The leverage increase reports claim that the Polish national regulator, the Komisja Nadzoru Finansowego (KNF), have gone ahead to relax the leverage to go as high as 1:100 for some retailers that qualify.
This decision came after the European Securities Markets Authority (ESMA) had tried to dissuade the Poland authorities from doing so. Prior to this, the KNF had made the proposal to a panel of the ESMA of its plans to allow some brokers offer such high leverage. This, in contrast to the recommended average of 1:30.
The ESMA had looked into the argument that the reason why this proposal was made was to stop traders who were in the habit of seeking offshore brokers who offered limitless leverages. After deliberating, it was decided that KNF should carry on with the already in place mandates: brokers are to offer retail traders leverage no higher than 1:30 with forex transactions and 1:20 with other CFDs.
However, increasing the growing political alienation of the Polish bodies from European entanglements, the KNF proceeded to go the opposite direction. The ESMA has stated that it is yet unproven that new traders suffered more losses than experienced ones. This means that the idea that only experienced traders are allowed this new leverage does not still make it a wise move.
The new mandate by the Komisja Nadzoru Finansowego (KNF) will allow this leverage on all forex pairs, gold and major stock indices like: FTSE 100, CAC 40, DAX30, DJIA, S&P 500, NASDAQ Composite, NASDAQ 100, Nikkei 225, ASX 200 and EURO STOXX 50. It is to be followed by every broker that offer CFDs in Poland.
This report does not however mean that the rules on compensation has changed. Also, it does not give lenience to unregulated brokers. KNF still remains one of Europe’s foremost forex regulating authorities.