Binary options banned in Poland permanently by the Polish Financial Supervision Authority

Polish financial supervision, the Polish Financial Supervision Authority (KNF), today decided (ie 25 June 2019) to introduce a ban on binary options offered to retail clients. The changes include not only Polish brokerage houses, but also all financial institutions operating on the territory of Poland, including those that they own "just" notification of the PFSA.

Be sure to read: What are binary options?

Binary options without a future

Option instruments were banned by European ESMA regulator on July 1, 2018. Recently, there have been rumors that ESMA wants to end the extension of product intervention (according to the law, it was only possible to introduce temporary restrictions for a period of 3 months with the possibility of extension). However, the necessary condition was changes on the part of regulators introduced at the national level to the once popular "binaries".

The Commission unanimously decided, on the basis of MiFIR, to completely limit binary options for retailers. This means that the regulations have been implemented at the national level in the same shape as it had been for less than 12 months.

The full wording of the KNF decision taken on 25 June this year. along with the justification will be published in the Official Journal of the Financial Supervision Authority and will come into force on 2 July this year. The PFSA decision will be indefinite. The official message is located on the regulator's website here.

No surprise

The KNF's decision is nothing shocking. Binary options have long been equated with a high risk of losing money, which was confirmed by all the statistics. These instruments were more often compared to a "gambling" tool than an investment tool (read: Trading on options - Gambling or investment?). Recently, similar decisions have been taken by regulators of other Member States, including yesterday by Italians.

At the present moment there are no known changes that will prevail in Polish law and will cover the Forex market and CFD instruments. In one from the last announcements of the Chamber of Brokerage Houses (full text in PDF), representatives of the institutions requested to refrain from the decision until a decision was taken by the Cyprus regulator CySEC. There is not much time left.