XTB Slips on Final $5.3M Fine Despite STOXX 600 Entry, Still Up 140% This Year

XTB shares dropped roughly 5% on Wednesday after Poland's Financial Supervision Authority (KNF) issued a final decision upholding a PLN 20 million (about $5.35 million) penalty against the Warsaw-listed broker. The regulator published the decision on Tuesday, having signed it on August 28, and kept the sanction first imposed on March 30 in place after XTB asked it to reconsider the case.

The fine covers several areas of XTB's retail business. KNF found the broker failed to properly assess whether clients had sufficient knowledge and experience to grasp the risks of the services and instruments it offered, a finding covering January 2022 to August 16, 2023. For a period running to September 17, 2023, the regulator also cited shortcomings in how XTB defined target markets for financial products, possible conflicts linked to its client-facing HOT list, and information about instruments and CFD risks that it said was unreliable or misleading.

The ruling does not create a fresh charge for XTB. The company booked the PLN 20 million as a one-time expense in its first-quarter accounts, when the original decision was issued. In April, XTB said it had already updated its registration form and onboarding mechanism in line with KNF guidance, and it has not published an updated response on its investor-relations site. The case sits within a broader KNF review of how domestic and cross-border firms sell CFDs to Polish retail clients, with particular attention on how brokers gauge experience, knowledge and risk awareness.

Separately, XTB confirmed that its shares will join the STOXX Europe 600 on September 21, a move that can attract demand from index-tracking funds and ETFs, though the broker did not estimate potential inflows. "Inclusion in the STOXX Europe 600 is a significant milestone for XTB," Chief Executive Officer Omar Arnaout said. The announcement did not shield the stock, which traded at PLN 174.24 against a firmer Warsaw market, about 5.4% below its record close of PLN 184.16 on August 31 and 6.7% under the PLN 186.70 intraday high set on August 28.

Even after Wednesday's pullback, XTB remains up around 143% this year, helped by an 8.6% jump in July when preliminary second-quarter profit beat market expectations. Derivatives still drive the business: CFDs accounted for 96% of first-half gross result, even as stocks, ETFs and investment plans brought in customers. Elsewhere in listed broking, CMC Markets reported record client assets and lifted its annual income outlook in July, although its business mix differs from XTB's.