Forex Trading in Poland and PFSA Forex Brokers

PFSA logoBefore you start worrying about which currency pairs to trade in, you are going to need to find the best Forex broker. It’s not the easiest of choices, and often one that is not given the attention it deserves. Perform a simple online search with the words “best Forex brokers in Poland” and you’ll get hundreds of hits. Should you pick the one at the top of the page, or look a little further down the list? It doesn’t matter which ones you go for, but you should always be wary of those that make no mention of regulation. The Forex industry isn’t regulated on a global scale, but generally left in the hands of local regulators. Those of you looking to trade Forex in Poland should be looking for PFSA-regulated brokers.

What is the PFSA, and how does it relate to Forex brokers in Poland?

PFSA stands for the Polish Financial Supervision Authority. It is known as the Komisja Nadzoru Finansowego (KNF) in Polish, and is the official body with responsibility for the supervision of capital markets, the banking sector, insurance, pension schemes, and electronic money institutions.

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Legislation was passed in 2006 that led to the creation of the PFSA, taking over the responsibilities of the Insurance and Pension Funds Supervisory Commission and the Securities and Exchange Commission. These two bodies were no longer needed following the passing of the 2006 law.

As a publicly funded body, the PFSA serves as a watchdog for all areas of the Polish financial markets, as well as acting as a point of contact for consumers. Recently it has made the financial news by restricting the levels of leverage offered to traders by Forex brokers. This has been one of the ways it has helped Polish banks to stay healthy during the global financial crisis that occurred recently.

PFSA regulated brokers are hit with leverage restrictions.

The PFSA hit the financial news in 2015 with plans to change the rules for PFSA Forex brokers. The changes were prompted by a review conducted by the Authority into how financial institutions were conducting their business. It was forced to make the review following the highlighting of poor customer performance in 2013. Also uncovered was the fact that more than 81% of Polish Forex brokers were realising losses. It was thought by a number of experts that the underlying cause was excessive leverage.

Initially, it was decided to cap leverage at 50:1, but the PFSA changed its mind, and a figure of 100:1 was eventually agreed on. A number of PFSA Forex brokers have already altered leverage for Polish residents, along with overseas brokers who are also imposing the restriction for Polish clients.

How you can get the best protection by choosing a broker regulated by the PFSA

All over the world, there are various regulatory bodies that are responsible for imposing rules and regulations to govern local financial services. Those of you living and trading in Poland are going to be interested in the level of protection this Authority provides. It will also help you to understand how the legislation will prevent fraudulent activities; because let’s face it, you have probably heard one of the many stories relating to Forex scams. It is possible to find the rules and regulations by visiting the relevant authority’s website, but you may find that some of them aren’t in English. Here we’re interested in Forex brokers in Poland, though, so let’s introduce the role that it plays:

Choose a PFSA Forex broker, but don’t forget some other very important features.

When the time comes to look for a Forex broker there are a number of important features you should bear in mind. Obviously, the first feature is whether a broker is regulated by a recognised regulatory body. And as you are living in Poland you can benefit from passporting rights provided by MiFID. MiFID allows a broker regulated by an EEA member country to offer its services across all member states. Other factors to bear in mind include the following:

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