Despite the negative reaction from the European Securities Markets Authority (ESMA) to the Polish proposal to allow leverage as high as 1:100 for some qualified retail traders, the national regulator the Komisja Nadzoru Finansowego of Poland (KNF) decided to go ahead with its plans.
KNF justifies its decision with the growing number of traders seeking offshore brokers, which offer virtually unlimited leverage.
This however is yet another example of the political alienation of the Polish government from the common European policies.
According to the ESMA guidelines brokers should offer retail traders leverage no higher than 1:30 with forex transactions and 1:20 with other CFDs.
Now the KNF adopts a new category of “experienced traders”, who will be allowed to trade with leverage as high as 1:100.
One of the ESMA arguments not to divide retail traders to experienced and beginner ones is the fact that there is simply no proven statistics that experienced traders lose less money.
According to its new rules KNF will allow leverage as high as 1:100 with all forex pairs, gold and major stock indices, namely FTSE 100, CAC 40, DAX30, DJIA, S&P 500, NASDAQ Composite, NASDAQ 100, Nikkei 225, ASX 200, and EURO STOXX 50.
The rules apply to all brokers offering CFDs in Poland.