XTB loses appeal on $2.2M fine imposed by Polish regulator
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The Polish Supreme Administrative Court (NSA) has dismissed the cessation appeal motion filed by XTB. The appeal pertained to the decision made by the Polish Financial Supervision Authority (KNF) to fine the broker PLN 9.9 million, equivalent to more than $2.2 million, in 2018.
Polish court upholds a $2.2M fine filed by XTB
The fine against the broker by the KNF accused the company of failing to comply with the Polish Financial Instruments Trading Act on providing brokerage services without serving the client’s best interests.
The regulator said that between January 1, 2014, and May 31, 2015, the broker enabled the transmission of execution losses to its clients via asymmetric price slippage. The broker also generated profits from profitable price movements. The manner in which the broker operated showed they fulfilled orders when the slippage benefited them. Clients failed to get any price enhancement when the orders were executed at a favorable price.
The regulator also said that XTB used a delay parameter for some clients under the observation of the Trading Department. This resulted in a suspension of order execution for clients within the timeframe specified under the parameter.
XTB has accepted the verdict saying, “in connection with the judgment of the Supreme Administrative Court, which upheld the verdict of the Warsaw Administrative Court dismissing our complaint against the decision of the KNF, we declare that, even though we consider it to be unfair, we recognize it and thus end our battle concerning the revocation of the KNF’s decision.”
XTB’s 2022 financial performance
XTB published its preliminary quarterly results around one month ago. These results showed that the forex and contracts-for-difference (CFD) brokerage platform listed on the Warsaw Stock Exchange had a notable profit drop during the last quarter of 2022.
The company also reported an annual revenue increase, which dropped compared to the previous quarter. According to the official numbers, the company’s revenue for the last three months of 2022 amounted to PLN 216.7 million, equivalent to around $49 million. The figure dropped almost 45% from the PLN 391.3 million reported in Q3 2022.
The financial results show that the last quarter of 2022 was the worst-performing period for the company during the year. In the first quarter of 2022, XTB reported revenues of PLN 439.8 million, while it reported revenues of PLN 396.4 million during the second quarter.
The CEO of XTB, Omar Arnaout, analyzed the company’s performance in 2022, the growing client numbers, and other developments in the company. According to the executive, the company saw healthy growth in Q4 2022 regarding operations.
Arnaout said that during this financial period, the company handled one of its largest marketing campaigns since the company’s inception. The marketing efforts enabled the trading platform to attract more than 50,000 new clients while it generated the highest quarterly volumes. Arnaout also said that market conditions during the year were unfavorable, leading to a profit decline.