Supervisory Impulses Package – Polish Financial Supervision Authority’s Office (PFSAO) proposes to ease regulatory burden and supervision amid coronavirus outbreak.

As the coronavirus epidemic spreads, the PFSAO works on a set of proposals to help entities supervised by the institution carry on under the present market conditions. The package has been named “Supervisory Impulses Package for the Security and Growth of the Capital Market” (SIP), with similar programs announced for the banking and insurance sectors.

The SIP for the capital market has the following goals:
• to keep market liquidity stable;
• to help entities fulfill regulatory obligations by rescheduling reporting deadlines;
• to help businesses raise capital;
• to allow businesses to focus on clients’ needs and key processes.

Actions that the PFSAO plans to take include:

A. individual approach to investment funds which fail to comply with applicable investment limits, covering adjustment of supervisory measures to the present market conditions;

B. creating or launching tools to boost liquidity in the treasury securities sector by implementing as well as supporting relevant measures;

C. legislative changes, such as:
• extending deadlines for entities supervised by the PFSA to prepare, approve and publish annual financial statements and annual consolidated financial statements;
• extending deadlines for issuers to submit quarterly reports and consolidated quarterly reports covering the first quarter of the financial year which started on 1 January 2020;
• extending deadline for holding the Annual Shareholders Meeting;
• extending deadline salary policy approval;
• modification of rules for preparing information memoranda leading to easier and faster processing of bid documents, which businesses are required to submit in order to raise capital.

D. pragmatic approach to selected supervisory actions, including:
• review of information submitted by the entities supervised by the PFSA in fulfillment of ongoing reporting obligations to lighten the burden on them; the need to postpone deadlines for fulfillment of these obligations is also expected;
• putting off non-reporting actions (e.g. audits, information obtaining);
• taking relevant supervisory actions in case of non-compliance with capital adequacy standards, with allowances being made for the epidemic’s impact;
• revision of the PFSA’s inspection schedule (verification of upcoming inspection actions), without modifying supervisory goals;
• pragmatic approach to delaying individual supervisory deadlines, e.g. deadlines for implementation of guidance issued after inspections, including deadlines established originally;
• simplified form of PFSAO’s supervisory assessments carried out in 2020, with allowances being made for the epidemic’s impact;
• six-month extension of the deadline for brokerage houses to adopt the EBA’s guidelines on outsourcing arrangements.

Moreover, the PFSUO will increase its reliance on electronic communication channels, esp. PORTAL and e-PUAP platforms, and e-mail, to keep in touch with entities it supervises.

The SIP is a work in progress, individual elements of which may or may not be implemented, depending on market developments. It remains to be seen how the initiatives will translate into law and supervisory practice. With the PFSU’s declarations of remaining open to suggestions and discussion with market participants about any initiatives to mitigate the epidemic’s impact on entities operating in the capital market, one may be optimistic.

Do not hesitate to contact us with any questions.

Piotr Wojnar
Attorney-at-law / Managing Partner
piotr.wojnar@actlegal-bsww.com
+48 602 660 610, +48 22 420 59 59

Małgorzata Stefaniak
Attorney-at-law / Partner
malgorzata.stefaniak@actlegal-bsww.com
+48 692 546 207, +48 22 420 59 59