The Polish Financial Supervision Authority (PFSA or KNF) is tightening its focus on the way contracts for difference (CFDs) are sold to retail clients in Poland, including by brokers operating on a cross-border basis. The regulator's deputy chairman, Dariusz Adamski, outlined the approach in an interview with the daily Parkiet published last week, marking the most detailed public comments from KNF leadership since the authority imposed a record penalty on brokerage house XTB in March.
KNF confirmed it is currently analyzing how CFD products are offered by both domestic brokers and entities serving Polish clients from abroad. The review centers on how firms assess investors' experience, knowledge and understanding of the risks associated with CFDs, and whether these processes comply with MiFID standards. Adamski did not identify any specific firms now under review, but his remarks indicated that the framework used in the XTB case will guide broader supervisory action.
In March, KNF fined XTB PLN 20 million (approximately $5.5 million) for breaches of MiFID II rules related to CFD onboarding, the largest penalty the regulator has ever imposed on a Polish brokerage house. KNF found that between January 2022 and September 2023 XTB used client questionnaires that did not adequately measure customers' experience with complex financial products. The authority also concluded that XTB had failed to define target groups for its CFD offerings and did not sufficiently disclose the risks associated with these products.
Adamski drew a clear distinction between complex and simple financial instruments when asked whether KNF would relax the MiFID suitability test for retail investors. He stressed that complex products such as CFDs require rigorous suitability assessments and cannot be treated like games of chance. "The capital market cannot function like gambling," he told Parkiet, adding that investing should rely on informed decisions, a proper understanding of risk and the goal of building long-term value for investors and the broader economy.
According to Adamski, KNF intends to apply its rules on investor protection with equal weight to firms that book Polish clients from outside Poland. At the same time, the regulator plans to ease onboarding requirements for simpler products, including shares, bonds, UCITS exchange-traded funds and standard fund products. KNF believes entry procedures for these instruments can be simplified without undermining investor protection, although legislative changes will be required to make such simplifications permanent.
The ongoing review of CFD distribution practices, combined with the precedent set by the XTB decision, signals a more stringent supervisory stance on how Polish retail investors are introduced to complex leveraged products. The outcome is likely to shape how both domestic and cross-border brokers structure their onboarding processes and risk disclosures in the Polish market.
