One of the segments of the main markets in Poland is the stock exchange market (WSE), on which secondary trading in securities takes place. Transactions on the stock exchange include buying and selling financial instruments that can be traded on the main market. In addition, NewConnect is an alternative trading system allowing smaller companies to float shares, and is also run by the WSE. Trading is conducted outside the main market as a multilateral trading facility.
An issuer of financial instruments can be any institution that floats securities on the WSE, being :
In Poland, the main issuer is the State Treasury, which floats government bonds and co-owns shares in many listed public companies. There are different kinds of securities. In general, securities can be divided into shares and bonds:
Issuers are required to publish current and periodic reports giving details of the issuer itself, and the issuer’s financial instruments. The Electronic Communications System (ESPI) is a highly useful tool for fulfilling this obligation. It is an important element of the disclosure obligation that the information provided by the issuer enables investors to assess how the information impacts commercial, material, and financial standing. Firms whose financial instruments are admitted to organized trading are required to file current reports. The issuer must declare all facts and events that may have a major impact on their commercial, material, or financial standing. This obligation arises where the firm believes that its situation may affect the price or value of listed financial instruments. The issuer must publish this information within twenty-four hours. Events that have to be disclosed include:
The types of periodic reports are quarterly, semi-annual, and annual. The time limits for publishing these documents are stated in the published current report, by the end of the first month of each year. The issuer is required to include periodic information and give details of the firm in the form of financial statements and other documents in the periodic report.
Once the Central Securities Depository of Poland (KDPW) has passed a resolution registering shares, the company files an application with the WSE for admission of the shares for trading. The application is filed by the issuer with the WSE management board, along with an opinion provided by an investment firm on eligibility for admission on the stock exchange.
For shares to be admitted and floated on the WSE, a company has to fulfill requirements under the WSE rules and Universal Trading Platform (UTP) Detailed Exchange Trading Rules. For this reason, shares can be admitted for trading on the WSE on the main or parallel market, subject to certain conditions:
The WSE also considers the following when reviewing the application (without limitation):
The WSE management board has fourteen days to adopt a resolution admitting financial instruments to trading on the WSE from the day of filing of a complete application.
If the WSE management board approves the application for trading on the WSE, the issuer is required to float the shares within six months, failing which the WSE management board may repeal the resolution admitting the shares for trading on the WSE.
The shares are floated as of the first day on which they are listed, i.e. when a company goes public on the WSE.
The main condition for issuing shares for trading on NewConnect is the preparation of an application containing information related to the issuer. Every issuer has to submit an application to the WSE for shares to be floated on NewConnect, and this includes the information document drawn up in cooperation with an authorized adviser.
The information documents of issuers must be uploaded on the of NewConnect website. Furthermore, every issuer must meet the following requirements laid down in the WSE rules to obtain the status of a company listed on NewConnect .
The WSE organizes NewConnect, and makes decisions regarding applications for admission of shares for trading, according to assessment of the documentation and status of the company. The WSE may also, at its discretion, verify the status of the applicant. The WSE will deny the application if admission of financial instruments for trading on NewConnect would pose a threat to safety of trading and the interests of its participants.
Shares are admitted for trading on NewConnect within ten working days from the day of filing of a complete and correct application along with all required documents.
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