The Forex market, just as it was the case with other simple and easily accessible financial instruments, has had a booming development with the computer and Internet technologies. The Polish financial sector was no different than the rest of the Europe, with many Forex brokers in Poland offering the trading services and many traders and enthusiasts moving into the world of Forex. Smaller countries are especially favoured by Forex companies because they offer many advantages to newly established businesses.
The Economy of Poland
Poland is definitely the dominant economy in Central Europe and ranks 6th in the EU. It is defined as a high-income liberalized economy which develops and grows steadily. Poland also managed to successfully circumvent the global economic recession of 2008/2009 which hit the majority of the world. One of the reasons was Poland’s low public debt and a large internal market. Poland’s employment rate has been fluctuating for years, constantly dropping and increasing. Still, in recent years, the unemployment rate is lower than the EU’s average, and Poland is even struggling with labour deficit. When it comes to foreign investments, Poland is highly ranked as one of the most desirable destinations for investments. The government supports international investments by offering tax reduction on corporate incomes, as well as competitive land prices and other benefits. Poland provides a sound and healthy environment for broker companies who are looking for well-regulated and tidy markets with a viable potential for large customer-bases.
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The PFSA Regulation
In 2006, the Polish Financial Supervision Authority (also known as KNF, in Polish: Komisja Nadzoru Finansowego) was established by the Polish government to administer and supervise banking, insurance, and electronic money institutions. It came into being as sort of a merger and took up obligations of SEK (Securities and Exchange Commission) and IPFSC (Insurance and Pension Funds Supervisory Commission). The agency is publicly financed and serves as a governmental watchdog, actively regulating the market by policymaking and enforcing the laws, authorizing the financial companies, monitoring the different aspects, and finally advising the traders about the Forex brokers in Poland through different input channels. The main duties of PFSA include ensuring regular operation in the financial markets, as well as providing assistance for the market’s development. It is also in charge to educate and distribute information on market conditions. The PFSA also participates in drafting legislation connected to the non-banking financial sector, and manages dispute settlements in the most harmless way possible. As other regulatory agencies, the PFSA tries also to foster the confidence in the financial market, to boost the Polish economy, protect consumers and market participants, ensure transparency and competitiveness of the market, etc. One thing all EU markets have in common is that they have to comply with EU legislation. When it comes to the financial markets, the MiFD directive is the main backbone of all other individual regulations in the member states.
Application Procedure
If a broker wants to apply for a PFSA license, the following is required:
a.) Data on members of the management board or the board of directors (in dependence of the organizational structure), as well as details on the members’ qualifications,
b.) List of shareholders, including subsidiaries with information on how much is owned by whom,
c.) Articles of association, organizational structure, internal audit procedures,
d.) Information on applicant’s previous activities and the required minimum substantial capital provided.
Forex Brokers in Poland
The Forex brokers in Poland are regulated in high fashion and in accordance with all the best European and world trading standards, through a fully authorized government regulatory body. The Polish Financial Supervision Authority acts as both policymaker and the enforcer, actively providing protection to the Polish traders joining the PFSA regulated brokers. The brokers thus provide a high standard of service in quality platforms with good conditions when it comes to liquidity, reliability, and spreads. It can be said that the PFSA thus uniforms the market and protects the traders with a good regulatory framework with proper legislation and remedy powers. All EU Forex traders have the luxury to trade under the same or similar conditions in the entire EU, and yet peek into a different market. The Forex market in the EU can even be regarded as a universal capital market where the rules are identical for all market participants. Therefore, if traders trust the EU system and the MiFD regulation, they can practically trade from anywhere in the EU without major concern about their safety and protection. The EU still gives some space to individual countries to manage their legislation, but at the end, the legislation has to comply with the superior EU laws and directives. Also, the consequences for violating the EU legislation are in place, which gives traders the security to trust the Forex companies on EU soil. Top Forex brokers in the EU may choose to register wherever they want and they still have the same obligations and bear the same consequences (if need be). It is exclusively their preferential choice and which system they like. Registering with the PFSA, they gain the benefits of tax exemption, perhaps lower registration fees, and workforce costs.