XTB, an online investing platform, has said that the Spanish securities regulator’s expanded restrictions on the marketing, distribution and sales of contracts for difference (CFDs) instruments have had a “minor” impact on its operations. The Polish multi-product broker noted that it has not seen “any significant changes” in its rate of customer acquisition as a result of the new rules.

Spain Tightens the Screws on CFD Marketing

In July, the Spanish regulator, the National Securities Market Commission (CNMV), disclosed that it expects its two-part additional rules to limit the marketing of CFDs to come into effect on July 20, 2023. The watchdog explained that the extra rules became necessary as approximately 75% of retail investors still suffer losses on their CFDs investments despite previous restrictions.

As a result, the new restrictions ban marketing practices aimed at retail clients or the general public. This includes the use of sales agents, call centres or software providers to recruit investors, Finance Magnates reported.

Furthermore, the restrictions sought greater investor protection by requiring providers of certain 'leveraged products' such as futures and options, to close one or more of a retail client’s open positions when the value of the positions is reduced to half of the initial margin, among other measures.

XTB Says It's Business as Usual

However, XTB in a note to its investors, welcomed the new rules, noting that they “will help clean the local market of unfair practices that negatively affected the image of the entire industry.” In addition, the broker believes that the new rules will help to further strengthen its market position in Spain as the product offerings of its competitors are limited.

“We have not conducted advertising activities related to CFDs in Spain for almost two years; hence, the impact of the new regulation on XTB’s operating activities is assessed as minor,” XTB explained. “In recent years, our marketing activities in this market have focused primarily on the promotion of the stock offer and educational activities.”

Nonetheless, XTB said it has already made certain changes to its websites, social media activities, principles of cooperation with partners, and payment methods offered to customers, in line with the additional rules.

Moreover, the Polish broker noted that its marketing strategy for the Spanish market “will not change significantly.” “At the beginning of 2024, we are planning a large advertising campaign related to our new concept of communication with clients,” XTB added.

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