Effective April 23, 2013, Polish securities laws were amended primarily in connection with an effort to transpose in Poland the 2010 amendments to the EU Prospectus Directive, and also to tighten up various securities regulations in other respects. While most of the amendments were wrought into the local prospectus regulation, the Law on Public Offers, Conditions of Introduction of Financial Instruments to Organized Trading and on Public Companies, various amendments were made also to the Commercial Companies Code, the Bond Law, the Investment Company Law and the Law on Trading in Financial Instruments
New Dividing Line Between Private and Public Offers
While the previous threshold between private (generally, unregulated) and public (regulated) offers was 99 identified addressees, taking cue from the revised Prospectus Directive, such threshold is set now at 149 identified addressees. In addition, the prior general exemption for gratuitous transactions has been eliminated.
A "public offer" involves now "making available to 150 or more persons, or to an unspecified addressee, in any form and manner, information on securities and terms and conditions of their acquisition, representing a sufficient ground for a decision on the acquisition of these securities."
The owner of securities making a public offer is no longer referred to as the "introducing party" (wprowadzajcy) but as the "seller" (sprzedajcy). The scope of the seller's and any guarantor's liability for prospectus information has been broadened materially - to the extent such entities are dominant (controlling) entities with regard to the issuer or are capable of exerting material influence over it, each of them is now liable for all information contained in the prospectus.
A trifle matter which caused previously practical difficulties due to imprecise drafting, the term "business day" includes now any day from Monday to Friday, except for statutory national holidays.
Disclosure Requirements
Exemptions from the prospectus disclosure requirements applicable to public offers and listing on secondary markets have been modified and extended to, inter alia, subscription of shares based on other securities (e.g., warrants) which were previously offered in a public offer and instruments issued within employee shareholding programs effected by companies which stock is not listed on a regulated market subject to the condition that their issuer has its registered seat on the territory of a EU Member State.
The procedures governing the approval of, publication and amendments to, prospectuses, and the confirmation of equivalency of disclosure in information memorandum to that included in a prospectus, have been streamlined. The rules on the period of validity of information included in prospectuses and information memoranda, were made more precise.
The ability to market/promote securities in connection with an impending public offer, has been curtailed - any such activity may take place now only once the prospectus is filed with the regulator, the Financial Supervision Commission (FSC), for its approval. If a public offer is to be conducted not based on a prospectus, the issuer and the seller must procure FSC's approval of all pertinent marketing materials. A new procedure has empowered the FSC to request changes to any promotional/marketing materials.
Other Matters
The requirement of an advance approval of the issuer's shareholders to the execution of an underwriting agreement (whether "firm commitment" or "best efforts"), has been eliminated.
A new regulation of mechanics of offering of, primarily, fixed-income instruments, involving multi-layered distribution systems (so called "retail cascade offers"), has been introduced.
Maximum criminal administrative fines imposed on offenses related to illegal public offers of securities, have been raised tenfold.
The new rules apply only to new transactions, while the various implementing regulations are to be issued within 6 months.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
