Disclosure Requirements – Poland

03.04.2024

Disclosure Category: 2

Upon request from the regulator, Clearstream Banking may fall under the obligation to disclose the identity and holdings of clients.

Consent

In order to comply with the legislation as mentioned below, clients entering into transactions in the Polish market must consent and are hereby deemed to consent to disclosure. Such consent includes the appointment of the requestor (for example, the issuer or its agent) as attorney-in-fact of such clients, under power of attorney, to collect from Clearstream Banking such information as is required to be disclosed. Clients not willing to give this consent cannot hold such securities and/or financial instruments in their account with Clearstream Banking.

Disclosure requirements

In the case of holdings in Polish securities, Clearstream Banking can be under an obligation, to disclose, or being asked to disclose, the identity of beneficial owners holding such securities in the following situations:

  • If the client wants to participate in corporate events and proxy voting (disclosure to the issuer).
  • If the client wants to apply for tax relief (disclosure to the tax authorities for tax purposes, please refer to the Market Taxation Guide – Poland). For T-bonds, clients are required to provide a split of positions between individuals and corporate beneficial owners. If the client does not provide the split for T-bonds, Clearstream Banking might assume that all securities are in the possession of individual investors. For all other fixed income securities, clients are also requested to provide a split of positions between individual and corporate beneficial owners. If the client does not disclose the beneficial owners, Clearstream Banking might assume that the securities are in the possession of corporate beneficial owners.
  • To answer market regulatory requests from the Polish Financial Supervision Authority (PFSA) and the General Inspector of Financial Information (GIFI).

Directive (EU) 2017/828 of 17 May 2017 amending Directive 2007/36/EC with regards to the encouragement of long-term shareholder engagement (the second shareholder’s rights directive “SRD II”) has been transposed into Polish law through the addition of Articles 68i-68n to the Act of July 29 2005 on trading in financial instruments. These new articles become effective from 3 September 2020 (SDR II Law).

Background and legal basis

Disclosure is required to the issuer and/or to the Polish Financial Supervision Authority (PFSA).

The basis for the disclosure derives from:

  • The Banking Act, dated 29 August 1997, as amended; and
  • Chapter 4 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated 29 July 2005 (the “Act on Public Offering”), as amended; and
  • Article 8b sections 1 and 2 of the Act of 29 July 2005 on trading in financial instruments (consolidated text: Journal of Laws 1010, No. 211, item 1384 as amended); and
  • The Act on Insurance Activities, dated 22 May 2003, as amended; and
  • The Act on Control of Certain Investments, dated 24 July 2015, as amended.

Sanctions

Sanctions apply in case of the exercise of rights of the parent company of a bank in breach of Article 25.1 of the Banking Law, that is, without notifying PSFA of the intention to become a parent company of the bank in another way than by taking up or acquiring shares of that bank: Members of the management board of the bank appointed by the parent company of the bank and members of the management board of the parent company are not allowed to participate in activities concerning the representation of the bank.

Obligation to report threshold crossings

The obligation falls on the investor who acquires or controls a major holding and it is the responsibility of the investor to organise such disclosure.

Ownership and/or acquisition must be reported in any of the following circumstances:

Disclosure in compliance with the Banking Act

  • Before acquisition of 10%, 20%, 33⅓% and 50% of votes at a domestic bank's shareholders’ general meeting, in each case, the investor should, before execution of the transaction, notify the PFSA of its intention to take up or acquire shares. The PFSA may, within 60 business days after the notification is filed, oppose the taking-up or acquisition of shares.
  • Upon acquisition, by any person, of shares in a domestic bank where these shares, together with any previously acquired, give that person a holding reaching or exceeding 5%, 10%, 20%, 25%, 33⅓%, 50%, 66%, 75% of votes at a shareholders’ general meeting, notification must be made immediately to the domestic bank concerned.
  • Any person intending to dispose of a shareholding in a bank shall, in the following circumstances, be required to notify PFSA of their intentions before executing the transaction:
    • If the holding in question entitles them to over 10% of the votes at a general meeting of domestic bank’s shareholders; or
    • If the disposal of the holding would result in their voting rights falling under 10%, 20%, 33⅓% or 50% at a general meeting of domestic bank’s shareholders.

Note: This notification requirement shall be duly applicable to the acquisition or disposal of bonds convertible into shares in a bank, depository receipts and any other securities to which are attached the right or obligation to acquire shares in a bank.

The acquisition or holding of shares by a subsidiary undertaking shall be deemed to constitute the acquisition or holding of such shares by the parent undertaking.
The provisions of the Banking Act shall not prejudice those of the Act on Public Offerings. Sanctions

Exercising voting rights on shares acquired in violation of the obligations specified above is void. The PFSA may order a disposal of such shares.

Disclosure in compliance with the Act on Public Offering

  1. Investor who (i) reached or exceeded 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3%, 50%, 75% or 90% of the total vote in a public company, or (ii) held at least 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3%, 50%, 75% or 90% of the total vote in a public company, and as a result of a reduction of equity interest holds 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3%, 50%, 75% or 90% of the total vote, respectively, or less, is required to notify the PFSA and the issuer immediately, but not later than within four working days after the obliged entity became aware, or could have become aware through exercise of due professional care, of the change or within six trading days from the trading date in case the trade was concluded on the regulated market or an alternative trading system.
  2. Investor entitled to more than 10% of the total vote in a public company is obliged to notify the PFSA and the issuer of the acquisition or sale of shares, which change their number of votes by: 2% or more for securities traded on the official stock exchange market, 5% or more for securities traded on other regulated markets or alternative trading systems, immediately, but not later than within four working days after the obliged entity became aware, or could have become aware through exercise of due professional care, of the change or within six trading days from the trading date in cases where the trade was concluded on the regulated market or an alternative trading system.
  3. Investor entitled to more than 33% of the total vote in a public company is obliged to notify change in their number of votes by 1% or more, immediately, but not later than within four working days after the obliged entity became aware, or could have become aware through exercise of due professional care, of the change or within six trading days from the trading date in cases where the trade was concluded on the regulated market or an alternative trading system.
  4. The obligations described in points 1 and 2 do not arise in case the investor settles a number of transactions during the day and, at the end of such day, the above-mentioned thresholds are not reached or exceeded.
  5. A shareholder who acquired shares which give the shareholder over 50% of the total vote in a public company, within three months of such an acquisition, must make a call for the sale or conversion of the remaining shares in that company (mandatory call). Such obligation will not apply if the shareholder reduces its stake below 50% due to an increase of share capital of the issuer, change of issuer statute or expiration of the share preference. 
  6. In case a shareholder, within six months from the end of the call, acquired shares (in another way than by the call) at a price higher than the price proposed at the public offer, such shareholder is required to pay the price difference to all the other shareholders who participated in the call.
  7. Obligations to make a call when exceeding 50% do not, for example, arise where the shareholder purchased shares from the State Treasury (subject to certain conditions), where the shareholder purchased shares on the alternative trading system or from another shareholder being in the same capital group.
  8. Regulations allow a voluntary call for up to 100% of shares from the regulated market. An announcement of a voluntary call for shares relieves the shareholder from making a mandatory call for shares.
  9. The transaction to purchase shares within a call must be concluded within three business days from the end of the period to respond to the call and then settled within three business days from date of such transaction.

The disclosure obligations set out in points 1 to 3 do not apply to the shares for which Poland is not the home country. “Home country” for issuer of shares is generally defined as the country chosen by the issuer, that is, the country of the issuer’s residence or country where such securities were admitted to trading on the regulated market. For dually listed securities, where Poland is not home country, this means that investors are no longer obligated to publicly disclose passing of the above thresholds in accordance with the Polish laws, which does not exclude that certain disclosure obligations should apply as per regulations of the issuer’s home country. 

Any shareholder, who failed to meet the requirements laid out in points 1 to 3 is prohibited to exercised voting rights out of shares purchased with violation of these points.

Any shareholder who failed to meet the requirements in point 5 is prohibited to exercise voting rights out of all company’s shares held by the shareholder and its subsidiaries. 

The obligation to make a call for shares will also not arise if the shareholder passes the 50% threshold due to the share’s heritage or in certain cases when the shareholder is the State Treasury, unless there was a further increase of the shares’ possession. 

Any shareholder, who failed to meet the price requirements set for a call is prohibited to exercise voting rights out of all company’s shares purchased within such call.

Note:

  • A call for shares shall be announced and carried out through the entity conducting brokerage activities in Poland, which shall be obliged, within 17 business days before the opening of the subscription period, to notify the PFSA and then immediately, but not later than within 24 hours, to notify the information agency. 
  • Financial instruments (incl. depositary receipts) conferring the right or obligation to acquire shares in the public company shall be included when calculating ownership levels and resulting permit acquisition obligations.
  • Shares held by an indirectly or directly controlled entity shall be treated as if they were held by the controlling entity.
  • The existence of written or oral agreements between shareholders aiming at a joint policy towards a particular company, parking of shares, informal trusts, may result in summarising votes held by such shareholders for establishing substantial shareholding levels.
  • The obligations rest also on an investment fund, if it reaches or exceeds a given threshold of the total vote, in connection with shares held jointly by: 
    • Other investment funds managed by the same investment fund company; or
    • Other investment funds established outside Poland, managed by the same company. 
  • Asset managers are required to report for their clients if they are authorised to exercise votes on general meetings out of managed shares. The disclosure obligations described above as well as other obligations referred to in Chapter 4 of the Law (for example, “call for shares” obligations) also apply to the institutions being empowered as an attorney-in-law for the securities account and allowed to purchase or sell securities over such securities account. 

For more detailed information on notification requirements please refer to amended Chapter 4 of the Law on Public Offering (only Polish version available).

Disclosure in compliance with the Act on Insurance Activities

If any person intends to take up or acquire shares in a Polish insurance company, directly or indirectly, where these shares would give that person a holding reaching or exceeding 10%, 20%, 33⅓% or 50% of votes at a shareholders’ general meeting or share capital, notification must be made to the PFSA.

If any person intends to dispose of a shareholding in a Polish insurance company, directly or indirectly, where the disposal of the holdings will result in the proportion of that party’s voting right at the general meeting or share capital falling below 10%, 20%, 33⅓% or 50%, notification must be made to the issuer at least 14 calendar days before executing the transaction. Respective notification to the PFSA has to be made.

Disclosure in compliance with the Act of 29 July 2005 on trading in financial instruments

In order to comply with Polish law and regulatory requirements, Clearstream Banking will disclose to the PFSA and the GIFI, upon market regulatory requests from them, the name and number of securities held by the Clearstream Banking client.

Act on Control of Certain Investments

As per the Act on Control of Certain Investments, effective since 1 October 2015 (and subsequently amended), an investor intending to pass either directly, indirectly, upon agreement or in cooperation with other entities the threshold of: 20%, 25%, 33% or 50% of votes at the general meeting of shareholders or in share capital, is required to submit specified motion to the relevant supervisory authority to pre-approve such transaction.

Such relevant authority may approve of or oppose to the acquisition (or taking up) of shares within 90 business days after the complete notification is filed (along with all required documents and appendices as specified in the Act on Control of Certain Investments). The notification has to be filed in Polish language or translated into Polish language by the authorised translator as specified in the Act on Control of Certain Investments. For a foreign investor outside the European Union, the following applies when filing the notification: To receive final decision, a permanent representative/attorney must be established on the territory of the Republic of Poland during the proceeding.

When issuing positive or negative decision, the relevant authority is required to seek for the opinion of the Consultation Committee composed of various representatives of 20 governmental agencies or ministries. 
Acquisition of shares or exercising voting rights on shares acquired in violation of the obligations specified above will be void.

Acquisition of shares in violation of the obligations specified above can result in a fine of up to PLN 100,000,000 or a prison sentence from six months to five years. 

A list of strategic companies where prior approval is required is published by the Council of Ministers and includes companies from the following sectors, among others: electricity, oil, gas, chemical, storing, distribution or transportation of such resources and telecommunication, rhenium production, mining of ore metals dedicated to the production of explosives, weapons or ammunition or technology dedicated to military or police activity.

The Law which came into force on 24 July 2020 for a 24-month period has been extended for 60 months from its entry into force, that is, until 24 July 2025. The Law is aimed at protecting local issuers (with registered seats in Poland) from hostile takeovers during COVID-19 period. The following applies to the Law:

  • It covers all public companies, which during any of the preceding two years (prior to the event resulting in investor motion to receive approval for the acquisition or approval after the acquisition) have exceeded EUR 10 million of revenue from the sale of its products and services in Poland.
  • It generally covers acquisition or reaching substantial participation, including purchase or exceeding, 20% and 40% of votes at the general meeting of shareholders (directly or indirectly or based on written or oral agreements). This purchase or excess may also result from shares redemption, spin-off or changes in voting power of the shares. In the first case, the motion is submitted by the investor, in the latter by the issuer.
  • It impacts investors outside the EU/EEA/OECD; there is a minimum two-year period required for the seat of the investor prior to the motion to Urząd Ochrony Konkurencji i Konsumentów (UOKiK).

Consent to the above acquisition is issued by the President of UOKiK. It may be given generally prior to the transaction or, in certain cases, after the transaction. Within 30 business days of the motion, UOKiK may issue a no objection letter, otherwise control proceeding is implemented, which may take up to 120 days (this period may be interrupted by certain administrative proceedings). The investor has to submit a motion in written form or send it electronically (by electronic form approved by the Office of Competition and Consumer Protection). The Law doesn’t specify that matter in detail as to what documentation needs to be submitted but broadly defines the scope of information required.

The Law states that such a motion for approval should be generally submitted prior to direct reaching of a significant/dominant position (no fixed dates) with some exceptions for indirect or post-factum acquisitions.

Acquisition without the UOKiK’s consent is subject to a penalty of PLN 50 million, imprisonment of up to five years or both.

Acquisition without the UOKiK’s consent, by virtue of law, is invalid. No rights out of such shares can be exercised except for their sale.

The above regulation also covers private companies from certain strategic sectors, as defined in the Law. As the regulation is broad and detailed (in particular when defining the definition of acquisition or reaching substantial participation), therefore seeking of legal advice is strongly recommended.

Shareholder identification as set out in the SRD II Law

The SRD II Law provides for the right of issuers to identify their shareholders.

Issuers can request intermediaries at each level of a custody chain to promptly provide relevant information to facilitate such identification.

In accordance with the SDR II Law as amended, an intermediary (in this case Clearstream Banking) shall, upon receipt of the shareholder identification disclosure request, transmit a similar request to the next intermediaries in the custody chain (that is, Clearstream Banking clients with holdings in the requested securities). A response to the shareholder identification disclosure request shall be sent by every intermediary in the custody chain directly to the recipient's address defined in the request and without delay. Clearstream Banking will generate the response as required, with information regarding the shareholder's identity, limited to Clearstream Banking books only.