I have positively evaluated last year's changes in the rules, which focused in particular on the activity of the WSE Authorised Advisers, as necessary along with hit changes made this year. An important, if not the most important change is in my opinion the addition of a chapter on the obligations of the issuer §15b, which says that in case of doubt as to the manner or circumstances in the conduct of the issuer's business which may affect the safety of trading or interests of the shareholders, the WSE Management Board may require the issuer to commission a specialized firm to analyze the financial and economic situation of the issuer and its prospects for the future. On this basis, there may be placed a requirement to draw the appropriate document, which an Organizer will be able to publish.

The reasons for the request of the WSE of such a report will include the the failure of the issuer's operating activities, significant change of subject or scope of activities or significant deterioration in the financial situation or the issuer's business. On submission of the report, the company will have 45 days of obligation. WSE already committed the first issuers from NewConnect to order the preparation of such a report. Mobilize market participants should work to introduce in § 17c sanctions for improper performance of duties of information. Especially, that penalty may take the form of a fine of up to 20,000 zł, which also can be combined with exclusion or suspension of trading. Up to this date, violations of the Rules of the Stock market reacted by warning or suspension and delisting shares of issuers.

I wish that the mere awareness of the fines acted more proactively market. Analysing further changes, I think it is also important to add §17a-17d to those that deal with disclosure obligations, and here – prohibition of sharing current and periodic information prior to publication. Equal access to information should be the guiding principle throughout the capital market, which is why I am pleased with the increase of transparency on the NewConnect market. Under the new regulations there will also be a change in reporting obligations of companies listed on the NewConnect.

WSE decided to clarify certain requirements concerning disclosure documents of companies to tighten policy regarding to prohibition of early sharing of information appearing in the current reports of issuers and change the rules for exemptions from the consolidation of financial statements. I am not enthusiastic about the creating of the segment - NC High Fluency Risk (high risk of Fluency for companies with low Fluency with an average market capitalization for the past 3 months free float of less than 1 million zł) and NC Super High Fluency Risk (very high Fluency risk for companies with very high risk of Fluency where the average capitalization for the past 3 months free float is less than 1 million zł.). Investors themselves can see which companies are characterized by low turnover and where trade is very safe.

Author: Jerzy Z. Bednarek, DSBJ