BEST PRACTICE AND CORPORATE GOVERNANCE
The key objective of WSE in this area is to create and promote best practice of corporate governance for public companies. Since 2002, the Exchange has promoted the corporate governance rules by continuously developing and disseminating the Code of Best Practice for WSE Listed Companies designed to strengthen the transparency of exchange-listed companies, reinforce the protection of shareholders’ rights and improve the quality of communication between companies and investors. Subsequent amendments of the rules included in the Code have been drafted to bring them in line with amendments of legal regulations, current international trends of corporate governance, as well as evolving needs and expectations of market participants.
In December 2014, WSE opened public consultations on draft amendments of the Code of Best Practice for WSE Listed Companies addressed to a wide group of capital market participants. The draft amendments prepared by WSE in co-operation with experts and market representatives on the WSE Corporate Governance Consultation Committee take into account corporate governance issues raised in the European Union. The consultations are designed to develop more transparent and clear rules addressing market needs and expectations. The consultations will be open until February 2015 to develop a new version of the Code of Best Practice for WSE Listed Companies which in the opinion of the Company should improve the quality of the Polish capital market.
In 2014, important steps were taken to improve the quality of investor relations and safety of WSE’s alternative markets. The objective of the amendments introduced as of 1 September 2014 is to improve safety on Catalyst and to harmonise the Catalyst ATS regulations with the standards introduced last year on NewConnect. The amendments included: introduction of a minimum value of an issue of bonds which may be introduced into the ATS; obligation imposed on issuers of low-value issues to have an Authorised Adviser; mandatory preparation of an information document even where bonds were previously offered under an information memorandum. In order to improve bondholder access to information relevant to bond payments, the duration of issuers’ reporting requirements was extended. The amendments were effective on 1 September 2014 and the requirement of a minimum value of bonds introduced into the Catalyst ATS took effect on 1 January 2015.

The rules of classification of shares in the Alert List segment were amended as of early 2014 to eliminate the penny stock problem on the WSE Main Market. All shares whose unit market price was lower than PLN 0.50 are classified in the Alert List segment irrespective of the volatility of the share price. The consequences of classification of an issuer’s shares in the Alert List include: exclusion of the issuer’s shares from index portfolios, transfer of the shares to the single price trading system, special designation of the issuer in the exchange’s information services, and removal of the shares from the list of securities available for short selling.

The Exchange also promotes the highest corporate governance standards among foreign investors. In spring 2014, WSE organised the WSE IR Leader 2014 competition for foreign companies listed on the stock markets in order to identify companies with the best investor relations. The competition winners were awarded in June at the fifth edition of the WSE International Companies’ Forum, yet another initiative of WSE designed to strengthen professional open relations between foreign issuers listed on WSE and investors. The Forum has been regularly organised by WSE since 2011.

Warsaw Stock Exchange also offers WSE EDU-Partner Best Practice and WSE IR Partner programmes. The former was established in 2008 and selects partners in education across the country who are actively involved in the development of corporate governance in Poland. The list of WSE EDU-Partners currently includes 8 entities.

WSE IR Partners are those media and portals which are strongly involved in the development of investor relations of public companies and the creation of best conditions enabling effective communication between companies and investors. The programme had 3 members at the end of 2014.

WSE also offers a special online service devoted to best practice and corporate governance: www.corp-gov.gpw.pl.

DIALOGUE WITH STAKEHOLDERS

WSE’s business decisions may have a material impact on other participants of the capital market; hence, the Company consults with stakeholder groups on developments which affect the markets.

Following the update of the WSE strategy announced in October 2014, WSE held nearly 30 meetings with the Company's key stakeholder groups including issuers on all markets operated by WSE, representatives of investment funds and pension funds, as well as foreign and individual investors. The dialogue resulted in the identification of areas key to the Exchange’s stakeholders which were taken into account by the Company in designing its strategy for 2014-2020.

The Company also opened consultations with market participants before deciding to change WSE’s main indices (to maintain WIG20 as the base index) and to maintain the PLN 20 multiplier of WIG20 futures.

In addition to irregular dialogue with the stakeholders concerning material business decisions, WSE is also engaged in on-going consultations with market participants within the Consultation Committees established in 2013. The Committees are advisory bodies active in the key areas of WSE’s operation. The Committees bring together representatives of the capital market community, lawyers, and representatives of the Polish Financial Supervision Authority. Consultations with the Committees on the Exchange’s business decisions help to develop solutions optimal to all WSE stakeholder groups.

As at the end of 2014, WSE had the following Committees:

  • WSE Exchange Indices Committee
  • WSE Science Committee
  • Corporate Governance Committee
  • Derivatives Market Committee
  • Debt Market Committee
  • Equities Market Committee

WSE Group companies also take initiatives in dialogue with the market. In 2014, PolPX appointed a Gas Market Committee of the Management Board which has an advisory and consulting role in developing solutions to create a friendly environment for the development of exchange trading in natural gas. The Committee held two meetings in 2014 and organised a series of workshops for gas market participants in collaboration with partners: the Energy Regulatory Office, Gaz-System S.A. and Polska Spółka Gazownictwa.

In 2014, PolPX initiated the first edition of a contest for journalists covering competition and liberalisation on the electricity and gas markets under the auspices of the President of the Energy Regulatory Office. The objective of the project was to open a public debate on the energy and gas markets and to promote critical and fair journalism devoted to the liberalisation of the energy industry.