New KNF Polish Forex regulation will limit maximum leverage


Ministry of Finance in Poland has proposed the amendments to the Polish Forex Law. The new KNF Polish Forex regulation will limit maximum leverage.

13 July, AtoZForex Polish financial regulatory officials have taken another step towards stricter Forex regulation. This time, the Polish Financial Supervision Commission (KNF) has introduced the new regulatory framework for Forex brokers in regards to the leverage, available for clients. The regulator sets out the new leverage standard, with the reduction of the leverage to a maximum of 1:25.

New Polish Forex regulation will limit maximum leverage

The Polish Ministry of Finance presented a draft "Act amending the Act on the supervision of financial markets ." The document comprises proposals for amendments to regulations on the Forex market. This among other things, limiting leverage for retail traders of this market. The new KNF Polish Forex regulation will require all of the Forex brokers in Poland to follow the broader mandate to publicly alert investors about any activity without authorization.

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Such drastic step from the Polish financial regulators highlights their intentions to follow the best regulatory practices. The watchdog’s efforts signal the lifted emphasis on the protection of the investors’ community. Also, it places the Polish Forex regulations on par with other countries.

In the recent times, Polish regulators have been very active in supervising the Polish Forex market. The regulatory bodies were imposing stricter penalties for brokers with no regulation. The latest attempt to advance the transparency of the Polish Forex market, the KNF has cut the maximum leverage available for retail Forex clients. In fact, the previous maximum leverage stood at 1:100 with a margin of 1 percent. The new Polish Forex regulations reduce the maximum leverage to 1:25, with a margin of 4 percent.

How will New KNF Polish Forex regulations impact the market?

Additionally, the KNF has stated that it will set up the new mechanism for external judicial control. The mechanism will allow the watchdog to coordinate with other telecommunications services providers. In this way, the regulator will be able to obtain any relevant information in regards to the brokers with no registration.

Also, the Polish financial regulator will have more powers in terms of alerting investors’ community about the potential investment scams. The regulator will be able to include the names of the firms in a special public domain list. This will be possible even without any notice of a suspected crime being released. The KNF states that as long as the safety of Polish investors is at risk, it can include the name of the suspicious firm in the list.

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