Key Insights
- XTB will continue operations in Spain despite new CNMV restrictions on CFD marketing, implementing compliant marketing practices immediately.
- The Polish broker expects potential negative impacts on new client acquisition and revenue in Spain, which accounted for 11.3% of its 2023 consolidated revenue.
- XTB’s shares dropped 7% following the announcement.
WARSAW/MADRID (MarketsXplora) – XTB, a based retail forex and CFD broker, announced on Monday its decision to continue operations in Spain, despite new restrictions on marketing activities for Contracts for Difference (CFDs) imposed by the Spanish National Securities Market Commission (CNMV).
The Polish broker’s decision follows a thorough analysis of the CNMV’s interpretative criteria, published on July 12, 2024, regarding the implementation of product intervention measures for CFDs and other leveraged products.
XTB stated that while the CNMV’s guidance prohibits advertising CFDs and certain business practices in Spain, it does not ban trading itself. The sale of CFDs is still permitted, provided it occurs at the investor’s sole initiative.
“Effective immediately, marketing restrictions compliant with the guidelines will be implemented in this market,” XTB said in a statement.
The company acknowledged that these restrictions could negatively impact new client acquisition in Spain over the medium to long term, potentially affecting revenue levels. However, XTB was unable to quantify this impact precisely at the time of the announcement.
In 2023, revenues from the Spanish market accounted for approximately 11.3% of XTB’s consolidated group revenues, equating to about PLN 180 million ($46 million).
XTB Shares Dip as Firm Adapts to Spanish CFD Marketing Curbs
Despite the company’s assurances, XTB’s shares on the Warsaw Stock Exchange plunged almost 7% on Monday, testing the level of PLN 66.40, though still close to their historical high of PLN 76.
XTB noted that it has not conducted significant CFD-related advertising activities in Spain for over two years. However, the company launched a campaign with VanEck at the end of May to promote passive investing using ETFs in Spain, aiming to boost the country’s savings culture.
The CNMV’s interpretation bars investment firms from placing promotional information about CFDs on their websites and prohibits sponsorship of events or organizations if the purpose is to directly or indirectly advertise CFDs.
A year ago, when the CNMV introduced initial restrictions on CFD marketing, XTB claimed they had a “minor” impact on its operations, reporting no significant changes in customer acquisition rates.