Forex Trading in Poland and PFSA Forex Brokers
Before 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:
- It works to ensure regular operation of the Polish financial market.
- It informs and educates all financial market participants.
- It helps in the development of the financial markets, and helps maintain competitiveness.
- It enables amicable and conciliatory settlement of disputes that can arise between PFSA-regulated brokers and their clients.
- It drafts acts relating to market supervision.
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:
- Customer service – Using an Internet-based service for Forex trading is very convenient, but what happens when things go wrong and you need some helpful advice? A good customer support service that is available 24 hours a day is going to be a godsend, and it shouldn’t be long before you are helped to get things back on track.
- A good choice of trading platforms – There are a large number of brokers that offer MetaTrader 4, as it is by far the most popular trading platform for brokers and traders alike. However, if you don’t like MT4 or would prefer more options, look for a broker offering a range of trading platforms
- Easy withdrawals – You’ll find the Internet littered with stories of traders who can’t get to their funds, and it is often the case that the trader failed to read and understand various trading terms and conditions. You want your broker to offer easy access to your funds, and preferably with no additional costs.
- Is social trading an option? – You might want to consider social trading as an option, because it seems to have become a very popular way to participate in Forex trading.
- Don’t forget about the cost of trading – All Forex brokers make a charge for their services, either through the spread or by charging a commission. Remember to factor these costs into your trading plan.
- Regulation – The importance of this feature means it’s worth mentioning again. Choosing an unregulated broker is putting you and your investment at greater risk of falling victim to a scam.