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10 March 2020
Tapestry
Alert: EU Securities Laws - Poland
Beware, the
Devil is in the Detail!
Dear
Client
When the European Prospectus
Regulation (EUPR) came into full force last year, there was an
assumption that it brought the arrival of uniform treatment for
securities filings across all EU countries. Unfortunately, some
member states have been busy amending their national laws to
incorporate the EUPR, whilst retaining their own local rules. Using
Poland as an example, this Alert highlights how national law may impact
the operation of your employee share plans and require additional
consideration.
Regulator
notification
Poland has extended the requirement for a company to notify the
securities regulator (the KNF) of an allocation of securities under
an employee share plan. Previously, a notification was only
required for an offer to 150 or more employees in Poland, but now
the notification is required for any offer, irrespective of the
number of offerees.
We have already issued an alert on the change in the process of
making the notification (as reported here), but here is a summary of the
updates:
- Threshold: the 150 person
threshold trigger has been removed, meaning that the
notification is required for any allocation of securities
under an employee share plan, regardless of the number of
employees included in the offer.
- Process: issuers can
now access and record security allocations directly on
the register of shares maintained by the KNF. Previously, the
notification was filed with the KNF who completed the
registration. The filing was typically undertaken by a local
lawyer acting on behalf of the company and we envisage that,
for the majority of issuers, this will continue to be the
easiest route to compliance. This route will take
additional time initially as the Polish lawyer will have to be
authorised under a power of attorney by the issuer, which may
have to be legalised / apostilled in the issuing
country. Alternatively, issuers can now record
allocations themselves using the online register if they
choose.
- Fee: the registration
fee of up to €12,500 per notification no longer applies. For
companies making large offers in Poland, this is a positive
change which will save on compliance costs.
- Applicable awards: all vests after 1
January 2020 are subject to the new notification obligation,
regardless of when the award was granted.
- Frequency of filing: previous practice
was that for multiple allocations (e.g. under a share purchase
plan where shares are acquired monthly or quarterly) it was
usually sufficient to consolidate the shares allocated and
make one filing covering the relevant 12 month period.
Currently, this remains unchanged, however, considering recent
developments this should be monitored.
Tapestry comment
For
companies which have not previously had to make a filing in Poland
(because you fell under the 150 person threshold), you will need to
ensure compliance with the extended notification requirement for
all plans. Companies which already make filings in Poland should
find that the new rules will make compliance with Polish securities
laws simpler and reduce costs over time - once you have had
experience of negotiating the new regime and put in place the
necessary authorisations. Companies should expect the initial
notification process under the new regime to require additional
efforts. Companies making ongoing filings should consider taking
specific advice on how and when they will notify the KNF of
allocations of securities under their share plans.
It is important to
note that as the EUPR only came into full force last year,
additional countries may continue to implement national legislation
(and finalise market practice) which could impact your share plan
compliance in Europe. For example, some countries (including
Poland) have put in place additional disclosure requirements. You
should, therefore, keep the position in all relevant countries
under review and not assume a blanket EU approach to your
securities laws compliance and plan documents is sufficient. We
will keep you updated with other changes.
For our OnTap subscribers: the changes in Poland
are now in force and so OnTap has been updated to include this
latest news.
If you
have any questions regarding your compliance in Europe, or
globally, please do contact us and we would be happy to
help.
Sally and
Lorna
 
Sally Blanchflower Lorna Parkin
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