Polish KNF Seeks Traders’ Feedback on 100:1 Leverage

The Polish Financial Supervision Authority, popularly known as KNF, is conducting a survey to gather feedback on the traders’ sentiments with the performance of the brokers and the offered services.

“The impact of product intervention in the case of CFDs on the domestic market of these derivatives was subject to constant monitoring in order to assess the effects of the introduced restriction,” the KNF noted.

Out of the 15 questions on the survey, the most highlighted one is the regulator’s interest in known traders’ opinions on the higher leverages offered by the locally regulated brokers.

“Have you started investing or have you returned to investing in CFDs with a Polish broker as a result of the increase in Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term on some underlying assets that occurred from August 2, 2019?” the survey questioned.

Defying the EU Regulations

Despite the restrictions by the European Securities and Markets Authority (ESMA) on the leverages offered by the European brokers, the KNF defied the framework and allowed locally regulated brokers, offering up to 100:1 leverage on derivative some assets.

The KNF further asked the traders if their 'CFD trading performance' improved or deteriorated with the higher leverage offered by the Polish brokers following the ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term curb.

Additionally, the regulator enquired if the traders still continue to trade on “brokers outside the European Union."

“If you are currently investing in CFDs through a broker from the European Union (including Polish), are you considering opening an account with a broker/brokers from outside the European Union?” the regulator asked.

The traders can participate in the survey throughout December, and the inputs will be gathered anonymously.

Though local regulators, like KNF, are trying to lure traders with higher leverages, major watchdogs are in favor of reducing risks. Similar to ESMA’s framework, Australia’s ASIC is going to impose similar restrictions on the leverage of retail derivative products.