Capital Markets 23. March 2020

Poland: Capital markets – easing regulatory burdens in face of coronavirus epidemic

23. March 2020
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Piotr Wojnar
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act legal Poland

Supervisory Impulses Package – Polish Financial Supervision Authority’s Office (PFSAO) proposes to ease regulatory burden and supervision amid coronavirus outbreak.

As the coronavirus epidemic spreads, the PFSAO works on a set of proposals to help entities supervised by the institution carry on under the present market conditions. The package has been named “Supervisory Impulses Package for the Security and Growth of the Capital Market” (SIP), with similar programs announced for the banking and insurance sectors.

The SIP for the capital market has the following goals:
– to keep market liquidity stable;
– to help entities fulfill regulatory obligations by rescheduling reporting deadlines;
– to help businesses raise capital;
– to allow businesses to focus on clients’ needs and key processes.

Actions that the PFSAO plans to take include:

1. Individual approach to investment funds which fail to comply with applicable investment limits, covering adjustment of supervisory measures to the present market conditions;

2. Creating or launching tools to boost liquidity in the treasury securities sector by implementing as well as supporting relevant measures;

3. Legislative changes, such as:
– extending deadlines for entities supervised by the PFSA to prepare, approve and publish annual financial statements and annual consolidated financial statements;
– extending deadlines for issuers to submit quarterly reports and consolidated quarterly reports covering the first quarter of the financial year which started on 1 January 2020;
– extending deadline for holding the Annual Shareholders Meeting;
– extending deadline salary policy approval;
– modification of rules for preparing information memoranda leading to easier and faster processing of bid documents, which businesses are required to submit in order to raise capital.

4. Pragmatic approach to selected supervisory actions, including:
– review of information submitted by the entities supervised by the PFSA in fulfillment of ongoing reporting obligations to lighten the burden on them; the need to postpone deadlines for fulfillment of these obligations is also expected;
– putting off non-reporting actions (e.g. audits, information obtaining);
– taking relevant supervisory actions in case of non-compliance with capital adequacy standards, with allowances being made for the epidemic’s impact;
– revision of the PFSA’s inspection schedule (verification of upcoming inspection actions), without modifying supervisory goals;
– pragmatic approach to delaying individual supervisory deadlines, e.g. deadlines for implementation of guidance issued after inspections, including deadlines established originally;
– simplified form of PFSAO’s supervisory assessments carried out in 2020, with allowances being made for the epidemic’s impact;
– six-month extension of the deadline for brokerage houses to adopt the EBA’s guidelines on outsourcing arrangements.

Moreover, the PFSUO will increase its reliance on electronic communication channels, esp. PORTAL and e-PUAP platforms, and e-mail, to keep in touch with entities it supervises.

The SIP is a work in progress, individual elements of which may or may not be implemented, depending on market developments. It remains to be seen how the initiatives will translate into law and supervisory practice. With the PFSU’s declarations of remaining open to suggestions and discussion with market participants about any initiatives to mitigate the epidemic’s impact on entities operating in the capital market, one may be optimistic.

Do not hesitate to contact us with any questions.

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Piotr Wojnar
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act legal - BSWW legal & tax
About the authors

Piotr Wojnar

Managing partner

Piotr specializes in commercial law, with a strong focus on assistance in corporate issues for public companies. He also has extensive litigation background within the areas of civil law, administrative law and criminal law. He has advised on numerous public and private share issues, incl. those of COMP S.A. and Bank BPS S.A. Piotr has piloted M&A transactions for listed companies (incl. Novitus S.A., ZUK S.A. and Elzab S.A.), participated in the establishment of brokerage houses and investment funds (incl. TMS S.A., Analizy Online Asset Management S.A., IFM S.A. and Opera TFI S.A.), as well as provided assistance with respect to their daily operations. He has been recommended in Capital Markets, Commercial, Corporate and M&A and White-Collar Crime by the Legal 500 EMEA 2020, one of the leading international legal directories. The white-collar crime practice, co-headed by Piotr, is considered by The Legal 500 EMEA to be among the elite of Polish law firms specialized in that area.

Małgorzata Stefaniak

Partner

Małgorzata is an expert in capital markets law, handling public and private securities issue, acquisitions of major blocks of shares and development of incentive programmes. She also provides support to listed companies in terms of compliance with disclosure obligations. Małgorzata also assists investment companies, represening them, among others, in applying to the Polish Financial Supervision Authority (KNF) for the grant or extension of a brokerage house license. Her practice also covers ongoing legal support to companies and due diligence audits.

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