The Polish Financial Supervision Authority (KNF) said on Monday that its review of how contracts for difference (CFDs) are offered in the market remains active, without providing a timetable or indicating potential measures. The regulator’s stance carries particular weight for XTB, whose earnings are heavily reliant on CFDs.
XTB Chief Executive Officer Omar Arnaout said in February that CFDs generate about 95% or more of the broker's revenue. The company aims to reduce that share to about 70% by expanding products including spot crypto and equities. Any regulatory changes affecting CFDs could therefore have a material impact on the firm’s business mix.
"Work in this area continues. We will report the conclusions once it is complete," KNF communications director Jacek Barszczewski told Polish financial news site Strefa Inwestorow. He did not specify when the review might conclude or what form any regulatory action could take.
The ongoing review follows a PLN 20 million (about $5.5 million) penalty imposed on XTB in March. KNF cited deficiencies in client knowledge assessments, target-market controls and risk disclosures, relating to conduct in parts of 2022 and 2023. The watchdog’s findings covered how questionnaire answers were scored and how an appropriate target market for CFDs was identified.
KNF also raised concerns over a list used by XTB highlighting high-performing clients. The regulator said the presentation could give a misleading view of CFD risk and that commercial relationships with individuals on the list created conflicts of interest. XTB has requested reconsideration of the decision, meaning the fine is not yet final.
Market reaction has been negative. XTB shares closed 4.1% lower at PLN 169.18 on Monday. By late morning on Tuesday, the stock traded at PLN 164.56, down another 2.7% and almost 7% below Friday’s close. Over the same period, the WIG20 index declined 1.1% on Monday and a further 0.4% by the same Tuesday snapshot, indicating XTB’s underperformance relative to the broader market.
Strefa Inwestorow reported that Spanish restrictions are among the solutions being examined in the KNF review. However, KNF has not publicly stated that it will adopt Spain’s model, and Barszczewski’s comments did not identify any preferred jurisdiction or regulatory measure under consideration.
