XTB, an internet-based investment platform, has announced that the recent amplification of restrictions by Spain’s securities regulator on the promotion, distribution, and trade of contracts for difference (CFDs) instruments has only had a “limited” impact on its operations. The Polish multi-product broker noted that there have been no “noteworthy changes” in its rate of attracting new customers due to these updated regulations.
In July, Spain’s National Securities Market Commission (CNMV) unveiled intentions to introduce additional regulations in two phases, intended to curtail the marketing of CFDs, with the rules becoming effective on July 20, 2023. The CNMV’s rationale for these extra rules is grounded in the reality that about 75% of retail investors are still encountering losses on their CFD investments despite prior regulatory measures.
Consequently, the revised restrictions entail a prohibition on marketing endeavors aimed at retail clients or the general public. This involves tactics encompassing the use of sales agents, call centers, or software providers to solicit investors.
Furthermore, these regulations are oriented towards furnishing heightened safeguards for investors. They mandate that providers of specific “leveraged products,” encompassing futures and options, close one or more open positions of a retail client when the value of those positions falls to half of the initial margin, among other protective measures.
XTB, in a communication directed toward its investors, has expressed appreciation for these new rules, emphasizing that they will help enhance the local market by addressing unfair practices that have cast an unfavorable light on the industry’s standing. The brokerage anticipates that these regulations will serve to strengthen its position in the Spanish market, particularly considering the limited product offerings of its competitors.
The Tactical Shift
XTB clarified that the impact of these regulations on its operations has been relatively minor, given that the company hasn’t been actively involved in advertising CFDs in Spain for nearly two years. Rather, its recent marketing efforts have primarily focused on promoting stocks and providing educational resources. Despite this, XTB has already implemented specific adjustments to its websites, social media strategies, partner collaboration approaches, and customer payment methods in alignment with the enhanced regulations.
The brokerage has also underscored that its marketing approach for the Spanish market will experience only subtle adjustments. It conveyed its plans to initiate a significant advertising campaign in early 2024, centered around its innovative approach to communicating with clients.
