polish securities and exchange commission jacek socha chairman of the polish securities and exchange...

Polish Securities and Exchange Commission

Jacek Socha

CHAIRMAN OF THE

POLISH SECURITIES AND EXCHANGE COMMISSION

DEVELOPMENT OF THEREGULATED CAPITAL MARKET

IN POLAND

„Development of the regulated capital market in Poland”, Washington, 2003


Foundations of the Polish public capital market Dematerialization of securities

all securities admitted to public trading are dematerialised what allows electronic trading, which is faster, safer and less costly

Concentration of trading trading in public securities is conducted on the regulated market concentration of supply and demand on one market allows more

effective price discovery thanks to larger liquidity

Equal access to information on public companies disclosure requirements: initial, current, periodic high standard and quality of disclosed information and data

Strong supervision over the market admitting securities to public trading licensing of brokerage houses, brokers and advisors supervision over market participants



Organisation of the Polish capital market Warsaw Stock Exchange:

main stock exchange in Poland organises trading in bonds and stocks, bonds and derivatives

Central Table of Offers: regulated over-the-counter market organises trading in stocks of medium and small enterprises

National Depository for Securities: central deposit of securities clears and settles transactions in public securities

Polish Securities and Exchange Commission: admits securities to public trading licences and supervises market participants



4

NUMBER OF ENTITIES IN PUBLIC TRADING

VALUE OF PUBLIC OFFERS [mln USD]

12 6 9

96

56

18 13 12 100 0 0 1 2 1 1 1 7 5 6

1512 18

59

81

107

200

253261 265 269 264

0 0 0 0 0 0 2 2 3 4 2 0

2724

33

27

0

50

100

150

200

250

300

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Entities admitted to public trading in a given periodEntities withdrawn from public trading in a given periodNumber of entities in public trading at the end of periodMergersSource: PSEC

858

358 49

8

2416

2304

1242

937

713

662

345

239

11

1407

1216

610

53 1 2

513

119

487

1009 10

88

632

884

712

147

512

0

500

1 000

1 500

2 000

2 500

3 000

1994 1995 1996 1997 1998 1999 2000 2001 2002

Total value Value of IPOs Value of stock issues Value of bond issuesSource: PSEC



5

916

22

44

65

83

143

198

221 225230

216

0

50

100

150

200

250

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Source: WSE

0

5000

10000

15000

20000

25000

09-9

1

03-9

2

09-9

2

03-9

3

09-9

3

03-9

4

09-9

4

03-9

5

09-9

5

03-9

6

09-9

6

03-9

7

09-9

7

03-9

8

09-9

8

03-9

9

09-9

9

03-0

0

09-0

0

03-0

1

09-0

1

03-0

2

09-0

212

-02

Source: WSE

WARSAW STOCK EXCHANGE INDEX WIG NUMBER OF COMPANIES LISTED ON THE WARSAW STOCK EXCHANGE



6

28185

4 657

11 77313 614

18 381

22 71921 079

26 887

58 249

46 049

36 544

0

10 000

20 000

30 000

40 000

50 000

60 000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Source: WSE

98 2493 206 3 249

4 416

8 768

12 414

20 674

29 86931 408

25 485

28 802

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Source: WSE

TURNOVER ON THE WARSAW STOCK EXCHANGE [mln USD]

CAPITALISATION OF THE WARSAW STOCK EXCHANGE [mln USD]



7

SECTORS IN THE CAPITALISATION OF THE WSE

Wood & paper2%

Food5%

Chemicals10%

Light industry0%

Building materials1%

Metals3%

Electroengineering1%

Construction2%

Other1%Media

3%

Telecomunication17%

Information Technology

3%

Insurance1%

Other0%

Other1%

Wholesale & Retails1%

Banking48%

SERVICES

FINANCE

INDUSTRY

Source: WSE

SHARE OF INVESTORS IN TURNOVER ON WSE EQUITY MARKET [%]

38 38

24

39 39

22

34

44

22

28

50

22

34

37

29

35

29

36

0

5

10

15

20

25

30

35

40

45

50

1997 1998 1999 2000 2001 2002

Foreign Investors Individual Domestic Investors Institutional Domestic Investors

Source: WSE



8

CAPITALISATION OF STOCK EXCHANGES IN THE REGION AS % OF

GDP - 2002

WSE AMONG MARKETS OF THE REGION (MAIN AND PARALLEL

MARKETS) - 2002

22,32%

17,53%16,98%

12,36%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

Budapest Prague Warsaw ViennaSource: OECD, FESE

27,1

16,6

32,2

12,912,4 12,6

9,8 11,8

0

5

10

15

20

25

30

35

Warsaw Vienna Budapest Prague

CapitalisationValue of trading (double counted)

Source: FESE

bln EUR



9

NUMBER OF COMPANIES AND COMPANY AVERAGE VALUE ON

LARGE EUROPEAN MARKETS

NUMBER OF COMPANIES AND COMPANY AVERAGE VALUE ON

MEDIUM-SIZE EUROPEAN MARKETS

2 824

1 114934

398 338 297295 203 202

605

1326

705

1554

195

575

1553

322134

0

500

1 000

1 500

2 000

2 500

3 000

Lond

onEu

ronex

tDe

utsch

e Börs

eSw

iss Ex

chan

geAth

ens

Stock

holm

Italia

n Exc

hang

eOs

loWa

rsaw

Lond

onEu

ronex

tDe

utsch

e Börs

eSw

iss Ex

chan

geAth

ens

Stock

holm

Italia

n Exc

hang

eOs

loWa

rsaw

Source: FESE.

NUMBER OF DOMESTIC & FOREIGN COMPANIES COMPANY AVERAGE VALUE [MLN EUR]

Number of companies

Number of companies

Company’s value [mln EUR]

Company’s value [mln EUR]

202 201149

12977 64 49 45

134

367

894

250

747

98

253218

0

100

200

300

400

500

600

700

800

900

Warsa

w

Cope

nhag

en Helsin

ki

Vienn

a

Irish E

xcha

nge Ice

land

Buda

pest

Prag

ue

Warsa

aw

Cope

nhag

en Helsin

ki

Vienn

a

Irish E

xcha

nge Ice

land

Buda

pest

Prag

ue

Source: FESE.

NUMBER OF DOMESTIC & FOREIGN COMPANIES COMPANY AVERAGE VALUE [MLN EUR]



10

DERIVATIVES TURNOVER ON PARTICULAR EUROPEAN MARKETS - XII 2002

406,2

195,2

118,1

75,4

16,55,4 0,8 0,7

0,0

50,0

100,0

150,0

200,0

250,0

300,0

350,0

400,0

450,0

EU

RE

X

IDE

M (I

taly

)

LIFF

E

EU

RO

NE

XT

Par

is(C

AC

40) *

BM

E (S

pain

)

Sto

ckho

lmbo

rsen

AD

AX

(Gre

ece)

War

saw

Source: FESE.

bln EUR

* IX.2002

691

186

136100 74

13

0

100

200

300

400

500

600

700

Warsaw Otob Market(Austria)

EURONEXT Lisbon(PSI20)*

Copenhagen(KFX) *

BSE (Hungary) * Oslo Borse(Norway)

Source: FESE.

mln EUR

* IX.2002



11

NUMBER OF ENTITIES CONDUCTING BROKERAGE ACTIVITIES

NUMBER OF INVESTMENTS ACCOUNTS

12

20 21 21

11

6 5

15

31

19

54 54

50 49

16

6

8

2222

36

4340

35

7 8

293232 33

4647 48

42

36

28

38

0

10

20

30

40

50

60

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Banks conducting brokerage activities Brokerage houses TotalSource: PSEC

I 93

III 9

3

I 94

III 9

4

I 95

III 9

5

I 96

III 9

6

I 97

III 9

7

I 98

III 9

8

I 99

III 9

9

I 00

III 0

0

I 01

III 0

1

I 02

III 0

2

0

200000

400000

600000

800000

1000000

1200000

1400000

Brokerage houses Banks conducting brokerage activities TotalSorce: PSEC



12

1 1 1 1 1 1 2 4 511 10

30

15

46

17

66

21

85

19

108

19

124

0

20

40

60

80

100

120

140

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Investment funds corporations Investment funds*Data includes also trust fund corporations and trust funds till 2000Source: PSEC

388

584

281

474 540 509 626

1 741

3 053

5 857

0

1 000

2 000

3 000

4 000

5 000

6 000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

*Data includes also trust fund corporations and trust funds till 2000

Source: PSEC

NUMBER OF INVESTMENT FUNDS AND FUNDS CORPORATIONS

VALUE OF NET ASSETS OF INVESTMENT FUNDS [mln USD]



Polish capital market in Central Europe Poland is a country with high economic potential, high stable growth

in domestic product and large population; Poland is expected to join European Union in 2004

Warsaw Stock Exchange is the biggest exchange in Central and Eastern Europe in capitalisation, turnover and number of listed companies

Warsaw Stock Exchange has successfully developed trading in futures on the main index WIG20, taking over many other countries in the region

Warsaw Stock Exchange implemented in 2000 new modern, advanced trading system called Warset; National Depository works on the implementation of the new clearing and settlement system



International cooperation of the PolishSecurities and Exchange Commission

IOSCO: Polish regulations implement IOSCO standards PSEC is member of Emerging Markets and European Regional Committees PSEC is in charge of WG-4 Working Group dealing with the matters of

enforcement and exchange of information FESCO: 1998-2000 Chairman of the PSEC was a Chairman of the IOSCO

European Regional Committee and acted as an observer in FESCO meetings 30th may 2001 Poland initiated creation in Warsaw Consultative Group of

countries preparing to integrate with the EU to cooperate in this process Memoranda of Understanding: cooperation and exchange of information

up to now 16 agreements are signed with such countries as France, Italy or Germany, others are negotiated

US SEC: cooperation in development of the Polish market and training



Best Practices in Public Companies In 2002 Warsaw Stock Exchange accepted Corporate

Governance Code describing best corporate governance standards in public joint stock companies

Corporate Governance Code constitutes a set of detailed rules of conduct addressed to authorities of companies, members of such authorities, as well as majority and minority shareholders

Listed companies are expected to implement these standards or explain the reasons of non-compliance

Disputes between interested parties arising from implementation of the standards will be resolved by the Warsaw Stock Exchange Arbitration Court



Harmonisation of the Polish Regulations with the European Union Directives

Polish securities regulations have been based on the European Union standards from the foundation of the capital market in Poland

Recent amendments of law fully harmonised Polish regulations with the European Union directives, among others in the following areas: mutual recognition of prospectuses single passport for investment firms mutual recognition of open-end investment funds introduction of the investor-compensation scheme

Regulations concerning operation of the Single Market will come into force at the date of Poland accession to the European Union

New regulations adopted in the European Union are also being currently implemented in Poland


polish securities and exchange commission jacek socha chairman of the polish securities and exchange...

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