Market Profiles

FII Market Entry Requirements for Poland

RBC IS operates a segregated account structure in this market.

Please refer to 'Market Account Opening Requirements' for information on the market requirements. Clients are requested to refer to the requirements for information purposes only.

For further information or support around accessing this market, please contact your RBC IS representative.

Warsaw Stock Exchange (WSE)

WSE is a member of international organisations such as the World Federation of Exchanges, the European Federation of Securities Exchanges (FESE) and International Federation of Stock Exchanges (FIBV). WSE operations are mainly governed by the Law on Trading in Financial Instruments of July 29, 2005, and supervised by the Polish Financial Supervision Authority.

The GPW Group, owning WSE, is also a shareholder in the following entities:

• BondSpot S.A (97.23% owned subsidiary)
• Towarowa Giełda Energii S.A. (TGE) – licensed commodity exchange in Poland, supervised by the PFSA (100% owned subsidiary)
• Izba Rozliczeniowa Giełd Towarowych S.A. (IRGiT) – commodity clearing house (100% owned subsidiary of the TGE Group)
• InfoEngine S.A. (100% owned subsidiary of the TGE Group)
• GPW Benchmark S.A. (100% owned subsidiary)
• GPW Private Market S.A. (100% owned subsidiary)
• GPW Logistics S.A. (95% owned subsidiary)
• GPW Ventures ASI S.A. (100% owned subsidiary)
• GPW Ventures Asset Management Sp. Z o.o. (100% owned subsidiary)
• GPW TECH S.A. (100% owned subsidiary)
• GPW DAI S.A. (100% owned subsidiary)
• Armenia Stock Exchange (72.22% owned subsidiary)
• Krajowy Depozyt Papierów Wartosciowych S.A. (KDPW) – the Central Securities Depository of Poland (33.33% stake – associated company)
• Indirectly, KDPW_CCP (100% owned subsidiary of KDPW)
• Centrum Giełdowe S.A. (24.79% stake – associated company)
• Polska Agencja Ratingowa (35.86% stake – associated company)

A company seeking listing on WSE has first to be admitted to the public trading on regulated market organised by a joint-stock company (Part II, Secondary Trading in Financial Instruments of the Act on Trading in Financial Instruments dated July 29, 2005). Before the commencement of a public offer the company should conclude an agreement with the central securities depository (KDPW) to register the securities offered in a public offering in the depository of securities. If the securities to be admitted to trading on WSE were not offered earlier in a public offering, the agreement with KDPW for registration is to be concluded before applying for admission of the securities to trading on a regulated market.

The entity seeking the admission of financial instruments other than securities to trading on regulated market shall conclude the agreement with KDPW to register such financial instruments in the depository of securities. In case of securities issued outside of the Republic of Poland, the portion and only that portion of such securities being offered in a public offering and admitting to trading in a regulated market shall be subject to registration in the central securities depository (KDPW).

In case of securities issued by the State Treasury represented by the Minister of Finance are subject to the systems for registration maintained by KDPW for T-bonds and by National Bank of Poland (NBP) for T-Bills, the State Treasury as the issuer is obliged to conclude a kind of specific agreement respectively with KDPW and with NBP to register the securities in their systems.

The securities issued upon the Prospectus approved by the Polish Financial Securities Authorities (PFSA) can be traded on the Warsaw Stock Exchange (WSE) only in dematerialised form and after the admission of such securities to the trading on regulated market (Art. 19. of the Act on Trading in Financial Instruments of July 2005). The admission requires to be approved with the resolution of the Management Board of the Exchange. Securities issued by the Treasury State or the National Bank of Poland do not require to be admitted to the public trading approved with the resolution of the Exchange Board.

The Warsaw Stock Exchange operates trading in financial instruments on the following markets:

• The WSE Main List operates since WSE began trading on April 16, 1991. It is supervised by PFSA and notified to the European Commission as a regulated market.
• CATALYST – launched on September 30, 2009, for non-Treasury debt instruments (like municipal bonds, corporate bonds, and mortgage bonds). CATALYST operates on transaction platforms of WSE and BondSpot S.A. and comprises of four trading platforms: two platforms operated by WSE (in the form of a regulated market and an alternative trading system) are dedicated to retail investors; two others operated by BondSpot markets (regulated market and ATS) are dedicated to wholesale investors.
• NewConnect is a market organised and operated by WSE as an alternative trading system launched on August 30, 2007 (one of the following alternative European markets: EN.A in Athens, Entry Standard in Frankfurt, Alternext (Euronext), IEX in Dublin, AIM in London, MAC in Milan, First North (OMX), Axess in Oslo and Dritter Markt in Vienna), established for young, dynamic start-up companies with a large growth of potential, with projected capitalisation up to ca. PLN20 million, from innovative sectors relying on intangible assets, such as, e.g. information technology, electronic media, biotechnology, environment protection, alternative energy, modern services, as well as innovative companies from other sectors.
• GlobalConnect is an equity market organised in the Alternative Trading System (ATS) of the Warsaw Stock Exchange, in addition to NewConnect and Catalyst ATS segments. The market started operating on 4 November 2022 and is intended to support trading in foreign equities without the consent of the issuer, allowing investors to trade foreign stocks, listed on global securities exchanges, in Warsaw.
• Treasury BondSpot Poland (previously MTS Poland Market), is an integral part of the Primary Dealer System. It is a wholesale market dedicated for the trading of treasury bonds and treasury bills operated by BondSpot S.A., WSE’s subsidiary. Minimum lots of PLN 5 million, and multiples thereof can be traded on the market. Treasury BondSpot Poland participants can act on the market in the capacity of either, Market Makers, or, Market Takers (Primary Dealers and the candidates for Primary Dealers are obliged to participate in Treasury BondSpot Poland as Market Makers). Currently there are 33 participants of the market; including 15 banks of Primary Dealer status (4-5 of these are foreign institutions).

The alternative trading system NewConnect (as defined in Art. 3. of the Act on Trading in Financial Instruments) is an organised market but is not treated as a part of the regulated market. It is designated for small, innovative issuers that would like to gain capital forfurther development without fulfilling more restrictive admission requirements applicable for the main market. NewConnect is a highly transparent market with the security of trading normally expected in public markets and specifically designed with less restrictive regulations and disclosure requirements in mind.

Settlement of trades executed on NewConnect market is governed by similar rules to the main market with the exception concerning lack of automatic lending facility. Performance of the market is measured by the NCIndex that includes all companies listed on NewConnect, with reference value of 100 points. The NewConnect trading platform is functioning within the same technological infrastructure UTP as the regulated market. All shares are traded in a continuous system or in single price quotation with a double fixing (at session opening and closing).

As at August 7, 2024, 410 companies are listed on the market with the market capitalisation amounting to PLN 1,465.65 billion (CAD 508.96 billion approx.).

Starting from 15 April 2013 WARSET, the old WSE's trading system based on the French NSC platform stopped working. WARSET has been replaced by a new trading system called the Universal Trading Platform (UTP) bought from NYSE Technologies as a part of a multi-year commercial agreement of 12 July 2010 on strategic and long-term cooperation between NYSE Euronext (NYX) and the Warsaw Stock Exchange (WSE) UTP has been launched for both cash and derivative markets in order to increase efficiency of trading on WSE.
In continuous trading, buyers and sellers place orders which, after being transferred to the exchange, are either executed immediately (on the condition that their prices match), or are entered into the order book, where they await orders of the appropriate price on the other side. There are two priorities in order execution: Price and order placement time. This means that whenever two orders of identical price are awaiting execution, the first one to be transacted is the one submitted earlier. On a given day, between the moment when acceptance of broker orders begins and the start of continuous trading, between the moment when acceptance of orders for closing begins and the moment at which the closing price is determined, and during the market balancing period, the indicative price is calculated on an ongoing basis.

The most liquid stocks are traded in the continuous system, as well as all bonds, investment certificates, futures contracts and warrants. Subscription rights and allotment certificates are traded in the continuous system only if their underlying stocks are traded in this system.

Trading in the single-price auction system is based on an auction procedure, i.e. determination of a security's price based on orders submitted before the start of trading. The first phase of the session is the so-called pre-opening phase, during which the system accepts buy and sell orders, but no transactions are executed. However, the indicative opening price (IOP) is calculated and published. Next, using the appropriate algorithm, the computer system calculates the single price at which transactions are to be executed. The single price is determined on the basis of broker orders containing a limit price and orders with no such limit. Once the single price is published, it becomes the price at which transactions are concluded.

Orders are prioritised for execution by price and time of acceptance or activation, observing the principle of minimising the number of transactions. First, all must-be-filled orders, then those with a limit price better than the single price are executed in full. Next, market-on-opening orders are realised, and then those with a limit price equal to the determined single price. If it is not possible to determine a single price within the permissible price variation limits, a non-transactional price is always given. In such situation, transactions are not executed, and this price becomes the reference price for the next session.

Apart from continuous and single-price auctions trading also block trades may be executed on the market. Block trades are those concluded outside of the continuous and single-price auction systems. The subject of this type of transaction can be large blocks of any security (except futures contracts). Most often, these transactions are between major players who have previously agreed upon the details of the transaction – i.e. the price, amount, and settlement date. The Exchange Rules specify the conditions for block trades, setting the minimum size of a block and maximum difference between the price in the block trade and the price of the security during the trading session on a given day.

A company can be traded only in one of the above-mentioned systems. The Exchange Management Board may decide to introduce shares to a particular quotation system regarding to the number and value of the shares and their projected liquidity (liquidity assessment is carried out quarterly). 
Shares are classified in the following regulated market segments:

• 250 PLUS (dedicated to the shares of issuers whose capitalisation in PLN exceeding the equivalent of EUR 250 million)
• 50 PLUS (dedicated to the shares of issuers whose capitalisation in PLN is greater than equivalent of EUR 50 million but do not exceed EUR 250 million)
• 5 PLUS (dedicated to the shares of issuers whose capitalisation in PLN is greater than equivalent of EUR 5 million but do not exceed EUR 50 million)
• 5 MINUS (dedicated to the shares of issuers whose capitalisation in PLN is not greater than equivalent of EUR 5 million)
• ALERT LIST (includes the shares of issuers who has declared bankruptcy or the share price is subject to a very strong volatility)

Shares that are classified to Alert List may then be moved to a single price quotation trading system.

Besides shares are listed within ALERT LIST segment also if their average price was lower than PLN0.50 in the quarter directly preceding the date of classification of the company's shares in the ALERT LIST. In addition, the WSE Management Board may decide to include the shares in to ALERT LIST when it is required in the interest of trading participants.

A minimum trading lot is one unit (in case of shares – one share). A particular trade order placed with a local broker or foreign broker recognized as a remote broker (having the status of WSE Remote Member) may be executed on the market (the Exchange) in many individual lots and at different prices dependently on a price limit for that trade order. Such a trade order may also settle respectively at KDPW upon trade confirmations and with the clients upon settlement instructions within so called post-transaction settlements.

Brokerage houses operating in UTP system can act as market makers upon a market making agreement with WSE who's the main task is to maintain liquidity of a particular security. There are two groups of them: a) market makers, b) issuer's makers. The Exchange Management Board may oblige an Issuer of securities to make a market making agreement with WSE if it believes the liquidity of securities requires so.

ISIN (International Securities Identification Numbering): Yes
KDPW is responsible for allocating ISIN codes for all tradable securities in the Polish market within the process of securities registration at KDPW.

Other: N/A

Polish Financial Supervision Authority (PFSA): commenced its activity on September 19, 2006, when the Act on Financial Market Supervision of July 21, 2006 (Dz. U. of 2006, No. 157, item 1119, as amended) came into force taking over the duties of both Insurance and Pension Funds Supervisory Commission and the Securities and Exchanges Commission (SEC).

Banking supervision in PFSA: due to the decision of the merger of financial and banking supervision based on evolution of the Polish financial market, since January 1, 2008 banking supervision has been carried out by the Polish Financial Supervision Authority, as stipulated in the Act of July 21, 2006 on Financial Market Supervision. As of that time employees of the General Inspectorate of Banking Supervision (which was part of Poland's central bank, NBP) became employees of the PFSA. All strengths of former banking supervision are maintained. Requirements for banking supervision inspectors remain unchanged. 

PFSA is supervised by the President of the Council of Ministry and is to ensure among others regular operation of the financial market, its stability, security and transparency, confidence in the financial market and to protect market interest of investors and all market participants. The main tasks of PFSA cover capital market supervision, insurance supervision, pension scheme supervision and complementary supervision of financial conglomerates whereof the supervised entities constitute the part.

Warsaw Stock Exchange: a joint-stock company in the meaning of the Act on Trading in Financial Instruments of July 29, 2005 (Art. 21. of the said Act) that debuted on the Main List of the Warsaw Stock Exchange on November 9, 2010 (free float of 64.80% bearer shares, representing 47.93% of the total vote in total at the General Meeting of Shareholders). The remaining shares (all the remaining shares are preferred ones) belong to two groups of shareholders, State Treasury with its 35.01% share in capital representing 51.80% share in voting at the General Meeting of Shareholders and other shareholders (investment firms, banks and other shareholders) with their 0.18% share in capital in total representing 0.27% share in voting. WSE conducts and organises public securities trading. WSE also creates non-Exchange regulated trading within an alternative trading system (NewConnect for shares and Catalyst for debt securities other than Treasury Debt securities).

The majority shareholder, the State Treasury is the only shareholder holding an equity stake greater than 5% of the total vote in the Company within the meaning of Article 22.5 of the Act on Trading in Financial Instruments dated 29 July 2005 (as amended).

Stock Exchange Supervisory Board: the board controls operations of the stock exchange, admits securities for trading as well as grants and recalls stock exchange memberships.

National Depository for Securities (Polish short name KDPW): a non-profit and joint stock company that oversees settlement and clearing transactions on fully dematerialised securities admitted to public trading. KDPW is a Polish central securities depository responsible for management and supervision of the depository settlement system in relation to trading in financial instruments in Poland. It is owned by WSE, NBP and the State Treasury each holding equal stakes.

In 2013 KDPW has launched trade repository service. On November 7, 2013, the European Securities Market Authority (ESMA) registered KDPW Trade Repository (KDPW_TR) as one of the fourth trade repositories in Europe and the first and only Trade Repository in Central-Eastern Europe. As a result KDPW_TR is able to register all classes derivative contracts both on a regulated and OTC market.

As of July 1, 2011, there has been a new clearing house, named KDPW_CCP in the Polish market. KDPW_CCP a wholly owned by KDPW, as a modern clearing house, was created in order to secure settlements of transactions with its own capital as a guarantor of transaction settlements within the system of Settlement Guarantee Fund. In line with international standards KDPW_CCP is a separate legal entity launched for the purposes of providing clearing house services in Poland. On April 8, 2014, Polish FSA authorized KDPW_CCP as full Clearing House, confirming that KDPW_CCP fulfils all requirements for clearing houses under the EU regulations EMIR as the third Clearing House in Europe. On December 12, 2013, KDPW_CCP received from KDPW_TR a LEI (legal entity identifier under ISO17442) necessary to comply with the obligation of reporting to trade repositories effective as of February 12, 2014. 
The KDPW_CCP LEI is: 2594000K576D5CQXI987. 

The Polish Clearing House is responsible for clearing of transactions concluded on organized market (regulated market and alternative trading system, ATS), using a range of mechanisms which reduce the risk of counterparty default on a systemic basis. The main objective of KDPW_CCP is to guarantee settlement of transactions executed on the regulated cash market (trading platforms of Warsaw Stock Exchange S.A. and BondSpot S.A.), and within alternative trading system, ATS (trading platforms of NewConnect, Catalyst, BondSpot S.A.). KDPW_CCP is equipped with share capital amounted to PLN 190 million (roughly EUR 45 million), which can be used in the clearing guarantee system, thus reinforcing the safety of clearing. Under the requirements of EMIR, KDPW_CCP's special reserve resources are PLN 13.1 million.

National Bank of Poland (NBP): is the central bank of Poland and its fundamental objective is to maintain price stability by stabilising the inflation rate at the level of 2.5% with a permissible fluctuation band of +/- 1 percentage point as well as guarding the stability of the financial system.

NBP is responsible for stability of the national currency (Polish zloty, PLN), developing and implementing the Polish monetary policy strategy and the annual monetary policy guidelines. It manages the official reserves to ensure the requisite level of the State's financial security.

As an issuer of the Polish currency, NBP maintains the liquidity of cash payments. Due to its supervisory and regulatory functions, NBP oversees the liquidity, efficiency and security of the payment system contributing also to the development of a secure infrastructure of the financial market. Moreover, NBP undertakes activities aimed at disseminating knowledge about economics, e.g. through publishing information on its website and operating the NBP Economics Education Portal.

* Registered shares cannot be subject to the exchange trading
** In accordance with the Polish law (Commercial Companies Code) the company can issue preferred shares however they should be registered. The preference of such shares must be defined in prospectus. The shares can be preferred as for voting rights, dividend rights, liquidation rights etc.

According to the Act of 29 July 2005 on Trading in Financial Instruments all public issues of securities shall be performed only in dematerialised form. Dematerialised securities are registered/recorded and deposited in NDS.

Since March 1, 2021, all non-public shares in Poland are safekept in book entry form only.

Static and dynamic limits, please refer to in the attached document which is dedicated to detailed calculation of the limits.

Poland price variation limits

PLN & EUR

BondSpot is a Polish unique institution licensed to organise and manage two independent different markets: off-exchange regulated market and wholesale non-regulated market, created as platforms for electronic trading in treasury debt securities - MTS Poland (i.e. not subject to the surveillance of the Polish Financial Supervision Authority). It established in January 1996 under the name CeTO from the initiative of major Polish banks and brokerage houses. Since November 2000 CeTO has been the member of WSE capital group. In May 2004, CeTo S.A. entered into a strategic alliance with the MTS Group and MTS S.p.A. became a shareholder of 25% minority equity stake of the Company. Currently, WSE holds 92.47 % of the Company's shares. In September 2009, the company changed its name from MTS-CeTo S.A. to BondSpot S.A. (BondSpot).

BondSpot is a joint-stock company owned by the following group of entities:

• WSE (97.23%)
• Local Brokerage Houses (0.05%)
• Banks (2.62%)
• Others (0.1%)

BondSpot operates in two areas of activity:

Treasury BondSpot Poland (TBS) – established on 24 November 2004, replaced previous MTS Poland Market, a wholesale non-regulated, organised market dedicated to electronic trading in Treasury Bills and Treasury Bonds with minimum lots of PLN 5 million and multiples thereof. It is an integral part of the Primary Dealer system developed by the Ministry of Finance in cooperation with the National Bank of Poland, the Central Securities Depository of Poland (KDPW), and banking environment. Currently, Treasury BondSpot Poland has 33 participants in total (including 5 foreign institutions), and of them, 15 have the status of Primary Dealer in 2015, and 16 are the candidates to become Primary Dealers in 2016 (5 of which are foreign entities). Primary Dealers have an exclusive right to purchase treasury securities on the primary market with an intention for their future resale among TBS participants on TBS Poland.

Regulated Market – regulated by the Polish FSA, off-exchange market supervised by the Financial Supervision Commission (PFSA) dedicated to trading in fixed Income instruments (mortgage bonds, municipal bonds, corporate bonds, bank bonds, and Treasury bonds), equities of small and medium-sized companies, investment certificates. Trades concluded on this market are settled via KDPW and are subject to Settlement Guarantee Fund. Currently 7 market members operate on this market.

Regulated Market enables access to an extensive group of especially institutional investors. Listing on the market enhances liquidity and market valuation of listed instruments, particularly important for the institutional investors who are obliged to valuate assets on a daily basis. Fixed income securities listed on the regulated market are a part of Catalyst system. The Catalyst architecture ensures that the market can accommodate issues of different sizes and parameters and serve the needs of different investor groups: wholesale and retail investors, institutions and individuals. Execution of transactions on all Catalyst markets is guaranteed by the KDPW. Issuers are bound by reporting requirements including current and periodic reports.

The settlement procedure is conducted by KDPW for T-bonds and NBP for T-bills. Participants must subscribe to the clearing system of KDPW and NBP directly or indirectly through an Agent bank (foreign participants). The trades settled on T+2 for outright cash transactions and T+0 (or on negotiable term) for repo, buy-sell-back and sell-buy-back transactions.

Equities: 
Equity trading for publicly traded securities is commenced in majority on the Warsaw Stock Exchange (WSE) including its alternative trading system, NewConnect market. Additionally, some equities are traded on regulated off-market, Treasury BondSpot Poland (less listing requirements attracting smaller companies). Equities can be also traded OTC, but such trades may be subject to 1% stamp duty tax, unless concluded with an intermediation of an investment firm/foreign investment firm, or directly with an investment firm/foreign investment firm.

According to existing regulations foreign institutions can provide brokerage services in Poland by establishing a branch or repo office or participate in WSE remotely as WSE members. At the moment, there are 17 foreign brokers that conclude WSE trades remotely.

Each WSE transaction (a so called market transaction) can be concluded only by a WSE member (domestic or foreign). A trade order placed by an investor with a WSE member (local broker or foreign remote WSE member) is executed directly on WSE. The orders can also be placed with foreign brokers (being not a remote broker) and then they can be executed on WSE through the intermediary of a WSE member. Once the Exchange executes the trade, confirmation of the execution of the transaction is sent simultaneously to the clearing house (KDPW_CCP) and to the WSE members. In case of foreign exchange members, KDPW_CCP provides the transaction executions in the form of contract notes to relevant clearing agents in order to clear the transactions and settle them on the brokers' accounts on SD at KDPW (the Polish CSD). The on-exchange transactions are cleared and settled automatically without any settlement instructions from the WSE members delivered to their clearing agents.

The transactions with clients/investors (post-trade transactions) are effective based on settlement instructions delivered to local agents by the WSE members on one side, and by investors on the other side. Such settlements are recognised by the market as post-trade settlements. Settlement instructions are required to be delivered to NDS by 10:30 CET on SD (free of charge market deadline). The instructions delivered to NDS after that deadline, but before the market deadline for settlement on SD, i.e. 15:30 CET are charged with a penalty fee imposed by NDS on the deliverer (here, local Agent).

On settlement date (T+2) upon successful matching at the KDPW level (verification of securities and cash positions on the KDPW participants' accounts), the transaction is settled on one of the several KDPW settlement sessions. The vast majority of settlements are performed in the main settlement session at 10:30. After the trade settled, KDPW provides the participants with the confirmation of transaction settlement. Upon the confirmation from KDPW, the transaction is settled on Client's account with subcustodian/broker and then the settlement confirmation is delivered to the client.

All trades executed on WSE (concluded by the WSE members) are covered by the Settlement Guarantee Fund and are subject to clearing by KDPW_CCP (clearing house). These transactions are also settled by KDPW, in the dedicated depository account of a WSE member's Settlement Agent, who is a direct participant of KDPW (the functionality of Settlement Agent together with an institution of clearing house for the convenience of foreign WSE members operating directly as clearing members of KDPW_CCP, is performed usually by local Agents). The suspension of settlement of these transactions will result in running an automatic securities lending, offered by KDPW, subject to the securities being available for the loan. The automatic securities lending service is subject to charge in accordance with the KDPW Fee Schedule. Post-trade transaction settlements are covered by other rules and are not subject to the Settlement Guarantee System. Such settlement may be suspended due to a shortage of securities or insufficient cash to cover cash liability in connection with the settlement on client's account. 

A settlement of transaction failure can be done also due to lack of client's settlement instruction that has to be provided to the client's local agent on SD the latest. Only upon such instruction the Agent issues the instruction to KDPW in order to match and settle the trade finally. There is no possibility to cancel a trade that has been correctly executed by a WSE member. Automatic partial settlements have been allowed since August 1, 2014. Automatic partial settlement functionality is used to optimise the settlement process by enhancement the liquidity of settlements in KDPW (optimisation of settlement of trades) and improving the liquidity of clearing in KDPW_CCP.

Local licensed custodians, who maintain clients' securities accounts, are obliged to settle trades on behalf of their customers only upon clients' instructions matched with counterparties' instructions at the level of KDPW. Thus, there is an irrevocable settlement commitment (the payment commitment as well as the obligation to deliver customer's securities). Resulting from that there is no market practice to verify securities and cash positions by local brokers prior to accepting any client's trade order. The brokers while concluding stock exchange transactions upon clients' orders are not obliged to block security holdings on clients' custody accounts (Art. 121. of the Act on Trading in Financial Instruments of July 29, 2005). 

Settlement based on Art. 121. of the Act on Trading in Financial Instruments of July 29, 2005:

Art. 121. of the Act on Trading in Financial Instruments of July 29, 2005, provides the legal framework for settlement process of transactions upon clients' instructions as well as direct settlement of transactions through a foreign broker's clearing account. Art. 121. gives ground to the local custodians to issue settlement instructions to KDPW system only upon the customer's instruction. The rule of mandatory settlement of transactions is still preserved for the settlement of on-exchange transactions (market side of transaction). It also allows registering the trades done by the intermediaries (i.e. international brokers) on their own accounts (proprietary accounts) also in order to sell the securities deposited thus further to the brokers' clients (client side of transaction, also called as post-trade transaction/OTC transaction). 

Art. 121. does not abolish the irrevocable settlement of securities transactions executed on WSE. WSE transactions are subject to Settlement Guarantee Fund system that secures settlements of transactions concluded on the stock exchange (on-exchange trades). Art. 121. allows a foreign broker to buy securities traded on the Warsaw Stock Exchange, settle them through its own clearance account in order to deliver them further to an ultimate investor. The settlement of such a transaction may be done through a foreign broker's securities account without a need to open segregated clients' securities accounts. In the meaning of the Polish Regulations a securities account's structure also reflects an ownership structure (since 1 January 2012 the above statement refers only to a segregated account structure) – an account holder is considered as an investor identified by a name of account. Starting from 1 January 2012 omnibus account structure has been allowed by the Polish law so underlying investors are not recognised by the market until they are revealed for the tax purposes if want to benefit from DTT tax rates at source or tax exemptions at source based on Polish Act on CIT.

In this meaning, Art. 121. changes the scope of responsibility of international brokers. It means that upon the agreements on guaranteeing the payments and delivery of securities concluded between international brokers and local brokers, the international brokers are responsible for settlement of transactions with local brokers in the same way as local custodians were responsible before Art. 121. has been introduced. Shares are no longer blocked on the final beneficiary's account and cannot be moved from the final beneficiary's account without the instruction. To avoid settlement failure caused by shortage of securities that might lead to huge penalties imposed by KDPW, the broker is authorised to use its proprietary assets, borrow securities on the market or execute a buy-in transaction with settlement on T+0 in order to settle the trade.

In accordance with the amendments to Detailed Rules approved by the Resolution of the KDPW Management Board, dated September 20, 2004, international brokers acting under Art. 121. are allowed to settle their on-exchange transactions with custodian's clients on a "free of payment" basis. Currently the same rule is used for settling of transactions also between two brokers' accounts. 

KDPW settles transactions executed on the regulated market on a DvP basis, however not via a true DvP model as settlement of cash is processed separately via the Banks' accounts at the Polish central bank, National Bank of Poland (NBP). Securities settlement between KDPW participants is executed on gross basis in accordance with contract notes (per execution basis) for market settlement (interbroker) while in case of post-trade transaction settlement it is based on matched instructions provided by KDPW participants. Cash settlement between KDPW participants is done on a net basis at the level of NBP. One of the new services to be offered by KDPW_CCP (Polish CCP) is securities netting mechanism on the cash market. The service has been formally available in the Polish market since August 4, 2014. The implementation of the netting mechanism has been co-ordinated with KDPW's simultaneous project "Introduction of automatic partial settlement". In practice, netting and partial settlement are only applied to instructions for guaranteed transactions concluded as of 4 August 2014 (inclusive).

The DvP procedure is assured by KDPW which controls the availability of cash in the participants' accounts at the Polish central bank (NBP) before securities movements are processed (matching criterion at the KDPW level). Should there be an insufficient amount of money in the participant's account at NBP, KDPW chooses transactions to be suspended and adjusts payment instructions to NBP.

Fixed Income:
T-Bonds - Primary auctions for Treasury bonds are organised by NBP (BondSpot). According to the provisions of Rules and Regulations Governing the Activities of the Treasury Securities Dealers as of September 21, 2007, only Treasury Securities Dealer (TSD) chosen in way of Competition arranged by the Minister of Finance for entities that apply for a TSD function has a right to attend and organise primary auctions on T-bonds. The Rules do not limit applicants for a TSD to only local banks. The terms of participants are detailed in Art. 13.2 of the Rules. One of the principal criteria for Applicants is: 
to have T-bills account with NBP, or securities/deposits account with KDPW (clearing agents set up an adequate account at KDPW for foreign entities) to point settling participant and consent to provide by him data on activity of the Applicant on financial markets in extend needed for the Applicant evaluation in the Competition. 

Foreign Entities can also apply for a TSD function however an applicant must submit the statement on fulfilling the function of government securities dealers in one of the OECD countries excluding Poland. Minister of Finance signs agreements on fulfilling the function of TSD for one year with those applicants who have been chosen in way of the Competition. 

Treasury BondSpot Poland participants can act on the market either in the capacity of Market Makers (currently 20 entities including 6 foreign ones) or Market Takers (currently 6 entities including 5 foreign ones). 

Secondary trading in T-bonds takes place on WSE and off the regulated market, also known as "interbank market". The settlement of T-bonds transactions on the secondary market is supervised and conducted by KDPW.

The most liquid T-bonds market is off-exchange market called interbank market where the trading is done with Polish banks. This trading is possible due to general exemption of treasury securities from obligatory trading on regulated markets. These transactions are identified by the market as OTC transactions. OTC transactions on T-bonds are exempt from Stamp Duty obligation on contrary to OTC transactions on equities due to the fact that debt securities do not generate ownership as it is in case of equities. Free of payment transactions on T-bonds are freely allowed between counterparties even if they are different entities. 

For WSE transactions on T-bonds the same procedure as for equities is applied except for settlement cycle, which is T+2. In case of interbank market transactions settlement takes place on individually negotiable basis upon the agreement between parties, usually on T+1. 

Off the regulated market practice is that repo transactions, buy-sell-back or sell-buy-back settlements take place on negotiable basis as well as on T+0. The settlement of transaction is done upon a client's instruction, prior pre-matched with counterparty's instruction by agents (client's and counterparty's local custodians).

Once they are initially pre-matched by the agents, they are delivered to KDPW in order to be matched and settled finally. If any discrepancies appear in participants' instructions, local custodians go to their clients with the reason of not pre-matching. Pre-matching is continuing after all discrepancies are clarified.

T-bonds transactions concluded on interbank market may be settled both versus payment (upon standard RVP/DVP instructions) and free-of-payment (upon RF/DF instructions). The transactions settle at KDPW upon matched settlement instructions delivered by local agents. 

In case of RF/DF settlement, cash clearing may take place elsewhere, as agreed between the counterparties, e.g. in USD outside Poland or via different local clearing channels.

T-Bills - Primary auctions for Treasury bills are organised by NBP every Monday and available only to Treasury Securities Dealers (also used Primary Dealers). 

Secondary trading in T-bills takes place on the interbank market and are listed on Treasury BondSpot Poland. All investors may become counterparties for such transactions. T-Bills settlement is negotiable between parties but usually settles on T+1 basis. Settlement is done on RTGS basis in both cash and securities via system SKARBNET4 (former Securities Registrar) within the National Bank of Poland.

After the instructions are pre-matched by local custodians, the banks deliver settlement instructions through RTGS system or DSP to the SKARBNET4 system at NBP between 08:00 and 17:00. T- bills settlement instructions are settled against payment, however free of payment settlements are also allowed. The market practice is to settle T-bills on a negotiable basis, however usually on T+1 basis.

For secondary market trades, same day settlement is possible under the following conditions:

• settlement must be initiated by the local custodian before an irrevocableSKARBNET4deadline, SD at midday, thus both counterparties of the transaction are required to comply with the deadlines and necessary pre-matching procedures agreed with local custodians.

Since January 1, 2006, foreign banks that have the status of Treasury Securities Dealers (Primary Dealers), are able to participate in the T-bonds and T-Bills primary market auctions (please also refer to the section Settlement Procedures: T-bonds). Such participation will be required either to:

• become a SKARBNET4 participant – in this case the foreign bank that is the Treasury Securities Dealer (here TSD) must sign a SKARBNET4 participation agreement and find a bank, that has its own cash account with NBP to support cash settlements, or
• use its local custodian to settle primary market auctions. A foreign bank with the status of TSD, would be required to sign a separate agreement with NBP on servicing of the primary market auctions. According to that agreement, TSD is required to provide its bids to the primary market auctions via SWIFT upon MT598.

Derivatives 
Governed by the same trading and settlement principles as equities admitted to public trading. The primary difference is that the Depository (KDPW) shall maintain individual deposit accounts for those investors who trade in derivative instruments in the derivatives markets. In Poland mark to market for derivatives is used and investors have to maintain margin accounts with their local brokerage houses or local agents in order to cover their positions on a daily basis.

A new short selling in the Polish market has been effective from July 1, 2010. 

Short selling is permitted for:

• shares participating in the WIG20 exchange index, or
• most liquid shares outside WIG20 index with the value of free-float shares at least equal to PLN 300 million and average daily value of trading in shares in the last six months is at least equal to PLN 4 million, or
• shares whose free-float value on the first day of trading represented at least 1% of the value of free-float shares of all companies participating in so called liquidity ranking run by WSE comparing however the shares may be subject to short sale under this criterion only for the next six months since the first day of trading, or
• all government bonds listed on WSE.

The list of securities available for short selling has been published by WSE on a daily basis from mid-June, 2010. By principle all securities that fulfil one of the above listed criteria should be available for short sale, although the Exchange Management Board may arbitrary not allow specific securities for short sale.

Each short sale order submitted to the exchange must include a special designation (short sale flag) to differentiate it from other broker's orders. A short sale order will be automatically rejected in the following circumstances:

• a short sale order is submitted for securities which, at the time of submitting the order, do not fulfil the eligibility conditions for short sale orders
• securities which fulfil the conditions are subject to a temporary suspension of accepting of short sale orders (the Exchange by its decision may suspend the accepting of short sale orders).

The exchange can discontinue accepting short sale orders in case of a significant increase in settlement risk upon the statement from NDS, or in the event of a significant decrease in the value of the WIG index or the price of individual shares during a given trading session in combination with a high share of short sale transactions in the value of trading in all transactions on the market (short sale circuit breakers). In particular cases when safety of the Exchange trading or interest of participants is considered, the Polish Financial Supervision Authority may request for suspension of accepting short sale orders. 

Short sale orders will be suspended by the end of current trading session for all shares admitted to short selling if:

• the value of the WIG index in relation to the reference value for the given session decreases by more than 3% and
• the share of the present value of trading in short sale transactions concluded in all shares available for short sale in the value of all transactions on these shares is greater than 20%.

Short sale orders will be suspended by the end of current trading session for individual shares admitted to short selling if:

• the price of the given shares in relation to the reference price for the given session decreases by more than 10% and
• the share of the present value of trading in short sale transactions on the given shares in the value of trading in all transactions on these shares is greater than 20%.

If the above conditions will appear at the closing of a trading session the suspension will be extended by the end of the next trading session. 

After the closing of a trading session, the exchange will publish information about the cumulative volume, value of trading and number of short sale transactions. 

Short selling transactions can be concluded on the Warsaw Exchange by direct participants of WSE upon a dedicated agreement signed with its local clearing Agent. The above requirement is stipulated by the Polish regulations (Art. 7.2 of Act of 29 July 2005 on Trading in Financial Instruments). 

Effective November 1, 2012, the relevant authority must be notified by investors of the short position of shares and government debt when the position reaches or falls below the levels specified in the regulation. The relevant authorities are the local Financial Supervisory Authorities (FSAs). 

The short positions of shares must also be disclosed to the public by posting information on the local FSA's website when a position reaches or falls below the specified levels. 

For full information of the new regulation and reporting requirements please visit the European Securities and Markets Authority website at http://www.esma.europa.eu/.

Turn-around transactions are allowed on the Polish market.

KDPW_CCP provides clearing house services. It is a modern clearing house that clears transactions using a range of mechanisms which reduce the risk of counterparty default on a systemic basis.
The creation of KDPW_CCP follows a decision of the Polish Financial Supervision Authority (KNF) approving the position of KDPW_CCP's capital in the clearing guarantee system (Clearing Guarantee Fund, CGF) and a cap imposed on clearing members' liabilities under additional contributions to the clearing fund (CGF). The capital of KDPW_CCP may be used to support the clearing of transactions executed on the regulated market.
KDPW_CCP is equipped with capital which can be used in the clearing guarantee system, thus reinforcing the safety of clearing. KDPW_CCP's capital is PLN 190 million and can be used as one of the resources of the clearing guarantee system. 
Since its launching, KDPW_CCP has taken over the control on risk management in terms of clearing management system. Currently the resources of the clearing guarantee systems of KDPW_CPP available to cover the risk of default of a system participant, include:

• maintenance margins posted by the clearing member
• basis contributions to the clearing fund
• additional contributions to the clearing fund
• KDPW CCP's own capital
• the marking-to-market of transactions concluded on the derivatives market
• a system of automatic securities lending operated in collaboration with KDPW

The final level of protection in the KDPW_CPP clearing guarantee system consists of capped additional contributions of members to the clearing fund and KDPW_CCP's own capital. 

Since April 8, 2014, KDPW_CCP has been recognized authorised Clearing House fulfilling all requirements for such institutions under the EU regulations EMIR and becoming the third Clearing House under EMIR regulation in Europe. On December 12, 2013, KDPW_CCP received from KDPW Trade Repository a LEI (legal entity identifier under ISO17442) necessary to comply with the obligation of reporting to trade repositories effective as of February 12, 2014. 

KDPW_CCP performs a clearing of conditional trades in Polish T-Bonds concluded in Treasury BondSpot Poland (TBSP).

The KDPW_CCP LEI is: 2594000K576D5CQXI987.

The Central Securities Depository of Poland (KDPW): is the sole and mandatory Polish central depository for securities that are admitted to public trading on both regulated and non-regulated (OTC, Interbank turnover) markets. KDPW is equally owned in one-third part (33,33% stake in the Company) by the State Treasury, WSE, and NBP. All members of WSE, local brokers, as well as local custodians, remote brokers, issuers and the State Treasury are participants of KDPW. 

KDPW was established in November 1994 as a non-profit, joint-stock company, after having operated as a separate organisational unit under the Warsaw Stock Exchange since 1992.

It holds deposit accounts and securities accounts alike. KDPW register the securities on deposit accounts, mainly of an omnibus structure, which do not bear the ownership structure on the contrary to securities accounts (segregated account structure) that are maintained at the level of local custodians (in line with the provisions of the Act of July 29, 2005, on trading in financial instruments deposit accounts opened at KDPW are not considered as securities accounts). There are the following types of deposit accounts that local custodian may have open at KDPW:

• their own assets
• customers' securities (omnibus structure)
• foreign customers' Treasury debt securities (omnibus structure)
• international brokers' securities settled under Art.121. of the Act on Trading in Financial Instruments (a special operational account) – omnibus structure
• WSE direct participant (remote broker) – segregated structure; account opened per a single remote broker
• participants of derivative market – segregated structure; account opened per a single participant
• customers' omnibus account – quasi-segregated structure; account opened per a single omnibus account holder not disclosed by name in the market maintained under customers' securities in omnibus accounts

There is no limitation for opening and maintaining individual deposit accounts for the participants' clients held with KDPW. The provisions of Act on Trading in Financial Instruments stipulate general rules of maintaining individual deposit accounts, as well as securities accounts (in the meaning of the said Act), opened with KDPW.

The KDPW participants are also responsible for opening and maintaining securities accounts for their customers on their books.

Generally, the KDPW' functions are among others, as follows:

• reconciliation of volume of an issue and the number of securities admitted to the public trading
• safe custody of all securities admitted to the public trading (securities must be deposited with KDPW in the form of global certificates representing one issue. In addition, KDPW keeps deposit accounts to register securities credited to the accounts held by its participants),
• maintaining and reconciling securities accounts for participants
• establishment of deposit rules for its participants
• settlement of transactions executed on the regulated market (effecting securities settlements)
• preparing and supervising cash clearing
• fulfillment of issuers' obligations towards investors (collecting and distributing interest and dividend payments as well as redemption on securities, execution of pre-emptive rights, pari passu, conversions, splits, assimilations etc.)
• management and operation of the Compensation Fund

Violation of an entity's obligation towards KDPW or its participants may be sanctioned by KDPW.

SKARBNET4 (former Securities Registrar) run by NBP has acted as the Central Depository for Treasury bills and has maintained the depository accounts for direct participants (mainly local banks) since April 13, 2015. Transactions in Treasury bills executed for the SKARBNET4 participants' clients are settled on a real DVP basis (free of payment settlements however available are occasional and upon special procedure).

BIS is an international organisation which fosters cooperation among central banks and other clearing agencies in pursuit of monetary and financial stability. The Committee on Payments and Market Infrastructures (CPMI) uses three common structural approaches, or models, to categorise the links between delivery and payment in a securities settlement system.

The National Bank of Poland actively participates in works of BIS. It regularly issues discussion documents, working papers, presentations, etc.

As all securities that are active in organised trading as well as T-bonds and T-bills are issued in book entry form, there is no registration process in the market.

Equity
Polish equities listed on WSE are bearer instruments and exist only in book entry form deposited at KDPW. The investors' local brokers or custodians, who maintain individual securities accounts on their behalf, are responsible for recording ownership. Beneficial and final ownership is recognised by the name of the securities accounts maintained by local custodians (segregated account structure) or is disclosed by the account holder on request of Polish FSA in case the securities are deposited in omnibus accounts. Shares including shares allotments, rights issue, etc. that are registered at KDPW and held in securities accounts of the Clients at local custodians/brokerage houses must be kept at KDPW on deposit accounts that do not reflect ownership structure as they are not securities accounts in the meaning of the Polish Regulations. It is allowed not to register issues at KDPW but those securities are not allowed to be publicly traded. Such shares may be settled and safe kept on clients' securities accounts at local custodians. Nominee concept with respect to securities accounts is not recognised in the market. However, omnibus accounts recognized as securities accounts in the meaning of the Act on trading in financial instruments since 1 January 2012 have been already present in the market. 

Shares of the companies admitted to organised trading are in book-entry-form after the registration of the whole issue at the commercial court by the company and depositing by the company's issue agent, the Issue Letter for securities at KDPW. Registration at clients' securities accounts is not applicable.

Fixed Income
T-bonds are bearer instruments and exist only in book entry form at KDPW. The investors' local brokers/custodians, who maintain deposit accounts on their behalf at the level of KDPW, are responsible for recording ownership at securities accounts being opened for investors at the level of their local brokers/custodians. KDPW shows the book entry of the whole issue of T-bonds on the issue letter for securities deposited by the Ministry of Finance.

T-bills issued by the State Treasury are in book entry form and are held at SKARBNET4 system at NBP (the Collective Receipt of T-bills is deposited in dedicated accounts at SKARBNET4 system). The investors' local brokers or custodians, who maintain individual securities accounts on their behalf, are responsible for recording ownership. Registration is not applicable.

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Share holdings may be required to be disclosed by the beneficial owner, particularly when holdings reach or exceed prescribed disclosure limits. Investors must ensure that they comply in full by reporting such holdings to the appropriate organisations for this market, within the timeframe required. If you have any questions regarding this issue, we encourage you to consult your legal counsel. 

Failure to comply with reporting requirements may lead to pecuniary penalty of up to PLN1,000,000.00 and/or other sanctions.

Notification must be made to the Polish Financial Supervision Authority and the issuer within four working days from the date the investors became, or could become aware taking due care about crossing the threshold for off-market trades, and within six trading days from the trade date in case of transactions executed on the regulated market.

Due to the changes in the Act on Public Offering, Conditions Governing the Introduction of Financial Instrument to the Organised Trading, and Public Companies (the Act on Public Offering) that became effective from August 5, 2009 the following situations need to be reported:

• if account holders acquiring shares of a public company achieve or exceed 5%, 10%, 15%, 20%, 25%, 33%, 33⅓%, 50%, 75% or 90% of the total vote at its general meetings.
• if account holders, prior to a sale, owned shares of a public company entitling them to at least 5%, 10%, 15%, 20%, 25%, 33%, 33⅓%, 50%, 75% or 90% of the total vote, and after the sale achieved accordingly 5%, 10%, 15%, 20%, 25%, 33%, 33⅓%, 50%, 75%, 90% or less of the total number of votes.
• if account holders entitled to more than 10% of the total vote changed their threshold in connection with acquisition or sale of shares resulting in changes of the total vote by at least 2% when shares of a public company are traded on official stock exchange listing market or at least 5% when shares of a public company are traded on other regulated markets, and the holders entitled to more than 33% of the total vote when acquiring or selling shares resulting in changes of the total vote by at least 1%.

Investors having, directly or indirectly, at least 5% of voting rights in real property companies are obliged to inform the relevant Polish Tax Authority about the number of shares and other rights. Deadline for the report is to be established individually based on the real property company’ financial year.

The reporting obligation applies also to investors who achieved or exceeded the threshold prescribed by the law to report in relation with:

• coming into being legal event other than act in law
• acquiring or selling financial instruments giving unconditional right or obligation of acquisition of shares already issued by the public company
• indirect acquisition of shares in the public company

Moreover, with regards to substantial holdings in public companies the following rules apply:

• the acquisition of shares constituting more than 10% of the total vote within a period of less than 60 days by the holders entitled to less than 33% of the total vote may be effected only as a result of announcing a public offer to subscribe for sale or conversion of equities representing not less than 10% of the total vote. The holders entitled to at least 33% of the total vote may acquire shares constituting more than 5% of the total vote within a period of less than 12 months only by way of announcing a public offer for subscription for sale or conversion of equities representing not less than 5% of the total vote.
• acquisition of shares resulting in crossing of 33% share in the total voting rights may be effected only as a result of announcing a tender offer to subscribe for sale or conversion of the shares aiming at achieving 66% of the total vote within three months since the crossing. Investors who crossed 66% of the total vote are obliged to announce a tender offer for all remaining shares of the company within three months since the crossing unless the stake exceeding 66% of the total vote decreases to not more than 66% of the total vote in this period as a result of respectively share capital increase, introduction of amendments to the company's articles of association or expiry of preference rights attached to shares.

The relevant notification of the ownership disclosure thresholds can be prepared and presented to the PFSA and to the Issuer either in Polish or in English language. 

The notification is required to include information about dependent entities possessing the shares in the same company as well as about the entities that concluded agreement on the transfer of voting rights with the investor who makes the notification.

If an investor fails to announce a tender offer required by the law, they (and all dependent entities) will not be allowed to execute voting rights from the holdings in the given company at all. Failure to comply with the reporting requirements in the Polish market may lead to penalty fine up to PLN 1 million imposed on the investor by the Polish Financial Securities Authorities.

The Act on Public Offering stipulates, that any entity that fails to provide disclosure notifications cannot execute its voting rights exceeding last disclosed limit. 

The Law on Trading in Financial Instruments regulates compulsory squeeze-out rules, which used to be determined by the Commercial Companies Code only. A strategic investor possessing more than 90% stake will be able to force minor shareholders to sell their shares within 90 days since the moment when crossing the 90% threshold have been notified. 
Any minor shareholder will be given right to request a dominant shareholder with over 90% stake to buy their shares. Such request might be filed within 30 days since notification of crossing a 90% threshold.

With effective from August 14, 2010, new disclosure requirements have been introduced for investors having their holdings of shares in banks, insurance companies, investment fund companies and brokerage houses. The most significant changes concern the reporting requirements in the following situations:

• intention of acquiring/taking up 10%, 20%, one third, 50 % of total vote/share capital in a relevant company (Art. 25.1 of the Banking Law, Art. 35.1 of the Insurance Law, Art. 54.1 of the Investment Fund Act and Art. 106.1 of the Law on Trading in Financial Instruments);
• intention of becoming a predominant shareholder of a relevant company in way other than by acquiring/ taking up the majority stake of that company (Art. 25.1 of the Banking Law, Art. 35.1 of the Insurance Law, Art. 54.1 of the Investment Fund Act and Art. 106.1 of the Law on Trading in Financial Instruments);
• acquiring/exceeding 5%, 10%, 20%, 25%, one third, 50%, 66% and 75% of total vote in a domestic bank – shareholder notifies that bank and the bank notifies the PFSA within 14 days since the receipt of the notification (Art. 25. of the Banking Law);
• acquiring/exceeding 10%, 20%, one third, 50%, of total vote in a relevant company – shareholder notifies that company within 14 days since the acquisition (Art. 35. of the Insurance Law, Art. 54. of the Investment Fund Act, Art. 106. of the Law on Trading in Financial Instruments);
• intention of disposal of shares resulting in new threshold over 10% of total vote in a domestic bank – a shareholder notifies the PFSA (Art. 25.1 of the Banking Law)
• intention of disposal of shares resulting in a new threshold maintained below 10%, 20%, one third, 50% of total vote – a shareholder notifies the PFSA (Art. 25.2 of the Banking Law)
• intention of disposal of shares resulting in a new threshold maintained respectively below 10%, 20%, one third, 50% of total vote in a relevant company – a shareholder notifies the PFSA not later than on 14 days prior the disposal (Art. 36.1 of the Insurance Law, Art. 57.1 of the Investment Fund Act, Art. 107.1 of the Law on Trading in Financial Instruments).

In accordance with the new regulations the Polish Financial Supervision Authority may oppose the planned acquisition (taking up) of shares within 60 business days since the receipt of notification with all required documentation. 

Investors are obliged to notify PFSA of taking up/acquiring of shares in relevant companies by entities acting in concert for the purposes of executing voting rights at the level of respective reporting thresholds (Art. 25.7 of the Banking Law, Art. 35.7 of the Insurance Law, Art. 54.7 of the Investment Fund Act and Art. 106.7 of the Law on Trading in Financial Instruments).

On July 24, 2015 new law over control of specific investments aiming at protecting strategic companies against hostile takeovers has been approved by the Polish Parliament. New law has become effective as of October 1, 2015. 

In accordance with the new law, investors need to receive approval from the Ministry of State Treasury before crossing the 20%, 25%, 33% or 50% thresholds in terms of voting rights in public companies classified as 'strategic'. Entities/persons buying the shares without such an approval may be penalised with a fee up to PLN 100 million and will not be able to effect voting rights from acquired shares.

The list of strategic companies, ranging from the power supply sector, chemical and petrochemical industry, telecommunication sector or arms industry that has been specified by a relevant governmental decree.

The list of the companies classified as protected in 2023 includes the following entities:

• Centrum Rozwojowo-Wdrożeniowe „Telesystem-Mesko” sp. z o.o. in Lubiczów (KRS: 0000096130)
• Emitel S.A. with its registered office in Warsaw (KRS: 0000716108)
• Gaspol S.A. with its registered office in Warsaw (KRS: 000021200)
• Grupa Azoty S.A. with its registered office in Tarnow (KRS: 0000075450)
• HAWE TELEKOM S.A. with its registered office in Warsaw (KRS: 0000981831)
• KGHM Polska Miedź S.A. with its registered office in Lubin (KRS: 0000023302)
• Orange Polska S.A. with its registered office in Warsaw (KRS: 0000010681)
• PKP Energetyka S.A. with its registered office in Warsaw (KRS: 0000322634)
• Polkomtel sp. z o.o. with its registered office in Warsaw (KRS: 0000419430)
• Polski Koncern Naftowy ORLEN S.A. with its registered office Płock (KRS: 0000028860)
• Rafineria Gdańska Sp. z o.o. with its registered office in Gdańsk (KRS: 0000204527)
• Stoen Operator Sp. z o.o. with its registered office in Warsaw (KRS: 0000270640)
• Tauron Polska Energia S.A. with its registered office in Katowice (KRS: 0000271562)
• TK Telekom Sp. z o.o. with its registered office in Warsaw (KRS: 0000024788)
• UNIMOT S.A. with its registered office in Zawadzkie (KRS: 0000382244)

Buy-in/sell-out facilities have been made available to investors with regard to the implementation of the settlement process based on Art. 121. of the Act on Trading in Financial Instruments. As a result, KDPW implemented its procedures with regard to the settlement of the Buy-in/Sell-out market called BISO available on WSE.

KDPW has introduced a formal buy-in procedure to ensure timely settlement of exchange transactions. According to the KDPW regulations in case of a market transaction is not settled within two days after the contractual settlement date, KDPW on SD+3 has the right to buy-in (sell-out) securities on participant's behalf using his funds and if the funds are not available the transactions are settled from Clearing Guarantee Fund from the part contributed by that participant. In extraordinary situations the funds may be taken from the part contributed by other CGF member.

The following regulations are effective from October 22, 2007:

• If settlement of an exchange trade has not taken place within two days after the contractual settlement date due to a securities shortage, KDPW can initiate a buy-in on SD+3 on behalf of the failing party;
• KDPW also reserves the right to initiate the buy-in on SD+1 or SD+2 in exceptional situations (e.g. upcoming corporate events).

Apart from the above, BISO market is available for Supervising Brokers of the WSE member to cope with settlement problems by making repurchase transactions. This facility is optional and allowed for settlement cycle from T+0 until T+2.

The settlement at KDPW level takes place upon receipt of matching settlement instructions, provided to KDPW by its participants no later than Settlement Date (SD) 15:30 local time. This constitutes that the settlement of BISO trades on the T+0 basis is feasible.

Buy-ins/sell-outs are mostly used by WSE members. If a local brokerage house (also foreign remote member of WSE) consistently fails to pay on time, it may be eventually suspended from WSE. In case of a bankruptcy of a local broker, its obligations are settled by the Guarantee Fund. The participation in Clearing Guarantee Fund is obligatory for all WSE members both local and foreign. 

Buy-in procedures on the BISO market may be concluded only in the following situations:

1. insufficient securities on client's account to settle the transaction
2. it is necessary to repurchase securities sold by a WSE member not in compliance with the client’s order,
3. there is no confirmation of the transaction concluded, referred to Art. 121. of the Act on Trading in Financial Instruments.

In first two cases a WSE member makes a proposal to buy securities on his own behalf and for his own account while in the third case a WSE member makes a proposal to buy securities on his own behalf but for either the client's account or his own account. The third case requires from a WSE member to provide KDPW with information on the transactions concluded on such basis.

BISO transactions are governed by the following WSE Rules:

• WSE members are only allowed to initiate buy-in transactions on the BISO market to ensure securities availability for either its own account in the event the client does not have sufficient securities coverage on their account with the broker, or in the event the broker has executed the sale transaction contrary to the client's order; or for its own as well as client's account in the event there is a lack of matching settlement instruction from the client in accordance with Art. 121. of the Act on Trading in Financial Instruments.
• BISO transactions are executed outside the continuous or fixed price quotations via a separate WSE module, an internet-based system, and are settled by the KDPW.
• BISO market sessions take place between 10:00 and 14:30 (proposals being not yet orders are accepted since 09:00).
• A WSE member wishing to buy-in securities makesa "Proposal" in the BISO system, stating the type and quantity of securities required, as well as the settlement date for BISO trade. The broker can modify or cancel his proposal.
• Another WSE member can respond to the Proposal by submitting a response to the proposal (mostly sell orders), providing the quantity of securities (can be equal or less than in the initial Proposal) as well as the price limit. The price limit tick has been set up for PLN 0.01. The Response to the Proposal can also be modified or cancelled.
• A Repurchase Order (buy) that is submitted by the buying party can not be modified or cancelled and must be placed with one entity.
• Both the Proposal and the trade order are only valid on the day they were placed on the BISO market.
• BISO market is a non-anonymous market, WSE publishes BISO transactions indicating the names of the securities traded, number of the transactions and the total volume of the transactions.

WSE is entitled to ask WSE member concluding the BISO transaction for further details if any doubts concern the BISO transaction particularly when it is not in compliance with the WSE rules.

Securities lending is allowed in the Polish market under the securities regulations involved in the Act on Trading in Financial Instruments. The following types of securities lending are recognised on the Polish market:

• Securities lending with the intermediation of investment firms and custodian banks and securities lending for short selling purposes;
• Negotiated securities lending;
• Securities lending system organised by the Central Securities Depository of Poland (KDPW), supporting securities transactions settlement.

The terms and conditions of concluding the automatic securities lending are set out in detail in the KDPW Rules (Chapter IVa Securities lending) and in the Detailed Rules of Operation of KDPW. 
Short selling and securities lending has been allowed since January 1, 2000. Since this year (2010) they have not been regulated by the Decree of the Minister of Finance dated April 20, 2006, on the procedures and conditions to be followed while lending broker-traded financial instruments with the participation of investment firms and custodian bank any more due to repeal of the Art. 94.1 of the Act on Trading in Financial Instruments. The only Polish regulations that stipulate securities lending is the Act on Trading in Financial Instruments supported by Regulations of the Central Securities Depository of Poland and the Warsaw Stock Exchange. Following the provisions of the said Act general international standards have to be introduced in the Polish market like it is practiced in the developed capital markets. 

The model of securities lending agreement considered as a future of the standard in the Polish market is already drafted and will be comprised of two documents:

• Global Master Securities Lending Agreement under the International Securities Lenders Associations (ISLA).
• The Polish supplement to the Global Master Securities Lending Agreement in the Polish and the English language version.

The draft model Securities Lending Agreement is applicable on WSE official website.

There are two kinds of securities lending procedure within that type of securities lending currently available in the Polish market:

• Automatic securities lending (the automatic lending program in KDPW used for settlement problems solution).

The KDPW participants upon authorisation from a client can move client's securities to a special KDPW deposit account from which securities are taken to cover any settlement problems. Securities to be lent are chosen on random basis but with consideration of full coverage of borrowing party (partial lending is not possible).

Borrowing participant must have collateral at least at the level of the market value of loaned securities calculated on a daily basis (Art. 72.4 of the KDPW Rules). Collateral can be in the form of cash or securities deposited with KDPW. Collateral in cash is deposited in the bank account of KDPW while securities are blocked in the relevant account maintained for the borrower in KDPW.

• Securities lending on request (previously determined by the Decree of Mister of Finance dated April 20, 2006, have not been in force any longer). Currently the new system of the securities lending on request is worked out. It is to be located off the organised market and conducted by the Warsaw Stock Exchange neither as a regulated nor an alternative trading system within its other activity than organising trading in financial instruments (Art. 21.2 of the Act on Trading in Financial Instruments).

With the exception of lending related to short selling, the so far existed securities lending system is not obligatory for KDPW participants, but it supplements the automatic securities lending. It is still allowed upon the agreement on securities lending. Such transactions are settled at the KDPW level upon matching instructions sent by KDPW direct participants (local custodians and local brokers), however, they are not registered as such in the meaning of the Polish market regulations. All issues regarding: collateral, fees and other technicalities are agreed between the KDPW direct participants themselves.

Currently, KDPW is working on implementation of securities lending system aiming at the increase of the liquidity of on-exchange short selling transactions. KDPW participants will be able to order for securities necessary to cover their short positions through the KDPW_CCP. KDPW expects that the new system for securities lending will enable to negotiate prices of the securities being the subject of the lending.

Depending on your country of residence and the terms of any applicable tax treaty in effect with Poland, income such as fees received from lending of Polish securities may be taxable in Poland. Where applicable, you may be required to remit Polish tax and file a Polish tax return. As such, please consult with your tax advisor for information on potential tax implications prior to confirming enrollment.

The Fund was established in 2001 and is managed and controlled by the Central Securities Depository of Poland (KDPW) in accordance with Chapter V of the Act of 29 July 2005 on Trading in Financial Instruments to protect investors (excluding specified groups of institutions like local and foreign banks, brokers, investment firms, pension and mutual funds, insurance companies etc.) in case of insolvency, or fraud of a brokerage house (local or foreign broker being a remote member of WSE), as recommended by the European Union. All KDPW members maintaining clients' both cash and securities accounts (foreign and local brokers and local custodians) must contribute to the Compensation Fund based on the value of clients' assets.

The Resolution of the Board of the Central Securities Depository of Poland (KDPW) specifies the height of the rates on the basis of which the payments of contributions to a compensation system are followed by. All the entitled KDPW members are obliged to contribute to a compensation system on a yearly basis up to 31 January. The payment is credited in KDPW cash account at the National Bank of Poland.

The Compensation Fund secures compensation of lost securities and cash upon a brokerage house or a bank bankruptcy in the amount of the Polish zloty equivalent of EUR 3,000 - at 100% of the assets covered under the compensation system and at 90% of the excess over that amount, with the ceiling on assets covered under the compensation system in the amount of EUR 22,000 in PLN equivalent.

The Act of November 16, 2000, entitled 'Counteracting the Introduction into Financial Circulation of Material Assets Derived from Illegal or Undisclosed Sources' last amended March 5, 2004 ("Anti-Money Laundering Act – AMLA"), regulates the principles and procedures for the prevention of the use of material assets from illegal or undisclosed sources in financial dealings, and outlines the duties of entities involved in financial dealings with regard to gathering and disclosing information. The AMLA imposed certain obligations on financial institutions such as banks, brokers, KDPW, insurance companies, investment and pension funds and others. 

The regulation lays the groundwork for creating a new regulatory office, called General Inspector of Financial Information (GIFI), responsible for supervising the Anti-Money Laundering activities on the Polish market. The GIFI reports to the Minister of Finance and performs his duties with the assistance of an organisational unit created especially for that purpose within the Ministry of Finance. The GIFI will have the following responsibilities:

• analysing of monitored transactions
• initiating of transaction suspension procedures based on well-founded grounds for suspicion
• documenting and justifying any suspicion of criminal acts,
• initiating preventative action
• monitoring the observance of the AMLA
• co-operating with foreign financial institutions on preventing the use of the funds from illegal sources in financial dealings.

Along with other institutions, local custodians and brokers are also required to monitor, register and report all capital and money market transactions defined in the AMLA. Especially, they are obliged to register:

• each transaction worth in excess of EUR 15,000 both when this transaction involves a single operation and when several operations are performed in circumstances suggesting that these operations are linked together,
• each transaction of any value and of whatever character if circumstances suggest that the funds involved in these transactions may originate from illegal or undisclosed sources.

The registration of the above transactions is kept with the relevant documents for a period of five years, starting from the first day of the year following the year in which the last entry concerning the given transaction was made. The custodians and brokers are required to maintain the register of transactions and provide the GIFI with information concerning all transaction details using the electronic means of data transmission, no later than seven days after the transaction date. Based on the written request received from the GIFI, the custodian and broker disclose the relevant information concerning transactions in case. The Minister of Finance is responsible for defining the details of maintaining such register. The obligation of introducing the register of transactions by the banks and brokers entered into force on July 1, 2004.

This is an FII market. Please contact your RBC Investor Services' Client Manager before making portfolio investments.

Subcustodians require a copy of client's incorporation documents like articles of incorporation or a trust deed as supplementary documentation to prove a legal entity status of the client while opening a segregated subcustody account. 

Starting from 16 April 2012, omnibus account structure for securities accounts is available on the Polish market. No establishment documents of omnibus account's holder as specified for segregated subcustody accounts are required for opening omnibus accounts in Poland. The entitlements to securities deposited in omnibus accounts are assigned to the entities /beneficial owners indicated by the holder of omnibus account in the Allocation List. Information on beneficial owners holding their assets on omnibus accounts is disclosed by the omnibus account's holder only upon the request of the Polish FSA and/or General Inspector for Financial Information (legal obligation). In case the omnibus account's holder has no information about the final beneficiary, he must indicate the entity, for whom the securities deposited in this omnibus account are recorded in his books. The entity running the omnibus account can request the holder of omnibus account to provide him with the relevant information on final beneficiaries in order to properly perform the duties stipulated by the provisions of the tax law. In case of withholding dividend and interest tax from the assets deposited in omnibus accounts, the account's holder is obliged to at least disclose the breakdown of securities belonging to natural persons (individuals) and legal/institutional entities. According to the law omnibus accounts are restricted to keep derivatives on such accounts. 
The owner of omnibus account can be penalized by PFSA with the fee in amount of up to PLN 500,000 if he confirms untrue information on final beneficiaries or does not deliver at all the requested by PFSA information on the final beneficiaries.

Certificate of Residency for tax purposes is not an opening requirement however is necessary to apply DTT withholding tax rates to the investor's accounts. Lack of Certificate of Residency on record date for dividend/interest payment unable the investor to be entitled to favourable withholding tax. The Power of Attorney is not a market requirement to open a subcustody account however is required for Proxy Voting purposes and some Corporate Actions events. Supplementary documentation may be subject to inspection by government regulators or internal/external audit control.

The Polish market is fully open for foreign investments. Foreign investors investing in securities have the same rights as domestic investors. 

Since August 14, 2010 the following situations require to be reported:

• intention of acquiring/taking up 10%, 20%, one third, 50 % of total vote/share capital in a bank/insurance company/investment company/brokerage house;
• intention of becoming a predominant shareholder of a bank/insurance company/investment company/brokerage house in way other than by acquiring/ taking up the majority stake of that company;
• acquiring/exceeding 5%, 10%, 20%, 25%, one third, 50%, 66% and 75% of total vote in a domestic bank;
• acquiring/exceeding 10%, 20%, one third, 50%, of total vote in a bank/insurance company/investment company/brokerage house
• intention of disposal of shares resulting in new threshold over 10% of total vote in a domestic bank
• intention of disposal of shares resulting in a new threshold maintained below 10%, 20%, one third, 50% of total vote/capital share in a domestic bank
• intention of disposal of shares resulting in a new threshold maintained respectively below 10%, 20%, one third, 50% of total vote in a bank/insurance company/investment company/brokerage house

Polish Financial Supervision Authority may oppose the planned acquisition (taking up) of shares within 60 business days since the receipt of notification with all required documentation. Investors acquiring/taking up the shares with the violation of the above reporting requirements are not allowed to execute voting rights from shares thus acquired.

Since October 1, 2015, investors need to receive approval from the Ministry of State Treasury before crossing the 20%, 25%, 33% or 50% thresholds in terms of voting rights in public companies classified as 'strategic'. Acquiring the shares without such an approval may be penalised with a fee up to PLN 100 million and will not be able to effect voting rights from acquired shares.

Non-resident investors can freely convert PLN for all current transaction payments. Non-residents from EU, EEA and OECD countries are allowed to obtain short term credit/loans, make short term deposits and invest in all types of instruments.

For capital transactions including portfolio investments, most regulatory limitations for the conversion of PLN have been abolished, with certain exceptions for non-residents from the "third" countries (non-EU and their autonomic, dependent or associated territories, non-EEA and non-OECD, autonomic, dependent or associated territories of EU, EEA and OECD countries). A National Bank of Poland permit is therefore required when:

• non-residents from third countries purchase or sale directly, or through intermediaries, any securities, mutual funds, participation units and other rights
• granting a loan or credit to non-residents from third countries if more than 50% is to be paid back within one year

for residents to make a donation in favour of a non-resident from a third country.

As of the new FX Law from April 21, 2007, individual FX permits are required for the sale in Poland of:

• debt instruments purchased abroad with a maturity shorter than one year (e.g. commercial papers, T-bills)
• certain other rights purchased abroad, or purchased from non-resident, or purchased from resident when trade is subject to individual FX permit.

Please note the individual permit is not required if the trade counterparty is the State Treasury, the National Bank of Poland, a licensed local bank or other financial institution being supervised by the relevant authority (e.g. insurance company, local investment fund, local pension fund, local broker), provided these institutions have the rights based on other regulations or FX license.

Based on the Minister of Finance Ordinance, unless the counterparty is one of the above entities, non-residents from "third" countries have a general permit to:

• purchase and sell certain types of securities (e.g. WSE equities, T-bonds), and mutual funds participation units (except for debt instruments with a maturity of less than one year)
• purchase and sell derivatives if they are traded on the Exchange or BondSpot S.A.

Cash clearing in Poland is supervised by the National Bank of Poland (NBP) though the cash clearing system that is organised and conducted by Krajowa Izba Rozliczeniowa(KIR), the National Clearing House (NCH). KIR operates through its regional centres and organised the cash clearing through its electronic payment system called ELIXIR. 

Another cash clearing system is conducted by DSP (Department of Payments Systems) of NBP through its system called SORBNET. 

ELIXIR
An electronic settlement based on a system that is used by local banks only for processing customers' payments not exceeding PLN 1 million. Funds transfers are processed electronically while grouping in larger ("wholesale") payments (all payments of one particular local bank, for instance) and delivered to NBP (DSP in fact) through SORBNET to settle finally. There are three ELIXIR sessions per day: morning session (10.30 – 11.00), afternoon session (14.30 – 15.00) and evening session (19.00 – 19.30). 
. 
Funds transfers, initiated during the first, and/or second session of ELIXIR, are available for the beneficiaries on the same day as value date and the payments are booked with the same value date. As funds from the third ELIXIR session are only available to the beneficiary's bank in the evening, market practice is for Polish banks to book payments cleared through this session in the morning on the next day with the original value date. Some banks may book such payments with the next-day value.

SORBNET / SORBNET-EURO
An electronic real time settlement system. Same-day funds transfers are processed electronically for all cash payment orders in the amount of or exceeding PLN 1 milliononly via SORBNET. Due to a real time basis of cash settlements, payment orders of the value below PLN 1 million can be processed via both systems.

The main features of interbank settlement in the SORBNET system are: 
unconditionally between 08:00 and 16:00, in exceptional emergency cases, upon prior approval with beneficiary's bank, the payment may be effected by 17:00, pursuant to the rule of real-time settlement, i.e. immediately, once payment order has been submitted by the bank to the NBP payment orders executed via SORBNET may not be cancelled once executed interbank settlements in SORBNET take place through simultaneously debiting and crediting banks' accounts maintained with DSP and serviced in this system payment orders in SORBNET are executed pursuant to the gross settlement rule, i.e. by separate execution of each payment order.

Effective March 7, 2005, NBP launched SORBNET-EURO, while the National Clearing House (KIR) launched Euro-ELIXIR, the local payment systems which allow Euro domestic payments and Euro cross-border payments from/to TARGET and STEP2 payment systems. In order to join TARGET system, the NBP opened an account with the Italian central bank Banca d`Italia, which is a member of TARGET.

SORBNET-EURO allows domestic payments in the form of RTGS, whilst Euro-ELIXIR allows domestic payments to be made via two settlement sessions a day (the same-day settlement). With regards to cross-border payments SORBNET-EURO allows RTGS, while Euro-ELIXIR allows overnight processing.

There is no limit for cash payment for domestic payments via Euro-ELIXIR. For cross-border payments via Euro-ELIXIR, there is an EUR 50,000 limit. For foreign currency securities traded in Poland, except for securities in EUR, KDPW has an agreement with the local commercial bank, BZ WBK S.A. (formerly it was Kredyt Bank S.A. – BZ WBK is a successor of the agreement between Kredyt Bank S.A and NBP after the takeover Kredyt Bank S.A. by BZ WBK S.A.), which acts as cash clearing agent for foreign currencies.

As a result of the launch of SORBNET-EURO payment system by the NBP, effective from March 7, 2005, KDPW moved Euro payments of issuers' obligations to the entitled holders of securities such as dividend and interest, and cash settlement of securities transactions denominated in Euro to NBP.

At present, there are only a few securities quoted in Euro admitted to the trading on WSE. Euro accounts of KDPW participants opened with NBP are mostly used for processing of payments of issuers' obligations in Euro to the entitled holders of securities (i.e., dividend payments) for several companies from the Euro zone traded on WSE that are quoted in PLN.

Trading on WSE in other currencies than PLN are available also for the following currencies: EUR, USD, GBP, CZK, and HUF, however issuers do not register their securities at KDPW denominated in other currencies than PLN. Both WSE system of quotation and clearing and of KDPW_CCP and KDPW are prepared for trading in financial instruments denominated in other currencies than PLN.

Proceeds from shares like dividends can be paid out in foreign currencies depending on the Issuer's decision as for dividend payment procedure.

Yes, overdrafts are permitted in the market.

• Ex-date is Record Date-1 for WSE trades on shares (as settlement cycle is T+2).
• Payment of net dividend is executed by the issuer to KDPW on the payment date. KDPW distributes funds in accordance with details from its participants to the KDPW participants' PLN cash accounts with the clearing bank (the National Bank of Poland). Payment date must be established at least 10 days after Record Date.
• Entitlements based on settled position on Record Date.
• Funds are available immediately, without any delay upon crediting to client's account on pay date.

The Polish Commercial Code was amended with effect from January 1, 2017. According to the amendments, for public companies, the record date for defining the entitlement to receive dividend can be set no earlier than five days from the date of resolution of General Meeting concerning the dividend payment and no later than three months from the date of such resolution. Furthermore, the pay date cannot be set later than three months from the dividend record date.

Dividend payments are announced once a year at AGM giving the record date and payment date details although frequency may be changed upon decision of shareholders. In Poland, dividends are usually paid once a year in the period between June and September upon AGM approval.

On a quarterly basis for three-year floating T-bonds.
Annual on two, five and ten year fixed rate T-bonds, ten-year floating rate T-bonds.
At maturity for one-year bonds.

Depending on each issue of T-bonds, the interest is accrued on a 360 or 365 day basis.

Under the Polish regulation local custodian/local investment firm is withholding tax agent for dividend and interest tax for income received from securities registered on securities accounts. Polish issuers are paying income in gross amount and tax is withhold by local custodian/investment firm running client’s securities account. After tax deduction client is credited on pay date with dividend/interest net amount. In case of income received from foreign securities (dual listed securities) it is received by KDPW and distributed to its participants in net amounts.

Only income in PLN and EUR is paid through National Bank of Poland. Income in any other currency (for dual listed securities) is paid through Bank Zachodni WBK who is KDPW clearing bank for any other currency than PLN and EUR.

Shareholders are entitled to receive dividend according to the settled position on securities account on Record Date. According to the law Record Date must be established at least 10 days prior to the payment date. Since January 1, 2015, according to the new tax law, issuers are no longer tax paying agents for dividends. The local agents holding securities accounts are tax paying agents on behalf of investors/beneficial owners and as such are responsible for collecting withholding tax from investors' accounts. It means that it is local agents that decide on the documentary requirements in order to benefit tax relief at source. Certificate of Tax Residence is a must to benefit Double Tax Treaty withholding tax rates at source. The Certificate in the original must be renewed on a yearly basis. There is no need to provide the statement confirming that the entity entitled to proceeds from securities held is a final beneficiary in accordance with the provisions of the relevant Double Tax Treaty and does not carry on business in the territory of the Republic of Poland through a permanent establishment situated therein within the year in which the tax was paid to a relevant tax office for applying reduced rates of withholding tax at source.

EEA-based UCITS and pension funds may benefit from WHT exemption at source under the Polish Act on CIT upon the Certificate of Tax Residence and Tax-Self Certification in place on Pay Date.

Interest details are established in the issuance letter (memorandum) issued by the Ministry of Finance for every issue of T-bonds at the time of issuance or in case of floating rate instruments updated interest for the forthcoming periods are available in the Ministry of Finance (accessible via Min Fin website). Those details include all record and payment dates for the whole lifecycle of the given Bond. For corporate debt, commercial papers or other debt instruments in most cases the same procedure applies, so either interest is provided in the issuing prospectus (memorandum) or it is periodically provided by the issuers or their agents.

Record date for interest on T-bonds is freely established before payment date (record date is usually close to payment date however no standards applies) on the contrary to other debt securities for which the issuer is not State Treasury where record date must be at least 6 days prior to interest payment date.

For T-Bonds, KDPW pays gross amount of interest to the cash accounts of KDPW participants with the National Bank of Poland on payment date. Custodian banks allocate interest to the clients' accounts. They are responsible by law for the payment of the interest tax on T-Bonds and corporate bonds that are registered at KDPW in line with relevant DTT rate upon the client's Certificate of Tax Residency delivered on pay date. Clients are paid the net interest amount. 

For other debt instruments issuers are responsible for tax payment on behalf of the securities holders unless the securities are registered at the KDPW. Interest is paid net via KDPW as described above or directly to the owner's account if securities are not deposited in KDPW.

For all debt instruments other than those issued by State Treasury the only tax paying agent is an institution-maintained securities accounts on which these securities are held in provided that the debt securities have been issued after January 1, 2015.

Securities holders are entitled to receive dividend/interest (maturities) according to the settled position on client's account on record date.

Ex-date (first day of trading without rights) for equities and T-Bonds traded on WSE is RD–1.

Unrestricted voting rights. 

In the Polish market corporate bonds are not entitled to participate on any GM as they do not represent shareholder rights. The same applies to mutual funds, pre-emptive rights or allotment rights.

No, effective from August 3, 2009, the record date for registration is set 16 days prior to the meeting date which replaces the need to block shares prior to the meeting until the meeting ends.

Ordinary general meetings of shareholders are held annually. The announcement of a general meeting is published on the issuer's website at least 26 days prior to the date of the meeting. According to the law issuer is also obliged to inform the Central Securities Depository of Poland (KDPW) of the general meeting not later than one day after the official announcement on its website. Meeting notices and agendas are provided in English as soon as they are publicly announced or on the following day at latest. Pursuant to the new Regulations, Issuers/Companies have an obligation to announce the meetings details including the Agenda on their websites. Such information is mostly available in Polish, however, most of the companies start preparing the announcement on their meetings additionally in English.

Yes, Companies are obliged to publish the results of the vote on their website within seven days following the meeting.

Available on request and at the discretion of the company.

In case of shareholders being legal entities or in case of proxies, voters must submit relevant written power of attorney signed by the shareholder or shareholder's representatives allowed for signing such documents and mentioned in the documentation of the shareholder. POA must be notarised and consularised or certified with an Apostille. To be used in the Polish market POA must be sworn translated into Polish and submitted to the issuer before GM. Subcustodians may arrange for the translation, if required.

General POA may be valid for all the meetings a shareholder is entitled to participate with the validity of unlimited duration.

Electronic powers of attorney (POAs) are accepted by issuers, if an issuer takes the necessary steps to identify the shareholder.

Remote participation in shareholders general meetings and remote voting by mail will be allowed upon the approval of the issuer and their agreement to offer such a facility. Such information must be included in the general meeting's procedure and available on companies' website together with the announcement on the meeting.

Statutory withholding tax of 19%. 

Reduce tax rate at source in accordance with the provisions of a relevant DTT is available upon valid Certificate of Tax Residency provided to the subcustodian on pay date at the latest. If the certificate is delivered after pay date, DDT tax rates can be applied within quick refund procedure, i.e. amendment tax rates before WHT is paid to a relevant tax office) . By default option, the tax can be refund based on tax reclaim procedure. By default, quick refund is performed between the day of dividend payment and the last day of the month in which the dividend was paid or on the best effort basis by the day in which the tax is paid to the tax office (7th day of the month following the month in which the withholding tax was collected). To benefit from quick refund the investor has to provide the same documents as required on pay date to benefit from relief at source.

Investors can reclaim WHT, applying to Tax Authorities for a refund of tax upon Certificate of Residence that must be delivered in the original confirming domicile country of the investor for taxation purposes. Tax reclaims are performed by licensed tax advisors (natural persons) upon Power of Attorney notarized and certified with Apostille.

Since January 1, 2011, EEA-based UCITS and pension funds are exempt from withholding tax in Poland.

EEA-based UCITS and pension funds are eligible to claim exemption status provided that they meet the following criteria:

• the fund is subject to unlimited tax obligation on all income in the country of incorporation
• the sole purpose of the fund is collective investment of money into transferable securities, money market instruments and other transferable rights (applicable only to UCITS)
• the fund conducts their business/activity upon permission given by the appropriate authorities in the country of their incorporation
• the fund's activity is supervised by the appropriate authorities in the in the country of their incorporation
• the fund appointed a depository to keep safe their assets
• the fund runs an activity with the area of business being only collecting and investing of monies with the purpose of paying them back to the participants of a pension scheme after achieving retirement age (applicable only to pension funds).

The entity that wants to benefit from tax exemption is obliged to provide a local agent with a document, notarized and certified with the Apostille, that will acknowledge the above criteria. 

The tax exemption will be applied provided that the DDT between Poland and the fund'scountry of incorporation enables the exchange of information between the tax authorities. Currently all DTTs with EEA countries, apart from Lichtenstein, contain such provisions.

EEA investment funds are required to provide a new version of the self-certification to benefit from tax exemption effective January 1, 2017.

Statutory withholding tax of 20%- corporate investors
Statutory withholding tax of 19% - individual investors 

Reduce tax rate at source in accordance with the provisions of a relevant DTT is available upon valid Certificate of Tax Residency confirming domicile country of the beneficiary for taxation purposes which should be provided to the subcustodian on pay date at the latest. Quick refund amending statutory tax rate applied on pay date to an investor is performed by default between the day of interest payment and the last day of the month in which the dividend was paid or on the best effort basis by the day in which the tax is paid to a relevant tax office (7th day of the month following the month in which the withholding tax was collected).

Apart from tax treaties some international organisations are relaxed from taxation in Poland provided that Poland is a member of such organisation or ratified conventions regulating such organisation.

Investors can reclaim WHT, applying to Tax Authorities for a refund of tax upon Certificate of Residence that must be delivered in the original confirming domicile country of the investor for taxation purposes. Tax reclaims are performed by licensed tax advisors (natural persons) upon Power of Attorney notarized and certified with Apostille.

Treasury bills as well as zero-coupon T-bonds redemptions are subject to a tax at 20% rate unless an applicable double taxation agreement supported with a valid Certificate of Tax Residency provides otherwise. DTT tax rates are applied only upon Certificate of Tax Residency in place, available on pay date.

Since January 1, 2011, EEA-based UCITS and pension funds are exempt from withholding tax in Poland.

EEA-based UCITS and pension funds are eligible to claim exemption status provided that they meet the following criteria:

• the fund is subject to unlimited tax obligation on all income in the country of incorporation
• the sole purpose of the fund is collective investment of money into transferable securities, money market instruments and other transferable rights (applicable only to UCITS)
• the fund conducts their business/activity upon permission given by the appropriate authorities in the country of their incorporation
• the fund's activity is supervised by the appropriate authorities in the in the country of their incorporation
• the fund appointed a depository to keep safe their assets
• the fund runs an activity with the area of business being only collecting and investing of monies with the purpose of paying them back to the participants of a pension scheme after achieving retirement age (applicable only to pension funds).

The entity that wants to benefit from tax exemption is obliged to provide a local agent with a document, notarized and certified with the Apostille, that will acknowledge the above criteria.

The tax exemption will be applied provided that the DDT between Poland and the fund's country of incorporation enables the exchange of information between the tax authorities. Currently all DTTs with EEA countries, apart from Lichtenstein, contain such provisions.

EEA investment funds are required to provide a new version of the self-certification to benefit from tax exemption effective January 1, 2017.

Publicly traded instruments are subject to 19% tax. Institutional investors pay that tax in the form of corporate income tax (current statutory rate 19%).

Foreign institutional investors that are covered by the Double Tax Treaty may benefit from paying such taxes in their own country. The withholding tax is not deducted in Poland from investors protected by relevant DTT, unless the provisions of that DTT state otherwise, investors who do not have DTT protection are subject to tax liability in Poland in general.

Since 2004 Poland has introduced CGT on individuals at a statutory rate of 19% paid separately from other personal income. Individual investors, non-residents that are protected by DTT may benefit from paying CGT in their own country. Those investors who are not protected by DTT are subject to tax liability in Poland.

There are no special taxes, charges or duties to enter the market and there is no stamp duty on securities transactions executed on the regulated market.

1% Stamp Duty tax on the market value of transaction on a trade date has to be levied in case of transactions in equities performed off the regulated market and without participation of a local or foreign investment firm. The Stamp Duty tax obligation is imposed on the receiver of securities and is to be paid with 14 days since trade date upon tax declaration (by completing a tax form PCC-3) delivered to a relevant tax office. All foreign clients have a dedicated tax office, II Urzad Skarbowy Warszawa-Srodmiescie. The payment details are as follows:

BIC (swift): NBPL PLPW

NBP O/O Warszawa
Bank account number (IBAN): 17 1010 1010 0165 9322 2700 0000

Beneficiary's name: Drugi Urząd Skarbowy Warszawa – śródmieście Beneficiary's address: ul. Jagiellońska 15, 03-719 Warszawa, Poland 

Portfolio transfers (also free of payment transactions) on equities are freely allowed, however, may subject to Stamp Duty tax obligation when change of beneficial owner. Securities lending transactions are Stamp Duty exempted. 

According to the Law on trading in financial instruments the term "investment firm" refers to entities conducting brokerage activities in the territory of Poland. "Foreign investment firm" refers to a natural person, legal person or an organisational unit without legal personality, being resident or having its registered office in the territory of a country being a member of the European Economic Area (EEA) conducting brokerage activities in the territory of another member state of the EEA on the basis of a license granted by a competent authority as well as a foreign credit institution.

Transactions concluded outside the organised market between investment firms or foreign investment firms and another entity are exempt from stamp duty fee, provided that the transacted financial instruments were originally purchased by these firms on the organised market. In practice this exemption will be applicable to over-the-counter (OTC) trades between the brokers selling shares from their own portfolios and their clients.

In accordance with Polish law, the following civil law transactions will be exempt from stamp duty tax:

• sale of Treasury bills and bonds
• sale of the National Bank of Poland's bills
• sale of other financial instruments:

Also transactions on equities will be exempt from Stamp Duty provided that it is a sale:
a) to investment firms or foreign investment firms, or
b) with intermediation of investment firms or foreign investment firms, or
c) effected on an organised market, or
d) effected outside the organised market by investment firms or foreign 
investment firms, provided that the financial instruments subject to the 
transaction were originally purchased by these firms on the organised market.

None

Poland Holiday Calendar

• Warsaw Stock Exchange: www.wse.com.pl/index.asp
• CATALYST: www.gpwcatalyst.pl
• National Bank of Poland: www.nbp.pl
• Krajowa Izba Rozliczeniowa, KIR: www.kir.com.pl
• Central Securities Depository of Poland (KDPW): www.kdpw.com.pl
• KDPW_CCP: www.kdpwccp.pl
• BondSpot: www.bondspot.pl
• Polish Financial Supervision Authority (PFSA): www.knf.gov.pl