capital markets | In Principle

In recent years, ESG has been mainly about “E”—environmental aspects, which were most often subject to regulation. Now there is increasing emphasis on social (S) and corporate governance (G). A noteworthy measure in governance is the EU’s Gender Balance Directive, which came into force at the end of 2022. The directive is intended to ensure more balanced representation of women and men among directors of listed companies.

The Central Register of Beneficial Owners is a public register maintained by the Polish Minister of Finance, established pursuant to the EU’s 4th Anti–Money Laundering Directive (2015/849). The register has been in operation since autumn 2019, but in connection with harmonisation of provisions on disclosure of information on beneficial owners under EU legislation it is undergoing changes and improvements. Further modifications were made on 9 March 2023.

Poland’s Commercial Companies Code provides for a number of institutions strengthening the position of minority shareholders. One is that shareholders representing a fifth of the share capital may demand that the company’s supervisory board be elected by voting in separate groups (Art. 385). This is a departure from the statutory method of appointing the supervisory board by a resolution of the general meeting adopted by a simple majority of votes. One or more shareholders representing 20% of the share capital may demand that the supervisory board be elected in groups, even if the company’s statute provides for a different way of appointing the supervisory board, e.g. through personal entitlements.

After July 2022 amendments to the law, companies can now benefit from crowdfunding. As usual, the devil is in the details.

A private subscription is a convenient method to raise share capital. How to carry it out in practice?
 

The Foreign Exchange Law has remained unchanged for many years. However, foreign exchange permits, though rarely required anymore, as well as reporting obligations, should still be kept in mind. To a large extent, foreign exchange transactions are freely allowed, but this does not mean that they are completely liberalised and not monitored by the National Bank of Poland.

One of this year’s tax amendments that may affect Polish capital market participants is the income tax exemption for taxpayers investing in IPOs of companies entering the Warsaw Stock Exchange. Under certain conditions, they will be exempt from capital gains tax.

The Polish Deal introduces several solutions for Polish capital market participants, including corporate income tax changes for companies preparing to debut on the stock exchange. This amendment came into force on 1 January 2022.

The game development market in Poland and worldwide is steadily growing, and ambitious companies from the game sector are looking for ways to increase brand recognition and raise funds for new productions. This leads them to consider listing their shares on the stock exchange. So the question is, who can go public, what is to be gained from doing so, and how to go about it?

Work on the amendment of the Investment Funds Act is coming to an end. The changes include extending the range of fees in connection with distribution of participation units in Poland and introducing uniform rules for advertising information provided by funds and detailed rules for protection of investors in the event of cessation of marketing of participation units in foreign funds in Poland.

The mandatory dematerialisation of shares of stock, introduced by the 30 August 2019 amendment of the Commercial Companies Code, was intended to bring about a situation as of 1 January 2021 where the shares of all joint-stock companies and joint-stock limited partnerships in Poland would take the form of an electronic record, and share documents would lose their legal force from that date. But the coronavirus epidemic has made it difficult for commercial entities to make this organisational change, and the parliament has extended the deadlines for complying with certain obligations related to dematerialisation of shares. The Polish Personal Data Protection Office has also issued an opinion on dematerialisation.

The end of 2019 was a kind of a caesura in the legislative process of abandoning the physical document as a carrier of securities used to raise finance on capital markets. Bonds, investment certificates, mortgage bonds, shares and subscription warrants have either bid farewell, or will soon do so to the physical document as a carrier.