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Changes in issuers’ reporting requirements

Companies listed on the main market of the Warsaw Stock Exchange and NewConnect will be required to release year-end and interim reports as well as disclose inside information. This is more of an evolution in reporting requirements than a revolution.

Major changes in issuers’ reporting obligations are in store for the capital market. Most of the changes, arising under the EU’s Market Abuse Regulation (596/2014), will enter into force on 3 July 2016—directly, without the need for implementation into Polish law. This means that sections of the regulation of the Polish Minister of Finance on current and periodic reports listing the catalogue of current reports will need to be repealed.

When the Market Abuse Regulation enters into force, the obligation to release current reports listed in the regulation of the Minister of Finance will disappear. Instead, public companies will be required to disclose inside information which, if it were made public, could likely have a significant effect on the price of financial instruments. This means that companies will have to monitor events and information on an ongoing basis in terms of their likely ability to affect prices. Information that could significantly affect prices of financial instruments should be understood to mean information on which a reasonable investor would base investment decisions.

The change is of particular concern to companies listed on NewConnect, which so far have not been required to release current reports. Under the new rules, they will also be required to disclose inside information.

There may be doubts surrounding the scope of information that should be included in such reports. But it may be anticipated that before the Market Abuse Regulation enters into force, the European Securities and Markets Authority will issue guidelines creating an exemplary open catalogue of information that may have this character.

The changes in periodic reporting by public companies should also be noted. Amendment of the Transparency for Listed Companies Directive (2004/109/EC) by Directive 2013/50/EU will result among other things in elimination of quarterly reports and extension of the deadlines for publication of the remaining periodic reports. The deadline for implementation of these rules is November 2015, and therefore a proposal for amendment of the Polish regulations governing these reporting obligations of public companies should be released soon.

Danuta Pajewska, Capital Markets and Financial Institutions practices, Wardyński & Partners