The new law on the Forex market will spit out debut takers

Today, an act enters into force to provide better protection to participants of the Polish Forex market. This is the result of several phenomena that could be observed in recent years.

No more ringing fusions

The amendment primarily introduces key changes relating to entities that can provide services related to marketing and customer acquisition for brokerage houses. The case became extremely high-profile. It started with the sale of customer databases by several unethical Forex brokers to other institutions - pseudo-brokers and companies providing call center services for them. This sparked an avalanche of phone calls to customers who have ever even set up a demo account with their real contact number. Some noted after several dozen phone calls during the week with offers regarding recommendations, opening an account or soliciting investments in debuts on ... Forex platforms, which in fact never had anything to do with debuts.

Be sure to read: Why (not) invest in company debuts with Forex brokers

We have informed you about this procedure in the above article. Unfortunately, many of the unconscious threats of people have been manipulated and promises of an easy, certain profit.

Everything has backfired on the entire Forex industry. Companies operating completely ethically and according to the letter of the law, which have all the necessary licenses and permits, have suffered from this. As a result of the Forex guidelines introduced by the Polish Financial Supervision Authority in September, they had many more obligations, while the companies operating illegally remained intact. Hence the idea for the next steps. According to the KNF Office, the purpose of the changes is to "civilize" the Forex market.

KNF spokesperson:

“The only entities authorized to perform such activities will now be only investment firms or agents of the investment firm. The purpose of the introduced regulations reported by the PFSA Office is to terminate the activity of unsupervised entities which, through direct contact, persuaded investors to use brokerage services ”.

It also adds:

“Persons persuading clients to invest in the Forex market who do not meet the new requirements will violate the provisions of the Act and will be subject to criminal sanctions. Information provided by such persons has often been unreliable or intentionally misleading only for the investor to contribute as much money as possible. The amendment to the act should allow for the elimination of the phenomenon of the so-called + aggressive, insistent marketing + on the Forex market ”.

Web sites will be blocked

This is not the end of changes. At the beginning of April, the PFSA Office submitted to the Ministry of Finance a draft amendment to the Act on supervision of the financial market. The amendment adds provisions that will allow blocking websites of entities that offer services related to the Forex market without the appropriate authorization (and thus those on the list of public warnings). They are also expected to increase fines for offering financial services without the required licenses.

Forex is risky

The effect of the introduced changes is also published statistics on the losses incurred by customers (by the way, would it not be fair to publish similar statistics on the stock market?). NIK report published in mid-March says that losses on the domestic FX market amounted to PLN 2,1 billion over 4 years. KNF statistics report that 79% of traders recorded a loss in 2016 ... You could go on and on, but with such information you had to expect a specific reaction.