French AMF Imposes €300,000 Fine on Polish Broker XTB

The Autorité des Marchés Financiers (AMF), France's top financial regulator, announced that it has fined X-Trade Brokers (XTB) €300,000 for breaches of its professional obligations in connection with the activities of its French branch.

According to AMF, between November 2013 and February 2020, XTB proposed to its clients to subscribe to contracts for difference (CFD) via trading accounts, through its branch in France (XTB France) acting within the framework of order execution for third parties.

The regultaor mentioned that the broker had breached the prohibition on sending promotional messages concerning the provision of investment services relating to certain financial contracts such as CFDs to clients who were likely to be retail clients. In addition, the broker failed to include proper risk disclosure of CFDs trading on several Google ads.

The commission also found that XTB France's questionnaire to assess the client's knowledge and experience was inadequate and that the calculation algorithm associated with this questionnaire did not make it possible to determine whether the client or potential client had the level of experience and knowledge required to understand the risks inherent in the product or service being offered.

It also found that the branch had circumvented the restrictions imposed by the European Securities and Markets Authority (ESMA) and later by the AMF on the marketing, distribution or sale of CFDs to retail clients, by making incorrect changes to the categorisation of clients.

Moreover, AMF found that XTB France, contrary to its general terms and conditions, had not informed its clients of a technical incident on its platform, although this incident constituted a material difficulty relevant to the proper carrying out of orders.