Choosing a reliable broker is the cornerstone of long-term investing success. While low fees, user-friendly platforms, and broad market access are important, none of these matter if the broker isn't safe.
In this article, we examine whether XTB is a secure and trustworthy platform for European investors.
Our take on XTB’s safety
At investingintheweb.com, we personally test and analyze dozens of investment platforms worldwide.
We believe that XTB is safe for the following reasons:
- Regulators: It is regulated by top-tier institutions;
- Track record: It has a large customer base, and has been around for over 20 years (founded in 2002);
- Publicly-traded: Is is a publicly-traded company, meaning it is more transparent and scrutinized than a private company;
- Investor compensation scheme: As a regulated broker, it offers an investor compensation scheme (explained below);
- Financial health: XTB is a profitable company, with a healthy financial position so far;
- Asset segregation: Your assets should be separate from the company’s funds. It also offers negative balance protection.
On the downside, XTB does not offer a banking license, meaning that your money (cash) won’t be protected by the deposit guarantee scheme, only by the investor protection scheme. This is normal in the brokerage industry, but is a downside compared to some competitors.
Want to know what happens if a broker goes bust? Check this Youtube video:
Overview of XTB
Founded in 2002 in Poland, XTB has grown into one of the most reputable brokers in Europe, serving over 1 million clients globally. It is publicly listed on the Warsaw Stock Exchange (WSE), a status that requires adherence to strict transparency and reporting obligations.
XTB’s offering includes:
- Real stocks and ETFs (with zero-commission trading up to €100,000 per month);
- CFDs on stocks, Forex, indices, commodities, and crypto;
- Automated investment plans;
- Interest on uninvested cash
But is it safe to entrust your money to XTB?
Safety and regulation
XTB operates through different legal entities, each regulated by local financial authorities:
The “Investor Protection”, also called “Investor Compensation Scheme (ICS)”, refers to a legal safety net established by financial regulators.
It ensures that if an investment firm fails and is unable to return your funds or financial instruments (due to bankruptcy, fraud, or operational failure), you will be entitled to reimbursement up to a predefined limit (Up to €20,000 in XTB).
These schemes do not cover investment losses due to poor market performance, they only apply in case of the broker’s default.
Asset segregation
XTB segregates client funds from company money, ensuring that your funds are protected in the event of bankruptcy.
In practice, this means that client money is held in separate bank accounts (ring-fenced accounts) from the broker’s own operating funds. These accounts are held in trust, with XTB acting only as a custodian. In the unlikely event of insolvency, client funds are not considered part of XTB’s assets and cannot be accessed by the broker’s creditors.
What does European legislation say?
This isn’t just a company policy, it is a legal requirement under European financial regulation. Investment firms operating in the EU are subject to MiFID II (Markets in Financial Instruments Directive II) and its supplementary regulations, which lay out clear obligations regarding the handling and safeguarding of client assets.
Under Article 16(8) of MiFID II:
“An investment firm shall, when holding client funds, make adequate arrangements to safeguard the ownership rights of clients, especially in the event of the investment firm’s insolvency, and to prevent the use of client instruments on own account.”
Read the directive on EUR-Lex here.
Commission delegated regulation (EU) 2017/565
This regulation provides more detailed rules for the implementation of MiFID II. Specifically: Article 4 states that client funds must be clearly identified and held in separate accounts from those of the investment firm.
Read the full regulation on EUR-Lex here.
National regulators follow this too
Each EU country implements these rules via its national regulator, such as KNF in Poland, or CySEC in Cyprus, ensuring consistent protection across the EU.
Negative balance protection
Negative balance protection is offered to retail clients under EU and UK regulations, so you can’t lose more than you deposit.
This is a crucial risk-mitigation feature, especially when trading leveraged products like CFDs (Contracts for Difference), where market volatility can cause rapid losses. With negative balance protection, your potential losses are limited to your account balance, and you are not liable for any debt to the broker, even in cases of extreme market movements.
What does European legislation say?
Negative balance protection is not just a broker feature, it is a legal requirement for brokers regulated in the European Union when dealing with retail clients. This rule was introduced by the European Securities and Markets Authority (ESMA) and incorporated into the EU regulatory framework.
ESMA intervention measures – 2018
In August 2018, ESMA implemented restrictions on CFD trading for retail investors, which included the mandatory provision of negative balance protection.
“A firm must ensure that a retail client cannot lose more money than they have in their trading account. This applies on a per-account basis.”
You can find ESMA’s official announcement on product intervention measures here.
Who qualifies for it?
Retail clients only. Professional clients and institutional investors are not covered unless the broker chooses to offer it voluntarily (which XTB does not).
Transparency and financial health
XTB S.A. is listed on the Warsaw Stock Exchange. This is a major advantage for investors and clients, especially when it comes to transparency, financial health, and trust.
Publicly traded companies are legally required to publish:
- Quarterly and annual financial reports
- Audited statements
- Material updates on operations and governance
This means you, as a client or potential investor, can freely access XTB’s financial performance, risk exposures, revenues, client growth, and profitability. It’s an open book.
Stricter oversight and governance
Being listed on a regulated exchange like the Warsaw Stock Exchange means:
- XTB must comply with capital requirements and risk controls
- Must follow corporate governance rules
- XTB Is subject to supervision by the Polish Financial Supervision Authority (KNF) and the WSE's internal rules
This reduces the risk of mismanagement or fraud, providing additional peace of mind to clients.
Proof of financial strength
To become publicly listed, companies must prove a strong financial position, a scalable business model, and long-term viability. XTB’s listing is a vote of confidence in its business and balance sheet.
As a result, clients can be more confident that:
- The broker is financially healthy
- It is less likely to go bankrupt
- It has access to capital markets for funding, if needed
As an example, you can clearly see the total capital ratio over time:
Reputation and accountability
Public listing enhances a broker’s credibility in the eyes of: Clients, institutional investors, Media and regulators. XTB has to maintain a strong reputation to protect its share price and public image, which encourages ethical behavior and client-focused practices.
This transparency is a clear advantage over private brokers, which aren't required to share their financial status publicly.
Other safety in practice
Two-factor authentication (2FA)
Although optional, XTB allows you to activate 2FA for added login protection.
2FA adds an extra layer of protection to your trading account by requiring not just your password, but also a second form of verification, a code sent to your mobile device or generated by an authenticator app (like Google Authenticator).
Conclusion: Is XTB safe for you?
If you're a European investor, the short answer is: Yes, XTB should be a safe broker.
- It is regulated by top-tier financial authorities (FCA, KNF).
- Offers investor compensation schemes.
- Maintains segregated accounts and negative balance protection.
- Is a publicly traded company with strict reporting obligations.
On the downside, for now, it lacks a banking license, meaning that your money (cash) won’t be protected by the deposit guarantee scheme, only by the investor protection scheme.
