The Polish Financial Authority (KNF), during a session held on 1 August 2019, based on MiFIR regulations, made a unanimous decision on introducing additional requirements applicable to entities offering CFDs to retail clients. Regardless of ESMA’s criticism, KNF decided to introduce a new category of investor called an experienced retail client and increase the level of leverage up to 100:1 for selected instruments. Below we present full text of KNF’s decision.


CFDs are derivative financial instruments where cash settlement is dependent on price changes, level or value of a specific base instrument (e.g. a currency, stock, index) when a contract is pending. A person investing in CFDs relies primarily on leverage which allows for generating profit, but at the same time may incur significant losses exceeding the invested funds.

The limitations introduced by KNF require that a CFD broker should provide retail clients with:

  1. protection of initial margin, i.e. application of leverage specific for a particular type of investment;
  2. protection by means of closing a position – a CFD broker is obliged to close a client’s transactions generating the most significant losses should the balance of funds deposited into the account fall below a specified level;
  3. negative balance protection, i.e. preventing a client from incurring losses that exceed the value of deposited funds;
  4. access only to materials about and advertisements of CFDs that contain a relevant warning against risks related to investing in CFDs, and
  5. a CFD broker is not allowed to offer any financial or non-financial bonuses aimed at encouraging clients to invest in CFDs.

The introduction of the additional requirements described applicable to entities offering CFDs to retail clients is designed to reduce exposing them to significant losses that result from investing in the derivatives mentioned above. With regard to protection of inexperienced investors, KNF agreed with the arguments brought up by ESMA.

As part of KNF’s decision, an additional category of an experienced retail client has been introduced. In order to obtain the status of an experienced retail client (a written application must be submitted), all of the conditions listed below must be met:

  • a retail client has, within the last 24 months:
  1. opened transactions on CFDs with the nominal value being at least the equivalent in PLN of EUR 50,000 each, with the frequency of at least 10 opened transaction within four quarters; or
  2. opened transactions on CFDs with the nominal value being at least the equivalent in PLN of EUR 10,000 each, with the frequency of at least 50 opened transaction within four quarters; or
  3. opened transactions on CFDS with the total nominal value being at least the equivalent in PLN of EUR 2,000,000 each, provided that a client has opened at least 40 transactions per quarter within four quarters;
  • a retail client has relevant knowledge of derivatives, including CFDs, confirmed as follows:
  1. by obtaining relevant professional certificates, particularly in the following areas: Investment Adviser, Stockbroker, Chartered Financial Analyst, Financial Risk Manager, Professional Risk Manager, ACI Dealing Certificate, ACI Diploma, or relevant specialist education, or
  2. by participation in training sessions of at least 50 hours, on derivatives, including CFDs, confirmed by obtaining relevant certificates issued following a verification of knowledge by competent entities conducting training sessions, within the last 12 months; or
  3. by confirmation that a client is or was engaged in activity or work under a contract of employment or other contractual relation as a basis for performing a function, for at least a year, in a position that requires professional knowledge related to opening transactions on CFDs or other derivatives.

An experience retail client may be offered CFDs with a higher level of leverage, however, the remaining limitations will still prevail. A CFD broker may apply a minimum initial margin of 1% of a CFD’s nominal value, when the base instrument is:

  1. a currency pair,
  2. one of the following stock indices:
  • Financial Times Stock Exchange 100 (FTSE 100);
    •    Cotation Assistée en Continu 40 (CAC 40);
    •    Deutsche Boerse AG German Stock Index 30 (DAX30);
    •    Dow Jones Industrial Average (DJIA);
    •    Standard & Poors 500 (S&P 500);
    •    NASDAQ Composite Index (NASDAQ),
    •    NASDAQ 100 Index (NASDAQ 100);
    •    Nikkei Index (Nikkei 225);
    •    Standard & Poors / Australian Securities Exchange 200 (ASX 200);
    •    EURO STOXX 50 Index (EURO STOXX 50);
  1. GOLD.

This decision applies to all entities that offer CFDs in Poland, i.e. investment companies, banks, branches of foreign investment firms and credit institutions, as well as cross-border entities operating based on the freedom of services principle.

The impact of KNF’s decision related to the limitations on the offering of CFDs to retail clients upon the domestic market involving those derivatives will be subject to ongoing monitoring. On that basis, KNF will conduct an analysis of the implications of that decision not later than within 12 months from the enforcement of the imposed limitations and will make relevant adjustments.

A full text of KNF’s decision together with accompanying justification will be published in KNF’s Official Journal one day after its publication. KNF’s decision has no time limits.


Comparic Group, with its team of top experts in financial markets and operating the widest range of financial, investment and business media in Poland, will be happy to assist you in entering the Polish market or launching your services in Poland. Feel free to contact us at redakcja@comparic.pl, tel. +48 731 244 014.

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