNF adds AvaTrade to caution list

abdelaziz Fathi

Poland’s financial regulatory body, the Polish Financial Supervision Authority (KNF), today issued a public warning against Dublin-based forex broker AvaTrade, stating that the firm is not authorized to provide investment services in the country.

Headquartered in Ireland, AvaTrade Group is a provider of a full spectrum of trading instruments, including forex, stocks, commodities, cryptocurrencies and indices. The company is licensed by six independent regulators, including the UK’s FCA, BVI Financial Services Commission, Central Bank of Ireland, Japanese Financial Services Authority, Australian Securities and Investments Commission and South Africa Financial Services Board.

As such, we understand that AvaTrade’s cross border license for the provision of its services to Poland is still valid and the company already maintains its business activities in Poland.

Investment services and activities in Poland may only be provided by companies licensed by the Polish Financial Supervision Authority, or those licensed in other EU Member States under the MiFID II passporting rights.

On the regulatory front, Poland was a notable outlier from ESMA’s restrictions on risky trading products when it introduced an additional level between retail and professional status – ‘experienced,’ which applies only to clients who can prove their financial markets trading experience.

At the time, the financial regulator said that both a retail and experienced client are two quite extreme types of clients, adding that ESMA’s efforts to protect traders have done anything other than pushing business offshore.

Back in 2020, AvaTrade settled allegations by the Alberta Securities Commission (ASC) that it was operating as an unregistered entity in violation of a Canadian province’s securities laws. The settlement resolved the regulator’s concerns that AvaTrade’s BV-regulated subsidiary violated Alberta securities law by issuing and distributing these products without a prospectus.

Earlier this year, some news reports floated the idea that AvaTrade is aiming to join the rush of high-profile listings in London. At the time, sources suggested the listing at London stock market might value the Irish online trading platform between £500 and £700 million.

At the upper end of its IPO range, AvaTrade, which was founded in 2006 by Emanuel Kronitz and Negev Nosatzki, would be worth six times more than the price proposed by Playtech in 2015. The gambling software company offered to pay $105 million, but the deal failed after Ireland’s central bank opposed the acquisition.

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