Binary options will be banned in Poland by the KNF

Everything seems to indicate that the temporary ban of the ESMA European regulator will be transformed into an indefinite period of the Polish Financial Supervision Authority. The domestic regulator informed ESMA that it intends to prohibit binary options in Poland and received a positive opinion of such a solution.

KNF just boasted its idea. The statement reads, among others:

"The opinion of ESMA was issued in connection with the notification of the Financial Supervision Commission of 27 February 2019 submitted to ESMA and members of ESMA, in which the PFSA announced its intention to take product intervention measures in accordance with art. 42 Regulation (EU) No 600 / 2014 (MIFIR). The planned product intervention measures of the PFSA relate to the prohibition on the marketing, distribution and sale of binary options to retail clients in Poland and from the territory of Poland. The KNF informed in the notification to ESMA that the product intervention measures of the KNF will be the same as ESMA's product intervention measures regarding binary options adopted in ESMA Decisions No. (EU) 2018 / 795, (EU) 2018 / 1466, (EU) 2018 / 2064 and (EU) 2019 / 509 ".

PFSA: there will be no binary options in Poland

The message clearly indicates that the KNF has decided to copy the ban issued by ESMA. However, it was only temporary. He assumed that the marketing, distribution and sale of binary options to retail clients throughout the European Union is not allowed. The ban was in force from last year's July. 2 will be permanently in Poland from 2019 in July.

ESMA wanted to protect investors for three months

The temporary product intervention introduced by the ESMA regulator was originally to apply for three months.

"The ESMA ban on the marketing, distribution and sale of binary options to retail investors is a response to our significant concerns about the safety of traders in relation to the characteristics of this financial product" - said in July 2018 year Steven Maijoor, chairman of ESMA.

Then the ban was regularly extended and there are many indications that it will not be withdrawn anymore, although it is still formally temporary.

The United Kingdom also prohibits binary options

A few days earlier binary options have also been banned in the UK.

“Binary options are gambling products that imitate financial instruments. By maintaining our ban, we want to ensure that investors do not lose money over such a defective product. " - said Christopher Woolard, Executive Director of Strategy and Competition at FCA, the British financial supervision.

What are binary options?

It is a kind of betting on the direction in which the price of a given asset will change. It can be a commodity such as oil or gold, a currency pair, a stock index or a stock price. If the direction was set correctly, you could earn tens of percent more on them than, for example, on the Forex market. However, the risk was huge - the mistake ended with the loss of all capital. That is why binary options were more common referred to as gambling, not an investment. Especially that with the time their turnover began to be interested in dishonest brokers and there were many abuses and frauds in this market.