On 26 July 2019 the Polish Financial Supervision Authority published its statement on the marketing, distribution or sale of Contracts For Differences (CFD) to retail clients.
As KNF reminds, on 31 July 2019 the term of application of European Securities and Markets Authority Decision (EU) 2019/679 of 17 April 2019 renewing the temporary restriction on the marketing, distribution or sale of contracts for differences to retail clients falls.
The KNF indicated in the statement that the institution agrees with the arguments raised by ESMA regarding the excessive risk that inexperienced retail clients might incur losses on investments in CFD. The Authority informed that the decision on the determination of terms of offering CFDs to retail clients should be made at the next meeting of the KNF Board.
KNF emphasized that under EU legislation and the Polish laws concerning the offering of CFDs, providers of such financial instruments are required to act in the best interest of clients. Therefore, the Authority expects that starting from 1 August 2019—by the effective date of the KNF Board’s decision—CFD providers operating and offering their services in Poland will be taking into account the rules defined in ESMA Decision 2019/679, subject to the terms of the measure adopted by the authority competent for such providers. The same rules should be applied to CFD providers established in Poland that provide their services on a cross-border basis in other EU Member States (through a branch or under the freedom to provide services), unless a decision on investing in CFDs is in force in the relevant Member State.
We read in the statement that the CFDs offered to retail clients in that period in accordance with the rules laid down in the above-mentioned ESMA Decision or the rules set by an authority competent for the relevant CFD provider will be treated by the KNF as a reliable professional practice consistent with the principles of fair trading and as acting in the best interest of the clients.
