Those of You Considering Forex Trading in Poland Should Read our Guide to PFSA Forex Brokers
Those of you considering investing in Forex trading would be wise to consider PFSA regulated brokers. Choosing a broker to facilitate your trading is one of the most important decisions you’ll have to make. All over the world, there are people embarking on a Forex trading career, and picking a regulated broker is rarely given the attention it deserves. Any time you spend deliberating your options will be time well spent and pay dividends in the long run. An unregulated broker is generally going to promise big profits, but there is little recourse available should things go wrong. So who is responsible for regulating the services of Forex brokers in Poland?
The PFSA and the regulation of Forex brokers in Poland
The official regulator for financial markets in Poland is the Polish Financial Supervision Authority (PFSA). In Polish, it is known as the Komisja Nadzoru Finansowego (KNF), and it is responsible for supervising banking, capital markets, pension schemes, insurance, and electronic money institutions. It was established in 2006, following legislation which was passed in the same year relating to the supervision of the financial markets. It took over the work of the Insurance and Pension Funds Supervisory Commission and the Securities and Exchange Commission. These authorities were abolished as part of the provisions of the 2006 legislation. The PFSA is an entity which is publicly funded and serves as the point of contact and watchdog for all areas of the financial market in Poland. One of its more recent roles has been to ensure Polish banks remain healthy during the recent global banking crisis.
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A recent regulation has been introduced by the PFSA for regulated brokers
In July 2015, the PFSA decided to change the rules for PFSA Forex brokers, in relation to leverage. During the previous year, the supervisory authority spent considerable time looking at the way financial institutions conducted business. It was prompted to take this course of action following a review of customer performance in 2013. The review highlighted a problem, in that more than 81% of Polish Forex brokers were realizing losses in their accounts. And a number of industry experts cited excessive leverage as the underlying cause. The KNF at first thought about capping leverage at 50:1, but eventually ended up by restricting leverage to 100:1. Some PFSA regulated brokers are imposing this restriction on Polish residents, and overseas brokers are also applying the limit to Polish account holders.
Choosing PFSA regulated brokers will provide the best protection
Wherever you might live in the world there will be local rules and regulations governing trading on the financial markets, along with all providers of related services. It’s important for you to understand the level of protection this regulation provides. And also to appreciate how the legislation serves to prevent fraudulent activities. The rules and regulations are generally accessible, although for some regulatory bodies this doesn’t necessarily mean they will be in English. All regulatory bodies will also have a website you can use to check a broker’s credentials. The roles of the PFSA (KNF) include:
- Working to ensure regular operation of the financial market in Poland
- Developing the financial market and improving its competitiveness
- Informing and educating all participants in the financial market
- Drafting acts in relation to financial market supervision
- Enabling amicable and conciliatory settlement of disputes that may arise between consumers and PFSA regulated entities
Looking for a top Forex broker in Poland? Choose one that is PFSA regulated
There are a number of things you should consider when looking for a Forex broker in Poland. First and foremost, you should be looking for one that has been licensed by the PFSA. You’re in a fortunate position as Poland is one of the EEA member states. This is because a broker that has a license from another EEA country will also be able to offer its services in Poland too. This is called passporting rights and provides you with a much wider choice of Forex broker. However, there are a number of other factors you should bear in mind. For example:
Customer service – Being able to trade Forex is a blessing but the fact it is internet based is bound to cause a few problems. At which point it will be reassuring to know the broker’s customer support is outstanding. You need to have a point of contact 24 hours a day, at the very least during the trading week, to help get you back on track. There is going to be little point in a customer support service that isn’t available when you need it, even if its the middle of the night. Being forced to wait until the following trading day could mean you miss an important trade.
Factor costs into your trading plan – There isn’t a broker in the world that offers a service for nothing. Some factor cost into the spread, while others charge a commission, either as a percentage or a flat rate fee.
Choice of trading platforms – you’re going to find a large majority of brokers use MetaTrader 4. It is by far the most popular trading platform for brokers and traders. However, there are a number of others and some brokers offer a trading platform of their own development.
Withdrawals – There is no point in Forex trading if you aren’t able to withdraw your profits. Your PFSA Forex broker may make depositing funds really easy, but what about taking it out again? It’s important you choose a broker offering easy access to your funds, preferably as low cost as possible.
Social trading – This form of trading has become very popular recently. So why not consider a Forex broker in Poland offering a social trading option?
Regulation – We’ll mention it one last time before we finish because it’s considered to be the most important factor to bear in mind. Choosing an unregulated broker will leave you at much greater risk of being scammed or falling victim of fraud. Or possibly losing all your funds because the unregulated broker has disappeared with all the money.