KNF report on price slippage on Forex platforms

The Polish Financial Supervision Authority issued a document explaining the process of executing orders on the Forex market with particular attention to price slippages. In our opinion, it is a must read for all traders, regardless of experience. A great step by the Polish Financial Supervision Authority towards increasing awareness and educating investors. What does the KNF report on price slippage contain?

KNF report

The document consists of 8 pages and thoroughly describes a number of basic issues related to the way orders are executed by brokers. The report focuses in particular on those operating in Market Maker model. It is also a definition of the types of transaction execution that we encounter in the Forex market - Market and Instant.

READ NECESSARY: What are the price slips resulting from?

The types of price slips (with examples and graphics) - symmetrical and asymmetrical - that occur on the Forex platform are explained in detail.

source: UKNF report on price slips

Investor's rights

Technical explanation is not enough. The KNF Office also explains what rights the client has in relation to obtaining information about the execution of their orders. The rights relate to information on the time of an execution transaction in relation to the average execution time of other investors. According to the document, the KNF guidelines, which entered into force at the end of September 2016, oblige brokers to explain all deviations from the adopted standard.

The report reads, among others:

In accordance with the provisions set out in Guideline No. 8, the investment firm is obliged to inform the client about the time the order was executed by the investment firm in typical standard conditions of functioning of the Forex market. The investment firm should also describe in detail any deviations from the specified standard order execution time so that the customer can verify the legitimacy of the order execution in a longer time than the standard one.

and:

The customer has the right to receive information about the time of his order, compare it to the standard time of the order by the investment company, and then check whether the resulting deviation from the standard execution time was eligible.

We sincerely hope that this is not the end of educational activities on the part of the KNF Office. We believe that in the future we can expect more, equally substantive and interesting reports on the Forex market.