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FinTechs belonging to this category operate trading platforms or online marketplaces for investment opportunities or certain financial contracts – e.g. securities, factoring etc. and sometimes furthermore provide contact to financial experts and tools for the decision-making.
FinTech-signalling and social trading platforms provide users with the opportunity to exchange opinions on financial investments and offer signal providers and traders the possibility to make their securities portfolio publicly visible. This way the portfolios can be linked to and followed by other traders via the platform automatically, so that the trading and investment strategy of the followed traders can be copied.
The platform often cooperates with a financial services provider or a credit institution where both the trader and the follower hold their securities accounts, and which execute the orders both of the trader and the follower and to which the platform passes on the trading decisions.
Introduction
Attitude of the country towards trading, social trading or signalling platforms
The Polish Financial Supervision Authority is currently preparing to launch a marketing campaign to draw attention to the need for informed investing.
Social trading is an increasingly common trend on the most popular investment markets - CFDs and Forex - which the Polish Financial Supervision Authority “KNF” (Komisja Nadzoru Finansowego) has warned investors about on several occasions. The highly complex nature of CFD derivatives combined with low awareness of potential investors as well as unfair practices of some investment firms translated into high percentage of losses for Polish clients.
In 2018, KNF launched a social campaign "And who will you be when the bubble bursts?". The aim of the campaign was to draw the public's attention to the risks associated with investing in cryptocurrencies and Forex, and to sensitize them to the fact that in the financial markets you cannot believe the entities and persons offering "fast, certain and high profits".
Legal affairs
Obligations and requirements to provide trading, social trading or signalling platforms described above
Whether a platform is regulated depends on what is being traded. For non-typical entities, an analysis is required each time.
Activities consisting in accepting and transmitting orders to buy or sell financial instruments; carrying out such orders; providing investment advice; offering financial instruments; operating an alternative trading system or an organised trading platform constitute brokerage activities regulated in the Act on Trading in Financial Instruments (Ustawa o obrocie instrumentami finansowymi).
Brokerage activities may be conducted on the basis of a permit granted by the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego).
The brokerage activities may be conducted, among others, by foreign investment firm conducting brokerage activities in Poland or brokerage houses. The amount of the fee for brokerage activity permits depends on the scope (types) of brokerage activity for which the permit is granted. The maximum amount of fees charged may not exceed EUR 4,500. The initial capital of a brokerage house for conducting brokerage activity is, as a rule, at least EUR 125,000. A brokerage house’s own funds cannot fall below the required level of initial capital.
In addition, investment firms are subject to the European Union's CRR regulation governing capital requirements.
Additional comments regarding the legal situation for trading, social trading or signalling platforms or what FinTech’s must be aware of in this business area
N/A
Economic conditions
Market