The Polish Financial Supervision Authority (KNF) said its review of how contracts for difference (CFDs) are offered in the market remains ongoing, without providing a timetable or details on potential measures. The regulator’s communications director, Jacek Barszczewski, stated that work in this area continues and that conclusions will be reported once the process is complete.
The review has significant implications for XTB, whose business model is heavily dependent on CFDs. Chief Executive Officer Omar Arnaout said in February that CFDs generate about 95% or more of XTB’s revenue. The broker is seeking to reduce that share to about 70% by expanding into products such as spot crypto and equities.
KNF’s ongoing examination follows a PLN 20 million (about $5.5 million) penalty imposed on XTB in March. The regulator cited deficiencies in how the firm assessed clients’ knowledge, controlled target markets and disclosed risks related to CFDs. According to KNF, the conduct under scrutiny covered parts of 2022 and 2023.
Among its findings, KNF pointed to issues with the scoring of questionnaire answers used to gauge client knowledge and experience, as well as shortcomings in identifying an appropriate target market for CFDs. The watchdog also objected to a list highlighting high-performing clients, arguing that such a presentation could give a misleading view of the risks associated with CFD trading.
Market reaction to the regulatory developments has been negative for XTB shares. The stock closed 4.1% lower on Monday and traded down another 2.7% on Tuesday, leaving it nearly 7% below Friday’s close.
The current review fits into a broader pattern of KNF scrutiny of how domestic and cross-border firms offer CFDs. The regulator has been examining how firms test clients’ knowledge, experience and understanding of risk when providing these leveraged products. Spanish restrictions on CFD offerings are among the solutions being studied, although KNF has not publicly indicated that it will adopt Spain’s model.
With the review still in progress and no clear timeline disclosed, the regulatory outlook for CFD providers in Poland, including XTB, remains uncertain. Any eventual conclusions or measures from KNF are expected to focus on tightening requirements around client suitability assessments, target-market definitions and the presentation of risk.
