POLAND ACT ON TRADING IN FINANCIAL INSTRUMENTS

Transcription

1 POLAND ACT ON TRADING IN FINANCIAL INSTRUMENTS Important Disclaimer This translation has been generously provided by the Polish Financial Supervision Authority. This does not constitute an official translation and the translator and the EBRD cannot be held responsible for any inaccuracy or omission in the translation. The text should be used for information purposes only and appropriate legal advice should be sought as and when appropriate.

2 The present English text is furnished for information purposes only. The original Polish text published in the Journal of Laws is binding in all respects. ACT on Trading in Financial Instruments 1) dated July 29th ) This Act implements, within the scope of its regulation, the following Directives: 1) Council Directive 93/6/EEC of March 15th 1993 on the capital adequacy of investment firms and credit institutions (OJ L 141, ) 2) Council Directive 93/22/EEC of May 10th 1993 on investment services in the securities field (OJ L 141, ; OJ L 168, ; OJ L 290, ; and OJ L 35, ); 3) Directive 97/9/EC of the European Parliament and of the Council of March 3rd 1997 on investorcompensation schemes (OJ L 84, ); 4) Directive 2001/34/EC of the European Parliament and of the Council of May 28th 2001 on the admission of securities to official stock-exchange listing and information to be published on those securities (OJ L 184, ; OJ L 96, ; OJ L 345, ; and OJ L 390, ); 5) Directive 2002/87/EC of the European Parliament and of the Council of December 16th 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (OJ L 35, ); 6) Directive 2003/6/EC of the European Parliament and Council of January 28th 2003 on insider dealing and market manipulation (market abuse) (OJ L 96, ); 7) Commission Directive 2003/124/EC of December 22nd 2003, implementing Directive 2003/6/EC of the European Parliament and of the Council as regards the definition and public disclosure of inside information and the definition of market manipulation (OJ L 339, ); 8) Council Directive 2003/125/EC of December 22nd 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council, as regards the fair presentation of investment recommendations and the disclosure of conflicts of interest (OJ L 339, ); 9) Commission Directive 2004/72/EC of April 29th 2004 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards accepted market practices, the definition of inside information in relation to derivatives on commodities, the drawing up of lists of insiders, the notification of managers transactions and the notification of suspicious transactions (OJ L 162, ). The data contained herein and relating to the promulgation of EU legal acts relate as of the date of Poland s accession to the European Union to the promulgation of such legal acts in the Official Journal of the European Union special edition. This Act amends the following statutes: Act on Acquisition of Real Estate by Foreign Nationals of March 24th 1920, Code of Civil Procedure of November 17th 1964, Act on Administrative Enforcement Procedure of June 17th 1966, Personal Income Tax Act of July 26th 1991, Corporate Income Tax Act of February 15th 1992, Act on the Banking Guarantee Fund of December 14th 1994, Bond Act of June 29th 1995, Act on Tax Offices and Chambers of June 21st 1996, Act on Rules Governing the Exercise of State Treasury s Rights of August 8th 1996, Act on the Registered Pledge and the Pledge Register of December 6th 1996, Act on Sureties and Guarantees Issued by the State Treasury and Certain Legal Persons of May 8th 1997, Act on the Organisation and Operation of Pension Funds of August 28th 1997, Act on Court Enforcement Officers and Enforcement Proceedings of August 29th 1997, Banking Law of August 29th 1997, Act on the Social Security System of October 13th 1998, Commercial Companies Code of September 15th 2000, Commodity Exchange Act of October 26th 2000, Act on Storage Warehouses and on Amending the Civil Code, Code of Civil Procedure and Other Statutes of November 16th 2000, Act on Prevention of Money Laundering Practices and Financing of Terrorism of November 16th 2000, Act on the Final Nature of Settlements in Payment Systems and Securities Clearing Systems, and Rules of Supervision over Such Systems of August 24th 2001, Act on Responsibility of Group

3 2 Part I General Provisions Art This Act defines the rules, manner and conditions for commencing and conducting business which involves trading in securities and other financial instruments, the rights and obligations of entities engaged in such trading and the supervision thereof. 2. The provisions of this Act shall not apply to promissory notes and cheques within the meaning of the Promissory Note and Cheque Act. Art Within the meaning of this Act, financial instruments shall include: 1) securities; 2) any of the following instruments other than securities: a) units in collective investment undertakings, b) money market instruments, c) futures contracts and other equivalent cash-settled financial instruments, forward interest-rate agreements, equity, interest-rate and currency swaps, d) options to buy or sell any financial instruments, interest rate options, currency options, options on such options and other equivalent cashsettled financial instruments; e) property rights whose price depends whether directly or indirectly, on the value of items of specified type, specified types of energy, measurements and allowances of production or pollution emissions (derivatives on commodities) f) any other instruments admitted or sought to be admitted to trading on a regulated market in the territory of a Member State. 2. Broker-traded financial instruments shall be the financial instruments referred to in Art and Art a-d. Any reference in this Act to: Art. 3. Entities for Prohibited Acts Subject to Penalty of October 28th 2002, Bankruptcy and Recovery Law of February 28th 2003, Insurance Activities Act of May 22nd 2003, Insurance Brokerage Act of May 22nd 2003, Act on Certain Types of Financial Collateral of April 2nd 2004, Act on Personal Pension Accounts of April 20th 2004, Act on Investment Funds of May 27th 2004, Act on Freedom of Business of July 2nd 2004 and Act on European Grouping of Economic Interests and on the European Company of March 4th 2005.

4 1) securities shall mean: 3 a) shares, pre-emptive rights within the meaning of the Commercial Companies Code of September 15th 2000 (Dz.U. No. 94, item 1037, as amended 2) ), rights to shares, subscription warrants, depositary receipts, bonds, mortgage bonds, investment certificates and other transferable securities, including securities incorporating property rights equivalent to rights attached to shares or debt, issued under pertinent provisions of Polish or foreign laws; b) other transferable property rights created by issuance, which incorporate a right to acquire or subscribe for securities referred to in Art. 3.1a or are exercisable by way of cash settlement (derivative rights); 2) alternative trading system shall mean a multilateral trading system organised by an investment firm or a company operating a regulated market, which is used for trading in securities and money market instruments outside a regulated market and ensures concentration of supply and demand so as to enable transactions between participants of the system; a market organised under and in accordance with an agreement with an issuer of securities shall not be deemed an alternative trading system if the issuer is the State Treasury or the National Bank of Poland; 3) units in collective investment undertakings shall mean securities and financial instruments other than securities, which represent property rights of unit holders of collective investment undertakings, including in particular investment fund units, issued under pertinent provisions of Polish or foreign laws; 4) Public Offering Act shall mean the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539) 5) public offering shall mean a public offering as defined in the Public Offering Act, which concerns securities governed by the provisions of the Public Offering Act; 6) primary trading shall mean primary trading as defined in the Public Offering Act; 7) secondary trading shall mean: a) a public offering made by an entity other than an issuer or a firm commitment underwriter, or acquisition of securities from such entity, or b) an offer of financial instruments other than securities made by an entity other than an issuer in accordance with Art. 3 of the Public Offering Act, or acquisition of such financial instruments from such entity; 7) initial public offering shall mean an initial public offering as defined in the Public Offering Act; 2) Amendments to the Act were promulgated in the Journal of Laws (Dziennik Ustaw) of 2001 No. 102, item 1117, Dz.U. of 2003, No. 49, item 408, and No. 229, item 2276, and Dz.U. of 2005 No. 132, item 1108.

5 4 8) organised trading shall mean trading in securities or other financial instruments on a regulated market or in an alternative trading system in the territory of the Republic of Poland; 10) stock exchange shall mean a stock exchange where securities are traded; 11) issuer of securities shall mean an issuer as defined in the Public Offering Act; 12) issuer of financial instruments other than securities shall mean an entity issuing, in its own name, financial instruments other than securities, which holds rights or has obligations thereunder; 13) selling shareholder shall mean a selling shareholder as defined in the Public Offering Act; 14) standby underwriting shall mean a standby underwriting agreement within the meaning of the Public Offering Act; 15) firm commitment underwriting shall mean a firm commitment underwriting agreement within the meaning of the Public Offering Act; 16) parent entity shall mean a parent entity as defined in the Public Offering Act; 17) subsidiary shall mean a subsidiary as defined in the Public Offering Act; 18) group shall mean a parent entity and its subsidiaries; 19) total vote shall mean the total vote as defined in the Public Offering Act or the sum of all votes attached to all shares in a limited liability company; 20) National Depository shall mean Krajowy Depozyt Papierów Wartościowych SA; 20) depository for securities shall mean a system maintained by the National Depository for registration of dematerialised securities, comprising securities accounts and deposit accounts kept by entities authorised to do so under this Act; 22) Member State shall mean a state which is a member of the European Union or the Agreement on the European Economic Area; 23) another Member State shall mean a Member State other than the Republic of Poland 24) OECD states shall mean members of the Organisation for Economic Cooperation and Development other than the Member States; 25) WTO members shall mean members of the World Trade Organisation other than the Member States; 25) public company shall mean a public company as defined in the Public Offering Act; 27) money market shall mean a system for trading in financial instruments which represent solely monetary claims and mature within a year from the date of their issuance or acquisition in primary trading; 28) money market instruments shall mean securities or financial instruments other than securities, issued under pertinent provisions of Polish or foreign laws, which may be traded on the money market;

6 5 29) rights to shares shall mean securities conferring the right to receive uncertificated new issue shares in a public company, which are created upon the allotment of such shares and expire after the shares are registered in the depository for securities or after a decision of the registry court refusing the entry of a share capital increase in the register of entrepreneurs becomes final; 30) depositary receipts shall mean securities issued by a financial institution with a registered office in the territory of a Member State or any other OECD state: a) outside the territory of the Republic of Poland, in connection with securities admitted to trading on a regulated market in the territory of the Republic of Poland or securities issued outside this territory, or b) in the territory of the Republic of Poland, in connection with securities issued outside this territory, which are traded on a foreign regulated market in a Member State or an OECD state incorporating a right to exchange such securities for specific securities in a proportion specified in the terms and conditions of the issue, transfer to the owner of such securities of property rights comprising benefits from the securities or the equivalent thereof, and, in the case of shares, the right of the owner of such securities to give the issuer thereof a binding instruction as to voting at the general shareholders meeting 31) foreign credit institution shall mean any credit institution referred to in Art of the Banking Law of August 29th 1997 (Dz.U. of 2002, No. 72, item 665, as amended 3) ), which conducts, on the basis of a licence granted by a competent authority and in the territory of another Member State, brokerage activities, or keeps, on the basis of an authorisation granted by a competent authority and in the territory of another Member State, accounts in which securities admitted to trading on a foreign regulated market are registered; 32) foreign investment firm shall mean a legal person or an organisational unit without legal personality, having its registered office in the territory of another Member State, and if the laws of a given country do not require registration of offices with a head office in the territory of another Member State, or a natural person resident in the territory of another Member State, which conducts brokerage activities in the territory of another Member State on the basis of a licence granted by a competent authority, as well as a foreign credit institution; 33) investment firm shall mean a brokerage house, a bank conducting brokerage activities, a foreign investment firm conducting brokerage activities in the territory of the Republic of Poland or any foreign legal person with a registered office in the territory of an OECD state or WTO member state, which conducts brokerage activities in the territory of the Republic of Poland; 34) Act on Capital Market Supervision shall mean the Act on Capital Market Supervision of July 29th 2005 (Dz.U. of 2005, No. 183, item 1537); 3) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2002 No. 126, item 1070, No. 141, item 1178, No. 144, item 1208, No. 153, item 1271, No. 169, items 1385 and 1387 and No. 241, item 2074, Dz.U. of 2003 No. 50, item 424, No. 60, item 535, No. 65, item 594, No. 228, item 2260 and No. 229, item 2276, Dz.U. of 2004 No. 64, item 594, No. 68, item 623, No. 91, item 870, No. 96, item 959, No. 121, item 1264, No. 146, item 1546 and No. 173, item 1808 and of 2005 No. 83, item 719 and No. 85, item 727.

7 6 35) Commission shall mean the Polish Securities and Exchange Commission referred to in the Act on Capital Market Supervision; 36) custodian bank shall mean a domestic bank authorised by the Commission to keep securities accounts; 37) regulated entity shall mean a regulated entity as defined in the Act on Capital Market Supervision; 38) foreign bank shall mean a bank with a registered office outside the territory of the Republic of Poland other than a foreign credit institution; 39) insurance undertaking shall mean a domestic insurance undertaking referred to in Art of the Insurance Activities Act of May 22nd 2003 (Dz.U. No. 124, item 1151, Dz.U. of 2004, No. 91, item 870 and No. 96, item 959, and Dz.U. of 2005, No. 48, item 447 and No. 83, item 719) or a foreign insurance undertaking referred to in Art of the Insurance Activities Act which conducts its activities in the territory of the Republic of Poland; 40) civil liability insurance agreement shall mean the agreement referred to in Art. 822 of the Civil Code of April 23rd 1964 (Dz.U. No. 16, item 93, as amended. 4) ); 41) Chairman of the Commission shall mean the Chairman of the Commission referred to in the Act on Capital Market Supervision. Art Securities accounts shall be accounts in which dematerialised securities are registered, kept solely by: 1) brokerage houses and banks conducting brokerage activities, custodian banks, foreign investment firms and foreign legal persons conducting brokerage activities in the territory of the Republic of Poland through their branches, the National Depository, and the National Bank of Poland, if such accounts are designated in such a way as to enable identification of the holders of rights attached to such securities; 2) other participants of the depository for securities or of a system for registration of securities maintained by the National Bank of Poland, which act as agents in the disposal of securities issued by the State Treasury or the National Bank of 4) The amendment to the Act were promulgated in Dz.U. of 1971 No. 27, item 252, Dz.U. of 1976 No. 19, item 122, Dz.U. of 1982 No. 11, item 81, No. 19, item 147, No. 30, item 210, Dz.U. of 1984, No. 45, item 242, Dz.U. of 1985, No. 22, item 99, Dz.U. of 1989, No. 3, item 11 and No. 33, item 175, Dz.U. of 1990, No. 34, item 198, No. 55, item 321 and No. 79, item 464, Dz.U. of 1991, No. 107, item 464 and No. 115, item 496, Dz.U. of 1993, No. 17, item 78, Dz.U. of 1994, No. 27, item 96, No. 85, item 388 and No. 105, item 509, Dz.U. of 1995, No. 83, item 417 and No. 141, item 692, Dz.U. of 1996, No. 114, item 542, No. 139, item 646 and No. 149, item 703, Dz.U. of 1997, No. 43, item 272, No. 115, item 741 and No. 117, item 751, Dz.U. of 1998, No. 106, item 668 and No. 117, item 758, Dz.U. of 1999, No. 52, item 532, Dz.U. of 2000 No. 22, item 271, No. 74, item 855 and 857, No. 88, item 983 and No. 114, item 1191, Dz.U. of 2001, No. 11, item 91, No. 71, item 733, No. 130, item 1450 and No. 145, item 1638, Dz.U. of 2002, No. 113, item 984 and No. 141, item 1176, Dz.U. of 2003, No. 49, item 408, No. 60, item 535, No. 64, item 592 and No. 124, item 1151, Dz.U. of 2004, No. 91, item 870, No. 96, item 959, No. 162, item 1692, No. 172, item 1804 and No. 281, item 2783 and Dz.U. of 2005 No. 48, item 462.

8 7 Poland, if the entries they make relate to such securities and enable identification of the holders of rights attached to such securities. 2. Beginning from the registration of securities under the agreement referred to in Art. 5.3 or 5.4, entries relating to such securities which are made in connection with their subscription or sale in primary trading or an initial public offering by: 1) entities conducting brokerage activities or 2) custodian banks; shall also be deemed securities accounts, if they identify the holders of rights attached to such securities. 3. Any reference in this Act to securities accounts shall also include accounts in which broker-traded financial instruments other than securities, admitted to organised trading, are registered. 1. Securities which are: 1) offered in a public offering or Art. 5 2) admitted to trading on a regulated market, or 3) introduced to an alternative trading system, or 4) issued by the State Treasury or the National Bank of Poland shall exist in uncertificated form as of the date of their registration under the agreement referred to in Art (dematerialisation). Securities may also exist in uncertificated form if permitted under other regulations concerning the issue of such securities. 2. Securities which are: 1) offered in a public offering but are not to be admitted to trading on a regulated market, or 2) introduced only to an alternative trading system may exist in certificated form if so determined by the issuer or the selling shareholder. Under such circumstances, Art shall not apply. 3. Before the commencement of a public offering, an issuer shall conclude with the National Depository an agreement to register the securities offered in a public offering in the depository for securities. 4. If the securities to be admitted to trading on a regulated market or introduced to an alternative trading system were not offered earlier in a public offering, the issuer shall conclude an agreement with the National Depository to register in the depository for securities the securities sought to be admitted to trading on a regulated market or introduced to an alternative trading system before applying for admission of the securities to trading on a regulated market or for introduction to an alternative trading system. 5. If the system for registration of securities issued by the State Treasury or securities representing disposable property rights incorporated in such securities is maintained by the National Bank of Poland, the State Treasury, as the issuer, is

9 8 obligated to conclude an agreement with the National Bank of Poland to register the securities in such a system before the commencement of the public offering and, if the securities were not offered in a public offering before their admission to trading on a regulated market or introduction to an alternative trading system before applying for admission of the securities to trading on a regulated market or for introduction to an alternative trading system. 6. Before applying for admission of financial instruments other than securities to trading on a regulated market, the entity seeking such admission shall conclude an agreement with the National Depository to register such financial instruments in the depository for securities. 7. In the case of securities issued outside of the Republic of Poland, only the portion of such securities which is to be offered in a public offering, admitted to trading on a regulated market or introduced to an alternative trading system in the Republic of Poland, shall be subject to registration. 8. Conclusion of the agreement to register securities, referred to in Art. 5.3 and 5.4, shall require the authorisation, in the form of a resolution adopted by the appropriate decision-making body of the issuer, and if the issuer is a joint-stock company (spółka akcyjna) in the form of a resolution of the general shareholders meeting of the company. Art Prior to the conclusion of the agreement referred to in Art in relation to certificated securities, the issuer shall place such securities in a deposit maintained in the Republic of Poland by an investment firm or the National Depository. Such investment firm or the National Depository shall create a register of holders of rights attached to the certificated securities. 2. In the case of registration of certificated securities in the depository for securities, the entries made in the register referred to in Art. 6.1 shall have the legal effect of entries in securities accounts, and the documents placed in the deposit shall lose their legal force as of the moment the securities are registered in the depository for securities. 3. In the case of certificated securities issued outside of the Republic of Poland, the obligation defined in Art. 6.1 shall be deemed fulfilled by the registration of such securities prior to the conclusion of the agreement referred to in Art by a legal person or another organisation which conducts outside of the Republic of Poland activities relating to the centralised registration of securities or the clearing of transactions in securities. 4. Documents evidencing securities registered by the entity referred to in Art. 6.3 shall lose their legal force in the Republic of Poland as of the moment the securities are registered in the depository for securities. Art The rights attached to dematerialised securities shall accrue as of the moment such securities are first registered in a securities account and shall inure to the benefit of the account holder.

10 9 2. Under an agreement on the transfer of dematerialised securities, such securities shall be transferred as of the moment the relevant entry is made in the securities account. If the record date as at which the holders of rights to benefits from dematerialised securities are determined falls on or after the date on which the transaction should be cleared at the depository for securities, and the securities continue to be registered in the transferor s account, the benefits shall inure to the benefit of the transferee and shall accrue as of the moment the securities are registered in the securities account of the transferee. 3. If the dematerialised securities are acquired by virtue of a legal event which results in the transfer of such securities by operation of this Act, such securities shall be registered in the transferee s account at the request of the tranferee. 4. The registration of securities in a securities account under the agreement referred to in Art. 7.2 shall be effected after the registration of the transfer of the securities between the relevant deposit accounts referred to in Art Provisions of Art shall not preclude the right to assume an obligation to dispose of securities prior to their registration in the transferee s securities account, as long as such securities have been acquired as a result of a transaction whose settlement is guaranteed by the fund referred to in Art. 65 or Art Provisions of Art shall apply to securities issued outside of the Republic of Poland which are offered in a public offering, admitted to trading on a regulated market, or introduced to an alternative trading system, provided such securities are registered in the depository for securities. Art. 8. Provisions of Art. 7 shall apply accordingly to broker-traded financial instruments other than securities, admitted to organised trading. Art At the request of a holder of a securities account, the entity keeping the account ( certificate issuer ) shall issue a written deposit certificate in the name of the holder ( certificate ) separately for each type of securities. The account holder may request that the certificate specify either a portion of or all the securities registered in the account. 2. The certificate shall confirm the holders entitlement to exercise such rights attached to the securities specified in the certificate as are not or cannot be exercised solely on the basis of registration in the securities account. 3. In order to participate in a general shareholders meeting of a public company with its registered office in the Republic of Poland, a certificate issued to confirm the right of a holder of dematerialised shares to participate at the general shareholders meeting must be submitted at the company s registered office not later than a week prior to the date of the general shareholders meeting. The relevant provisions of Art of the Commercial Companies Code of September 15th 2000 shall not apply.

11 1. The certificate shall specify: 10 Art ) Company name, registered office and address of the certificate issuer, and the certificate number; 2) number of securities; 3) type and code of securities; 4) company name, registered office and address of the issuer; 5) par value of securities; 6) name (company name) and registered office and address of the holder of the securities account; 7) information on any restrictions on transferability of the securities or on any encumbrances thereon; 8) date and place of certificate issuance; 9) purpose for which the certificate has been issued; 10) certificate validity period; 11) if a certificate issued earlier for the same securities has been annulled, destroyed or lost prior to the lapse of its validity period an indication that it is a new certificate document; 12) signature of a person authorised to issue the certificate on behalf of the certificate issuer and the seal of the certificate issuer. 2. In the case of securities of an issuer with a registered office in the Republic of Poland, registered in a deposit account kept by the National Depository for a legal person or another organisation conducting outside of the Republic of Poland activities relating to the centralised registration of securities or the clearing of transactions in securities which is a participant of the National Depository pursuant to Art , a document which specifies the items defined in Art. 10.1, issued by an entity indicated to the National Depository by such participant, shall also be deemed a certificate. 3. Any deposit certificate made or issued in breach of Art , , , , or 10.2, shall be null and void. Art As of the date the certificate is issued, the number of securities specified in the certificate shall not be traded until the lapse of the certificate s validity period or its earlier return to the certificate issuer. The certificate issuer shall block the relevant number of securities in the account for the duration of the certificate validity period. 2. In the period referred to in Art the same securities may be specified in more than one certificate, provided that each certificate is issued for a different purpose. In such a case, subsequent certificates shall also include, pursuant to Art , information on securities having been blocked in connection with earlier certificates.

12 1. A certificate shall cease to be valid: 11 Art ) upon the lapse of its validity period; 2) upon the transfer of securities encumbered with a pledge in order to satisfy claims of the pledgee in the case of a certificate issued for the pledgor in relation to such securities; 3) upon the transfer of securities as part of enforcement proceedings conducted under other regulations in the case of a certificate issued for the debtor in relation to securities subject to enforcement; 4) upon its destruction or loss. 2. The lapse of the certificate s validity period or its earlier return to the certificate issuer shall preclude the use of the certificate to exercise the rights attached to securities evidenced by the certificate for the purpose for which the certificate has been issued. 3. The certificate issuer shall promptly notify the public company concerned of the cessation of validity, for reasons specified in Art , of a certificate issued for the purpose of participation in a general shareholders meeting of such company. 4. If a certificate ceases to be valid for the reason specified in Art , the certificate issuer, at the request of the account holder made prior to the lapse of the certificate s validity period, shall issue a new certificate after the account holder submits a written representation stating that the account holder had held the certificate and describing the circumstances in which it has been destroyed or lost. Art Declarations of will referring to performance of actions connected with public trading in securities or other financial instruments under this Act, or other actions performed by regulated entities within the scope of this Act may be made in electronic form, provided that the parties concerned have decided accordingly by way of an agreement. 2. Documents connected with the actions referred to in Art may be drawn up on electronic carriers, provided that such documents are duly created, recorded, relayed, stored, and secured. 3. A declaration of will made in electronic form and incorporated in the document referred to in Art shall be deemed to meet the requirement of written form also in cases where the written form has been stipulated on pain of nullity. 4. The minister competent for financial institutions shall define, by way of a regulation, the rules governing creation, recording, relay, storage, and securing of the documents relating to the activities referred to in Art so as to ensure the security of trading and the protection of investors interests.

13 12 Part II Secondary Trading in Financial Instruments Chapter 1 General Provisions Art. 14. Within the meaning of this Act, a regulated market is a system for trading in financial instruments admitted to trading, which operates on a continuous basis and provides investors with universal, equal and concurrent access to market information when matching the offers to acquire and to sell financial instruments, and ensures equal terms for the acquisition and disposal of such instruments; such market to be organised and supervised by a competent authority pursuant to the provisions of this Act, recognised by a given Member State as compliant with the abovementioned requirements, and notified to the European Commission as a regulated market. Art The regulated market in the Republic of Poland shall comprise: 1) stock exchange market; 2) over the counter (OTC) market; 3) commodity exchange market. 2. The regulated market referred to in: 1) Art shall be organised by a company operating a stock exchange; 2) Art shall be organised by a company operating an OTC market; 3) Art shall be organised by a commodity exchange as defined in the Commodity Exchange Act of October 26th 2000 (Dz.U. of 2005, No. 121, item 1019) and it shall be used only for trading in financial instruments referred to in Art c and d. 3. The provisions of Art. 16, Art. 18, Art and Art. 32 shall apply to the commodity exchange market and to the commodity exchange operating such commodity exchange market. The provisions of Art shall apply to the rules of the commodity exchange operating a commodity exchange market. Art A company operating a stock exchange and a company operating an OTC market may organise separate markets for different types of securities or financial instruments other than securities or for various types of issuers. 2. When organising the stock exchange market, a company operating a stock exchange may create a separate official stock-exchange listing market, hereinafter referred to as the official listing market, that shall meet requirements concerning the issuers of securities and the securities traded on such market which are additional to the minimum conditions for regulated markets.

14 13 Art The minister competent for financial institutions shall define, by way of a regulation: 1) conditions to be met by the regulated market, including the rules for dissemination of information on transactions and trading volumes on such market, 2) detailed conditions to be met by the official listing market and by the issuers of securities admitted to trading on such market. taking into account the need to ensure the security of trading and the protection of investors interests on such markets. 2. The minister competent for financial institutions shall recognise the regulated market by way of a regulation. 3. The Commission shall forward to the European Commission and to other Member States: 1) the regulation referred to in Art and the information on any amendments thereto; 2) the rules referred to in Art and Art Art A company operating a stock exchange and a company operating an OTC market shall ensure: 1) concentration of supply of and demand for the financial instruments traded on a given market with a view to shaping a common price of such instruments; 2) security and efficiency of transactions; 3) dissemination of uniform information on the prices and trading volumes of the financial instruments traded on a given market organised by such company. 2. If the financial instruments traded on a regulated market are at the same time traded in an alternative trading system or in direct transactions referred to in Art. 74.1, a company operating a regulated market for such instruments may disseminate the information referred to in Art , to the extent such information pertains to such transactions, based on the information provided by the investment firm organising the alternative trading system or being a party to direct transactions. 3. The information referred to in Art shall be disseminated as provided in the regulations issued under Art Unless this Act provides otherwise: Art ) securities covered by an approved issue prospectus may be traded on the regulated market only after they have been admitted to trading on such a market;

15 14 2) public offerings of or trading in securities or other financial instruments on the regulated market in the Republic of Poland shall require the intermediation of an investment firm; 3) financial instruments referred to in Art c and d which incorporate the right to acquire the securities referred to in Art. 3.1a may be offered under Art. 3.1 of the Public Offering Act only on the regulated market; 4) financial instruments referred to in Art c and d which incorporate the right to acquire the securities referred to in Art. 3.1a, may be offered under Art. 3.1 of the Public Offering Act only if the such securities have been admitted to trading on the regulated market. 2. A transaction involving the acquisition or disposal of financial instruments other than securities, admitted to trading on the regulated market, or a transaction whereby such instruments are created, shall not be deemed a game or a bet within the meaning of the Civil Code of April 23rd 1964, or a game of chance or betting within the meaning of the laws on games of chance and betting, even if the actual performance of the mutual obligations has been waived by the express or implied will of the parties to such a transaction and only one party remains obliged to pay the difference between the agreed selling price and the market price prevailing at the time of the performance of the agreement. 3. Lending of broker-traded financial instruments with the participation of investment firms or custodian banks shall be carried out in accordance with the regulations issued under Art Lending of broker-traded financial instruments with the participation of investments firms or custodian banks shall not be subject to the provisions of the Civil Code concerning loan agreements. Art If justified by the security of trading on the regulated market or a threat to investors interests, at the demand of the Commission a company operating a regulated market shall withhold the admission to trading on the regulated market or the listing of the securities or other financial instruments indicated by the Commission for up to ten days. 2. If the trading in specified securities or other financial instruments is carried out in circumstances which indicate a possible threat to the proper operation of the regulated market, the security of trading on such a market, or a possible compromise of investors interests, at the demand of the Commission, a company operating a regulated market shall suspend the trading in such securities or instruments for up to one month. 3. At the demand of the Commission, a company operating a regulated market shall exclude from trading the securities or other financial instruments indicated by the Commission, if the trading in such securities or other financial instruments materially threatens the proper operation of the regulated market or the security of trading on such a market, or compromises investors interests. 4. The demand referred to in Art shall be accompanied by a detailed justification. 5. A company operating a regulated market shall promptly disclose to the public, through the information agency referred to in Art of the Public Offering Act,

16 15 the information on the withholding, suspension or exclusion from trading of specified securities or other financial instruments. The provisions of Art. 19 of the Public Offering Act shall apply accordingly. 6. If given financial instruments are traded also in an alternative trading system, the entity organising such alternative trading system, having received the information published pursuant to Art. 20.5, shall take steps in order to comply with the demand of the Commission referred to in Art. 20.1, 20.2 or 20.3 with respect to such financial instruments. 7. A company operating a regulated market shall not bear the cost of the services of the information agency related to the publication of the information referred to in Art Chapter 2 Regulated Market Section 1 Stock Exchange Market Art A stock exchange may be operated only by a joint-stock company. 2. The business of a company operating a stock exchange shall consist exclusively in the operation of a stock exchange or other activities related to the organisation of trading in financial instruments and trade-related activities, subject to Art A company operating a stock exchange may be involved in activities related to education, promotion and provision of information connected with the operation of the capital market. 4. A company operating a stock exchange may organise an alternative trading system upon a prior notification to the Commission and approval of the rules of such a system by the Commission. 5. A company operating a stock exchange shall have an obligation and the exclusive right to include the words stock exchange in its company name. 6. The provisions of Art , 78.5 and 78.6 shall apply accordingly to the rules of the alternative trading system organised by a company operating a stock exchange. 7. The share capital of a company operating a stock exchange shall amount to no less than PLN 40,000,000. Art A company operating a stock exchange may issue only registered shares. 2. The shares of a company operating a stock exchange may only be acquired by the State Treasury, investment firms, banks, investment fund companies, insurance undertakings, pension fund companies and issuers of securities listed on such stock

17 16 exchange. The shares of a company operating a stock exchange may be acquired by other domestic and foreign legal persons subject to the Commission's approval. 3. The provisions of Art and 22.2 shall not apply if a company operating a stock exchange is a public company. Art No shareholder of a company operating a stock exchange, with the exception of the State Treasury, shall have the right to exercise more than 5% of the total vote in such company. In justified cases, the Commission may, at the shareholder's request, authorise the shareholder to exercise a greater percentage of the voting rights, subject to Art The shareholders of a company operating a stock exchange which are not investment firms or banks shall have the right to exercise in aggregate no more than 50% of the total vote. This restriction shall not apply to the State Treasury or any shareholder who obtained the authorisation referred to in Art to exercise 20% or more of the total vote. 3. The detailed rules for the exercise of voting rights shall be defined in the articles of association of a company operating a stock exchange. 4. The shares of a company operating a stock exchange shall not confer the right to dividend as long as the State Treasury is entitled to exercise more than 50% of the total vote. 5. The provisions of Art and Art shall not apply if a company operating a stock exchange is a public company. Art The Commission shall be notified of any intended direct or indirect acquisition or subscription for any number shares in a company operating a stock exchange which: 1) represent 10% or more of the total vote or the share capital, or 2) which would result in reaching or exceeding 10%, 20%, 33% or 50% of the total vote or the share capital, with the proviso that the holding of shares in a company operating a stock exchange by entities belonging to the same group shall be deemed the holding of such shares by a single entity. 2. Indirect acquisition of shares in a company operating a stock exchange shall be the acquisition or subscription for shares in an entity which holds, whether directly or indirectly, shares in such company operating a stock exchange, if the acquisition or subscription results in reaching or exceeding 50% of the total vote or 50% of the share capital of such entity. 3. The Commission shall have the right to raise objections to any intended direct or indirect acquisition of or subscription for a specified number of shares in a company operating a stock exchange, within three months from the notification referred to in Art. 24.1, if there is a reasonable suspicion that the entity proposing to acquire shares in such company operating a stock exchange could exert detrimental

18 17 influence on the management of such company. If no objection is raised, the Commission may set a final date by which the shares in a company operating a stock exchange may be acquired. 4. Any exercise of the voting rights attached to shares acquired despite the objection referred to in Art shall be deemed null and void. 5. If shares in a company operating a stock exchange are to be acquired by a foreign investment firm, foreign bank or foreign insurance undertaking authorised to conduct its activities by the competent authority of another Member State, the Commission shall seek an opinion on such entity from the competent authority that had granted the authorisation. 6. The provisions of Art shall apply accordingly where the entity acquiring shares in a company operating a stock exchange is the parent entity of the entity referred to in Art or an entity exerting significant influence within the meaning of Art on the entity referred to in Art. 24.5, or where as a result of an indirect acquisition the target entity would become a subsidiary of the acquirer or an entity over which the acquirer would gain significant influence within the meaning of Art The notification referred to in Art shall specify the number of shares to be acquired, their share in the share capital, and the number of votes which the acquirer will obtain at the general shareholders meeting, and shall include a statement, subject to criminal liability, on the source of funds to be used to pay for the shares in a company operating a stock exchange. 8. If the Commission has not raised an objection within the timeframe referred to in Art. 24.3, the same shall be deemed an approval of the acquisition of shares in a company operating a stock exchange on the terms and conditions set forth in the notification. Art Subject to Art. 25.4, the operation of a stock exchange shall require an authorisation by the minister competent for financial institutions, to be granted upon an application of the party concerned, on which the Commission has issued its opinion. 2. To obtain such an authorisation, the company concerned shall file an application through the intermediation of the Commission, indicating: 1) name and registered office of the company; 2) personal details of the members of the management board and the supervisory board of the company operating a stock exchange, hereinafter referred to as the stock exchange management board and the stock exchange supervisory board, and of other persons who are responsible for the launch of the stock exchange or who will manage the stock exchange; 3) expected amount of own funds and loans allocated to the financing of the launch of the stock exchange, and information on how its operations would be financed; 4) information on the amount and structure of shareholders equity and its sources;

19 18 5) information on the intended location of the stock exchange and the technical means to be used to facilitate its operations, in particular the means ensuring ongoing communication with the National Depository; 6) commitment of at least ten investment firms to conduct operations on the stock exchange. 3. The application should be accompanied by the company s articles of association, the stock exchange rules and a study of the economic and financial feasibility of the stock exchange operations. If the company also intends to organise an alternative trading system, the rules of such system should also be attached to the application. 4. If any formal deficiencies are found in the application, the Commission shall issue a decision that the application shall not be considered. 5. By granting the authorisation, the minister competent for financial institutions shall approve the company s articles of association and the stock exchange rules. Art. 26. The minister competent for financial institutions shall refuse an authorisation to operate a stock exchange, if following the analysis of the application and the attached documents the applicant is found to be unable to conduct its operations in a manner which would guarantee the security of trading in financial instruments and duly protect the interests of trade participants. Art. 27. Any changes in the composition of the stock exchange management board shall require an approval by the Commission, to be granted at the request of the body authorised to appoint and remove members of the stock exchange management board. The Commission shall refuse such approval, if the proposed changes do not ensure the conduct of operations in a manner which would guarantee the security of trading in financial instruments or duly protect the interests of trade participants. Art At a request of the stock exchange management board, the stock exchange supervisory board shall adopt the stock exchange rules and any amendments thereto. 2. The stock exchange rules shall define in particular: 1) criteria and conditions for the admission of securities and other financial instruments to trading on each of the markets of the stock exchange, including securities admitted to trading on a regulated market in another Member State; 2) method and procedure for resolving disputes related to the execution of stock exchange transactions; 3) types of transactions to be executed on the stock exchange; 4) order of trading in securities and other financial instruments on the stock exchange;

20 19 5) conditions and procedure for listing, suspending and delisting of securities and other financial instruments on or from the stock exchange; 6) method for determination and publication of prices; 7) trading days and trading hours; 8) rules for cancellation of transactions; 9) classification of securities and other financial instruments listed on the stock exchange; 10) information system of the stock exchange; 11) amount of the fixed annual fee for using the stock exchange's facilities; 12) amount of trading fees and the methods of their calculation; 13) disclosure requirements applicable to the issuers whose securities are traded on a stock exchange market other than the official listing market; 14) procedure to be followed if issuers fail to comply with the disclosure requirements specified in the rules; 15) provisions intended to prevent and reveal any market manipulation referred to in Art The stock exchange rules may specify additional conditions for admission of securities to trading, whose sole purpose will be the protection of investors interests. In such a case, the entity applying for admission of given securities to trading should be advised on such conditions before it submits its application. Art Any amendment to the articles of association of a company operating a stock exchange and the stock exchange rules shall be subject to the Commission s approval. The Commission shall refuse such approval if the proposed amendments are in conflict with the law or could adversely affect the security of trading. 2. A company operating a stock exchange shall notify the Commission of any changes in the data referred to in Art A company operating a stock exchange shall make available to the trade participants the stock exchange rules and any amendments thereto, as well as any other regulations adopted by the company which are effective on the market it operates, at least two weeks before the effective date of such rules, amendments or regulations. Art The Chairman of the Commission or a person authorised by the Chairman shall have the right to: 1) enter the registered office and premises of a company operating a stock exchange to inspect the books, documents and information stored in other forms; 2) participate in meetings of the stock exchange supervisory board and general shareholders meetings.

21 20 2. At a request of the Chairman of the Commission or a person authorised by the Chairman, the authorised representatives of a company operating a stock exchange, or members of its management or supervisory boards, or persons bound by an employment relation with such company, shall promptly prepare and deliver, at the cost of the company, copies of documents and other data carriers and shall provide written or oral explanations. 3. The obligation referred to in Art shall also apply to the qualified auditor and the authorised representatives of the auditing firm (qualified auditor of financial statements) or persons bound by an employment relation with such firm to the extent related to actions undertaken by such persons or firm in connection with an audit of the financial statements of a company operating a stock exchange or provision to such company of other services specified in Art of the Act on Qualified Auditors and their Self-Government of October 13th 1994 (Dz.U. of 2001, No. 31, item 359, as amended 5) ). The above shall not be deemed a breach of the secrecy obligation referred to in Art. 4a of the Act on Qualified Auditors and their Self-Government. 4. At a written request of the Commission, the management board of a company operating a stock exchange shall: 1) convene an extraordinary general shareholders meeting, or 2) include the matters indicated by the Commission in the agenda of the general shareholders meeting. 5. In the event of failure to perform the obligations referred to in Art. 30.4, the provisions of Art and Art of the Commercial Companies Code of September 15th 2000 shall apply accordingly to the Commission s request. 6. The Commission may order the stock exchange supervisory board to promptly, and in any case no later than within 10 business days, adopt a resolution on a specific matter. 7. The Commission may appeal to the court against a resolution of the general shareholders meeting or supervisory board of the stock exchange within 30 days of becoming aware of such resolution, by way of an action for repeal of such resolution, if such resolution is in conflict with the law, the articles of association, the stock exchange rules or the principles of secure trading, or if it has been adopted in violation of the law, the articles of association or the stock exchange rules. 8. If there are any doubts as to the accuracy or reliability of the financial statements or other financial information which are required to be prepared under other regulations or as to the proper maintenance of accounting books, the Commission may order an audit of such statements, information or accounting books to be performed by a qualified auditor of financial statements. If any material irregularities are found during the audit, a company operating a stock exchange shall reimburse the costs of the audit to the Commission. 5) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2002, No. 240, item 2052; Dz.U. of 2003, No. 124, item 1152; and Dz.U. of 2004, No. 62, item 577, No. 96, item 959, No. 173, item 1808, and No. 213, item 2155.

22 21 Art Only investment firms and, in the case referred to in Art. 59.3, the National Depository may be parties to transactions on a stock exchange market. 2. The parties to transactions executed on a stock exchange market may also be, subject to the terms and conditions set forth in the stock exchange rules, other entities which acquire and dispose of financial instruments in their own name and for their own account and: 1) are participants of the National Depository; 2) are not participants of the National Depository but have designated a participant of the National Depository who has agreed to perform the obligations related to the clearing of the executed transactions. 3. A legal transaction which consists in a transaction executed on a stock exchange market by entities other than indicated in Art shall be null and void. Art A resolution on admission of financial instruments to trading on a stock exchange market shall be adopted by the stock exchange management board within 14 days from the date of submission of the application. 2. If the submitted application is incomplete or if additional information needs to be provided, the stock exchange management board or supervisory board, as the case may be, may to the extent necessary to determine whether financial instruments covered by the application meet the criteria and conditions referred to in Art demand that the application be supplemented or additional information be provided. In such a case, the timeframes specified in Art and 32.3 shall be counted from the day on which the applicant satisfies the demand. 3. The stock exchange management board shall refuse admission of financial instruments to trading on a stock exchange market if the criteria and conditions referred to in Art are not met. If the admission is refused, the applicant shall have the right to appeal to the stock exchange supervisory board within the timeframe specified in the stock exchange rules. The appeal shall be considered within one month from the date of its submission. 4. A resolution of the stock exchange supervisory board which does not grant the applicant s appeal may be appealed against by the applicant to the court having territorial jurisdiction over the registered office of a company operating a stock exchange, within 14 days of the applicant becoming aware of the resolution, if the refusal of admission is in breach of the stock exchange rules. The court judgement granting an appeal shall substitute a resolution on admission of financial instruments to trading on a stock exchange market. 5. Convertible bonds or bonds with pre-emptive rights may be admitted to trading on the official listing market, provided that the shares to be issued or issued in order to enable the holders of rights attached to such bonds to exercise such rights are also covered by an application for admission to trading on an official listing market or are already listed on the same or another official listing market or on a regulated market in another Member State.

23 22 6. A company whose shares are admitted to trading on the given official listing market shall be required to apply for admission to trading on such market with respect to any new issue shares of the same type offered in a public offering, no later than within 12 months from the closing of the subscription period or from the end of the lock-up period, if any, during which the transferability of such shares was limited. Section 2 Over the Counter Market Art An over the counter (OTC) market may be operated only by a joint-stock company. 2. The business of a company operating an OTC market shall consist exclusively in the operation of an OTC market or other activities related to the organisation of trading in financial instruments and trade-related activities, subject to Art A company operating an OTC market may be involved in activities related to education, promotion and provision of information connected with the operation of the capital market. 4. A company operating an OTC market may organise an alternative trading system upon a prior notification to the Commission and approval of the rules of such a system by the Commission. 5. The provisions of Art and shall apply accordingly to the rules of the alternative trading system organised by a company operating an OTC market. 6. The share capital of a company operating an OTC market shall amount to no less than PLN 7,500,000. Art A company operating an OTC market may issue only registered shares. 2. The shares of a company operating an OTC market may only be acquired by investment firms, banks, investment fund companies, insurance undertakings, pension fund companies and issuers of securities traded on such OTC market. The shares of a company operating an OTC market may be acquired by other domestic and foreign legal persons subject to the Commission's approval. 3. The provisions of Art shall not apply if a company operating an OTC market is a public company. Art No shareholder of a company operating an OTC market shall have the right to exercise more than 10% of the total vote in such company. In justified cases, the Commission may, at the shareholder's request, authorise the shareholder to exercise a greater percentage of the voting rights, subject to. Art

24 23 2. The shareholders in a company operating an OTC market which are issuers of securities traded on such market shall be entitled to exercise in aggregate no more than 25% of the total vote. This restriction shall also apply to investment fund companies, pension fund companies, and insurance undertakings. 3. The detailed rules for the exercise of voting rights shall be defined in the articles of association of a company operating an OTC market. 4. The provisions of Art and 35.2 shall not apply if a company operating an OTC market is a public company. Art The operation of an OTC market shall require an authorisation by the Commission, to be granted upon an application of the party concerned. The provisions of Art shall apply accordingly. 2. The Commission shall consider the application within two months from its submission. 3. The Commission shall refuse the authorisation to operate an OTC market if the application fails to meet conditions specified therefor or if the information furnished implies that the applicant cannot ensure operation of the market in a manner which would guarantee the security of trading in financial instruments or duly protect the interests of trade participants. Art At a request of the management board, the supervisory board of a company operating an OTC market shall approve the trading rules of such market. 2. By granting the authorisation referred to in Art. 36.1, the Commission shall approve the company s articles of association and the trading rules of the OTC market. 3. The provisions of Art and Art shall apply accordingly to a company operating an OTC market and to the supervision over such company. Art The provisions of Art. 31 shall apply accordingly to the execution of transactions on an OTC market. 2. Investment firms which are parties to transactions on an OTC market and which conduct activities related to the organisation of a regulated market as specified in the trading rules referred to in Art. 37.1, may execute buy or sell transactions in securities directly with an entity placing an order.

25 24 Section 3 Market Manipulation Art Manipulation involving financial instruments, hereinafter referred to as market manipulation, shall be prohibited. 2. Market manipulation shall mean: 1) placing orders or executing transactions which are or may be misleading as to the actual supply of, demand for or price of a financial instrument, unless the reasons behind such activities have been legitimate, and the placed orders or executed transactions have not been in breach the established market practice on the relevant regulated market; 2) placing orders or executing transactions which result in the price of one or more financial instruments moving to an abnormal or artificial level, unless the reasons behind such activities have been legitimate, and the placed orders or executed transactions have not been in breach of the established market practice on the relevant regulated market; 3) placing orders or executing transactions with the intention to produce legal consequences other than the actual objective of a given legal transaction; 4) dissemination, through the media, including the Internet, or by any other means, of false or inaccurate information or rumours which are or may be misleading as regards financial instruments: a) by a journalist if he/she has failed to exercise due professional care or if he/she has obtained financial or personal benefits for himself/herself or another person by disseminating such information, even acting with due professional care, b) by another person if the person has known or, acting with due care could have known, such information to be false or misleading; 5) placing orders or executing transactions while simultaneously misleading market participants, or using the fact that the market participants are being misled, as regards the price of a financial instrument; 6) securing control over demand for or supply of a financial instrument in breach of the principles of fair trading or in a manner resulting in a direct or indirect fixing of the purchase or selling prices of financial instruments; 7) acquisition or disposal of financial instruments at the close of trading with the effect of misleading investors acting on the basis of closing prices; 8) deriving financial benefits from the influence of opinions concerning financial instruments or their issuers, expressed in the media on an occasional or a regular basis, on the price of the financial instruments held, unless an existing conflict of interest has been fully and reliably disclosed to the public. 3. The provisions of Art shall not apply to: 1) acquisition of own shares in buy-back programmes by a public company or an entity acting for its account or in its name, provided that the acquisition is

26 25 carried out in the manner, time and on the terms specified in Commission Regulation (EC) No. 2273/2003 of December 22nd 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programmes and stabilisation of financial instruments (OJ L 336, ); 2) transactions carried out in performance of statutory responsibilities concerning the monetary, foreign currency or public debt-management policies of a state, executed by authorised representatives of relevant governmental authorities or the National Bank of Poland, as well as by the European System of Central Banks; 3) acquisition of financial instruments with a view to stabilising their prices in trading on a regulated market, provided that the acquisition is carried out in the manner, time and on the terms specified in the regulations referred to in Art The prohibitions and requirements referred to in Art shall apply to: 1) behaviour occurring in the territory of the Republic of Poland or another Member State and relating to financial instruments admitted or sought to be admitted to trading on a regulated market in the territory of the Republic of Poland; 2) behaviour occurring in the territory of the Republic of Poland and relating to financial instruments admitted or sought to be admitted to trading on a regulated market in the territory of another Member State; 3) financial instruments introduced to an alternative trading system in the territory of the Republic of Poland. Art The regulated entities referred to in Art and of the Act on Capital Market Supervision shall be obliged to promptly deliver to the Commission (if the Commission is the competent body for the authorisation to conduct regulated activities or the registered office of the entity or its branch) information on each reasonable suspicion that an instance of market manipulation has occurred. Subject to Art. 40.2, such information shall include: 1) detailed information on the suspected transaction, including: a) the financial instrument involved in the transaction, b) transaction type and manner of its execution, c) transaction date and place, d) transaction price and volume, e) type of market and trading system to which the transaction relates, f) description of the order covering the financial instruments to which the transaction relates, including the type and size of the order, g) the person who has placed the order or executed the transaction, including in particular information whether the person has acted for his/her own account or a third party s account;

27 2) reasons justifying the suspicion; 26 3) information enabling the identification of the persons for whose account the order has been placed or transaction executed, as well as of other persons connected with the transaction; 4) nature of the regulated entity s relation with the suspected transaction and the persons referred to in Art which results from the nature of actions performed by this entity, including in particular the actions specified in Art or ; 5) any other information which in the opinion of the regulated entity referred to in Art and of the Act on Capital Market Supervision may be relevant for examination of the reported suspicion; 6) date when and place where the information has been prepared and the signature of the person delivering the information. 2. If while performing the obligation referred to in Art the regulated entity does not have all the information required, then it shall deliver the information known to it at the time being, including at least the reason for its suspicion that an instance of market manipulation has occurred. The regulated entity shall deliver any other information which may become available to it at a later time promptly after such entity becomes aware thereof. 3. The regulated entity may prepare and deliver the information referred to in Art in a form other than the written form, including on electronic data carriers and by means of remote communication, provided that the confidentiality of such information is maintained. In such a case, at the Commission s request, the regulated entity shall present a document confirming in writing that the information has been conveyed. 4. Upon the receipt of the information referred to in Art , the Commission shall promptly forward it to the relevant authority in another Member State competent for the regulated market to which the information relates. 5. The obligation referred to in Art shall also apply to other non-regulated domestic banks and branches of credit institutions, as defined in the Banking Law of August 29th The information on the notification having been made and the contents of the notification may not be provided by the entity performing the obligation referred to in Art to any entity other than the Commission, including in particular the persons for whose account the suspected transaction has been executed or entities related to such persons, unless the obligation to deliver such information arises under other statutory regulations. Art When considering whether placing given orders or executing given transactions may be deemed an instance market manipulation referred to in Art , the Commission and market participants shall in particular take into account the following: 1) significance of the share of given orders or transactions in the daily volume of trade in a given financial instrument on the relevant regulated market,

28 27 including in particular whether such orders or transactions cause a material change in the price of such a financial instrument; 2) to what extent the orders with a significant share in buy or sell offers of, or transactions with a significant share in buy or sell transactions, in a given financial instrument cause a material change in the price of: a) such a financial instrument or b) a derivative of the financial instrument referred to in item a, or c) the specific right underlying the issuance of such a financial instrument and admitted to trading on a given regulated market; 3) whether given transactions cause a change in the actual holding of a given financial instrument admitted to trading on a given regulated market; 4) if a share of orders or transactions in buy offers or buy transactions changes at short intervals into a share in sell offers or sale transactions, or vice versa, and such orders or transactions have a significant share in the daily volume of trading in a given financial instrument on a given regulated market to what extent such changes cause, whether directly or indirectly, a material change in the price of such a financial instrument; 5) to what extent orders placed or transactions executed at short intervals cause a short-lived change in the price of a financial instrument, which then moves back to its earlier level; 6) to what extent orders which are placed and then cancelled prior to their execution cause a change of the best-price buy offers or best-price sell offers, or of other buy or sell offers for a financial instrument admitted to trading on a given regulated market; 7) to what extent orders placed or the transactions executed in or before a period which is a measurement period used to determine the settlement price, execution price, reference price or valuation of a given financial instrument affect the price of a given financial instrument which serves as a basis for the determination of such settlement price, execution price, reference price or valuation. 2. When considering whether orders are placed or transactions are executed while simultaneously misleading market participants, or using the fact that the market participants are being misled, as regards the price of a financial instrument, the Commission and market participants shall in particular take into account the following: 1) whether placing orders or executing transactions by given persons precedes or follows dissemination of false or misleading information by such persons or persons related to them; 2) whether placing orders or executing transactions by given persons precedes or follows the preparation and dissemination, by such persons or persons related to them, of recommendations which are incorrect, biased or obviously intended to obtain financial or personal benefits by such persons.

29 28 Art Persons preparing recommendations concerning financial instruments or issuers thereof, for dissemination among investors, as well as persons disseminating such recommendations, shall be obliged to exercise due diligence, ensure reliability of the recommendations prepared by them and disclose any legitimate interests and conflicts of interest existing at the time of such preparation or dissemination. 2. The minister competent for financial institutions may, by way of a regulation, define the types of information constituting a recommendation concerning financial instruments or issuers thereof, the manner for the preparation and dissemination of such recommendations and the detailed conditions to be met by these recommendations, taking into account the need to ensure fair presentation of such information and disclosure of legitimate interests and conflicts of interest, as well as to ensure the security of trading and to prevent any compromise of the interests of trade participants. 3. The prohibitions and requirements referred to in Art and those resulting from the regulations issued under Art shall apply to the cases specified in Art Art The provisions of this Section shall apply to financial instruments admitted to trading on a regulated market in the territory of the Republic of Poland or of any other Member State, or sought to be admitted to trading on such a market, irrespective of whether the transactions in such an instrument are executed on such market or not, subject to Art The provisions of Art b shall also apply to securities which are offered in a public offering and are to be admitted to trading on a regulated market or introduced to an alternative trading system. Section 4 Established Market Practice Art Established market practice shall mean any behaviour which can reasonably be expected on one or more financial markets and which is approved, by way of a resolution, by the Commission in accordance with the guidelines set forth in Art The resolution referred to in Art shall be published in the Official Journal (Dziennik Urzędowy) of the Polish Securities and Exchange Commission. Art While determining whether a given behaviour is an established market practice, the Commission shall in particular take into account the following: 1) transparency and comprehensibility of such market practice to market participants;

30 29 2) need to protect the proper operation of the market and proper interaction of supply and demand forces; 3) effect of a given market practice on market liquidity and efficiency; 4) extent to which trading rules applicable on a given market are followed and whether a given market practice enables market participants to perform appropriate actions at appropriate time in response to market developments caused by such market practice; 5) with respect to financial instruments the risk posed by a given market practice to the proper operation of related, whether directly or indirectly, regulated or non-regulated markets in any Member State; 6) outcome of proceedings relating to a specific market practice, conducted by the competent authority and other authorities qualified to conduct proceedings concerning instances of abuse in financial instrument trading, in particular if such practice has violated legal regulations enacted to prevent abuse on a given market or market(s) related, whether directly or indirectly, to any market of a Member State, or has violated regulations containing rules to be followed on such markets; 7) profile of a given regulated or non-regulated market, types of financial instruments traded on such market, categories of market participants, including the share of retail investors in trading on a given market. 2. The Commission shall on review a regular basis the established market practices, taking into account material changes in market operation, such as changes in trading rules or market organisation rules. 3. Considering the need to protect the principles of fair trading and proper interaction of supply and demand forces, a given market practice should in particular be reviewed in terms of its effect on the main market parameters, such as: 1) conditions prevalent on a given market; 2) average price during a trading session; 3) price fixed at the close of trading. 4. A market practice, especially a new or developing one, may be followed even if not yet approved by the Commission. 5. Prior to approving a given behaviour as established market practice, the Commission shall hold a consultation process to obtain the opinion of: 1) relevant entities which are participants of any of the following markets: the market of securities or other financial instruments, commodities or investment fund services, as well as associations and organisations of such entities; 2) competent authority in another Member State where the regulated market has similar characteristics, especially in terms of its organisation, size and transaction types. 6. The implementation of a change in established market practice shall be conditional upon prior consultation with the entities and organisations referred to in Art The Commission shall deliver to the Committee of European Securities Regulators and publish the contents of the resolution referred to in Art. 44.1, indicating the

31 30 guidelines followed while approving a given behaviour as established market practice. 8. If administrative, explanatory or criminal proceedings have been instituted in a case relating to the Commission s supervision over behaviour which is subject of the opinions referred to in Art. 45.5, the Commission may suspend the consultation process until such proceedings are completed. Part III National Depository for Securities Depository and Clearing System Art The National Depository shall be a joint-stock company. 2. The National Depository may issue only registered shares. 3. The following entities shall be allowed to hold shares in the National Depository: companies operating a stock exchange, companies operating an OTC market, investment firms, banks, the State Treasury, the National Bank of Poland as well as legal persons and other organisations whose scope of business includes securities registration, clearing or settlement of transactions in securities or organising a regulated market, whose registered offices are situated in the territory of a Member State or an OECD state and which are subject to supervision by a competent authority of such state. 4. The shares of the National Depository shall not confer the right to dividend. 5. With respect to matters related to the National Depository directors reports, business plans and financial plans, reports of the operation of the compensation scheme referred to in Art of the rules referred to Art. 50.1, Art and Art and other regulations issued by the National Depository on the basis of such rules, the management and supervisory boards of the National Depository shall consult an advisory body comprising: 1) two delegates of representative associations or organisations of the entities referred to in Art d of the Act on Capital Market Supervision; 2) two delegates of representative associations or organisations of the entities referred to in Art e of the Act on Capital Market Supervision; 3) two delegates of commercial chambers referred to in Art. 92.1; 4) two delegates of the entities referred to in Art ; 5) one delegate of each company operating a regulated market. 6. The advisory body may on its own initiative issue and deliver to the management or supervisory board of the National Depository opinions regarding issues referred to in Art Art The Commission shall be notified of any intended direct or indirect acquisition or subscription for any number of shares in the National Depository which:

32 1) represents 10% or more of the total vote or the share capital; or 31 2) would result in reaching or exceeding 10%, 20%, 33% or 50% of the total vote or the share capital with the proviso that the holding of shares in the National Depository by entities belonging to the same group shall be deemed the holding of such shares by a single entity. 2. Indirect acquisition of shares in the National Depository shall be the acquisition or subscription for shares in an entity which holds, whether directly or indirectly, shares in the National Depository, if the acquisition or subscription results in reaching or exceeding 50% of the total vote or 50% of the share capital of such entity. 3. The Commission shall have the right to raise objections to any intended direct or indirect acquisition of or subscription for a specified number of shares in the National Depository, within three months from the notification referred to in Art.47.1, if there is a reasonable suspicion that the entity proposing to acquire shares in the National Depository could exert detrimental influence on its management. If no objection is raised, the Commission may set a final date by which the shares in the National Depository may be acquired. 4. Any exercise of the voting rights attached to shares in the National Depository acquired despite the objection referred to in Art shall be deemed null and void. 5. If shares in the National Depository are to be acquired by a foreign investment firm, foreign bank or foreign insurance undertaking authorised to conduct its activities by the competent authority of another Member State, the Commission shall seek an opinion on such entity from the competent authority that had granted the authorisation. 6. The provisions of Art shall apply accordingly in cases where the entity acquiring shares in the National Depository for Securities is the parent entity of the entity referred to in Art or an entity exerting significant influence within the meaning of Art on the entity referred to in Art. 47.5, or where as a result of an indirect acquisition the target entity would become a subsidiary of the acquirer or an entity over which the acquirer would gain significant influence within the meaning of Art The notification referred to in Art.47.1 shall specify the number of shares to be acquired, their share in the share capital and the number of votes which the acquirer will obtain at the general shareholders meeting, and shall include a statement, subject to criminal liability, on the source of funds to be used to pay for the shares. 8. If the Commission has not raised an objection within the timeframe referred to in Art. 47.3, the same shall be deemed an approval of the acquisition of shares in the National Depository on the terms and conditions set forth in the notification. Art The National Depository s responsibilities shall include: operation of the depository for securities, settlement and clearing of transactions in securities, operation of a system ensuring liquidity of settlements, and activities related to the operation of

33 32 a system for registration, clearing and settlement of transactions in financial instruments other than securities. 2. The National Depository s responsibilities shall include in particular: 1) registration, subject to Art. 49, of dematerialised securities and other financial instruments admitted to trading on a regulated stock exchange or OTC market or introduced to an alternative trading system; 2) supervision over whether the size of an issue registered in the depository for securities is consistent with to the number of traded securities; 3) provision of services supporting issuers in performance of their obligations towards the holders of rights attached to securities registered in the depository for securities; 4) clearing, subject to Art. 49, of the transactions executed on regulated stock exchange and OTC markets; 5) clearing of transactions executed in an alternative trading system in respect of dematerialised securities; 6) activities related to deregistration of securities from the depository for securities; 7) settlements of financial instruments and cash in connection with the transactions referred to in Art ; 8) operation of the system ensuring liquidity of settlements, including a settlement guarantee system for transactions executed on regulated stock exchange and OTC markets; 9) ensuring the proper operation of the mandatory compensation scheme described in Art Furthermore, the National Depository may also: 1) register financial instruments other than those specified in Art ; 2) clear and settle transactions other than the transactions specified in Art , including in particular transactions executed on the commodity exchange market; 3) operate a system ensuring liquidity of settlements of transactions referred to in Art The National Depository may provide services related to trading in securities other than dematerialised securities. Unless this Act provides otherwise, regulations on the maintenance of a depository for securities shall apply accordingly to such services. 5. The National Depository may keep cash accounts, settle payments in cash, advance loans and participate in transaction settlements conducted by the National Bank of Poland on the terms applied in inter-bank settlements to the extent it is necessary for the fulfilment of its responsibilities referred to in Art The responsibilities specified in Art , and shall remain the exclusive domain of the National Depository.

34 33 7. Upon the prior consent granted by the Commission the National Depository may delegate, by way of an agreement, certain activities connected with the fulfilment of its responsibilities specified in Art to another entity. 8. To the extent provided for in such agreement, the National Depository shall supervise the activities conducted by the entity referred to in Art. 48.7, in particular it shall establish the rules and procedures governing the performance of the delegated activities, determine their scope and supervise the performance. 9. The Commission shall revoke the consent referred to above in the event the continuing performance of such activities might pose a threat to the security of trading or in the event the agreement referred to in Art is terminated. 10. The clearing referred to in Art shall consist in determining the amount of cash and non-cash liabilities due under executed transactions from the participants of the National Depository (hereinafter referred to as the participants ) who are parties to such transactions or other participants who have undertaken to fulfil obligations arising in connection with such clearing (each a clearing participant ). 11. The settlement referred to in Art shall consist in the debiting or crediting the deposit account or the securities account, as the case may be, kept by the National Depository, in connection with disposal or acquisition of financial instruments, and the crediting or debiting of the bank account indicated by a clearing participant with the appropriate amount determined during the clearing. Art. 49. Registration and clearing of transactions in securities: 1) issued by the State Treasury or the National Bank of Poland, 2) representing transferable property rights attached to securities issued by the State Treasury or the National Bank of Poland may, should the issuer so decide, be effected through a separate system operated by the National Bank of Poland. Art At the request of the management board, the supervisory board of the National Depository shall adopt the rules of the National Depository. 2. The rules of the National Depository and amendments thereto shall be subject to the Commission s approval. 3. The Commission shall refuse to approve amendments to the rules of the National Depository if the proposed amendments are in conflict with the law or could adversely affect the security of trading. 4. The rules of the National Depository shall define in particular: 1) rights and obligations of participants, procedure and detailed rules governing the acquisition or loss of the status of a participant; 2) manner of registration of financial instruments in the National Depository as well as the manner of keeping by participants of securities accounts and other accounts auxiliary to securities accounts;

35 34 3) rules governing the reduction of value or number of shares and the issuer s procedure for returning monies in respect of the shares affected by the reduction referred to in Art. 56; 4) manner and procedure of transaction clearing; 5) manner of providing services related to participants cash accounts; 6) manner of providing services supporting issuers in performance of their obligations towards the holders of rights attached to securities; 7) procedure for the issuance of certificates by the National Depository; 8) manner of computation and the amount of fees referred to in Art. 63; 9) disciplinary and procedural measures to be used with respect to participants who breach their obligations arising from participation in the National Depository, as well as the rules and procedure governing the application thereof; 10) actions to be taken and measures to be applied in connection with: a) supervision over whether the size of an issue registered in the National Depository is consistent with to the number of traded securities; b) supervision over participants activities relating to securities trading; 11) manner of operation of the clearing and settlement system; 12) manner of organisation of a system ensuring liquidity of settlements, defining in particular a settlement guarantee system for transactions executed on regulated stock exchange and OTC markets; 13) rules governing the work of the advisory body referred to in Art The National Depository shall make available to participants the rules of the National Depository, amendments thereto and other regulations concerning participants rights and obligations issued on the basis of the rules, at least two weeks before the effective date of such rules, amendments or regulations. 6. If amendments to the rules of the National Depository do not limit the participants rights or increase the scope of their obligations, the Commission may grant its consent to the shortening of the notice period preceding their effective date. Art The responsibilities referred to in Art and Art shall be performed by the National Depository in collaboration with participants. 2. The participants shall include only those entities whose business includes keeping securities accounts, issuers of dematerialised securities, and other financial institutions, provided that the purpose of their participation is to collaborate with the National Depository in the performance of its responsibilities. 3. The participants may also include legal persons or other organisations with registered offices outside the Republic of Poland which conduct activities relating to the centralised registration of securities or the clearing of transactions in securities, with the proviso that those entities whose activities are not supervised by a relevant authority competent for financial institutions in a Member State or in an

36 35 OECD state, may become participants subject to the approval of and on the terms and conditions defined by the Commission. 4. The participants may also include foreign investment firms and foreign legal persons conducting brokerage activities in the Republic of Poland. Art The status of a participant shall be acquired upon the conclusion with the National Depository of an agreement on the participation in the depository for securities, hereinafter referred to as the participation agreement. 2. An entity which has obtained the Commission s authorisation for keeping securities accounts or which keeps such accounts pursuant to Art. 117 and meets the requirements provided for in the rules of the National Depository, shall be entitled to demand conclusion of a participation agreement. 3. The conclusion of a participation agreement shall be effected following the lapse of two weeks from the submission of a representation by an entitled entity to the effect that it intends to conclude a participation agreement, unless the management board of the National Depository resolves, within the said timeframe, to refuse conclusion of such an agreement. 4. The applicant shall have the right to appeal to the supervisory board of the National Depository against such a resolution. The supervisory board shall consider the appeal within two weeks from the date of its submission. Art Should a given entity s participation in the National Depository be limited or cancelled in the cases provided for in the rules of the National Depository, a company operating a stock exchange and a company operating an OTC market shall be obliged to limit or suspend such participant s activities on the regulated market, unless the responsibilities relating to transaction clearing are performed by another participant. 2. The National Depository shall promptly inform a company operating a stock exchange and a company operating an OTC market of any such limited or cancelled participation. Art. 54. With respect to its performance of the responsibilities referred to in Art and Art , the National Depository may receive from the participants identification details of such participants customers holding rights attached to specific securities and information on the number of securities held by such customers at the time being, and in connection with the performance of the responsibilities referred to in Art , the National Depository may demand that a participant provides it with such details and information.

37 36 Art Securities of a given issue which confer the same rights and are of the same status in trading, shall be assigned a separate designation by the National Depository, hereinafter referred to as the code. 2. At an issuer s request, securities of various issues which confer the same rights to their holders and which are of the same status in trading may be assigned a single code by the National Depository, provided that it had previously notified a company operating the regulated market on which such securities are traded, or an entity which organises an alternative trading system for such securities. 3. An issuer may not attach different rights to securities which are assigned the same code. Any change with respect to the rights attached to securities which are assigned the same code requires that they be assigned a separate code. 1. If: Art ) a court s decision on the entry of the increase in the share capital of a public company in the register of entrepreneurs has been repealed; or 2) a general shareholders meeting s resolution on a share capital increase has been repealed or invalidated and the shares issued as a result of such share capital increase had previously been assigned the same code as other shares in such a company, a reduction of the par value of all the shares assigned that code shall be effected at the depository for securities. 2. If the reduction referred to in Art cannot be effected, then a reduction of the total number of securities assigned a given code shall be effected at the depository for securities. 3. Based on the notification of such reduction having been completed, submitted by the National Depository, a competent registry court shall make a relevant change in the register of entrepreneurs, and shall subsequently order the company to amend, within a specified timeframe, the wording of its articles of association to reflect the new legal status. 4. A public company shall be obliged to return to shareholders the proceeds from the issue of shares registered in the shareholders accounts which are affected by the reduction referred to in Art and Art The share of particular shareholders in the amount of funds to be returned by the issuer shall be determined based on the ratio of the post-reduction par value of the shares registered in such shareholders securities accounts to the par value of all the shares affected by the reduction, or based on the ratio of the number of shares registered in such shareholders securities which are affected by the reduction to the total post-reduction number of shares. Art The National Depository shall register securities in:

38 37 1) deposit accounts, in the case of which identification of the holder of the securities account in which such securities have been registered is not possible; 2) securities accounts. 2. Balances on securities accounts kept by the participants should correspond with the balance on a relevant deposit account kept at the National Depository. Art. 58. An issuer s obligation to deliver securities shall be satisfied upon the receipt of such securities by the participant keeping the securities account for the entitled person, and an issuer s obligation to make a cash payment shall be satisfied upon the transfer of the cash to the bank account indicated by such participant. Art When arranging and effecting the clearing of transactions referred to in Art , the National Depository shall specify in particular the scope of obligations of the parties to transactions or, if the parties to a transaction perform their obligations through other entities, of the clearing participants, in order to ensure proper discharge by the parties of their monetary or non-monetary obligations under the executed transactions. 2. The National Depository shall organise and operate a system guaranteeing proper performance of obligations under transactions. 3. The National Depository may be a party to a transaction executed on a regulated stock exchange or OTC market solely in connection with the use of the funds of the system referred to in Art in line with its purpose. Art. 60. If settlement of a transaction consists in the delivery by a party to the transaction or a clearing participant of cash or non-cash instruments representing an excess over the value of cash or non-cash instruments owed to such party or clearing participant, an obligation of a participant to deliver such cash or non-cash instruments in the amount of such excess shall arise upon the execution of the transaction; the above shall not exclude the possibility of setting a different amount of cash or non-cash instruments in the cases referred to in Art. 62. Art In the event any bankruptcy, recovery, or enforcement proceedings are instituted, or liquidation is opened, or other legal remedies are taken against a participant or another entity operating directly on the regulated market, including the suspension of a bank s operations under the Banking Law of August 29th 1997, and as a result of such proceedings, liquidation or remedies such participant or entity ceases or suspends repayment of its debts or its ability to freely administer its assets is restricted, such proceedings, liquidation or remedies shall be of no legal effect in relation to the funds registered in the deposit account, securities account, cash account or bank account of such a participant or another entity operating on the

39 38 regulated market which is used for the purpose of performing transaction settlements, to the extent such funds are necessary to settle transactions at the National Depository, even if such proceedings have been instituted, liquidation opened, or another legal remedy has been taken prior to the settlement of such a transaction. 2. Legal remedies referred to in Art shall be of no legal effect in relation to the security established, in accordance with the rules of the National Depository, by a participant or another entity operating directly on the regulated market for the benefit of another participant or the National Depository as part of the system ensuring liquidity of settlements. 3. The provisions Art shall also apply when the system for registration of securities referred to in Art. 49 is maintained by the National Bank of Poland. Art If in the deposit account or the bank account indicated by a clearing participant, or in the securities account or cash account of a participant who is a party to the transaction or a clearing participant, there are no sufficient funds to settle transactions, the National Depository shall specify the transactions whose settlement will be suspended. 2. The rules of the guarantee system referred to in Art may provide for nondelivery of cash or non-cash instruments owed to a participant who caused the suspension of transactions settlement. Art. 63. The National Depository shall charge fees for the actions performed for the benefit of its participants. Art Chairman of the Commission or a person authorised by the Chairman shall have the right to: 1) enter the registered office of the National Depository in order to inspect the books, documents and information stored in other forms; 2) participate in meetings of the supervisory board of the National Depository and in general shareholders meetings. 2. At a request of the Chairman of the Commission or a person authorised by the Chairman, the authorised representatives of the National Depository, or members of its management or supervisory board, or persons bound by an employment relation with the National Depository, shall promptly prepare and deliver, at the cost of the company, copies of documents and other data carriers and shall provide written or oral explanations. 3. The obligation referred to in Art shall also apply to the qualified auditor and the authorised representatives of the auditing firm (qualified auditor of financial statements) or a person bound by an employment relation with such firm to the extent related to actions undertaken by such persons or firm in connection with an

40 39 audit of the financial statements of the National Depository or provision to the National Depository of other services referred to in Art of the Act on Qualified Auditors and their Self-Government of October 13th The above shall not prejudice the secrecy obligation referred to in Art. 4a of the Act on Qualified Auditors and their Self-Government. 4. At a written request of the Commission, the management board of the National Depository shall: 1) convene an extraordinary general shareholders meeting; or 2) include the matters indicated by the Commission in the agenda of the general shareholders meeting. 5. In the event of failure to perform the obligations referred to in Art. 64.4, the provisions of Art and Art of the Commercial Companies Code of September 15th 2000 shall apply accordingly to the Commission s request. 6. The Commission may order the supervisory board of the National Depository to promptly, and in any case no later than within ten business days, adopt a resolution on a specific matter. 7. The Commission may appeal to the court against a resolution of the general shareholders meeting or of the supervisory board of the National Depository within 30 days of becoming aware of such resolution, by way of an action for repeal of such resolution, if such resolution is in conflict with the law, the articles of association, the rules or the principles of secure trading, or if it has been adopted in violation of the law, the articles of association or the rules. 8. If there are any doubts as to the accuracy or reliability of the financial statements or other financial information which are required to be prepared under other regulations or as to the proper maintenance of accounting books, the Commission may order an audit of such statements, information or accounting books to be performed by a qualified auditor of financial statements. If any material irregularities are found during the audit, the National Depository shall reimburse the costs of the audit to the Commission. Art The participants shall be obliged to make contributions to the National Depository. The fund thus created, hereinafter referred to as the settlement guarantee fund, shall serve the purpose of securing proper settlement of transactions. 2. The settlement guarantee fund shall ensure the settlement of transactions executed on the regulated market, within the scope specified in the rules of such fund. 3. The National Depository may manage the monies accumulated in the settlement guarantee fund. Art The amount of contributions to the settlement guarantee fund shall be determined by the National Depository, depending on the liabilities which may arise as a result of the settlement of a participant s activities, within the scope referred to in

41 40 Art The amount of contributions may also depend on the financial standing of a given participant. 2. At the management board s request, the supervisory board of the National Depository shall adopt the rules for the creation and use of the settlement guarantee fund. The rules and amendments thereto shall be subject to the Commission s approval. Art The assets of the settlement guarantee fund shall represent joint property of the participants, which does not exclude a possibility of defining individually the duties of a participant in connection with the use of the settlement guarantee fund on account of the actions of such a participant. 2. The settlement guarantee fund may consist of parts separated by function, each of which comprises funds for securing the settlement of transactions executed on particular markets or for securing the settlement of particular types of transactions. 3. Provisions of Art. 61 shall apply accordingly to the funds of the settlement guarantee fund. Art. 68. The National Depository may also, under an agreement with an entity organising an alternative trading system, manage a fund securing proper settlement of transactions in such trading. Part IV Participation in Financial Instruments Trading Chapter 1 Activities of Investment Firms Section 1 General Provisions Art The conduct of brokerage activities shall require a licence, to be granted by the Commission upon application referred to in Art. 82 and submitted by the party concerned. 2. Subject to Art. 70 and 71, brokerage activities shall encompass the following activities: 1) acceptance and transfer of orders to acquire or dispose of broker-traded financial instruments;

42 41 2) execution of the orders referred to in Art for the account of the customer, 3) acquisition or disposal, for the broker s account, of broker-traded financial instruments, 4) management of portfolios including one or more broker-traded financial instruments, 5) offering broker-traded financial instruments, 6) provision of services under standby underwriting agreements and firm commitment underwriting agreements or execution and performance of other similar agreements on broker-traded financial instruments. 3. The following activities shall also be considered as brokerage activities: 1) keeping securities accounts and cash accounts auxiliary to the securities accounts, with the exception of securities accounts kept by a custodian bank; 2) investment advisory on broker-traded financial instruments admitted to organised trading; 3) organising alternative trading systems, subject to Art and Art The following actions by an investment firm shall also be considered as brokerage activities: 1) safekeeping of broker-traded financial instruments and registering changes in the holdings of such instruments, 2) recording and keeping accounts in which broker-traded financial instruments are registered, except for securities accounts, and keeping cash accounts auxiliary to the accounts in which broker-traded financial instruments are registered, except for services related to securities accounts, as well as clearing transactions in such instruments, except for transactions in dematerialised securities or other broker-traded financial instruments admitted to organised trading, 3) making available safety-deposit boxes, 4) advancing loans to finance transactions in one or more broker-traded financial instruments, if the transaction is effected through the intermediation of the investment firm advancing the loan, 5) advising companies on capital structure, corporate strategy and other matters related to such structure or strategy, 6) advisory and other services relating to mergers, demergers and acquisitions of companies, 7) investment advisory on matters concerning broker-traded financial instruments, except for financial instruments admitted to organised trading, 8) additional services related to standby underwriting and firm commitment underwriting, 9) providing foreign-exchange services where these are connected with the brokerage activities, as provided for in Art. 69.2

43 42 Art The provisions of this Part shall not apply to: 1) insurance undertakings, 2) entities performing the activities referred to in Art solely for the benefit of undertakings belonging to the same group as the entity performing such activities, 3) entities conducting operations other than brokerage business and performing the activities referred to in Art on an incidental basis in connection with their business, provided that such business is regulated by laws which do not preclude the possibility of performing such activities, 4) entities engaged solely in the activities referred to Art , provided that it is not done on a regular basis and as part of professional activities, and in particular if such activities are not the core business of a given entity, 5) central banks of Member States and other domestic entities performing similar functions, as well as other public bodies established to manage public debt, 6) investment funds within the meaning of the Act on Investment Funds of May 27th 2004 (Dz.U. No. 146, item 1546 and Dz.U. of 2005, No. 83, item 719), 7) pension funds within the meaning of the Act on the Organisation and Operation of Pension Funds of August 28th 1997, (Dz.U. of 2004 No. 159, item 1667), 8) safekeeping of the assets of the funds referred to in Art or , and management of such funds, 9) entities whose core business activity consists in investing, for their own account, in commodities, within the meaning of the Commodity Exchange Act of October 26th 2000, and which provide their services to manufacturers of the commodities or entities using the commodities in their core business activity, 10) entities which enter, as part of their business activity, into transactions on futures or options markets, for their own account or for the account of other participants of such markets, provided that the responsibility for the performance of the obligations under such transactions rests with clearing participants of such markets, 2. A bank with a registered office in the Republic of Poland may, without a brokerage licence, perform in accordance with the rules defined in other regulations the activities specified in: 1) Art , provided that the activities concern securities referred to in Art or other broker-traded financial instruments not admitted to organised trading; 2) Art Performance of the activities specified in Art by a bank in accordance with the provisions of Art shall not be deemed brokerage activities.

44 43 Art Activities which involve solely acceptance and transfer of orders to acquire or dispose of securities or units in collective investment undertakings shall not be considered brokerage activities, provided that the entity performing such activities is not authorised to provide services consisting in safekeeping of cash or securities belonging to a third-party, and that the activities are performed by an entity involved in business activity regulated by other regulations. 2. Orders accepted in accordance with Art may be transferred solely to investment firms or collective investment undertakings operating in the Republic of Poland. 3. Performance of the activities referred to in Art shall require notification to the Commission no later than one month prior to their commencement. The provisions of Art. 88 and Art , as well as provisions issued under Art and Arts of the Act on Capital Market Supervision shall apply accordingly to the entity performing the activities referred to in Art Art In the agreement on offering broker-traded financial instrument, an investment firm shall agree to act as an agent in: 1) issuers offers of new issue securities or disposal of such securities, 2) issuers offers of broker-traded financial instruments other than securities or disposal of such instruments as a result of such offers, 3) selling shareholders offers of securities or disposal of such securities as a result of such offers, or 4) offers of broker-traded financial instruments other than securities by entities introducing such instruments to trading on a regulated market or to an alternative trading system, or disposal of such instruments as a result of such offers. 2. The agreement on offering financial instruments shall be in writing under pain of nullity. Art Subject to Art. 74, an investment firm shall execute orders to acquire or dispose of securities admitted to organised trading on the basis of brokerage services agreement. 2. In the brokerage services agreement, the investment firm: 1) shall agree to accept and execute, in accordance with the terms defined in the agreement, orders to acquire or dispose of in the name of the investment firm but for the customer s account securities: a) traded on a regulated market, or b) traded in an alternative trading system; 2) may also agree to:

45 44 a) accept and transfer orders to acquire or dispose of securities admitted to organised trading, or b) keep a securities account or a cash account auxiliary to the securities account, and to provide services supporting discharge of other obligations of the investment firm towards the customer, or the customer s obligations towards the investment firm, which may arise from provision of services by the investment firm to the customer. 3. By accepting the order referred to in Art. 73.1, the investment firm shall make a commitment towards the customer to acquire or dispose of specific securities in its own name but for the customer s account. The investment firm shall be responsible towards the customer for payment of the price by the entity that acquired the securities. 4. The agreement and orders referred to in Art shall be in writing under pain of nullity. 5. To the extent not provided for in Art : 1) the provisions of the Civil Code of April 13th 1964 concerning mandate contract (umowa zlecenie), with the exception of Art. 737, shall apply accordingly to brokerage services agreements; 2) the provisions of the Civil Code of April 13th 1964 concerning consignment agreement, with the exception of Art , shall apply accordingly to execution of the orders referred to in Art The provisions of Art of the Civil Code of April 13th 1964, excluding the right of temporary use of free cash, shall apply accordingly to the cash accounts auxiliary to securities accounts. This shall not prejudice the Commission s rights under Art The provisions of Art shall apply accordingly to the execution of orders to acquire or dispose of broker-traded financial instruments other than securities by an investment firm for the customer s account in organised trading, provided that the application of the said provisions is possible given the structure of such instruments. Art An investment firm may execute orders to acquire or dispose of securities admitted to organised trading by entering, for its own account, into a sale agreement (direct transaction) with the customer. 2. Execution of orders as provided for in Art shall be effected on the basis of a brokerage services agreement. 3. An investment firm shall accept and transfer orders to acquire or dispose of brokertraded financial instruments by way of: 1) accepting and transferring orders to acquire or dispose of broker-traded financial instruments to another entity with a view to their execution, or 2) taking steps to find an entity interested in entering into a purchase agreement with the customer concerning such broker-traded financial instruments.

46 45 Art In the agreement on management of a portfolio which includes one or more brokertraded financial instruments, the investment firm shall agree to make and implement, for a consideration and for the customer s account, investment decisions concerning the cash or broker-traded financial instruments left by the customer at the manager s disposal. 2. The agreement referred to in Art shall be in writing under pain of nullity. Art In the agreement on investment advisory services concerning broker-traded financial instruments admitted to organised trading, the investment firm shall agree to prepare, taking into account the customer s needs and standing, and to present to the customer a written or oral recommendation to acquire or dispose of specific broker-traded financial instruments or to refrain from transactions in such instruments. 2. The agreement referred to in Art shall be in writing under pain of nullity. Art Foreign-exchange services shall mean acceptance of foreign currencies by an investment firm and their sale for the customer s account or purchase of foreign currencies for the customer s account, in connection with the services supporting discharge of the obligations of the investment firm towards the customer, or the customer s obligations towards the investment firm, which may arise from provision of services by the investment firm to the customer, obligations of the customer towards the issuer of securities where the investment firm acts in the name and for the account of the issuer, or the obligations of the issuer of securities towards the customer where the investment firm acts in the name and for the account of the customer with respect to the activities specified in Art The provision of foreign-exchange services by an investment firm shall not be deemed foreign-exchange office activities within the meaning of the Foreign Exchange Act of July 27th 2002 (Dz.U. No. 141, item 1178, as amended 6 ). Art An investment firm shall organise an alternative trading system in accordance with the rules, which shall be subject to the Commission s approval. The rules of the alternative trading system shall specify in particular: 1) type of broker-traded financial instruments to be traded; 2) criteria and conditions for admission of financial instruments referred to in Art to trading; 3) procedure and conditions for executing transactions; 6 ) Amendments to the Act were promulgated in Dz.U. of 2003, No. 228, item 2260 and Dz.U. of 2004, No. 91, item 870 and No. 173, item 1808.

47 46 4) procedure for resolution of disputes concerning execution and clearing of transactions; 5) procedure and conditions for listing, suspension of trading or delisting financial instruments referred to in Art ; 6) trading days and hours of trading; 7) manner for determining and publishing prices or quotations of the financial instruments referred to in Art ; 8) classification, if any, of the financial instruments referred to in Art ; 9) procedure and conditions for dissemination of information on the offers and transactions made; 10) description of a settlement guarantee system for transactions in the alternative trading system, if the investment firm organising the alternative trading system has developed or participates in such a system; 11) means to prevent and reveal any market manipulation. 2. If a transaction concerns financial instruments admitted to trading on a regulated market, performance of the obligation to disseminate the information specified in Art by the entity organising an alternative trading system shall include forwarding such information to the regulated market so that it can be published in accordance with the regulations issued under Art In such a case, the rules referred to in Art shall specify the procedure and conditions for forwarding information on the offers and transactions made to a company operating a regulated market on which a given financial instrument is traded. 3. If the scope of activities referred to in Art includes organisation of an alternative trading system, when granting the brokerage licence the Commission shall approve the rules of such a system. 4. An investment firm which intends to start organising an alternative trading system shall make a relevant notification in accordance with the procedure provided for in Art. 87, and shall request for the Commission s approval of the rules of the alternative trading system. 5. Any amendments to the rules of the alternative trading system shall be subject to the Commission s approval. 6. The Commission shall refuse approval of the rules of the alternative trading system or amendments thereto, if such rules or amendments are in conflict with the law or do not guarantee the security of trading. 7. The provisions concerning the obligation to obtain the Commission s approval of the rules of the alternative trading system or amendments thereto shall not apply to foreign investment firms. Art An investment firm may, under a written agreement, commission a natural or legal person or an organisational unit without legal personality to perform, on an ongoing or temporary basis, in the name and for the account of the investment firm, agency services related to the activities of the investment firm (investment firm agent).

48 47 2. On the basis of the agreement referred to in Art the investment firm agent may perform activities which are related to the execution of agreements for provision of services by the investment firm, or which facilitate performance of such agreements, in particular activities involving advising a customer or a potential customer on the services offered by such investment firm, accepting the orders referred to in Art , and collecting other declarations of will for the investment firm. The agreement referred to in Art may not provide for the commissioning of brokerage activities. 3. It shall be prohibited to maintain contractual relations under the agreement referred to in Art with more than one investment firm. 4. An investment firm agent shall be prohibited to accept any payments in respect of activities performed under the agreement referred to in Art from persons to whom the investment firm provides its services or any payments made by the investment firm to such persons. 5. The liability for any damage caused by an investment firm agent as a result of its performance of activities in the name and for the account of the investment firm shall rest jointly and severally with such investment firm and the agent which caused the damage. The liability shall be excluded if the damage is caused by force majeure or sole fault of a third party. 6. An investment firm agent shall be required to present power of attorney issued by the investment firm on behalf of which it acts while performing each action for the investment firm. If an investment firm agent is a person practicing the profession of a securities broker or an investment adviser, such a person shall also be required to produce a document confirming its qualifications to practice the profession of a securities broker or an investment adviser. 7. With respect to investment firm agents the Commission shall have supervision powers provided for in the Act on Capital Market Supervision as regards the activities performed for the investment firm and documents prepared in connection with such activities. 8. The Commission shall maintain a register of investment firm agents. 9. The Commission shall delete an investment firm agent from the register referred to in Art. 79.8, if it performs activities referred to in Art in violation of the law or without exercising due care. The provisions of Art and shall apply accordingly. 10. The entity which has been deleted from the register of investment firm agents for reasons referred to in Art may not be re-entered into the register for ten years from the date of deletion, and if an investment firm agent has been deleted in connection with an offence it has committed also before the cancellation of an entry of sentence for such offence in the register of convictions. Art. 80. An investment firm agent that concluded with an investment firm the agreement referred to in Art shall be an entrepreneur within the meaning of Art. 4 of the Act on Freedom of Business of July 2nd 2004 (Dz.U. No. 173, item 1807 and No 281, item. 2777, and Dz.U. of 2005, No. 33, item 289 and No. 94, item 788).

49 48 Art When a natural person is to be an investment firm agent, the Commission, upon application of the party concerned, shall enter it into the register of investment firm agents, provided that such person has the adequate level of knowledge and professional experience in the area of financial agency services, applicable laws and regulations and standards of operations of investment firms, as confirmed by the Commission by way of an examination conducted pursuant to Art An application for registration shall be submitted within 30 days from the date of passing an examination for investment firm agents. 2. The conditions referred to in Art shall be deemed to be met in the case of persons qualified to practice the profession of a securities broker or an investment adviser. 3. When a legal person or an organisational unit without legal personality is to be an investment firm agent, the Commission, upon application of the party concerned shall enter it into the register of investment firm agents, provided that its experience in the area of trading in broker-traded financial instruments and its organisational structure guarantee the performance of the activities referred to in Art in a correct manner and with due care. 4. When investment firm agent s services are to be provided by an entity conducting business activities regulated under other regulations by an authority with whom the Commission entered into the agreement referred to in Art of the Act on Capital Market Supervision, the Commission, upon receipt of the application referred to in Art. 81.1, shall apply to the competent authority to obtain an opinion on such entity s financial standing and the manner in which it conducts its operations. If the competent authority issues a positive opinion, the entity applying for registration in the register of investment firm agents shall be deemed to meet the conditions referred to in Art The Commission shall refuse registration in the register of investment firm agents if a natural person applying for registration or a person managing the entity referred to in Art which applies for registration has been found by a final court judgment guilty of a tax offence, an offence against reliability of documents, property, business transactions and cash and securities transactions, offences specified in Art. 305, Art. 307 or Art. 308 of the Industrial Property Law of June 30th 2000 (Dz.U. of 2003, No. 119, item 1117, Dz.U. of 2004, No. 33, item 286, and Dz.U. of 2005, No. 10, item 68), offences specified in the Commodity Exchange Act or offences specified herein. 6. The Commission shall also refuse to enter the entity referred to in Art into the register of investment firm agents, if the performance of activities referred to in Art by such entity could pose a threat to the security of trading or compromise the interests of the investment firm s customers. 7. An application for registration in the register of investment firm agents shall be submitted through the intermediation of the investment firm for the benefit of which the activities referred to in Art are to be performed, and shall contain: 1) in the case of a natural person personal details and information on the professional career or conducted business activities, representation that such person has not been found guilty of the offences specified in Art and

50 49 a certificate confirming that such person has passed the examination for investment firm agents; 2) in the case of legal persons and organisational units without legal personality information on the name and address of the registered office, description of the business activities, a valid excerpt from the relevant register, personal details of such entity s management staff and their representation to the effect that they have not been found guilty of the offences specified in Art An entity entered into the register of investment firm agents shall promptly notify the Commission in writing of: 1) any changes of the information contained in the application for registration in the register of investment firm agents; 2) conclusion of the agreement referred to in Art. 79.1, with an indication of the execution date and the investment firm with which the agreement has been concluded; 3) termination of the agreement referred to in Art. 79.1, with an indication of the termination date, the reasons for termination, and the investment firm with which the agreement has been terminated. Art The application for a brokerage licence shall contain the following: 1) personal details of the members of the management board, or partners or general partners in a partnership, the members of the supervisory board and the audit committee, if such a committee is established, and other persons who are responsible for launching brokerage activities by the applicant or will manage such operations, information on their professional qualifications and careers; 2) list of shareholders holding shares of the applicant, whether directly or indirectly through subsidiaries, specifying the number of shares held and the percentage of the total vote conferred by such shares; 3) in the case of shareholders who are natural persons and hold the right to 10% or more of the total vote or 10% or more of the applicant s share capital personal details of such persons, information on their professional careers or on business activities conducted by them; 4) in the case of shareholders who are legal persons and hold the right to 10% or more of the total vote or 10% or more of the share capital of the joint-stock company which makes the application information on their business activities, a valid excerpt from the relevant register, and the most recent financial statements together with an auditor s opinion and the audit report, if such an audit is required by the law; 5) information on the entities of the same group as the applicant; the information shall include the company name or the first name and surname, address of the registered office or address of residence, description of business, and, in the case of legal person being the parent entity with respect to the applicant, list of members of their governing bodies; 6) information specified in Art with respect to shareholders of the parent entity of the group of which the applicant is a member;

51 50 7) description of the first activities to be performed by the applicant as part of its brokerage activities; 8) information on the amount of initial capital, specifying its source, or information on a concluded insurance agreement referred to in Art. 98.9, including in particular the name if the insurance undertaking and the sum insured; 9) study of the economic and financial feasibility of conducting brokerage activities for a year from the date of their launch; 10) representations by the persons specified in Art , with the exclusion of partners or general partners in a partnership, to the effect that they have not been found by a final court judgment guilty of a tax offence, an offence against reliability of documents, property, business transactions and cash and securities transactions, offences specified in Art. 305, Art. 307 or Art. 308 of the Industrial Property Law of June 30th 2000, offences specified in the Commodity Exchange Act or offences specified herein. 11) information on the proposed organisation of the business, with an indication of the address of its head office and branches, if any, and on the telecommunications equipment owned and the offices occupied; 12) information on the business activities conducted previously by the applicant and the reasons for discontinuation; 13) information on parent entities and subsidiaries of the shareholders holding the right to 10% or more of the total vote or 10% or more of the share capital of the applicant, including the name of the company or first name and surname, the address of the registered office or the address of residence, and a description of their business activities. 2. The following shall be attached to the application: 1) articles of association and an excerpt from the register of entrepreneurs or, if the applicant is a foreign entity, from the relevant register; 2) rules specifying how the operations involving the activities referred to in Art shall be performed; 3) organisational rules and internal audit rules; 4) rules for the protection of the flow of inside information and the internal procedures aimed at: a) money laundering, and b) counteracting and revealing market manipulation; 5) the rules for investing in broker-traded financial instruments by members of the management board and the supervisory board, partners in a general partnership (spółka jawna) or limited-liability partnership (spółka partnerska), or general partners in a limited partnership (spółka komandytowa) or limited joint-stock partnership (spółka komandytowo-akcyjna), and employees of a brokerage house, for their own account; 6) procedures for monitoring and control of interest-rate risk related to the entire business of the applicant;

52 51 7) list of securities brokers or investment advisers employed by the applicant pursuant to Art. 83; 8) in the case of applicants taking advantage of the exemption under Art a copy of the insurance agreement referred to in that article; 9) representations, subject to criminal liability, made by shareholders who are natural persons and hold the right to 10% or more of the total vote or share capital of the applicant, concerning the source of funds used to pay for the shares of the applicant subscribed for or acquired, if the applicant applies for a licence to conduct brokerage activities in the form of a brokerage house. 3. The application referred to in Art shall not include the information specified in Art and , if it relates to: 1) an entity which is an issuer of securities or other financial instruments admitted to trading on a regulated market, an investment firm, a commodity brokerage house, a bank, an insurance undertaking, an investment fund, a pension fund, a foreign fund or a foreign management company within the meaning of the regulations on investment funds, or another foreign entity regulated by a body with which the Commission has executed an agreement described in Art of the Act on Capital Market Supervision or an agreement referred to in the regulations on investment funds; 2) parent entity or a subsidiary of the undertaking referred to in Art , or 3) subsidiary of the parent entity of the undertaking referred to in Art To determine the influence of an entity holding, whether directly or indirectly, a number of the applicant s shares representing 10% or more of the total vote on the conduct of brokerage activities, compliance with the principles of fair trading, or due protection of the customers interests, the Commission may demand other information concerning the legal or financial situation of such entity. 5. The provisions of Art. 82.1, Art and Art relating to shares or shareholders in joint-stock companies shall apply accordingly to shares or shareholders in limited-liability companies, if the applicant is a limited-liability company (spółka z ograniczoną odpowiedzialnością). The provisions of Art relating to the representation on the source of funds used to finance the acquisition of subscription for shares shall apply accordingly to the representation on the source of funds contributed to a partnership, if the applicant is a general partnership, a limited-liability partnership or a limited partnership. Art An investment firm shall be required to employ at least: 1) one securities broker to perform each of the activities specified in Art , and , Art and , and Art and , and to perform the activities specified in Art , if they are related to the organisation of organised trading; 2) two investment advisers to perform the activities specified in Art ; 3) one investment adviser or one securities broker to perform the activities specified in Art and Art

53 52 2. The conditions referred to in Art shall be deemed to be met if the activities specified in Art are performed by a securities broker or an investment adviser who is a general partner in a limited joint-stock partnership or limited partnership, or a partner in a general partnership or limited-liability partnership operating as an investment firm. 3. The provisions of Art shall not apply to foreign investment firms conducting brokerage activities in the Republic of Poland which are not required to open a branch for this purpose. Art The Commission shall consider an application for a brokerage licence within two months of its submission. 2. The brokerage licence shall specify: 1) company name, registered office and the address of the investment firm; 2) list of all activities specified in Art ; 3) date of commencing brokerage activities, which shall no later than 12 months from the date on which the decision granting the licence became final. The Commission shall refuse the licence if: Art ) the application does not meet the requirements set out in Art. 82; 2) the application or the documents attached thereto do not comply, in the terms of their content, with the law or are inconsistent with the actual state of affairs; 3) the applicant does not meet the requirements set out in Art. 95 or Art. 98; 4) due to the nature of links between the entities of the same group as the applicant it is impossible to determine the group s actual structure, its actual owners or to exercise effective supervision over the applicant s operations; 5) the persons referred to in Art. 103, Art or Art do not meet the requirements specified therein; 6) the opinion referred to in Art. 96.1, Art or Art is negative; 7) following the analysis of the application and the attached documents the applicant is found to be unable to conduct its operations in a manner which does not pose any threat to the security of trading in financial instruments and duly protects the customers interests; 8) the applicant fails to provide, at the request of the Commission, the information specified in Art and 82.5; 9) the funds used to finance the acquisition of or subscription for shares in the applicant or the funds contributed to an applicant which is a general partnership, a limited-liability partnership or a limited partnership come from loans or undocumented sources, if the applicant applies for a licence to conduct brokerage activities in the form of a brokerage house;

54 53 10) the entities holding, whether directly or indirectly through subsidiaries, applicant shares representing in aggregate 10% or more of the total vote or the share capital do not guarantee that the applicant will conduct brokerage activities in a proper manner. Art. 86. An investment firm shall promptly notify the Commission of: 1) any changes of the information contained in the application for a licence and the documents attached thereto, subject to Art. 86.2, and any changes in the information contained in the notification referred to in Art. 87; 2) any changes in the composition of shareholders that hold, whether directly or indirectly through subsidiaries, the right to 10% or more of the total vote or 10% or more of the share capital; 3) any acquisition of a number of shares in another company which confers the right to 5% or more of the total vote. Art Once it has obtained the licence, an investment firm shall notify the Commission of its intention to commence brokerage activities other than those indicated in the application referred to in Art. 82, at least 30 days prior to the commencement of such activities. 2. The notification referred to in Art shall specify: 1) scope of brokerage activities the investment firm intends to conduct; 2) rules for the conduct of the planned activities; 3) personal details of the persons responsible for launching the planned activities and persons who will manage such activities, information on their professional qualifications and careers and opinions related to the positions they have held; 4) the rules referred to in Art and , adapted to the scope of the planned activities; 5) documents confirming employment of the number of securities brokers or investment advisers which is required to conduct the planned activities; 6) information on the amount of the brokerage house s initial capital or the amount of the funds designated to finance brokerage activities in the case of the foreign legal person referred to in Art , if conducting the planned activities would require an increase in the existing amount of such initial capital or funds, and an indication of their sources; 7) representations by persons specified in Art to the effect that they have not been found by a final court judgment guilty of a tax offence, an offence against reliability of documents, property, business transactions and cash and securities transactions, offences specified in Art. 305, Art. 307 or Art. 308 of the Industrial Property Law of June 30th 2000, offences specified in the Commodity Exchange Act of October 26th 2000, or offences specified herein;

55 54 8) information on the organisation of the business or a branch proposed in connection with the expansion of the company s activities and, in particular, information on the telecommunications equipment to be used for that purpose and on the premises occupied. Art. 88. At the demand of the Commission or a person authorised by the Chairman, the authorised representatives of an investment firm, or persons who are members of its governing bodies provided for in its articles of association, or persons bound by an employment relation with such investment firm, shall be required to promptly prepare and deliver, at the cost of the investment firm, copies of documents and other information carriers, and to provide written or oral explanations related to the regulatory tasks performed by the Commission. 1. The brokerage licence shall expire: Art ) if the investment firm fails to commence brokerage activities by the date specified in the decision granting the licence, 2) upon declaration of the investment firm s bankruptcy; 3) if liquidation proceedings are opened with respect to the investment firm following three months from the proceedings opening date, subject to Art If it is necessary to protect the public interest, the Commission may, by way of its decision, shorten the period specified in Art Unless otherwise specified in the decision to revoke the brokerage licence or the decision referred to in Art. 89.2, in the case of opening of the liquidation proceedings until expiry of the licence, or in the case of licence revocation until discontinuation of the activities, the investment firm shall conduct only those activities which are related to the keeping of securities accounts, the accounts specified in Art , cash accounts, or agreements for managing portfolios of broker-traded financial instruments without the ability to conclude new agreements, and activities related to the broker-traded financial instruments referred to in Art c or d acquired for the customer s account if such activities are performed with a view to closing such investments by the customers. 4. In the event of expiry or revocation of the licence, or discontinuation of the keeping of securities accounts, the accounts specified in Art , and cash accounts by an entity conducting brokerage activities, the Commission may order a transfer of securities, other broker-traded financial instruments and any cash and documents related to the keeping of securities accounts, the accounts specified in Art , and cash accounts to another investment firm, subject to such firm s prior consent. In all other cases, the handling of the documents related to the conduct of brokerage activities shall be regulated by the provisions of Art of the Commercial Companies Code of September 15th The competent court shall promptly notify the Commission of the entity which has been designated to store such documents.

56 55 Art An investment firm which discontinued brokerage activities shall be obliged to archive and store, in the territory of the Republic of Poland, for a period of five years from the date of discontinuation of the activities, all documents and other information carriers related to such activities. The obligation shall be deemed to be fulfilled if such investment firm ensures that the documents and other information carriers are stored by a third party which meets the requirements set out in other regulations. 2. An authorised representative of the Commission shall have the right to enter the registered office or the premises of the entity which stores the documents and other information carriers to inspect such documents and information carriers. 3. At a written demand of the Commission or its authorised representative, the entity which stores the documents shall be obliged to promptly prepare, at its own cost, and deliver copies of such documents and information carriers. 4. The provisions of Art shall not prejudice the provisions of the Accountancy Act of September 29th 1994 (Dz.U. of 2002, No. 76, item 694, as amended 7) ). 5. The provisions of Art shall not apply to foreign investment firms conducting brokerage activities in the Republic of Poland without opening a branch. Art The Commission shall maintain an open register of investment firms, containing information on the names, addresses of the registered offices and scopes of business activities conducted by each of the firms in the territory of the Republic of Poland on the basis of the authorisations they hold. 2. The register of investment firms shall be available on the web pages of the Commission. Art A group of at least 25 investment firms may establish, on the terms provided for in other regulations, a commercial chamber ( the commercial chamber ). 2. The organisation of the commercial chamber s governing bodies, the procedure for their appointment, the commercial chamber s scope of powers and responsibilities shall be defined in the commercial chamber s by-laws. 3. Investment firms whose only area of activities is the management of portfolios of broker-traded financial instruments or investment advisory services related to broker-traded financial instruments admitted to organised trading may become members of the commercial chamber referred to in Art or the commercial chamber specified in the regulations on investment funds. 7) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2003, No. 60, item 535, No. 124, item 1152, and No. 229, item 2276; Dz.U. of 2004, No. 96, item 959, No. 145, item 1535, No. 146, item 1546, and No. 213, item 2155; and Dz.U. of 2005, Nr 10, item 66.

57 56 Art The provisions of Art. 82, Art and Art and 89.2 shall not apply to foreign investment firms. 2. The provisions of Art and 89.4 shall apply accordingly to foreign investment firms if the brokerage activities conducted by such investment firms in the Republic of Poland are suspended or prohibited, in full or in part, pursuant to Art or Art The minister competent for financial institutions shall define by way of a regulation: 1) the procedures and conditions to be followed by investment firms and custodian banks in the course of their activities related to: a) promoting their brokerage services and maintaining relations with potential customers, b) executing and clearing transactions, c) providing brokerage services, including brokerage services for professional customers, d) recording the executed transactions and archiving documents and other information carriers prepared in connection with brokerage or custodian bank activities, e) creating and realising collateral for loans advanced to finance the acquisition of broker-traded financial instruments, and creating security interests in broker-traded financial instruments to secure claims, if creation of such security interest is possible given the structure of such instruments, f) transferring securities in direct transactions referred to in Art. 74.1, including activities related to disseminating information on the investment firm s services and on the transactions it executes, g) organising alternative trading systems, including activities related to providing information on such systems, while ensuring due care, protection of the customer and the security and efficiency of the process of executing and clearing transactions, as well as the transparency and security of trading; 2) the scope and the detailed rules for determination of the capital requirements for brokerage houses and banks conducting brokerage activities (excluding entities conducting brokerage activities only in the area specified in Art or Art ), and the maximum ratio of loans and issued debt securities to capitals of brokerage houses and banks conducting brokerage activities, taking into account the need to ensure adequate capital cover in relation to each of the risks incurred in brokerage activities, the amount of fixed costs and liabilities, and the initial capital; 3) the procedures and conditions to be followed while lending broker-traded financial instruments, with the participation of investment firms and custodian

58 57 banks outside the system ensuring liquidity of settlements, referred to in Art , taking into account the need to ensure secure and efficient operation of the clearing system; 4) the scope, procedure, form and dates for provision of information other than specified in Art. 86 concerning the activities of investment firms and custodian banks and the financial standing of brokerage houses, banks conducting brokerage activities and foreign legal persons conducting brokerage activities in the Republic of Poland, taking into account the need to enable the Commission to exercise supervision over the operations of such entities, to the extent provided for in the statute; 5) the technical and organisational requirements for the conduct of brokerage activities by an investment firm and keeping securities accounts by a custodian bank, taking into account the need to ensure secure and efficient conduct of such activities; 6) the reporting requirements for brokerage houses, banks conducting brokerage activities, foreign investment firms conducting brokerage activities in the Republic of Poland through a branch, and foreign legal persons referred to in Art. 115 conducting brokerage activities in the Republic of Poland, related to the performance of agency services in the area of acquisition and disposal of broker-traded financial instruments traded on foreign regulated markets, taking into account the need to enable the Commission to exercise supervision over the operations of such entities, to the extent provided for in the statute; 7) the procedures and conditions to be followed by investment firms while advancing loans to finance the acquisition of broker-traded financial instruments, taking into account the need to ensure conditions which would guarantee that the funds allocated to the loans would not be funds deposited by investors in cash accounts auxiliary to the accounts in which broker-traded financial instruments are registered, and that appropriate collateral exists for such loans in order to ensure security of the lenders, as well as the need to examine the credibility and solvency of the borrowers. 2. The minister competent for financial institutions shall define, by way of a regulation, the reporting requirements for brokerage houses, banks conducting brokerage activities, foreign investment firms conducting brokerage activities in the Republic of Poland through a branch and foreign legal persons referred to in Art. 115 conducting brokerage activities in the Republic of Poland through a branch, custodian banks, the entities referred to in Art , and the National Depository, related to trading in securities issued by the State Treasury so that the financial statements prepared by such entities make it possible to perform analyses of the condition, dynamics and structure of the state budget s debt under treasury securities by groups of investors and types of such securities. Section 2 Brokerage Houses Art A brokerage house may operate only in the form of:

59 1) a joint-stock company, 58 2) a limited joint-stock partnership with at least two general partners, each general partner being a person qualified to practice the profession of a securities broker or investment adviser, 3) a limited-liability company, 4) a limited partnership with at least two general partners, each general partner being a person qualified to practice the profession of a securities broker or investment adviser, 5) a limited-liability partnership with at least two partners, each partner being a person qualified to practice the profession of a securities broker or investment adviser, 6) a general partnership with at least two partners, each partner being a person qualified to practice the profession of a securities broker or investment adviser with a registered office in the territory of the Republic of Poland, hereinafter referred to as a brokerage house. 2. Brokerage activities conducted by a partnership referred to in Art may comprise exclusively the activities indicated in Art , , , and Brokerage activities conducted by a partnership referred to in Art may comprise exclusively the activities specified in Art , and Shares in a brokerage house shall be only registered shares, unless they are dematerialised. 5. Payment for the acquisition or subscription for non-dematerialised shares in a brokerage house may not be financed with a loan or funds derived from undocumented sources. 6. Funds contributed to a brokerage house which is a general, limited-liability or limited partnership may not be a loan or funds derived from undocumented sources. 7. If a brokerage house operating ad a joint-stock company has a single founder, such founder may only be a legal person. 8. If a brokerage house operating as a limited-liability company has a single founder, such founder may only be a legal person or a natural person qualified to practice the profession of a securities broker or investment adviser. 9. A supervisory board shall be appointed in a limited joint-stock partnership and a limited-liability company conducting brokerage activities. 10. If the number of general partners or partners meeting the condition stipulated in Art or , respectively, falls below two, then, subject to Art. 83, a given brokerage house shall be obliged to promptly restore compliance with the provisions of Art. 95.1, in no event later than six (6) months from the day on which such a brokerage house ceased to meet the condition stipulated in Art Until compliance with Art is restored, such a brokerage house shall only act under brokerage services agreements which are then in force, but shall not conclude new agreements.

60 59 Art The Commission shall grant a brokerage licence to a company or partnership which: 1) is a subsidiary of a foreign investment firm or a legal person conducting brokerage activities in the territory of an OECD state or WTO member state, or a subsidiary of a foreign bank, or 2) is a subsidiary of the parent entity with respect to a foreign investment firm or a legal person conducting brokerage activities in the territory of an OECD state or WTO member state, or with respect to a foreign bank, or 3) is under a significant influence of the same natural or legal persons which exert significant influence on a foreign investment firm or a legal person conducting brokerage activities in the territory of an OECD state or WTO member state, or on a foreign bank upon obtaining a written opinion from the competent authority of another Member State, an OECD state or WTO member state which has granted the authorisation to conduct activities in that state; the opinion shall concern the manner of conducting such activities, including in particular their compliance with legal regulations applicable in such state. 2. The Commission shall grant a brokerage licence to a company or partnership which: 1) is a subsidiary of a credit institution, within the meaning of Art of the Banking Law of August 29th 1997, or of a foreign insurance undertaking authorised to conduct its activities by the competent authority of another Member State, 2) is a subsidiary of a parent entity with respect to a credit institution, within the meaning of Art of the Banking Law of August 29th 1997, or with respect to a foreign insurance undertaking authorised to conduct its activities by the competent authority of another Member State, 3) is under a significant influence of the same natural or legal persons who/which exert significant influence on a credit institution, within the meaning of Art of the Banking Law of August 29th1997, or on a foreign insurance undertaking authorised to conduct its activities by the competent authority of another Member State only upon the receipt of a written opinion to be issued by the competent authority of another Member State which granted the company or partnership referred to in Art an authorisation to conduct activities in that state; such an opinion shall serve to assess the shareholders of the company or partnership belonging to the same group as the applicant, as well as to assess the reliability and experience of members of the management board of the company or partnership belonging to the same group as the applicant, or other persons which may exert influence on the management of such a company or partnership. 3. Exerting significant influence shall mean the holding of no less than 20% and no more than 50% of total vote at the general shareholders meeting (in the case of a joint-stock company, limited joint-stock partnership or limited-liability company)

61 60 or a power to adopt decisions concerning the financial policy or day-to-day operations of such a legal person. Art With respect to a brokerage house, the initial capital shall be the aggregate of: the share capital (to the extent it has been paid up), reserve funds, retained profit brought forward, current-profit net profit (net of any dividend which is being subject to approval and only if such profit has been audited by persons responsible for auditing financial statements), and capital reserves other than the revaluation capital reserve, less accumulated loss brought forward. 2. With respect to a general, limited-liability or limited partnership, the share capital shall mean the aggregate of the contributions made by all partners. Art The initial capital of a brokerage house to finance the business activities specified in Art and 69.3 shall, subject to Art , amount to at least PLN 625,000 but no less than the equivalent of EUR 125, If a brokerage house conducts solely the business activities specified in Art or , the initial capital shall amount to at least PLN 250,000 but no less than the equivalent of EUR 50, If a brokerage house conducts solely the business activities specified in Art , the initial capital shall amount to at least PLN 500,000 but no less than the equivalent of EUR 100, If a brokerage house conducts solely the business activities specified in Art and , the initial capital shall amount to at least PLN 500,000 but no less than the equivalent of EUR 100, If a brokerage house conducts the business activity specified in Art or , the initial capital shall, subject to Art. 98.8, amount to at least PLN 4,000,000 but no less than the equivalent of EUR 800, If the brokerage house conducts activities referred to in Art or , and activities referred to in Art , or , the initial capital shall amount to at least PLN 625,000 but no less than the equivalent of EUR 125, If the brokerage house conducts activities referred to in Art , the initial capital shall amount to at least PLN 4,000,000 but not less than the equivalent of EUR 800, The initial capital in the amount specified in Art shall not be required if the activities referred to in Art conducted by a brokerage house comprise exclusively long-term transactions which meet the criteria stipulated in the regulations issued under Art The initial capital shall not be required if the brokerage house conducts solely the activities referred to in Art or and has concluded with an insurance undertaking a civil liability insurance agreement for any damage caused in the course of brokerage activities and providing for the minimum sum insured in the amount of the złoty equivalent of EUR 1,000,000 per occurrence and the złoty

62 61 equivalent of EUR 1,500,000 for all occurrences of events covered by the insurance agreement. The minimum sum insured shall be calculated at the relevant mid exchange rate first quoted by the National Bank of Poland in the year during which such an insurance agreement has been concluded. 10. The equivalents of the euro amounts specified in Art shall be calculated at the mid exchange rate quoted by the National Bank of Poland in effect on the day immediately preceding the date of the application for a brokerage licence. 11. The minister competent for financial institutions shall, by way of a regulation, define the criteria to be met by long-term transactions which the brokerage house may execute without holding the initial capital in the amount specified in Art. 98.5, taking into account the need to guarantee that its brokerage activities are conducted in a secure manner. Art In the event that the own funds held by a brokerage house, referred to in the regulations issued under Art , hereinafter referred to as own funds, fall below the required level, the Commission shall order the brokerage house to take appropriate measures to rectify the situation and shall set a deadline by which the own funds must be restored to the level required by the law. 2. If the deadline referred to in Art lapses and the situation is not rectified, the Commission may impose one of the sanctions referred to in Art The provisions of Art and shall apply accordingly. Art If there are any doubts as to the accuracy or reliability of the financial statements or other financial information which are required to be prepared by a brokerage house under other regulations or as to the proper maintenance of accounting books, the Commission may order an audit of such statements, information or accounting books to be performed by a qualified auditor of financial statements. If any material irregularities are found during the audit, the brokerage house shall reimburse the costs of the audit to the Commission. 2. With respect to a brokerage house s branch situated in another Member State the Commission shall have the powers specified in Art and Art. 88. The Commission may exercise its powers subject to a prior written notification to the competent authority in the state in which the brokerage house s branch is situated. 3. The qualified auditors of financial statements who audit financial statements of a brokerage house, the parent entity of a brokerage house or the entity exerting significant influence on a brokerage house, within the meaning of Art. 96.3, shall promptly report to the Commission any information they become aware of in connection with their activities which relates to any circumstances resulting in: 1) reasonable suspicion of any breach of the law or principles of fair trading, or any compromise of customers interests by the brokerage house, members of its management board or its employees, 2) any threat to the continued operation of the brokerage house, or,

63 62 3) refusal to issue an opinion on the financial statements of the brokerage house, or issuance of a negative or a qualified opinion on the financial statements of the brokerage house. 4. Fulfilment of the obligation referred to in Art shall not be deemed a breach of the secrecy obligation referred to in Art. 4a of the Act on Qualified Auditors and their Self-Government of October 13th Art If a brokerage house which is a limited joint-stock partnership intends to expand its existing activities to include activities other than those specified in Art , , and , the notification referred to in Art shall be submitted upon the transformation of such partnership into a joint-stock company or a limited-liability company. The notification shall be accompanied by documents certifying the completion of such transformation. 2. If a brokerage house which is a general, limited-liability or limited partnership intends to expand its existing activities to include activities other than those specified in Art , and , the notification referred to in Art shall be submitted upon the transformation of such partnership into a joint-stock company or a limited-liability company. The notification shall be accompanied by documents certifying the completion of such transformation. Art A brokerage must have a head office in the territory of the Republic of Poland. 2. The head office of a brokerage house shall be the organisational unit of the brokerage house at which members of the management board of the brokerage house, general partners (where the brokerage house is a limited joint-stock partnership or limited partnership) or partners (where the brokerage house is a general or limited-liability partnership) perform their duties on a regular basis. Art The management board of a brokerage house shall include at least two persons holding a university degree, having at least three-year experience of work for financial market institutions, and enjoying a good opinion with respect to the positions they have held. 2. Where a brokerage house operates in the legal form of a partnership, the requirements specified in Art shall apply to general partners or partners (as the case may be) authorised to manage the affairs of the partnership, pursuant to the provisions of the Commercial Companies Code of September 15th Art Subject to Art , the brokerage licence shall authorise a brokerage house to conduct brokerage activities through a branch or without establishing a branch in the territory of all other Member States as regards such activities as are conducted under the licence in the territory of the Republic of Poland.

64 63 2. A brokerage house shall be obliged to notify the Commission of its intention to open a branch or conduct brokerage activities without establishing a branch in the territory of another Member State. 3. The notification referred to in Art shall include: 1) name of the Member State where a branch is planned to be opened or activities are to be conducted without establishing a branch, 2) anticipated scope of operations and organisational structure, 3) address where the documents relating to the conducted operations will be available, 4) personal details of persons managing the operations. 4. The provisions of Art shall not apply if the brokerage activities are conducted without establishing a branch. 5. The Commission shall forward the information referred to in Art , within three months if the activities are to be conducted through a branch, or within one month if the activities are to be conducted without establishing a branch of its receipt, to the competent authority of the Member State in which the branch is to operate or in which activities are to be conducted. If the activities are to be conducted through a branch, then, along with the information referred to in Art , the Commission shall provide the information on the general rules of the compensation scheme effective in Poland. 6. The Commission shall inform the brokerage house concerned about providing the information referred to in Art to the competent authority of the Member State. 7. In the event of a change in the rules of the compensation scheme, the Commission shall inform the competent authority of the Member State where the brokerage house operates of such changes. 8. The brokerage house shall provide the information on any changes in the data contained in the notification to the Commission and the competent authority of the Member State in which a branch operates or in which activities are conducted without opening a branch, not later than one month prior to the effective date of such changes. 9. The Commission may, within three months if the activities are to be conducted through a branch, or within one month if the activities are to be conducted without establishing a branch of the notification, raise an objection to the intention to establish a branch or commence activities without establishing a branch outside of the Republic of Poland, if such actions could pose a threat to the operation of a given brokerage house in the territory of the Republic of Poland. 10. Brokerage activities in the territory of another Member State may be commenced upon receipt of information specifying the terms and conditions for conducting such activities from the competent authority of the state, or, following the lapse of two months from the day of receipt by the competent authority in the state in which the activities are to be conducted of the notification referred to in Art The activities which are to be conducted without establishing a branch may be commenced upon receipt by the brokerage house of the information referred to in Art

65 The Commission shall promptly inform the competent authority of another Member State where the brokerage house operates of any revocation or expiry of the brokerage licence which serves as a basis for conducting business in a given state. 12. The Commission shall inform the European Commission of the number of cases in which objections referred to in Art have been raised. 13. The provisions of Art shall not apply to a brokerage house conducting brokerage activities exclusively in the scope defined in Art or A brokerage house may apply for an authorisation to open a branch or conduct brokerage activities in another form in a state which is not a Member State, provided that the Commission has concluded the agreement referred to in Art of the Act on Capital Market Supervision with the competent authority in the state in which such activities are to be conducted. The provisions of Art and shall apply accordingly. Art The following shall require a Commission s authorisation, to be granted upon application of a brokerage house: 1) early repayment (repayment before the agreed repayment date) by the brokerage house of liabilities: a) under securities or other financial instruments of unspecified maturity, b) under a loan which gave rise to subordinated liabilities; 2) inclusion of liabilities under securities and other financial instruments of unspecified maturity in the brokerage house s capital; 3) using by a brokerage house of a model other than that prescribed on the regulated market to calculate the ratio of a change in an option s value to a change in the value of the underlying instrument; 4) calculation of capital requirements to cover particular risks on the basis of internal risk management models used by the brokerage house. 2. The minister competent for financial institutions shall define, by way of a regulation, the requirements to be met by the applications referred to in Art , taking into account the fact that such applications are to serve as a basis for the evaluation of possible effects of the activities covered by the applications on the financial standing of the brokerage house. Art The Commission shall be notified of any intended direct or indirect acquisition or subscription for any number of shares in a brokerage house which: 1) represents 10% or more of the total vote or the share capital; or 2) would result in reaching or exceeding 10%, 20%, 33% or 50% of the total vote or the share capital with the proviso that the holding of shares in the brokerage house by entities belonging to the same group shall be deemed the holding of such shares by a single entity.

66 65 2. Indirect acquisition of shares in a brokerage house shall be the acquisition or subscription for shares in an entity which holds, whether directly or indirectly, shares in such brokerage house, if the acquisition or subscription results in reaching or exceeding 50% of the total vote or 50% of the share capital of such entity. 3. The Commission shall have the right to raise objections to any intended direct or indirect acquisition of or subscription for a specified number of shares in a brokerage house, within three months from the notification referred to in Art , if there is a reasonable suspicion that the entity proposing to acquire shares in such brokerage house could exert detrimental influence on its management. If no objection is raised, the Commission may set a final date by which the shares in a brokerage house may be acquired. 4. Any exercise of the voting rights attached to shares in a brokerage house acquired despite the objection referred to in Art shall be deemed null and void. 5. If shares in a brokerage house are to be acquired by a foreign investment firm, foreign bank or foreign insurance undertaking authorised to conduct its operations by the competent authority of another Member State, the Commission shall seek an opinion on such entity from the competent authority that had granted the authorisation. The opinion shall concern the manner of conducting activities by the entity proposing to acquire shares in a brokerage house, including in particular its compliance with legal regulations. 6. The provisions of Art shall apply accordingly in cases where the entity acquiring shares in a brokerage house is the parent entity of the entity referred to in Art or an entity exerting significant influence within the meaning of Art on the entity referred to in Art , or where as a result of an indirect acquisition the target entity would become a subsidiary of the acquirer or an entity over which the acquirer would gain significant influence within the meaning of Art The notification referred to in Art shall specify the number of shares to be acquired, their share in the share capital and the number of votes which the acquirer will obtain at the general shareholders meeting, and shall include a statement, subject to criminal liability, on the source of funds to be used to pay for the shares. 8. If the Commission has not raised an objection within the timeframe referred to in Art , the same shall be deemed an approval of the acquisition of shares in the brokerage house on the terms and conditions set forth in the notification. 9. The provisions of Art referring to shares in a brokerage house operating in the legal form of a joint-stock company shall apply accordingly to shares in a brokerage house operating in the legal form of a limited-liability company. Art The Commission shall be notified of any intended disposal of shares in a brokerage house: 1) if the number of shares to be disposed of represents 10% or more of the total vote or the share capital; or 2) by an entity holding such a number of shares in the brokerage house which confers the right to exercise at least 10%, 20%, 33% or 50% of the total vote or represents at least 10%, 20%, 33% or 50% of the share capital, if as a result of

67 66 the disposal the disposing entity shall hold shares conferring the right to less than 10%, 20%, 33% or 50%, respectively, of the total vote, or representing less than 10%, 20%, 33% or 50%, respectively, of the share capital with the proviso that the holding of shares in the brokerage house by entities belonging to the same group shall be deemed the holding of such shares by a single entity. The disposing entity shall submit the notification no later than two weeks prior to the intended disposal of shares. 2. The notification referred to in Art shall specify the number of shares to be disposed of, their share in the total vote and the share capital, and the number of votes which the disposing entity will obtain at the general shareholders meeting. 3. The notification to the Commission of the intended disposal of shares in a brokerage house shall not prejudice the obligation to make the notification referred to in Art The provisions of Art shall not apply to shares in a brokerage house which have been admitted to trading on a regulated market. 5. The provisions of Art concerning shares in a brokerage house operating in the legal form of a joint-stock company shall apply accordingly to shares in a brokerage house operating in the legal form of a limited-liability company. Art If a shareholder or shareholders of a brokerage house who hold shares which represent 10% or more of the total vote or 10% or more of the share capital exert detrimental influence on the management of such brokerage house, the Commission may order that such detrimental influence be discontinued, specifying the final date, the conditions for and the scope of appropriate measures to be taken, and in the event of non-compliance with such an order it may prohibit, for a period of up to two years, the exercise of voting rights attached to the shares. 2. If following the lapse of the period of prohibition referred to in Art the grounds for the prohibition of the exercise of voting rights do not cease to exist, the Commission may order the shareholder or shareholders to whom the prohibition applies to dispose of all or some of the shares they hold by a final date set in the decision. 3. If persons who indirectly acquired shares in a brokerage house exercise detrimental influence on the management of such brokerage house, the Commission may order that the exercise of such detrimental influence be discontinued, specifying the final date, the conditions for and the scope of appropriate measures to be taken. 4. The provisions of Art concerning shareholders of or shares in a brokerage house operating in the legal form of a joint-stock company shall apply accordingly to shareholders of or shares in a brokerage house operating in the legal form of a limited-liability company. Art A brokerage house shall not acquire in its own name shares issued by entities with respect to which such brokerage house is a subsidiary.

68 67 2. The provisions of Art shall not apply to any acquisition of shares in organised trading for the purpose: 1) specified in Art , or 2) of reselling a number of such shares representing in aggregate up to 5% of the share capital. Art The Commission shall notify the European Commission of: 1) any brokerage licence granted to a legal person which is a direct or indirect subsidiary of an entity that is subject to the laws of a non-member State within one month from the grant of such licence, 2) any acquisition of a block of shares in an entity conducting brokerage activities, where the buyer is subject to the laws of a non-member State and where as a result of the transaction the buyer becomes the parent entity of the entity whose shares it has acquired. 2. The Commission shall enclose with the notifications referred to in Art , a description of the structure of the group, with the proviso that in the case of the notification referred to in Art , the description shall present the structure after the acquisition of the shares in the entity conducting brokerage activities. 3. The Commission shall notify the European Commission of any legal, regulatory, or organisational obstacles encountered by brokerage houses or banks conducting brokerage activities in connection with such activities conducted in the territory of non-member States. Section 3 Banks Conducting Brokerage Activities Art A bank with a registered office in the territory of the Republic of Poland may conduct brokerage activities upon obtaining the Commission s licence. 2. A bank s application for a brokerage licence shall also include: 1) name of the bank s organisational unit which is to conduct brokerage activities; 2) in the case of a bank which is a joint-stock company list of the shareholders holding 10% or more of the total vote or 10% or more of the share capital; 3) information on parent entities of the applicant; 4) information on the amount of own funds; 5) information of the amount of the initial capital referred to in Art ; 6) information specified in Art , and

69 68 3. In the case of a bank s application for a brokerage licence, the rules referred to in Art shall mean the rules of investing in broker-traded financial instruments by employees of the bank s organisational unit conducting brokerage activities and by the management and supervisory staff of this such for their own account. 4. The application referred to in Art shall be also accompanied by information on the procedures for monitoring and control of interest-rate risk related to the entire business of the applicant. 5. A pre-requisite for obtaining the licence shall be separation of brokerage activities within the bank s structures, which shall consist in: 1) conducting brokerage activities in a manner which makes it possible to keep them organisationally separate from the bank s other operations, subject to Art. 113 (organisational separation); 2) maintaining separate accounting books and preparing separate financial statements in accordance with the rules provided for in other regulations (financial separation). 6. The composition of the governing bodies of the organisational unit referred to in Art. 2.1 shall include at least two persons holding a university degree, having at least three-year experience of work for financial market institutions, and enjoying a good opinion with respect to the positions they have held. 7. The regulations on financial separation of brokerage activities within the structure of a bank shall not apply to a bank whose brokerage activities comprise exclusively accepting and transferring orders for acquisition or disposal of brokertraded financial instruments. 8. A bank conducting brokerage activities shall have its head office in the territory of the Republic of Poland. 9. The head office referred to in Art shall be the organisational unit of a bank which conducts the brokerage activities and at which the persons managing the brokerage activities perform their duties on a regular basis. 10. The minister competent for financial institutions shall define, by way of a regulation, detailed rules governing organisational separation of banks brokerage activities, taking into account the need to ensure confidentiality of information at the separated organisational unit of a bank, while ensuring security and efficiency of brokerage activities. Art The initial capital of a bank conducting brokerage activities shall be the funds appropriated for the financing of brokerage activities from the own funds, as defined in the Banking Law of August 29th 1997, of such bank, increased by the capital reserves created by the bank conducting brokerage activities other than the revaluation capital reserve. 2. The following shall require a Commission s authorisation, to be granted upon application of a bank conducting brokerage activities: 1) repayment by the bank of liabilities under securities and other financial instruments of unspecified maturity;

70 69 2) inclusion of liabilities under securities and other financial instruments of unspecified maturity in the brokerage house s capital; 3) using by a bank of a model other than that prescribed on the regulated market to calculate the ratio of a change in an option s value to a change in the value of the underlying instrument; 4) calculation of capital requirements to cover particular risks on the basis of internal risk management models used by the bank. 3. The minister competent for financial institutions shall define, by way of a regulation the requirements to be met by the applications referred to in Art , taking into account the fact that such applications are to serve as a basis for the evaluation of possible effects of the activities covered by the applications on the financial standing of the bank. Art Activities which are related to the execution of agreements for provision of services by the bank as part of its brokerage activities, or which facilitate performance of such agreements, in particular activities involving advising a customer or a potential customer on the brokerage activities conducted by the bank, accepting and transferring the orders referred to in Art , and collecting other declarations of will for the bank as part of brokerage activities, may be performed outside the bank s separated unit which conducts brokerage activities. 2. The basis for performing the activities referred to in Art outside the bank s unit conducting brokerage activities shall be the bank s internal regulations, specifying in particular the detailed scope of such activities and the manner of their performance. No later than within one month before the commencement of the activities referred to in Art outside the organisational unit conducting brokerage activities, the bank shall deliver to the Commission the internal regulations which describe the adopted procedures. 3. In the event that the procedures adopted by the bank might threaten the security of trading or compromise interests of the bank s customers, the Commission may raise objections to their implementation within one month from the date of notification. 4. With respect to the bank s units performing activities referred to in Art , the Commission shall have supervision powers provided for in the Act on Capital Market Supervision as regards such activities and documents prepared in connection with such activities. Art In all matters not provided for in this Section, the provisions of Section 2, except Art. 95, Art. 96, and Arts , shall apply accordingly to a bank conducting brokerage activities and the exercise of supervision over such bank. 2. The provisions of Art shall apply exclusively to the financial statements of the bank s organisational unit which conducts brokerage activities. The provisions of Art shall apply to the financial statements of the bank to the extent such financial statements concern only brokerage activities.

71 70 3. The notification referred to in Art prepared by a bank conducting brokerage activities shall be transferred by the Commission, through the intermediation of the Banking Supervision Commission, to the competent authority in another Member State in the territory of which the bank intends to establish a branch or conduct brokerage activities without establishing a branch. Section 4 Foreign Entities Conducting Brokerage Activities in the Territory of the Republic of Poland Art A foreign legal person conducting brokerage activities and having its registered office in the territory of an OECD state or a WTO member state may conduct brokerage activities in the territory of the Republic of Poland through a branch. 2. A branch of a foreign legal person referred to in Art shall be an organisational unit without legal personality separated within the organisational structure of such legal person, which conducts brokerage activities in the territory of the Republic of Poland. All organisational units of a legal person referred to in Art , which are situated in the territory of the Republic of Poland and which conduct brokerage activities, shall be regarded as a single branch. 3. The Commission shall grant a brokerage licence to a foreign legal person referred to Art upon obtaining a written opinion from the competent authority which has granted the authorisation to conduct activities in the state where such legal person has its registered office. The opinion shall concern the manner of conducting such activities, including in particular their compliance with legal regulations applicable in such state. 4. The Commission shall grant a brokerage licence to a foreign entity referred to in Art on the following conditions: 1) there are solutions in place which enable the Commission to obtain information necessary in the context of the Commission s supervision over brokerage activities conducted in the territory of the Republic of Poland, including in particular an agreement referred to in Art of the Act on Capital Market Supervision, concluded with the competent authority which has granted such legal person a brokerage licence in the state where it has its registered office; 2) in the state where the legal person has its registered office such legal person is subject to capital requirements equivalent to the requirements specified in the regulations issued under Art ; and 3) where the business is to be conducted through a branch the legal person has separated funds for conducting brokerage activities in the territory of the Republic of Poland, whose amount is not lower than the amount specified in the regulations governing the initial capital of a brokerage house. 5. The composition of the governing bodies of a branch shall include at least two persons holding a university degree, having at least three-year experience of work for financial market institutions, and enjoying a good opinion with respect to the positions they have held.

72 71 6. The provisions of Art and shall apply accordingly to the supervision over a foreign legal person referred to in Art which conducts brokerage activities in the territory of the Republic of Poland through a branch if branches of such legal person are required under other regulations to prepare financial statements. Art A foreign investment firm or a foreign legal person referred to in Art may open a representative office in the territory of the Republic of Poland. 2. A representative office shall be an organisational unit without legal personality separated within the organisational structure of an investment firm or legal person, whose activities comprise exclusively advertising and promoting such foreign investment firm or foreign legal person referred to in Art in the territory of the Republic of Poland. 3. A foreign investment firm or a foreign legal person referred to in Art shall promptly notify the Commission of the opening of a representative office in the territory of the Republic of Poland. Art Without the licence referred to in Art. 69.1, a foreign investment firm may perform in the territory of the Republic of Poland any brokerage activities within the meaning of Art , provided that such investment firm has been authorised to conduct such activities by the competent authority of the state where it has its registered office. Brokerage activities may be conducted in the territory of the Republic of Poland through a branch, as defined in Art , or without establishing a branch. 2. The provisions of Art shall not apply to activities performed under an agreement with the National Bank of Poland, the State Treasury or a governmental authority performing activities concerning the monetary, exchange-rate or public debt-management policies or a policy of managing State Treasury s free cash. 3. A condition for commencing brokerage activities in the territory of the Republic of Poland by a foreign investment firm within the scope defined in Art shall be the receipt by the Commission of a notification of the intended commencement of activities from the competent authority which has granted such investment firm a brokerage licence. A foreign legal person may commence brokerage activities without establishing a branch upon the Commission s receipt of the relevant information from the foreign competent authority, and if such activities are to be conducted through a branch upon the Commission s specifying the conditions for the conduct of such brokerage activities or upon the lapse of two months from the date of the Commission s receipt of the relevant information from the foreign competent authority. 4. Within two months from receiving the notification referred to in Art , the Commission shall prepare for supervision of the activities of the investment firm and shall advise it of the conditions for the conduct of such activities in the territory of the Republic of Poland.

73 72 5. The conditions for the conduct of brokerage activities referred to in Art shall include in particular: 1) if such activities are to be conducted through a branch the rules specified in Art. 83 and in the regulations issued under Art , 2) if such activities are to be conducted without establishing a branch the rules specified in the regulations issued under Art The provisions of the Act on Freedom of Business of July 2nd 2004, except Art. 14, shall not apply to the establishment and the activities of branches of foreign investment firms. Art A foreign investment firm which conducts brokerage activities in the territory of the Republic of Poland shall be subject to supervision in another Member State by a competent authority which has granted it a brokerage licence, with the proviso that the Commission shall supervise compliance with the rules for brokerage activities provided for in Polish law. Chapter 2 Special Forms of Participation in Financial Instruments Trading Section 1 Custodian Banks Art Subject to obtaining a Commission s authorisation, a bank with the registered office in the territory of the Republic of Poland may keep securities accounts (custodial activities). 2. Keeping securities accounts by a bank in the territory of another Member State shall require an authorisation referred to in Art The authorisation referred to in Art may be granted even if the bank has already obtained a brokerage licence, in which case the securities accounts shall be kept outside the bank s organisational unit which conducts brokerage activities. 4. The application for the authorisation referred to in Art shall contain: 1) personal details of the members of the management board and the supervisory board of the bank, and of other persons who are responsible for the launch of activities covered by the application or who will manage such activities, as well as information on their professional qualifications and careers; 2) in the case of a bank which is a joint stock company list of the shareholders holding 10% or more of the total vote or 10% or more of the share capital; 3) information on the parent entities and subsidiaries of the applicant;

74 73 4) information on the amount of own funds; 5) information on telecommunications equipment and offices which are necessary for keeping securities accounts, owned and occupied by the applicant; 6) information on the proposed organisational framework for keeping securities accounts; 7) representations by the persons who will manage the activities covered by the application to the effect that they have not been found by a final court judgment guilty of a tax offence, an offence against reliability of documents, property, business transactions and cash and securities transactions, offences specified in Art. 305, Art. 307 or Art. 308 of the Industrial Property Law of June 30th 2000, offences specified in the Commodity Exchange Act or offences specified herein. 5. The following shall be attached to the application: 1. the bank s articles of association and an excerpt from the relevant register; 2. rules for the keeping of securities accounts; 3. rules for the protection of the flow of inside information; 4. the most recent annual financial statements together with an auditor s opinion and report, and 5. internal audit rules. 6. A bank s activities related to the keeping of securities accounts should be managed by at least two persons holding a university-degree, having at least three-year experience of work for financial market institutions, and enjoying a good opinion with respect to the positions they have held. 7. The initial capital of a custodian bank shall amount to or exceed the initial capital as provided for in Art of the Act on Banking Law of August 29th Custodian banks must have their head offices in the territory of the Republic of Poland. 9. The head office of a custodian bank shall be the organisational unit of the bank at which persons managing the bank s activities related to the keeping of securities accounts perform their duties on a regular basis. 10. A custodian bank shall employ at least one securities broker to conduct activities consisting in keeping securities accounts. Art The authorisation referred to in Art shall specify the bank s name, the address of its registered office and the date of commencing the activities covered by the authorisation, which shall fall within 12 months from the date on which the decision granting the authorisation becomes final.

75 74 Art In an agreement on keeping a securities account, a customer of the custodian bank may reserve that a transaction which has been executed at the customer s order can be settled in the customer s account only upon the bank s receiving from the customer a document confirming the execution of the said transaction. 2. The securities acquired in the transaction referred to in Art shall be registered in a securities account: 1) of an investment firm if the order referred to in Art has been placed directly with such investment firm; or 2) of a foreign investment firm or a foreign legal person referred to in Art which does not conduct brokerage activities in the territory of the Republic of Poland if such firm or person serves as an intermediary in transferring orders placed by customers to the entities specified in Art maintained for the purpose of keeping a record of securities acquired and disposed of on behalf of customers specified in Art Transfer of securities in connection with the transaction referred to in Art from the account of the entity referred to in Art to the customer s securities account shall be made at the time specified in the confirmation submitted by the customer, after the customer and the abovementioned entity deliver to the bank documents which are consistent and which confirm the execution of such transaction. 4. Securities disposed of in the transaction referred to in Art shall continue to be registered in the customer s securities account until the time specified in the confirmation submitted by the customer. 5. In the event of failure to submit documents which are consistent and which confirm the execution of the transaction referred to in Art by the date on which the transaction should be cleared in the depository for securities, the entity mentioned in Art shall be responsible to the entity which executed the transaction for the customer s account on a regulated market for paying the price and delivering the securities for settlement. In the event that the customer places an order directly with the entity referred to in Art , such entity shall be responsible for settling the executed transaction. 6. The provisions of Art shall not apply to cases when prior to the clearing of the transaction referred to in Art in the depository for securities the legal relation between the entity referred to in Art and the customer whereby such entity provided its services has expired or ceased to exist, or to cases when such entity no longer holds a brokerage licence. 7. Transfer of securities in connection with the transaction referred to in Art , and transfer of benefits from such securities, between the securities accounts of a custodian bank s customer and of the entity referred to in Art , and between the accounts of entities referred to in Art , shall be deemed to be effected on a regulated market. 7. Acquisition of securities in the transaction referred to in Art by the entity referred to in Art shall place such entity under the obligations stipulated in Chapter 4 of the Public Offering Act only if the securities continue to be registered

76 75 in such entity s securities account referred to in Art on the day following the clearing of such transaction in the depository for securities. 8. Provisions of Art shall apply accordingly to broker-traded financial instruments other than securities admitted to trading on a regulated market. Art At the demand by the Commission or its authorised representative, authorised representatives of a custodian bank, persons who are members of its governing bodies or persons employed with such custodian bank, shall be required to immediately prepare and deliver, at the custodian bank s cost, copies of documents and other information carriers and to provide written or oral explanations in connection with the custodial activities conducted by such bank, as regards the Commission s supervision over compliance of such custodial activities with the rules for keeping securities accounts. 2. At the demand of the Commission or its authorised representative a custodian bank shall be also required to promptly deliver information concerning the crediting to the accounts kept by such bank of cash serving as collateral, as defined in the regulations issued under Art , and of cash provided as margin with respect to transactions in broker-traded financial instruments if the structure such instruments requires provision of a margin. 3. With respect to a branch of a custodian bank situated in the territory of another Member State, the Commission within the scope of its supervision over custodial activities shall have the powers specified in Art Such powers shall be exercised subject to a prior written notification to the competent authority of the state in whose territory the custodian bank s branch is situated. Art The provisions of Art. 85, Art. 86, Art. 89, Art. 90, Art. 92 and Art. 99 shall apply accordingly to any matters which are not provided for in this Section and which relate to a custodian bank and the exercise of supervision over such bank. 2. The notification referred to in Art submitted by a custodian bank shall be delivered by the Commission through the intermediation of Banking Supervision Commission to the competent authority of another Member State in whose territory the bank intends to keep securities accounts. Section 2 Investor Clubs Art Natural persons which have full capacity to enter into legal transactions may, based on an agreement to be concluded in writing under pain of nullity, associate in investor clubs. No fewer than three and no more than 20 persons may be associated in one investor club. 2. In the agreement referred to in Art , members of the investor club shall undertake to:

77 76 1) act together with a view to gaining knowledge on the rules of investing in organised trading, in particular by jointly investing in dematerialised securities or other broker-traded financial instruments admitted to trading on the regulated market; 2) not participate in any other investor clubs; 3) not to contract in connection with the activities of the investor club any liabilities whose total amount would exceed the value of the assets registered in the securities accounts held for the investor club and credited to the cash accounts auxiliary to such securities accounts. 3. Each member of the investor club shall have the right to credit to the cash accounts auxiliary to the securities accounts kept for the club funds totalling up to PLN 20, Neither the investor club nor its members shall be entrepreneurs within the meaning of the Act on Freedom of Business of July 2nd To the extent not provided for in Art , the agreement referred to in Art shall be governed by the provisions of Arts , Art and Arts of the Civil Code of April 13th Chapter 3 Securities Brokers and Investment Advisers Art The practising of the profession of a securities broker (hereinafter referred to as the broker ) or of an investment adviser (hereinafter referred to as the adviser ) shall mean the holding of positions in the management or supervisory bodies of an investment firm, or the conduct or supervision of conduct of: 1) brokerage activities, 2) activities related to the financial market other than brokerage activities, 3) other activities connected with customer service or access to customers accounts as part of a legal relation under an employment contract, a mandate contract or as part of another legal relation of a similar nature between a given person and an investment firm. 2. The following situations shall also be understood as practising of the profession of a broker or adviser: 1) the broker or the adviser is bound by a legal relation under an employment contract, a mandate contract or another legal relation of a similar nature with the custodian bank regarding the conduct or supervision of conduct of activities related to maintenance of securities accounts; 2) the broker or the adviser is bond by a legal relation under an employment contract, a mandate contract or another legal relation of a similar nature with the entity which is required on the basis of other laws to hire brokers or

78 77 advisers for the conduct or supervision of conduct of the activities specified in such laws; 3) the broker or the adviser conducts the activities referred to in Art. 79.2; 4) the broker or the adviser conducts the activities referred to in Art. 71 as part of such broker s or adviser s sole trader activities or under an employment contract, a mandate contract or any other legal relation of a similar nature with an entity which conducts such activities as part of its business. Art In practicing their profession, the broker and the adviser shall act in compliance with the law and the principles of fair trading, and to take into account the legitimate interests of their customers. 2. The professional titles of a securities broker and an investment adviser shall be subject to legal protection. 3. The persons authorised to practice the profession of a broker or an adviser shall be the persons who are entered in the register of brokers or advisers, as the case may be, unless such authorisation has been suspended as provided for in Art Art Any natural person may be entered in the register of brokers or advisers if such person: 1) has the full capacity to enter into legal transactions; 2) enjoys full civic rights; 3) has not been found by a final court judgment guilty of a tax offence, an offence against reliability of documents, property, business transactions and cash and securities transactions, offences specified in Art. 305, Art. 307 or Art. 308 of the Industrial Property Law of June 30th 2000, offences specified in the Commodity Exchange Act of October 26th 2000, or offences specified herein; 4) subject to Art , passed an examination before an examination board qualifying brokers or advisers. 2. In the case of a person who is not a Polish citizen the fact of such person enjoying full civic rights shall be ascertained in the light of the law of the country of which such person is a citizen. Art The examinations for brokers, advisers and investment firm agents shall check the candidates theoretical knowledge in the following fields: 1) civil law; 2) commercial law; 3) tax and foreign exchange law;

79 78 4) law of securities, financial instruments and trading in financial instruments; 5) brokerage and custodial activities; 6) the deposit and clearing system for trading in financial instruments; 7) financial market; 8) creation and operation of investment funds; 9) commercialisation and privatisation of enterprises; 10) accounting standards; 11) commodities market; 12) financial mathematics; 13) financial analysis; 14) investment strategies; 15) professional ethics. 2. The examination for advisers shall additionally check the candidates theoretical knowledge in the following fields: economics, statistics, public finance, corporate finance and management of portfolios comprising one or more broker-traded financial instruments. 3. The proficiency test referred to in Art shall check the candidates theoretical knowledge in the following fields: 1) civil law; 2) commercial law; 3) tax and foreign exchange law; 4) law of securities, financial instruments and trading in financial instruments; 5) brokerage and custodial activities; 6) the deposit and clearing system for trading in financial instruments; 7) financial market; 8) creation and operation of investment funds; 9) commercialisation and privatisation of enterprises; 10) accounting standards; 11) commodities market; 12) professional ethics. 4. The thematic scope of the examination or of the proficiency test referred to in Art , determined by the examination board, shall be published at least 90 days prior to the planned examination/proficiency test date together with such date in the Official Journal of the Polish Securities and Exchange Commission and on the Commission s website. 5. The examination for brokers shall be held by the examination board qualifying brokers, the examination for advisers by the examination board qualifying advisers, and the examination for investment firm agents by the examination

80 79 board qualifying investment firm agents. The proficiency test referred to in Art shall be held by the examination board qualifying advisers. 6. An examination board shall be composed of six members, appointed and removed by the Chairman of the Commission. From among the members of the examination board the Chairman of the Commission shall appoint the chairman of the examination board and at the request of the chairman of the examination board the deputy chairman of the examination board and the secretary of the examination board. 7. The administrative and office work for the examination boards shall be handled by the office of the Commission. 8. The chairman of an examination board shall organise the board s work and determine the dates of the examinations. The chairman of the examination board qualifying advisers shall determine the dates of the proficiency tests referred to in Art Members of an examination board shall be entitled to remuneration for their work on the examination board. 10. Fees shall be charged for the examinations and the proficiency test referred to in Art ; such fees shall constitute revenue of the state budget. 11. By way of a regulation, the minister competent for public finances shall define: 1) the level of the fees referred to in Art , taking into account the costs of holding the examination or the proficiency test referred to in Art and the expenses related to the operation of examination boards; 2) the rules for the conduct of the examination for brokers, the examination for advisers and the examination for investment firm agents as well as the rules for the administration of the proficiency test referred to in Art , taking into account the need to ensure equal treatment of the persons taking the examination or the proficiency test referred to in Art , confidentiality of the examination or the proficiency test and their efficient organisation, and 3) the manner of determination and the level of the remuneration due to members of the examination boards for the participation in the examination board meetings, administering the examinations or the proficiency test referred to in Art and the preparation of drafts of questions to be answered and problems to be solved during the examinations or the proficiency test, taking into account the scope of duties of each examination board member. Art Entries in the register of brokers or advisers shall be made by the Commission following application of the party concerned, to be filed within three months from the passing of the examination, the date of recognition by the Commission of the qualification to practice the profession or the date of passing the proficiency test. 2. Any person may be entered in the register of brokers or advisers without the need to pass the examination if such person s qualifications are ascertained according to the principles defined in the Act on the Principles of Recognition of Qualifications to

81 80 Perform Regulated Professions Acquired in Member States of April 26th 2001 (Dz.U. No. 87, item 954, as amended 8) ). 3. Persons who do not have the qualifications referred to in Art but hold a title specified in the regulations issued under Art , awarded by a foreign institution upon checking a given person s knowledge within the scope similar to the scope of the examination for advisers, may be entered in the register of advisers with no need to take the examination, provided that their qualifications, as ascertained in a proficiency test, guarantee that they will practise their profession in the territory of the Republic of Poland in a due manner. 4. The minister competent for financial institutions shall define, by way of a regulation, a list of titles awarded by specified foreign institutions which authorise their holders to apply, pursuant to Art , for the entry in the register of advisers with no need to take the examination; the minister shall take into consideration exclusively titles awarded by those foreign institutions which in their own qualification procedures recognise the results of examinations held before the examination board qualifying advisers. 5. A person entered in the register of brokers or in the register of advisers shall be obliged to promptly notify the Commission in writing: 1) when such person commences the practising of the profession, specifying the date of such commencement, the basic scope of duties and the place where the profession is practised; 2) whenever there is any change in the data covered by the application referred to in Art and the information referred to in Art Registers of brokers and advisers, deletions from the registers and suspensions of the authorisation to practice the profession of a broker or adviser shall be subject to publication in the Official Journal of the Polish Securities and Exchange Commission. 7. The minister competent for financial institutions shall define, by way of a regulation, the form of the application referred to in Art ; the application should contain a reference to the information referred to in Art , and with respect to the information concerning the criminal record and the result of the examination, the proficiency test or the ascertainment of the qualification to practice the profession relevant documents or their copies should be attached. The information required to be included in the application should enable the Commission to check whether the applicant meets the requirements specified in Art Art The Commission may delete a broker or an adviser from the register or suspend his or her authorisation to practice the profession for a period from three months to two years, as a result of infringement by such broker or adviser in the performance of their professional duties of the law or rules and other internal regulations that such broker or adviser is obliged to comply with in practicing their profession. 8) Amendments to the Act were promulgated in Dz.U. of 2002, No. 71, item 655; Dz.U. of 2003, No. 190, item 1864 and Dz.U. of 2004, No. 96, item 959.

82 81 2. The Commission shall issue a decision to delete a broker or an adviser from the register or to suspend the authorisation to practice a profession after a relevant investigation is held. 3. In the case of a need to protect public interest the Commission may suspend the broker s or the adviser s authorisation to practice the profession from the moment of commencement of the proceedings relating to the matters referred to in Art until a decision is issued on such matters, but in any case for no longer than six months. The provisions of Art shall not apply. 4. If a decision is issued to suspend a broker s or an adviser s authorisation to practice a profession, the suspension period referred to in Art shall be counted towards the suspension period referred to in Art Subject to Art , a person deleted from the register of brokers or advisers for the reasons referred to in Art or Art , may not be re-entered in such register prior to the lapse of ten years from the date on which the decision on the deletion was issued. If the deletion was a result of the circumstances referred to in Art , the broker or adviser may not be re-entered in the register prior to the cancelling of an entry of sentence for the offence the commitment of which served as the basis for the issuance of the decision on the deletion from the register. 6. In the case referred to in Art , in issuing the decision on the deletion from the register of brokers or advisers, the Commission may shorten the period referred to in Art Art Deletions from the registers of brokers and advisers shall be made: 1) at the request of the person entered in such register; 2) in the case of complete or partial legal incapacitation; 3) if the person entered in such register has been found by a final court judgment guilty of a tax offence, an offence against reliability of documents, property, business transactions and cash and securities transactions, offences specified in Art. 305, Art. 307 or Art. 308 of the Industrial Property Law of June 30th 2000, offences specified in the Commodity Exchange Act of October 26th 2000, or offences specified herein; 4) as a result of death of the person entered in the register; 5) in the cases specified in Art Part V Protection of Investors Interests; Compensation Scheme 1. Within the meaning of this Part: Art ) an investor shall be a natural or a legal person, or an organisational unit without legal personality, for whom or which a brokerage house provides any of the services referred to in Art. 69.2, , , , except for:

83 a) the State Treasury, 82 b) the National Bank of Poland, banks whose registered offices are situated in the Republic of Poland, and foreign banks, c) investment firms, d) companies operating regulated markets, e) the National Depository, f) entities operating pursuant to the Insurance Activities Act of May 22nd 2003, g) entities operating pursuant to the Act on Investment Funds of May 27th 2004, h) entities operating pursuant to the Act on the Organisation and Operation of Pension Funds of August 28th 1997, i) companies operating commodity exchanges or exchange clearing houses, commodity brokerage houses, foreign legal persons conducting brokerage activities related to trading in commodities, operating pursuant to the Commodity Exchange Act of October 26th 2000, j) communes/municipalities (gminy) and their associations, counties (powiaty) and their associations, and provinces (województwa), k) states and their territorial sub-divisions having legal personality, l) entities whose parent entity is the same as the parent entity of a brokerage house, m) persons holding 5% or more of the total vote or the share capital of a brokerage house, and persons who are a parent entity or a subsidiary of a brokerage house, n) members of the management board, supervisory board and an audit committee of a brokerage house and persons holding the posts of directors and deputy directors of departments of a brokerage house, as well as directors and deputy directors of branches of a brokerage house, if such persons held such posts on: the date of bankruptcy of a brokerage house or of the dismissal of bankruptcy petition on the grounds that the assets of the brokerage house are insufficient to cover the cost of the proceedings; on the date of the Commission s ascertaining that the circumstances referred to in Art have occurred; or in the current or previous financial year, o) persons responsible for the audit of financial statements of a brokerage house, persons holding the post of a chief accountant at a brokerage house, and persons responsible for the preparation and keeping of accounting documents of a brokerage house, p) members of the management and supervisory boards, persons holding 5% or more of the total vote or of the share capital, and persons responsible for the audit of financial statements of the parent entity or a subsidiary of a brokerage house, r) persons related through blood or marriage in the first or second degree to the persons referred to in Art m p,

84 83 s) investors whose failure to perform their obligations towards the brokerage house contributed to its bankruptcy or to the Commission s ascertaining of that the circumstances referred to in Art have occurred; 2) investors cash shall be the cash credited to cash accounts and other cash payable to investors by a brokerage house in connection with the services rendered to such investors, to the extent such services relate to the activities referred to in Art. 69.2, , , and ; 3) a brokerage house shall be a brokerage house, a bank conducting brokerage activities or a custodian bank; 4) the management board of a brokerage house shall include general partners of the brokerage house referred to in Art , or authorised representatives of a brokerage house referred to in Art ; 5) persons holding an interest in the share capital of a brokerage house shall include accordingly partners making contributions to the brokerage house referred to in Art The provisions of this Part shall apply accordingly to branches of foreign legal persons referred to in Art , if such persons are not participants of the compensation scheme of the state where they have their registered offices or the compensation scheme in such state fails to provide compensation in the amount stated in this Act. 3. In the case of custodian banks, the compensation scheme shall cover securities and other broker-traded financial instruments traded on an organised market registered in securities accounts kept by such custodian banks. Art The National Depository shall create and manage a mandatory compensation scheme in order to gather funds to be used to pay compensation to investors from the contributions referred to in Art and The purpose of such compensation scheme shall be to ensure payments of cash to investors up to the statutorily defined level, and compensation for the value of lost broker-traded financial instruments accumulated by such investors in brokerage houses or their branches outside of the Republic of Poland in connection with services provided to them, to the extent such services relate to the activities referred to in Art. 69.2, , , , in the event that: 1) a brokerage house is declared bankrupt, or 2) a bankruptcy petition is dismissed by virtue of a final decision on the grounds that the assets of the brokerage house are insufficient to cover the costs of the proceedings, or 3) the Commission ascertains that due to reasons closely related to the financial standing of the brokerage house, the brokerage house is, and will continue to be in the near future, unable to fulfil its obligations under investors claims. 3. The costs of managing the compensation scheme by the National Depository and the fees for the management thereof shall be covered from the assets of the scheme.

85 84 Art At the management board s request, the supervisory board of the National Depository shall adopt the rules of the compensation scheme. The rules and amendments thereto shall require the Commission s approval. The Commission shall refuse to approve such rules or amendments if the wording of the rules or the proposed amendments conflicts with the law or could impair the security of the compensation scheme management or of the compensation payments. 2. The rules referred to in Art shall define in detail the operation of the compensation scheme, including in particular: 1) manner of the management of the compensation scheme assets; 2) manner of ensuring the performance of obligations by entities covered by the compensation scheme; 3) manner and procedure for making contributions to the compensation scheme by entities covered by the scheme; 4) conditions and procedure for the return of the overpaid annual contributions made by brokerage houses, as referred to in Art ; 5) procedure for making payments to investors; 6) if an entity which is covered by the compensation scheme is released from the obligation to participate in such scheme the manner of making settlements with such entity and the length of period following release of such entity from the obligation to participate in the scheme during which emergence of circumstances giving grounds for the payment of compensation results in no return to such entity of its share in the scheme;7) amount of fees payable to the National Depository for its performance of obligations related to the operation of the compensation scheme, and the manner of settling the costs incurred in connection with the operation of the scheme with the entities covered by such scheme; 8) disciplinary and procedural measures to be used with respect to entities covered by the compensation scheme which breach their obligations under the scheme, the rules and procedure governing the application of such measures as well as the procedure for notifying the Commission of the breach. Art The participation of brokerage houses in the compensation scheme shall be mandatory. 2. A brokerage house shall be released from the obligation to participate in the compensation scheme as of the moment when: 1) it ceases to conduct the activities specified in a decision concerning a revocation or annulment of the licence referred to in Art. 69.1, or in a decision concerning a revocation or annulment of an authorisation for keeping securities accounts by a bank; 2) the expiry of a licence in the cases referred to in Art

86 85 Art If the compensation scheme of the state where a foreign investment firm which conducts brokerage activities through a branch in the Republic of Poland has its registered office does not provide compensation in the amount or to the extent provided for in this Act, such branch of the foreign investment firm may apply to the National Depository to join the compensation scheme provided for herein, in order to guarantee its investors compensation payments in the amount and to the extent provided for in this Act. Filing such application shall be tantamount to the branch s joining of the scheme. 2. The aim of the annual contributions referred to in Art made by branches of foreign investment firms is to make the amount and extent of the compensation under the scheme in its home country equal to those under the compensation scheme provided for herein. 3. The National Depository shall promptly inform the Commission of any case of nonperformance or undue performance by a foreign investment firm s branch of its obligations arising from participation in the compensation scheme. The Commission shall forward the information received from the National Depository to the competent authority which granted the brokerage licence to the foreign investment firm, specifying the period, no longer than 12 months from the day of the forwarding of the information, after which the foreign investment firm s branch may be excluded from the compensation scheme. 4. The National Depository shall cooperate with the competent authority referred to in Art in taking measures by such authority to ensure due performance of the obligations arising from participation in the compensation scheme by a foreign investment firm s branch. 5. If, after lapse of the period referred to in Art and despite taking the measures referred to in Art , the non-performance or undue performance by the foreign investment firm s branch of its obligations arising from the participation in the compensation scheme continues, the National Depository may, subject to approval by the competent authority referred to in Art , exclude such branch from the compensation scheme. 6. The share of the foreign investment firm s branch in the compensation scheme shall not be returned in the event of exclusion from the scheme if within the period, defined in the rules referred to in Art , following such exclusion circumstances emerge which give grounds for the payment of compensation to investors who are customers of such branch. 7. The compensation scheme shall ensure payment to investors of compensation in connection with the services rendered to such investors by a foreign investment firm through its branch in the Republic of Poland prior to the date of its exclusion from the scheme, to the extent such services relate to the activities referred to in Art. 69.2, , , and The foreign investment firm s branch shall promptly notify its customers of its exclusion from the compensation scheme, specifying in particular the exclusion date. 9. In the case referred to in Art , the National Depository shall define the rules and procedure for payment to investors of compensation in connection with the services rendered to such investors by a foreign investment firm conducting

87 86 brokerage activities through a branch in the Republic of Poland, to the extent such services relate to the activities referred to in Art. 69.2, , , and The rules and procedure referred to in Art shall be defined in cooperation with the entity managing a compensation scheme effective in the state where the registered office of the foreign investment firm is situated. 11. The rules and procedure referred to in Art should ensure in particular: 1) a possibility for the National Depository to demand that the foreign investment firm provide information necessary for due performance of the obligations arising from participation in the compensation scheme, and a possibility to request verification of such information by a competent authority in the state where the registered office of the foreign investment firm is situated; 2) payment of compensation equal to the difference between the amount of compensation paid under the scheme of the state where the registered office of the foreign investment firm is situated and the amount of compensation payable to investors under the scheme provided for herein, upon receipt of information on the events referred to in Art from the competent authority of the state where the registered office of the foreign investment firm is situated; 3) the right for the National Depository to revise the rights of investors with respect to the services rendered to such investors by a foreign investment firm through its branch in the Republic of Poland; 4) close cooperation between the National Depository and the entity managing the compensation scheme in the state where the registered office of the foreign investment firm is situated, with a view to ensuring efficient payment of compensation to investors in the amounts they are entitled to. 12. The rules and procedure referred to in Art should provide for the manner of determining the amount of compensation payable under each of the compensation schemes to investors entitled to counterclaims against the foreign investment firm conducting brokerage activities through a branch in the Republic of Poland. 13. To the extent not provided for in Art , the other provisions of this Part shall apply accordingly to all matters concerning participation of a foreign investment firm s branch in the compensation scheme. Art Subject to Art and , each calendar year brokerage houses shall make annual contributions, hereinafter referred to as the annual contributions, to the compensation scheme; such contributions shall be equal to the sum of: 1) the product of a rate of up to 0.4% and the average balance of investors cash; 2) the product of a rate of up to 0.01% and the average value of broker-traded financial instruments held by investors over the last 12 months. 2. The value of broker-traded financial instruments held by investors shall be their current price established in accordance with the rules prescribed in the regulations on special accounting rules for brokerage houses.

88 87 3. The average balance of investors cash shall be the ratio of: the sum of the balances of investors cash on each business day during the 12-month period to the number of business days in such period. 4. The average value of broker-traded financial instruments held by investors shall be the ratio of: the sum of the values of broker-traded financial instruments held by investors on each business day during the 12-month period to the number of business days in such period. 5. Each year custodian banks shall be obliged to make annual contributions to the compensation scheme in the amount equal to the product of the rate specified in Art and the average value of broker-traded financial instruments traded on the organised market which are registered in investors accounts over the last 12 months, computed in accordance with Art and The exception referred to in Art s shall not apply in the case of computation of the average balance of cash referred to in Art , and the average value referred to in Art and The National Depository shall determine the rates referred to in Art for the next calendar year, and shall provide them to brokerage houses not later than by the end of the calendar year preceding the year in which contribution is to be made. 8. Brokerage houses shall, subject to Art , make annual contributions in four instalments, to be made by the last business day of the last month in each calendar quarter, with the proviso that the instalments for the first and the second quarter shall be equal and their amounts shall be determined as specified in Art and 137.5, whereas the instalments for the third and the fourth quarter shall be also equal and their amounts shall be determined as specified in Art and Art based on the average balance of investors cash and the average value of broker-traded financial instruments held by investors in the second half of the previous calendar year and in the first half of the calendar year in which the contributions are to be made, subject to Art If the aggregate value of investors claims for compensation exceeds the funds accumulated by the compensation scheme, the annual contribution instalments for a given calendar year which are due but have not been paid yet shall be paid within seven days of the National Depository announcement, circulated nationwide in a letter requesting brokerage houses to make the payment. 10. If the aggregate value of investors claims for compensation exceeds the amount of funds accumulated by the compensation scheme and of the instalments for a given calendar year which are due but not paid yet, the amount of the annual contributions to be made in a given calendar year may be increased through the application of a rate of up to 1.8%. 11. Upon consultation with the Commission and the National Depository, the minister competent for financial institutions shall increase, by way of a regulation, the amount of the annual payments referred to in Art , and shall determine the date for the payment thereof, taking into account the need to satisfy investors claims. 12. In the event of delay with the payment of any of the instalments referred to in Art and 137.9, or of the amount referred to in Art , the National Depository shall be entitled to demand payment of interest to the compensation scheme, in the amount calculated at the rate applicable to default interest on tax

89 88 arrears. Excerpts from the records of the National Depository, signed by authorised members of the management board of the National Depository and bearing its seal, certifying the existence of an obligation of an entity covered by the compensation scheme, and containing a statement that the claims based on such excerpts are due and payable, shall be deemed writs of execution and shall not require to be endorsed with an enforcement clause. 13. The National Depository shall promptly inform the Commission of any event of non-performance or undue performance by a brokerage house of its obligations arising from the participation in the compensation scheme. In the event of undue performance by the brokerage house of its obligations arising from the participation in the compensation scheme, the Commission shall take the measures referred to in Art or In the event of non-performance or undue performance by a branch of a brokerage house conducting activities in another Member State of its obligations arising from the participation in the compensation scheme it has jointed, the Commission shall, upon receipt of information on the occurrence of such circumstances from the entity managing the scheme, cooperate with such entity and take measures referred to in Art or Art in connection with undue performance by the brokerage house s branch of the obligations arising from the participation in the scheme. 15. If, despite taking the measures referred to in Art and 167.2, the brokerage house s branch continues the non-performance or undue performance of its obligations arising from the participation in the compensation scheme of another Member State after the lapse of 12 months following the notification to the Commission by the relevant entity managing the compensation scheme, the Commission may, at a request by the entity managing the compensation scheme of such another Member State, agree to the exclusion of such branch from the compensation scheme. 16. The brokerage house s branch shall promptly notify its customers of its exclusion from the compensation scheme of another Member State, specifying in particular the exclusion date. 17. The Commission shall notify the relevant entity managing the compensation scheme in another Member State, which has been joined by the brokerage house s branch of the occurrence of any of the circumstances referred to in Art The brokerage house s obligation to make annual contributions to the compensation scheme shall be suspended if payments made by the brokerage house to the scheme reach the amount specified in Art The above shall not prejudice the brokerage house s obligation to make the contribution to the scheme in connection with the rate increase referred to in Art The amount triggering the suspension of brokerage house s contributions to the compensation scheme shall be determined respectively, in line with the rules for the computation of the annual contributions, using a rate equal to ten times the rate referred to in: 1) Art with respect to investors cash; 2) Art with respect to broker-traded financial instruments held by investors.

90 If the brokerage house makes the annual contributions to the compensation scheme in excess of the amount due, the National Depository shall return the overpayment. The overpayment shall not be returned if its results from the discontinuation of the activities conducted by the brokerage house which are subject to the requirement to make contributions to the scheme. 21. The provisions of Art shall not apply if payments have been made to investors under the compensation scheme, until the value of the compensation scheme assets reaches the level required by law. Art Funds paid by brokerage houses as the annual contributions, and the interest referred to in Art , as well as the benefits obtained in connection with the management of such funds, shall be common property of the scheme participants. If the brokerage house is released from the obligation to participate in the compensation scheme, such brokerage house shall be returned its interest in the common property, in the amount to which it would be entitled if the ownership in common has been terminated or has expired. Such interest shall be returned provided that during the period defined in the rules of the compensation scheme no circumstances emerge which would give grounds for payment of compensation to investors who are such brokerage house s customers. 2. In connection with their participation in the compensation scheme, brokerage houses shall create provisions of up to the value of the contributions made to the scheme and shall charge them to costs. In the event of return of any overpayments, the brokerage house shall reduce the provision by the amount of the overpayment. 3. Funds paid by the brokerage house as annual contributions and the interest referred to in Art , as well as the benefits obtained in connection with the management of such funds, shall not be subject to enforcement against the assets of a scheme participant. Art The compensation scheme shall secure the payment of the investors funds referred to in Art , less the amounts due from the investor to the brokerage house for the services provided according to the balance as at the date of the occurrence of any of the circumstances referred to in Art ; the payment shall comprise 100% of the funds covered by the compensation scheme in the case of funds of up to the złoty equivalent of EUR 3,000, and 90% in the case of funds in excess of that amount, provided that the upper limit for the funds covered by the compensation scheme shall equal the złoty equivalent of EUR 22,000, subject to Art The upper limit for the funds covered by the compensation scheme shall be: 1) a złoty equivalent of EUR 15,000, effective January 1st December 31st 2006; 2) a złoty equivalent of EUR , effective January 1st December 31st The złoty equivalent of the amounts expressed in the euro shall be calculated using the mid exchange rate quoted by the National Bank of Poland on the date of occurrence of the circumstances which give grounds for compensation payment, as specified in the exchange rate table.

91 90 4. The amounts referred to in Art are the maximum amount of the investor s claims, regardless of the amount of funds and the number of the accounts in which the funds referred to in Art have been kept, or the number of claims under which a given investor is entitled to receive monies from the brokerage house. 5. If the broker-traded financial instruments and cash are co-owned, each of the coowners shall have the right to file claims against the scheme in the amount proportionate to such co-owner s share but not higher than the amount specified in Art In the case of ownership in common, the amount of co-owner s share shall be determined by regulations applicable to expiry or termination of such ownership in common. 6. The compensation shall be paid as provided for in the compensation payment schedule, however not later than within three months from the date the National Depository approves such schedule. 7. If particularly justified by circumstances which prevent the payment of compensation within three months, the Commission may, at the request of the National Depository, postpone the payment date by up to another three months. 8. The National Depository shall file the request referred to in Art not later than 14 days prior to the date set for compensation payment. 9. Claims for compensation shall be subject to a ten-year statute of limitations counting from the occurrence of the circumstances which give grounds for the compensation payment. 10. Investors shall have the right to enforce claims in excess of the amount referred to in Art against the bankruptcy estate or a brokerage house. Art Within 30 days from the declaration of bankruptcy of a brokerage house, a receiver or trustee shall determine, based on the books of such a brokerage house, and shall submit in writing to the National Depository the following: 1) a list of investors entitled to receive compensation, specifying the amounts in respect of which the compensation is to be paid; 2) the a brokerage house s liquid assets included in the bankruptcy estate as at the date the bankruptcy is declared; 3) the expenses related to the payment of salaries and wages to the employees of the bankrupt brokerage house, and current expenses related to the bankruptcy proceedings, incurred by the date of preparation of the list of investors, increased by the amount of necessary expenses related to the payment of compensation, along with the current value of the brokerage house s liquid assets administered by the receiver or trustee; 4) the payment schedule. 2. Within 14 days the National Depository shall check the list of investors submitted by the receiver or the trustee, the compliance of the compensation amounts computation with the provisions of this Act and the requirements referred to in Art , and the payment schedule referred to in Art

92 91 3. In the event of reasonable doubts as to the amount of expenses referred to in Art , as determined by the receiver or trustee, the National Depository shall request the judge-commissioner to approve the expenses in accordance with the procedure provided for in Art. 168 of the Bankruptcy and Recovery Law of February 28th 2003 (Dz.U. No. 60, item 535, as amended 9) ); the above shall not prevent the adoption by the National Depository of a resolution on the appropriation of amounts to be paid as compensation. 4. If the National Depository finds that the list of investors is not compliant with the requirements provided for in Art , it shall refuse to accept such a list and shall return the list to the receiver or trustee, of which it shall promptly notify the judge-commissioner. 5. The receiver or trustee shall remove the defects indicated by the National Depository within seven days. 6. After the receiver, court-appointed supervisor or trustee draws up a list of claims or after claims are recognised by virtue of a final court decision, the list referred to in Art shall be supplemented with claims of investors not included in the former list. 7. The provisions of Art shall not prejudice the investor s right to lodge claims with the National Depository for compensation not included in the list referred to in Art Art The management board of the National Depository shall, within seven days as of the acceptance of the list referred to in Art , adopt and publish, by way of an announcement placed in two daily newspapers with nationwide circulation, a resolution on the transfer to the receiver or trustee of the amounts to be paid as compensation, subject to Art The resolution referred to in Art shall define: 1) the amount of the funds to be transferred to the receiver or trustee for payment of compensation, which shall represent the difference between the total compensation payable to the investors and the value of the liquid assets of the brokerage house, less the expenses referred to in Art ; 2) manner of payment of the compensation by the receiver or trustee, including the dates and place of such payment. 3. The amount to be paid as compensation shall be determined based on the entire share of the bankrupt brokerage house in the scheme. 4. The amounts for the payment of compensation, transferred to the receiver or trustee by virtue of the resolution of the management board of the National Depository, shall not be included in the bankruptcy estate and may not be used by the receiver or trustee for any purpose other than the payment of compensation. 9) Amendments to the Act were promulgated in Dz.U. of 2003, No. 217, item 2125; Dz.U. of 2004, No. 91, items 870 and 871, No. 96, item 959, No. 121, item 1264, No. 146, item 1546, No. 173, item 1808 and No. 210, item 2135; and Dz.U. of 2005, No. 94, item 785.

93 92 Art Fr the funds transferred to the receiver or trustee, the National Depository shall acquire rights to a claim against the bankruptcy estate for the return to the compensation scheme of amounts transferred, which shall fall within Category 1 of claims as specified in Art of the Bankruptcy and Recovery Law of February 28th 2003, satisfiable directly after the costs of the bankruptcy proceedings and salaries. The provisions of Art , first sentence, of the Bankruptcy and Recovery Law shall apply accordingly. The claim for the return shall not include the portion of the amounts transferred which corresponds to the bankrupt brokerage house s share in the compensation scheme. Art The receiver or trustee shall be obliged to pay the compensation on the terms and conditions provided for in this Act and in the resolution of the management board of the National Depository, referred to in Art , in line with the payment schedule. 2. After all the payments are made, the receiver or trustee shall account for the amounts paid and shall prepare a report to be submitted to the National Depository within 21 days following the completion of payments. Within the said timeframe, the receiver or trustee shall transfer to the National Depository the amounts which have not been paid to investors, together with the interest accrued at the bank keeping the account in which the amount transferred by the National Depository for payment of compensation has been held, which are to be returned to the compensation scheme. 3. The National Depository shall supervise compliance by the receiver or trustee of the brokerage house with the terms and conditions for compensation payment provided for in this Act and in the resolution of the management board of the National Depository referred to in Art The National Depository shall notify the judge-commissioner of any irregularities found while exercising such supervision, and shall request the receiver or trustee to remedy such irregularities. Art The investors claims against the bankruptcy estate, equal to the amounts paid as compensation, shall be transferred by operation of law to the National Depository, which shall enforce them for the benefit of the compensation scheme. 2. The amounts returned to the National Depository by the receiver or trustee as provided for Art shall not reduce the amount of claims of the National Depository against the bankruptcy estate to be raised in connection with the transfer of funds for the payment of compensation. Art In the event the bankruptcy petition is dismissed by virtue of a final decision on the grounds that the assets of the brokerage house are insufficient to cover the costs of the proceedings, or in the event that own administration referred to in Art of the Bankruptcy and Recovery Law of February 28th 2003 is established with

94 93 respect to all of the assets of the brokerage house, or the Commission ascertains occurrence of the circumstances referred to in Art : 1) the actions referred to in Art , 140.5, Art , Art and to be performed by the receiver or trustee, shall be performed by the management board of the compensation scheme participant, by the general partners of the compensation scheme participant referred to in Art and , or by authorised representatives the compensation scheme participant referred to in Art and ; 2) the provisions of Art and Art , Art , Art. 142, Art , and Art. 144 shall apply accordingly. 2. In the event of declaration of a brokerage house s bankruptcy with an arrangement option, the investors claims against the bankrupt brokerage house with respect to the services provided to such investors (to the extent such services relate to the activities referred to in Art. 69.2, , , and ), up to the compensation amounts to which such investors are entitled, shall not be included in the arrangement. Investors shall be entitled to participate, along with other creditors, in the voting on the arrangement only to the extent such investors claims against the bankrupt brokerage house exceed the compensation to which they are entitled. Art The National Depository shall submit to the Commission an annual report on the operation of the compensation scheme in the previous year, within three months from the last day of the previous financial year. 2. The report on the operation of the compensation scheme shall be subject to an audit by a qualified auditor of financial statements. Part VI Access to Information of Special Nature Chapter 1 Professional Secrecy Art Professional secrecy shall apply to any information obtained by the person specified in Art in connection with the performance of such persons professional duties under an employment or a mandate contract or another legal relation of a similar nature, relating to the legally protected interests of the entities performing activities related to trading in financial instruments, or any other activities performed as part of a statutorily regulated business falling within the scope of supervision by the Commission or a foreign competent authority, or information concerning the activities taken as part such supervision, in particular any information comprising: 1) personal details of a party to an agreement or another legal transaction;

95 2) the contents of an agreement or the subject of a legal transaction; 94 3) information on the economic standing of a party to an agreement, including the designation of a securities account, any other account in which financial instruments other than securities are registered, or of a cash account auxiliary to any such accounts, the number and designation of financial instruments and the value of funds credited to any such accounts. Art The following persons shall be bound by the professional secrecy obligation: 1) brokers and advisers; 2) members of the governing bodies, established pursuant to the articles of association, of: a) an investment firm, b) an entity performing the activities referred to in Art. 71, c) a custodian bank, d) a commodity brokerage house which engages in activities related to trading in financial instruments other than securities, e) companies operating stock exchanges and companies operating over-thecounter markets, f) the National Depository, g) the commercial chamber, h) the associations and the organisations referred to in Art of the Act on Capital Market Supervision; 3) persons employed by the entities enumerated in Art ; 4) persons bound by a legal relation under a mandate contract or in any other legal relation of a similar nature with the entities referred to in Art ; 5) persons employed by the entities bound by a legal relation under a mandate contract or in any other legal relation of a similar nature with the entities referred to in Art ; 6) members of the advisory body referred to in Art. 46.5; 7) any other persons, if their professional secrecy obligation results from other statutory provisions. 2. The professional secrecy obligation shall survive the termination of the legal relations referred to in Art Art Subject to Arts and Art. 20, Art. 21, Art. 23 and Art. 25 of the Act on Capital Market Supervision, information covered by the professional secrecy obligation which is held by the natural persons enumerated in Art , shall be revealed exclusively at the demand of:

96 95 1) a court or a prosecutor, in connection with pending criminal proceedings or proceedings regarding a tax offence; 2) a court or a prosecutor, in connection with a request for legal assistance made by a foreign country which, on the basis of a ratified international agreement binding on the Republic of Poland, has the right to request to be provided with information covered by the professional secrecy obligation; 3) a court, in connection with pending civil proceedings in a case to which an entity being a party to an agreement or another legal transaction covered by the professional secrecy obligation is a party as regards information related to such entity; 4) the General Tax Supervision Inspector, in connection with proceedings pending before a tax supervision authority regarding: a) a tax offence or a tax misdemeanour against a natural person who is a party to an agreement or another legal transaction covered by the professional secrecy obligation as regards information concerning such person, b) a tax offence committed in the performance of activities related to the activity of a legal person or an organisational unit without legal personality which is a party to an agreement or another legal transaction covered by the professional secrecy obligation as regards information concerning such legal person or an organisational unit without legal personality; 5) the President of the Supreme Chamber of Control or an inspector authorised by such President as regards information concerning the entity which is subject to inspection, if such information is necessary to establish the facts in the inspection proceedings, as defined in the Act on the Supreme Chamber of Control of December 23rd 1994 (Dz.U. of 2001, No. 85, item 937, as amended 10 ); 6) the qualified auditor of financial statements who audits the financial statements of the entity referred to in Art on the basis of an agreement as regards information specified in the accountancy laws; 7) the state security services and their officers or soldiers holding a written authorisation as regards information necessary to conduct vetting proceedings on the basis of the laws on the protection of classified information; 8) the police, where necessary to prevent commitment of an offence, to detect an offence or to determine the perpetrator and gain the evidence in compliance with the rules and pursuant to the procedure specified in the Act on the Police of April 6th 1990 (Dz.U. of 2002, No. 7, item 58, as amended 11) ); 10) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2001, No. 154, item 1800, Dz.U. of 2002, No. 153, item 1271, Dz.U. of 2004, No. 123, item 1291 and Dz.U. of 2005, No. 10, item 71 and No. 14, item ) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2002, No. 19, item 185, No. 74, item 676, No. 81, item 731, No. 113, item 984, No. 115, item 996, No. 153, item 1271, No. 176, item 1457 and No. 200, item 1688, Dz.U. of 2003, No. 90, item 844, No. 113, item 1070, No. 130, items 1188 and 1190, No. 137, item 1302, No. 166, item 1609, No. 192, item 1873 and No. 210, item 2036, Dz.U. of 2004, No. 171, item 1800, No. 179, item 1842, No. 210, item 2135, No. 273, item 2703 and No. 277, item 2742, and Dz.U. of 2005, No. 10, item 70.

97 96 9) a court enforcement officer, in connection with pending proceedings to safeguard claims or enforcement proceedings concerning claims against the entity which is a party to an agreement or another legal transaction covered by the professional secrecy obligation as regards he information concerning such entity; 10) an enforcement authority, in connection with the conduct of administrative enforcement proceedings regarding duties of an entity which is a party to an agreement or another legal transaction covered by the professional secrecy obligation as regards information concerning such entity. Art The professional secrecy obligation shall not be deemed breached by disclosure of information covered by professional secrecy: 1) directly to the person to which such information relates or to another entity whom such person authorised in writing to receive such information, subject to Art ; 2) in a notification of an offence and any documents submitted in connection with such notification; 3) to the General Inspector for Financial Information to the extent and on the terms defined in the Act on Prevention of Money Laundering Practices and Financing of Terrorism of November 16th 2000 (Dz.U. of 2003, No. 153, item 1505 and Dz.U. of 2004, No. 62, item 577, No. 96, item 959 and No. 116, item 1203); 4) to the General Tax Supervision Inspector or persons authorised by the General Tax Supervision Inspector to the extent such information is necessary for the performance of the Inspector s statutory duties; 5) to the Head of the National Centre for Crime-Related Information in accordance with the rules specified in other regulations, to the extent such information is necessary for the performance of the Head s statutory duties; 6) to tax authorities in accordance with the rules specified in other regulations, to the extent such information is necessary for the performance of their statutory duties; 7) by a brokerage house to the bank which is its parent entity within the meaning of Art of the Banking Law of August 29th 1997 for the purpose of preparation of consolidated financial statements, and to the Banking Supervision Commission to the extent such information is necessary for the purpose of exercising supervision over such bank on a consolidated basis in line with the rules determined in the aforementioned Banking Law; 8) by investment firms and custodian banks: a) in the case referred to in Art. 54 and Art. 152, b) to the extent and in accordance with the rules provided for in the Act on the Availability of Business Information of February 14th 2003 (Dz.U. No. 50, item 424 and Dz.U. of 2004, No. 68, item 623 and No. 116, item 1203);

98 97 9) by a brokerage house, a foreign legal person referred to in Art or a foreign investment firm: a) to the ultimate parent entity as defined in Art. 4.5 and Art. 4.6 of the Act on the Supplementary Supervision of Credit Institutions, Insurance Undertakings and Investment Firms in a Financial Conglomerate, dated April 15th 2005 (Dz.U. No. 83, item 719), hereinafter referred to as the Supplementary Supervision Act, b) to a coordinator, as defined in Art of the Supplementary Supervision Act, c) to a foreign coordinator, as defined in Art of the Supplementary Supervision Act in performance of the obligations specified in the Supplementary Supervision Act; 10) by the National Depository, brokerage houses, banks conducting brokerage activities and custodian banks to the extent specified in Art of the Insurance Activities Act of May 22nd 2003; 11) by the participants of the National Depository to a public company, in the case referred to in Art of the Public Offering Act; 12) between the Commission or a competent authority in another Member State, and: a) a qualified auditor of financial statements who audits the financial statements of a brokerage house, a bank conducting brokerage activities or a bank keeping securities accounts; or the qualified auditor of financial statements who audits the financial statements of a foreign investment firm, b) a judge-commissioner, court-appointed supervisor, receiver, trustee, or liquidator of a brokerage house, a bank conducting brokerage activities or a bank keeping securities accounts; or an authority responsible for conducting bankruptcy or liquidation proceedings of a foreign investment firm, if such information is necessary for the performance of supervisory responsibilities by the Commission or the competent authority in another member State, or for an efficient conduct of bankruptcy proceedings, administration of bankruptcy estate or conduct of liquidation, or with respect to information specified in the accountancy regulations for the purpose of auditing financial statements of such brokerage houses, banks, or foreign investment firms; 13) to the National Depository if such information is necessary for the performance of its statutory duties, particularly those related to the establishment, organisation and management of the compensation scheme; 14) by the Commission or its authorised representative: a) to the public as regards the contents of the adopted resolutions and decisions, including those concerning individual cases, on the basis of which administrative decisions are issued if the Commission finds the

99 98 disclosure of such information to be justified by the interest of the securities market, the commodity market or the investment funds market, b) to the public in line with the procedure and on the terms specified in Art of the Act on Capital Market Supervision, c) in explanatory proceedings in the case referred to in Art of the Act on Capital Market Supervision, d) in performance of the agreements referred to in Art. 20 and Art. 23 of the Act on Capital Market Supervision, e) in the cases specified in Art. 151 and in Art of the Act on Capital Market Supervision and in Art of the Public Offering Act; 15) by the Commission: a) to an exchange clearing house operating pursuant to the Act on Commodity Exchanges of October 26th 2000, as regards the clearing of transactions in broker-traded financial instruments if such information is necessary for the performance of statutory duties of such clearing house, particularly those related to ensuring proper performance by such house members of their obligations under such transactions, b) to the Governor of the National Bank of Poland, if such information is necessary for the performance of statutory duties of the National Bank of Poland with respect to monetary policy and supervision over the payment system; 16) in the cases specified in Art. 40 and Persons referred to in Art shall be obliged to keep confidential the information regarding the provision of information to the police under Art of the Act on the Police of April 6th 1990, as well as the information regarding the notification referred to in Art of the Act on the Police. The confidentiality obligation shall remain effective with respect to the persons to whom such information relates and with respect to third parties, with the exception of Commission s representatives and employees of the office of the Commission to whom such information is conveyed in connection with the performance of the statutory supervisory responsibilities. Art The Commission may also provide the information held by it which is covered by the professional secrecy obligation: 1) to the disciplinary ombudsman or the disciplinary court of the association referred to in Art a-b of the Act on Capital Market Supervision, exclusively to the extent necessary to ascertain, for the purposes of initiation or conduct of disciplinary proceedings, whether a broker or an adviser has violated the principles of professional ethics; 2) a chamber court ombudsman or a chamber court, solely to the extent necessary to ascertain, for the purposes of ongoing proceedings, whether a member of the commercial chamber has violated the principles of ethics or fair business practice;

100 99 3) the National Depository, a company operating a stock exchange or a company operating an OTC market, to the extent such information is necessary for the performance of their statutory duties. Art Investment firms and custodian banks may exchange information covered by the professional secrecy obligation and concerning the debt owed to them by customers to whom they provide services, to the extent to which such information is necessary to protect their interests against unreliable customers. Art The professional secrecy obligation shall also apply to the persons to whom information covered by such obligation has been disclosed in the cases referred to in Arts or Art. 20, Art. 21 and Art. 23 of the Act on Capital Market Supervision, unless the disclosure of such information by such persons is permitted under other provisions of the law. 2. Persons referred to in Art and those referred to in Art , shall be liable for any damage inflicted as a result of unlawful disclosure of information covered by the professional secrecy obligation and the use of such information for an illegitimate purpose. 3. Persons referred to in Art shall not be liable for any damage inflicted as a result of disclosure and illegitimate use of the information covered by the professional secrecy obligation by the persons to whom such information has been provided on the basis of Arts or Art. 20, Art. 21 and Art. 23 of the Act on Capital Market Supervision. Chapter 2 Inside Information Art Inside information within the meaning of this Act shall be any information of a precise nature, relating, whether directly or indirectly, to one or more issuers of financial instruments, one or more financial instruments, or acquisition or disposal of such instruments, which has not been made public and which, if made public, would be likely to have a significant effect on the prices of financial instruments or related derivative financial instruments, with the proviso that such information: 1) shall be considered of a precise nature if such information discloses circumstances or events which have happened or may reasonably be expected to happen, and such information is sufficient to assess the potential effect of such circumstances or events on the price or value of financial instruments or related derivative financial instruments; 2) shall be considered to be likely, if made public, to have a significant effect on the price or value of such financial instruments or the price of related derivative

101 100 financial instruments if such information is likely to be taken into account by a reasonable investor in making an investment decision; 3) shall be considered inside information in relation to persons executing orders concerning financial instruments also if it is disclosed to such person by an investor or another person who is aware of such orders and it relates to investor s orders to acquire or dispose of financial instruments, provided that the premises specified in Art and are satisfied. Art In the case of derivatives on commodities, inside information shall be understood to mean any information of a precise nature, relating, whether directly or indirectly, to one or more derivatives on commodities traded on commodity exchanges which has not been made public and which could be expected by the market participants to be made public in line with the established market practice. The market participants may in particular expect the disclosure of such information which should be disclosed to market participants on a regular basis or whose disclosure is required under regulations, agreements and practice applicable on such commodity exchanges markets. 1. Anyone who: Art ) gains inside information by virtue of membership in the governing bodies of the company, by virtue of an interest in the capital of the company, or as a result of having access to inside information in connection with employment, practised profession, or a mandate contract or any other contract of a similar nature, and in particular: a) the members of the management board, supervisory board, proxies or attorneys-in-fact of the issuer, its employees, qualified auditors or other persons related to the issuer under any mandate contract or any legal relation of a similar nature, or b) shareholders of a public company, or c) persons employed or holding posts referred to in Art a in the subsidiary or parent entity of the issuer of financial instruments admitted or sought to be admitted to trading on the regulated market, or bound with such entity under a mandate contract or any other legal relation of a similar nature, or d) brokers or advisers, or 2) gains inside information through criminal activities, or 3) gains inside information in a manner other than described in Art and if such person has known or, acting with due diligence, could have known such information to be inside information, is prohibited from using such information. 2. The persons referred to in Art shall not: 1) disclose inside information;

102 101 2) recommend or induce another person on the basis of inside information to acquire or dispose of financial instruments to which such information relates. 3. If inside information is gained by a legal person or an organisational unit without legal personality the prohibition specified in Art shall also apply to the natural persons who participate in investment decisions made in the name or for the account of such legal person or an organisational unit without legal personality. 4. Use of the inside information shall consist in acquisition or disposal of financial instruments for one s own account or for the account of a third party effected on the basis of inside information held by a given person, or any other legal transaction undertaken for one s own account or for the account of a third party which leads or might lead to disposal of such financial instruments, if such instruments: 1) are admitted or sought to be admitted to trading on a regulated market in the territory of the Republic of Poland or another Member State (irrespective of whether the transaction in such instruments is executed on such market), or 2) are not admitted to trading on a regulated market in the territory of the Republic of Poland or another Member State but their price or value depends, whether directly or indirectly, on the price of the financial instrument referred to in Art Disclosure of inside information shall consist in communicating to an unauthorised person, or enabling such unauthorised person to gain, or facilitating the gaining by such person of, inside information concerning: 1) one or more issuers of financial instruments referred to in Art ; 2) one or more financial instruments referred to in Art ; 3) acquisition or disposal of any financial instruments referred to in Art The prohibition of disclosure of inside information shall not apply to the disclosure of such information: 1) by persons referred to in Art , if such disclosure is made as part of the ordinary course of such person s employment, practising such person s profession or performing such person s duties, provided that relevant measures have been taken to ensure that such information will be kept confidential by the persons to whom it has been disclosed; 2) in under and in accordance with Art of the Act on Capital Market Supervision; 3) on the basis of: a) Art and 160.4; b) Art. 24 of the Act on Capital Market Supervision; c) Art. 66 of the Public Offering Act; 4) by the Commission or its authorised representative to the General Inspector for Financial Information, to the extent and on the terms defined in other regulations; 5) in connection with the activities described in Art The following actions shall not be deemed the use of inside information:

103 102 1) transactions carried out in performance of the statutory responsibilities concerning the monetary, exchange-rate or public debt-management policies of a state, executed by authorised representatives of relevant governmental authorities, including the National Bank of Poland, as well as by the European System of Central Banks; 2) acquisition of financial instruments with a view to stabilising their prices on a regulated market, provided that such acquisition is made in the manner, time and on the terms specified in the regulations referred to in Art ; 3) acquisition of own shares by a public company or an entity acting for its account, provided that such acquisition is made in the manner, time and on the terms specified in regulations referred to in Art ; 4) transactions carried out to discharge an obligation to dispose of or acquire financial instruments, where such obligation results from a written agreement with the date certified by a notary public, concluded before the person concerned gained the inside information. 8. The prohibition of recommending or inducing another person to acquire or dispose of financial instruments on the basis of inside information which relates to such instruments shall not apply to the disclosure of information made in connection with the actions enumerated in Art Art If in the course of the activities specified in Art the issuer of financial instruments admitted to trading on a regulated market in the territory of the Republic of Poland or another Member State, irrespective of whether transactions in a given instrument are executed on such market, or any person acting in the name or on behalf of the issuer, discloses inside information to an unauthorised person, the issuer shall if the disclosure was intentional simultaneously disclose such information to the Commission, a company operating a regulated market where the issuer securities are traded, and shall make it available to the public as provided for in Art of the Public Offering Act, and if the disclosure was unintentional shall promptly disclose such information, unless the person who has obtained such information is bound by an obligation to keep it confidential under the provisions of other laws, a relevant agreement or articles of association. Art The issuer of financial instruments admitted to trading on a regulated market in the territory of the Republic of Poland or another Member State, irrespective of whether transactions in a given instrument are executed on such market, shall prepare and maintain separate lists of natural persons who have access to specific inside information and who are employed, mandated or otherwise legally engaged by the issuer (including members of the issuer s supervisory bodies) or other entity acting in its name and on its behalf. 2. On entering the name of a person who gains access to specific inside information into the list referred to in Art , the issuer shall advise such person of criminal and administrative sanctions for illegal disclosure of inside information, including disclosure caused by inadequate protection of such information or by use thereof.

104 At the demand of the Commission or its authorised representative, the issuer shall promptly submit the lists referred to in Art , shall provide information about new entries in the list made after the date as at which it was prepared and about any changes of the data included therein. Art During a restricted period persons enumerated in Art a may not acquire or dispose of, for their own account or for the account of a third party, any of the issuer shares, derivative rights attached thereto or other financial instruments related to such shares, and may not take for their own account or for the account of a third party any other legal transactions which lead or might lead to the disposal of such financial instruments. 2. Restricted period shall mean: 1) the period between the time when a natural person referred to in Art a gains inside information concerning the issuer or the financial instruments referred to in Art which meet the conditions specified in Art and the time when such information is made public; 2) in the case of an annual report the period of two months preceding the publication of such report or, if shorter, the period between the end of a given financial year and the publication of such report, unless a natural person referred to in Art a had no access to the financial data on the basis of which such report was prepared; 3) in the case of a semi-annual report the period of one month preceding the publication of such report or, if shorter, the period between the end of a given half year and the publication of such report, unless a natural person referred to in Art a had no access to the financial data on the basis of which such report was prepared; 4) in the case of a quarterly report the period of two weeks preceding the publication of such report or, if shorter, the period between the end of a given quarter and the publication of such report, unless a natural person referred to in Art a had no access to the financial data on the basis of which such report was prepared. 1. Persons: Art ) who are members of the issuer s management and supervisory bodies or who are issuer s proxies, 2) other persons who hold management posts in the organisational structure of the issuer, have permanent access to inside information related, whether directly or indirectly, to the issuer, and are authorised to make decisions concerning the issuer s development and economic prospects shall notify the Commission or the issuer of any transactions executed by them or by persons related to them for their own account, whereby they acquire or dispose of any issuer shares, derivative rights attached thereto and other financial

105 104 instruments related to the issuer shares admitted or sought to be admitted to trading on a regulated market. 2. Related persons of the person referred to in Art shall be: 1) such person s spouse or cohabitating partner; 2) such person s dependant children and persons related through adoption, custody or guardianship; 3) other persons related through blood or marriage who are members of the same household with such person for at least one year; 4) entities: a) in which the person referred to in Art or such person s related person referred to in Art is a member of the management or supervisory body or holds a management post within the organisational structure of such entity, has permanent access to inside information related to such entity and is authorised to make decisions concerning such entity s development and economic prospects, or b) which are directly or indirectly controlled by the person referred to in Art or such person s related person referred to in Art , or c) from whose activities the person referred to in Art or such person s related person referred to in Art derives profits, or d) whose economic interests are equivalent to the economic interests of the person referred to in Art or such person s related person referred to in Art Entities described in Art shall be obliged to provide the persons referred to in Art or their related persons with any information required to ensure due performance of the obligation specified in Art The issuer shall be obliged to promptly disclose any information which was disclosed to him pursuant to Art simultaneously to a company operating a regulated market where the issuer securities are traded and to the public as provided for in Art of the Public Offering Act. 5. The minister competent for financial institutions shall define, by way of a regulation: 1) the detailed scope of the information referred to in Art as well as the manner and time for disclosing such information by the obliged persons, 2) the detailed scope, manner and time for disclosing such information by the issuers, 3) the detailed information to be included in the list of persons having access to inside information referred to in Art. 158, the manner of keeping and updating such list and the for which it must be stored taking into account the proper performance by the Commission of its supervisory responsibilities and the need to provide market participants with access to information.

106 105 Art The regulated entities specified in Art , 5.12 and 5.13 of the Act on Capital Market Supervision shall promptly notify the Commission of any reasonable suspicion of illegal disclosure or use of inside information to the extent, by way of a procedure and on the terms provided for in Art The obligation mentioned in Art shall also apply to: 1) domestic banks and branches of credit institutions as defined in the Banking Law of August 29th 1997, which are not regulated entities and which conduct activities specified in Art. 69.2; 2) entities which conduct activities specified in Art , and in Art The prohibitions and requirements referred to in Arts , including those resulting from the regulations issued under Art , shall apply to cases specified in Art Part VII Fees and Charges Art Granting licences, authorisations and approvals provided for in this Act shall be subject to the payment of a fee of up to the złoty equivalent of EUR 4,500. Art Each company operating the regulated market and the National Depository shall pay regulatory fees totalling up to 0.03% of the value of rights transfer agreements concluded on the regulated market. 2. Each entity organising an alternative trading system shall pay regulatory fees totalling up to 0.03% of the value of rights transfer agreements concluded as part of such a system, with the exception of agreements concerning securities issued by the State Treasury or the National Bank of Poland, or securities incorporating transferable property rights attached to securities issued by the State Treasury or the National Bank of Poland. 3. Each investment firm entering into the transactions referred to in Art shall pay regulatory fees totalling up to 0.015% of the value of rights transfer agreements. 4. Each investment firm entering, for its own account, into a sale agreement with the customer placing an order to acquire or dispose of broker-traded financial instruments other than securities, admitted to organised trading, shall pay regulatory fees totalling up to 0.015% of the rights transfer agreements. 4. Each foreign investment firm conducting brokerage activities in the territory of the Republic of Poland and each foreign legal person conducting such activities in the territory of the Republic of Poland through a branch shall pay the fees referred to in Art , unless, on a reciprocal basis, such fees are not charged on Polish

107 106 entities conducting brokerage activities in the countries where such foreign entities have their registered offices. Art The application and distribution of proceeds from the fees and charges referred to in Art. 162 and Art. 163, as well as determination of the amount, the manner of charging and the payment thereof shall be performed in accordance with the procedure and on the terms and conditions stipulated in Art. 17 of the Act on Capital Market Supervision. Part VIII Administrative Sanctions for Infringement of Regulations Art If a company operating a stock exchange violates the provisions of the law, fails to comply with the principles of fair trading or compromises the interest of trade participants, the Commission may impose a pecuniary penalty of up to PLN 1,000, The relevant decision shall be issued following a hearing. 3. The Commission may also apply to the minister competent for financial institutions for revoking the authorisation to operate a stock exchange if the company operates the stock exchange in breach of the provisions of the law, fails to comply with the principles of fair trading or compromises the interest of trade participants. Art If a company operating an OTC market violates the provisions of the law, fails to comply with the principles of fair trading or compromises the interest of trade participants, the Commission may: 1) impose a pecuniary penalty of up to PLN 1,000,000, 2) revoke the authorisation referred to in Art. 36.1, or 3) revoke the authorisation and impose the pecuniary penalty referred to in Art The relevant decision shall be issued following a hearing. Art Subject to Art , the Commission may revoke the brokerage licence or limit its scope if an investment firm: 1) grossly violates the provisions of the law, in particular the regulations issued under Art and ; 2) fails to comply with the principles of fair trading; 3) compromises the customer s interest;

108 107 4) has discontinued the activities specified in the licence for at least six months; 5) no longer meets the conditions on the basis of which the licence was granted, subject to Art ; 6) has been granted the licence on the basis of misrepresentations or false documents. 2. In the cases referred to in Art or Art , the Commission may also: 1) choose not to apply the sanctions referred to in Art but impose a pecuniary penalty of up to PLN 500,000 on the investment firm, or 2) impose one of the sanctions referred to in Art and the pecuniary penalty referred to in Art if justified by the nature of the investment firm misconduct. 3. The Commission may also impose the sanctions referred to in Art or on an investment firm which has commissioned an agent to perform the activities referred to in Art if, in connection with its services for the investment firm, the agent violates the provisions of the law or the principles of fair trading or compromises customers interests. 4. The entity whose brokerage licence has been revoked shall not reapply for such a licence for five years from the date when the decision revoking the licence became final, unless the Commission agrees to shorten this period. 5. If justified by the need to protect the public interest, the Commission may suspend, in whole or in part, the authorisation to conduct brokerage activities for up to one month from the initiation of the proceedings concerning matters referred to in Art The Commission may impose a pecuniary penalty of up to PLN 500,000 on the entity performing the activities referred to in Art in breach of the regulations issued under Art The relevant decision shall be issued following a hearing. 8. The Commission s resolution serving as a basis for the decision referred to in Art shall be published in the Official Journal of the Polish Securities and Exchange Commission. The Commission may order that the resolution be published in two daily newspapers with nationwide circulation at the cost of the entity referred to in Art or The provisions of Art , and shall apply accordingly if the Commission becomes aware of an infringement of the regulations governing brokerage activities in another Member State by a brokerage house conducting brokerage activities in such a state. In this case, the Commission shall inform the competent authority in the Member State about the sanctions imposed. 1. If the custodian bank: Art ) grossly violates the provisions of the law, in particular the regulations issued under Art and , 2) fails to comply with the principles of fair trading, or

109 108 3) compromises the customer s interest, the Commission may impose a pecuniary penalty of up to PLN 500,000 on the custodian bank, subject to Art If justified by the nature of the custodian bank s misconduct, the Commission may revoke the authorisation to conduct custodial activities. 3. The provisions of Art , and shall apply accordingly to custodian banks. Art If the Commission ascertains that a foreign investment firm or an investment firm s agent representing a foreign investment firm violates the provisions of the laws regulating brokerage or custodial activities binding in the Republic of Poland, it shall order, by way of a decision, that the foreign investment firm discontinue the violation and shall determine the deadline for remedying such violation. 2. The Commission shall notify the authority competent for the foreign investment firm of the violation referred to in Art and failure to meet the deadline for remedying such violation. 3. If the foreign investment firm referred to in Art fails to discontinue or remedy the violation within the set timeframe, then following the lapse of one month from the time the competent authority was notified in accordance with Art , the Commission may take the following steps: 1) prohibit, in whole or in part, the conduct of brokerage or custodial activities in the Republic of Poland, or 2) suspend, in whole or in part, the right to conduct brokerage or custodial activities in the Republic of Poland for up to six months, or 3) impose a pecuniary penalty of up to PLN 500,000, or 4) impose one of the sanctions referred to in Art and and the pecuniary penalty specified in Art ; and shall concurrently inform the authority competent for the foreign investment firm that such steps have been taken. 4. The relevant decision shall be issued following a hearing. 5. The Commission s resolution serving as the basis for the decision referred to in Art shall be published in the Official Journal of the Polish Securities and Exchange Commission. The Commission may order that the resolution be published in two daily newspapers with nationwide circulation at the cost of the foreign investment firm. 6. If a foreign investment firm is prohibited from conducting brokerage or custodial activities in the Republic of Poland, it shall not resume such activities for five years from the date when the decision prohibiting such activities became final, unless the Commission agrees to shorten this period. 7. If justified by the need to protect the public interest, before taking the steps referred to in Art , the Commission may, suspend, in whole or in part, the right to conduct brokerage or custodial activities by a foreign investment firm in the Republic of Poland for up to one month, and shall notify accordingly the European

110 109 Commission and competent authority in another Member State which has granted the authorisation to the foreign investment firm. 8. The Commission shall notify the European Commission of the sanctions imposed in accordance with Art The provisions of Art. 167 shall not apply to foreign investment firms conducting brokerage activities in the Republic of Poland. Art If the National Depository violates the provisions of the law, fails to comply with the principles of fair trading or compromises the interest of trade participants, the Commission may impose a pecuniary penalty of up to PLN 1,000, The relevant decision shall be issued following a hearing. Art By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 500,000 on anyone who fails to make the notification referred to in Art. 24.1, Art. 47.1, Art or Art , or fails to do so acting in the name or interest of a legal person or an organisational unit without legal personality. 2. By way of a decision, the Commission may also impose the pecuniary penalty referred to in Art on any person who acquires or subscribes for shares despite the objections referred to in Art. 24.3, Art or Art , or does so in the name or interest of a legal person or an organisational unit without legal personality. 3. The decision referred to in Art or shall be issued following a hearing. 4. The Commission s resolution serving as the basis for the decision referred to in Art or shall be published in the Official Journal of the Polish Securities and Exchange Commission. The Commission may order that the resolution be published in two daily newspapers with nationwide circulation at the cost of the party concerned. Art By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 200,000 or a pecuniary penalty of up to ten times the financial benefit gained, or both, on anyone who engages in the market manipulation referred to in Art b or The same penalties shall be imposed on anyone who engages in collusion with other persons for the purpose of market manipulation. 3. The relevant decision shall be issued following an hearing. 4. The resolution serving as a basis for the decision referred to in Art shall be published, in whole or in part, by the Commission in its Official Journal, or the Commission may order that the resolution be published in two daily newspapers with nationwide circulation at the cost of the party concerned, unless such publication could cause disproportionate damage to trade participants or pose a serious threat to financial markets.

111 110 Art By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 1,000,000 on anyone who stabilises the prices of financial instruments, or orders such stabilisation, in breach of the rules laid down in the relevant issue prospectus or of the regulations referred to in Art By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 1,000,000 on any entity which acquires its own shares in breach of the provisions of Art By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 1,000,000 on anyone who acquires shares in a company operating a stock exchange market or an OTC market without being entitled to do so. 4. By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 1,000,000 on anyone who fails to deliver the information referred to in Art. 40 or delivers such information in breach of the provisions of Art By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 1,000,000 on anyone who fails to deliver the information referred to in Art. 161 or delivers such information in breach of the provisions of Art The same penalty may be imposed on anyone who commits the acts specified in Art while acting in the name or interest of a legal person or an organisational unit without legal personality. 7. By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 1,000,000 on anyone who prepares recommendations concerning financial instruments or issuers thereof, for dissemination among investors, or who disseminates such recommendations, in breach of the regulation referred to in Art. 42.2, or who in doing so fails to exercise due care, ensure reliability of the recommendations, disclose legitimate interests or conflicts of interests existing at the time such recommendations are prepared or disseminated. 8. In the decision imposing a penalty, the Commission may determine a deadline for the performance of the obligation or act which is required under applicable regulations the breach of which was the reason for imposing the pecuniary penalty. If the obligation or act is not performed by such deadline, the Commission may again, by way of a decision, impose a pecuniary penalty. 9. The relevant decision shall be issued following a hearing. Art By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 200,000 on any of the persons enumerated in Art a if during the restricted period they commit the actions set forth in Art , unless such person has commissioned an authorised entity conducting brokerage activities to manage such person s securities portfolio in a manner which excludes such person s influence on the decisions made for its account. 2. The relevant decision shall be issued following a hearing.3. The resolution serving as a basis for the decision referred to in Art shall be published, in whole or in part, by the Commission in its Official Journal, or the Commission may order that the resolution be published in two daily newspapers with national

112 111 circulation at the cost of the party concerned, unless such publication could cause disproportionate damage to trade participants or pose a serious threat to financial markets. 4. The Commission s powers referred to in Art shall apply in the cases specified in Art Art By way of a decision, the Commission may impose a pecuniary penalty of up to PLN 100,000 on any person who fails to perform or unduly performs the obligation referred to in Art , unless such person: 1) has commissioned an authorised entity conducting brokerage activities to manage such person s securities portfolio as a result of which such person has no knowledge of the transactions executed by the portfolio manager; 2) did not or could not know, despite exercising due care, of the execution of the transaction. 2. The relevant decision shall be issued following a hearing. Art If the issuer or the selling shareholder fails to perform or unduly performs the obligations referred to in Art. 157 and Art. 158, or the obligations under regulations issued under Art , the Commission may: 1) issue a decision that the relevant securities be excluded from trading on the regulated market, 2) impose a pecuniary penalty of up to PLN 1,000,000, or 3) issue a decision that the securities be, for a definite or indefinite period, excluded from trading on the regulated market and impose the pecuniary penalty referred to in Art The provisions of Art. 19, Art , and of the Public Offering Act shall apply accordingly. Part IX Civil Liability Art The certificate issuer shall be liable for any damage caused by the issuance of an invalid certificate, issuance of a certificate to a person who is not entitled to such certificate, or failure to block securities in connection with the issuance of a certificate, unless such damage is caused by an occurrence of force majèure or the exclusive fault of the party which has suffered the damage or a third party for which the certificate issuer is not responsible. 2. If the issuer of a certificate has acted upon another person s instruction, the liability of the issuer and such person shall be joint and several and may not be limited or disclaimed in advance.

113 112 Part X Penalties Art Anyone who engages in trading in broker-traded financial instruments without the required a licence or an authorisation provided for in other regulations, or any other statutory authorisation, shall be liable to a fine of up to PLN 5,000,000. Art Anyone who is bound by the professional secrecy obligation and who discloses or uses information covered by such obligation in securities trading shall be liable to a fine of up to PLN 1,000,000 or a penalty of imprisonment for up to three years, or to both these penalties jointly. Art Anyone who, in violation of the prohibition referred to in Art , discloses inside information shall be liable to a fine of up to PLN 2,000,000 or a penalty of imprisonment for up to three years, or to both these penalties jointly. Art Anyone who, in violation of the prohibition referred to in Art , uses inside information shall be liable to a fine of up to PLN 5,000,000 or a penalty of imprisonment for a period from three months to five years, or to both these penalties jointly. 2. If the act referred to in Art is perpetrated by a person referred to in Art a, the perpetrator shall be liable to a fine of up to PLN 5,000,000 or a penalty of imprisonment for a period from six months to eight years, or to both these penalties jointly. Art Anyone who, in violation of the prohibition referred to in Art , issues a recommendation or induces another person to acquire or dispose of financial instruments to which inside information relates shall be liable to a fine of up to PLN 2,000,000 or a penalty of imprisonment for up to three years, or to both these penalties jointly. Art Anyone who engages in the market manipulation referred to in Art , a or shall be liable to a fine of up to PLN 5,000,000 or a penalty of imprisonment for a period from three months to five years, or to both these penalties jointly.

114 Anyone who engages in collusion with other persons for the purpose of the market manipulation referred to in Art , a or shall be liable to a fine of up to PLN 2,000,000. Art Anyone who prevents or obstructs the performance of the actions referred to in Art , Art. 37 in conjunction with Art. 30 and Art. 64, Art. 88, Art and Art. 122 shall be liable to a penalty of a detention or restriction of freedom, or to a fine. 2. The same penalty may be imposed on anyone who, acting in the name or interest of a legal person or an organisational unit without legal personality: 1) fails to perform the transfer of securities, other broker-traded financial instruments and cash or documents relating to the keeping of the relevant accounts, contrary to the order referred to in Art. 89.4; 2) fails to archive or store documents or other data carriers related to the conducted brokerage or custodial activities in breach of the obligation referred to in Art Adjudication in the cases specified in Art shall be governed by the regulations pertaining to proceedings concerning minor offences. Part XI Amendments to Legislation in Force Art In the Act of March 24th 1920 on Acquisition of Real Estate by Foreign Nationals (Dz.U. of 2004, No. 167, item 1758, and Dz.U. of 2005, No. 94, item 788), Art. 3e.3 shall read as follows: 3. The provisions of Art. 3e.1-2 shall not apply where the company shares have been admitted to trading on a regulated market or where the company is the owner or perpetual usufructuary of the real estate specified in Art , 8.1.1a and 8.1.5, subject to Art Art The following amendments are hereby made to the Code of Civil Procedure of November 17th 1964 (Dz.U. No. 43, item 296, as amended 12) ): 12) Amendments to the Code were promulgated in Dz.U. of 1965, No. 15, item 113; Dz.U. of 1974, No. 27, item 157, No. 39, item 231; 1975, No. 45, item 234; Dz.U. of 1982, No. 11, item 82 and No. 30, item 210; Dz.U. of 1983, No. 5, item 33; Dz.U. of 1984, No. 45, item 241; Dz.U. of 1985, No. 20, item 86; Dz.U. of 1987, No. 21, item 123; Dz.U. of 1988, No. 41, item 324; Dz.U. of 1989, No. 4, item 21 and No. 33, item 175; Dz.U. of 1990, No. 14, item 88, No. 34, item 198, No. 53, item 306, No. 55, item 318 and No. 79, item 464; Dz.U. of 1991, No. 7, item 24, No. 22, item 92 and No. 115, item 496; Dz.U. of 1993, No. 12, item 53; Dz.U. of 1994, No. 105, item 509; Dz.U. of 1995, No. 83, item 417; Dz.U. of 1996, No. 24, item 110, No. 43, item 189, No. 73, item 350 and No. 149, item 703; Dz.U. of 1997, No. 43, item 270, No. 54, item 348, No. 75, item 471, No. 102, item 643, No. 117, item 752, No. 121, items 769 and 770, No. 133, item 882, No. 139, item 934, No. 140,

115 1) Art shall read as follows: 114 Art In the case of security comprising seizure of rights attached to financial instruments registered in a securities account or another account as defined in the regulations on trading in financial instruments, the obligated party may, within three months from the seizure date, order the financial instruments to be sold. The proceeds from such sale shall be deposited to a court s escrow account. The obligated party may also order that cash maintained in such party s account be paid to the court s escrow account. The provisions of Art. 752 shall apply accordingly. ; 2) Art shall read as follows: Art The enforcement officer may sell seized securities not registered in a securities account through the agency of an investment firm, as defined in the regulations referred to in Art Such sale may be executed within one month from the seizure date. Upon the debtor s consent, such sale may also be executed at a later time. An expert should be appointed for the determination of the selling price. Upon the debtor s request, the sale may be executed at a price specified by the debtor. ; 3) Art shall read as follows: Art The enforcement officer shall commence enforcement against financial instruments registered in a securities account or another account with the seizure thereof. To this end, the enforcement officer shall: 1) notify the debtor that he must not collect any benefits from or dispose of the seized securities or other assets accumulated in the account, unless under orders referred to in Art ; 2) call upon the entity conducting brokerage activities which keeps the debtor s account to refrain from executing the debtor s instructions with the exception of orders referred to in Art , as well as from paying out to the debtor any funds deposited in the debtor s account, and to deliver to the enforcement officer the seized funds, up to the value of the enforced claim, or credit the same to the court escrow account. 2. If the funds in the debtor s account are insufficient to cover the enforced claim, the entity conducting brokerage activities which keeps item 940 and No. 141, item 944; Dz.U. of 1998, No. 106, item 668 and No. 117, item 757; Dz.U. of 1999, No. 52, item 532; Dz.U. of 2000, No. 22, items 269 and 271, No. 48, items 552 and 554, No. 55, item 665, No. 73, item 852, No. 94, item 1037, No. 114, item 1191 and No. 122, items 1314, 1319 and 1322; Dz.U. of 2001, No. 4, item 27, No. 49, item 508, No. 63, item 635, No. 98, items 1069, 1070 and 1071, No. 123, item 1353, No. 125, item 1368 and No. 138, item 1546; Dz.U. of 2002, No. 25, item 253, No. 26, item 265, No. 74, item 676, No. 84, item 764, No. 126, items 1069 and 1070, No. 129, item 1102, No. 153, item 1271, No. 219, item 1849 and No. 240, item 2058; Dz.U. of 2003, No. 41, item 360, No. 42, item 363, No. 60, item 535, No. 109, item 1035, No. 119, item 1121, No. 130, item 1188, No. 139, item 1323, No. 199, item 1939 and No. 228, item 2255; Dz.U. of 2004, No. 9, item 75, No. 11, item 101, No. 68, item 623, No. 91, item 871, No. 93, item 891, No. 121, item 1264, No. 162, item 1691, No. 169, item 1783, No. 172, item 1804, No. 204, item 2091, No. 210, item 2135, No. 236, item 2356 and No. 273, item 2384; and Dz.U. of 2005, No. 13, item 98, No. 22, item 185, No. 86, item 732 and No. 122, item 1024.

116 115 such debtor s account shall promptly call upon the debtor to place, within three days, a sell order so as to secure satisfaction of the creditor for one month, indicating which of the deposited financial instruments are to be the subject of such a sell order. If the financial instruments thus seized have earlier been seized under a claims safeguarding decision, the debtor s sell order pertaining to such financial instruments shall be executed following the seizure performed in the course of enforcement, provided that the debtor has placed the sell order by the date specified in Art If the debtor fails to perform the action referred to in Art or, despite performing this action the financial instruments are not sold, the entity keeping the account shall within three days notify the debtor through the enforcement officer of the financial instruments deposited in the account. The creditor shall then place a sell order for selected financial instruments. 4. If the creditor fails to place a sell order referred to in Art within two weeks or if the sale ordered by the creditor has not been effected within one year, the enforcement shall be discontinued. 5. If the seizure has been made for the benefit of two or more creditors, the order referred to in Art shall be placed by a custodian appointed under Art. 908, unless the creditors have unanimously requested that the financial instruments be sold. If a custodian is appointed, the two-week period shall count from the appointment date.. Art The following amendments are hereby made to the on the Act on Administrative Enforcement Proceedings of June 17th 1966 (Dz.U. of 2002, No. 110, item 968, as amended 13) ): 1) Art. 1a.12a shall read as follows: a) in enforcement proceedings concerning financial claims, the enforcement against: cash, remuneration for work, old-age pension and social security benefits, as well as social pension, bank accounts, other financial claims, rights attached to financial instruments, as defined in the regulations on trading in financial instruments, registered in a securities account or 13) Amendments to the consolidated text of the Act have been promulgated in Dz.U. of: 2002, No. 113, item 984, No. 127, item 1090, No. 113, item 984, No. 141, item 1178, No. 153, item 1271, No. 169, item 1387, No. 199, item 1672, No. 200, item 1679 and No. 216, item 1824; Dz.U. of 2003, No. 80, item 718, No. 135, item 1268, No. 137, item 1302, No. 193, item 1884, No. 217, item 2124 and No. 228, item 2255; Dz.U. of 2004, No. 68, item 623, No. 91, items 870 and 871, No. 96, item 959 and No. 116, item 1203; and Dz.U. of 2005, No. 86, item 732.

117 116 another account, as well as receivables credited to a cash account auxiliary to such accounts, securities not deposited in any securities account, promissory note, economic copyright and neighbouring rights, as well as industrial property rights, shares in a limited-liability company, other property rights, movables, real estate, ; 2) In Part 2, Chapter 5, Section 2 shall read as follows: Section 2 Enforcement against Rights Attached to Financial Instruments Registered in Securities Accounts or Other Accounts and against Receivables Credited to Cash Accounts Art The enforcement authority shall seize the rights attached to financial instruments, as defined in the regulations on trading in financial instruments, registered in a securities account or another account, and receivables credited to the cash account of the obligated party by way of delivering to the entity keeping such accounts, hereinafter referred to as the account keeper, a notification of the seizure of rights attached to financial instruments and receivables credited to the cash account of the obligated party up to the amount of the enforced claims referred to in Art The enforcement authority shall call upon the account keeper to deliver to the enforcement authority funds from the obligated party s cash account in an amount of up to the value of the enforced claim increased by default interest and cost of enforcement, and, if the funds in such cash account are not sufficient to cover the enforced claim, to sell, at the demand of the enforcement authority, the seized financial instruments and pay the sale proceeds to the enforcement authority or notify the enforcement authority within seven (7) days from the receipt of the notification of any obstacle to the realisation of the seized assets, including the fact that such an entity does not keep a cash account, securities account or another account for the obligated party. 3. The seizure of rights attached to financial instruments and of receivables credited to a cash account shall be deemed effected upon the account keeper receiving the notification of the seizure and shall also cover rights and receivables which have not been registered in or credited to the obligated party s accounts at the time of the seizure. 4. The seizure of rights attached to financial instruments and receivables credited to a cash account shall also be effective if the notification referred to in Art includes only the obligated party s first name and surname, or name, and address.

118 Art While sending the notification referred to in Art. 93.1, the enforcement authority shall: 1) notify the obligated party of the seizure of such party s rights attached to financial instruments and receivables credited to a cash account, delivering to such party an official copy of the writ of execution, if not yet delivered, and an official copy of the notification (addressed to the account keeper) of the seizure of rights attached to financial instruments and receivables credited to a cash account, and shall notify the obligated party that such party may not dispose of the seized rights, 2) call upon the obligated party to inform the enforcement authority, within seven (7) days from the receipt of the notification referred to in Art , of the order in which and prices at which the financial instruments are to be sold. 6. In the case referred to in Art , in line with the obligated party s instructions, the enforcement authority shall issue a sell order for financial instruments which traded in organised trading as defined in the regulations on trading in financial instruments. 7. If the obligated party has failed to specify a selling price or order in which financial instruments are to be sold by the time prescribed or if the sale of financial instruments in line with the obligated party s instruction has not been effected within five (5) consecutive trading days, the enforcement authority shall issue a sell order for financial instruments at a price enabling the order to be executed in organised trading. 8. The enforcement authority shall determine the scope of sale and the order in which financial instruments are to be sold on the basis of the quotations in organised trading on the day preceding the date of the sell order. 9. The financial instruments whose prices on the day preceding the date of the sell order guarantee the highest income or lowest loss in relation to their respective nominal values shall be sold first. 10. If the sale of financial instruments has not been effected on the first trading day after the lapse of the period referred to in Art or the sale proceeds are insufficient to cover the enforced claims, the enforcement authority shall order supplementary sell transactions, to which the provisions of Art shall apply accordingly. The provisions of Art. 93.1, 93.3, 93.4 and shall apply accordingly also to the seizure of financial instruments which are registered in a securities account or another account, but are not traded in organised trading. 2. Upon the receipt of the notification of the seizure of financial instruments referred to in Art.94.1, the account keeper shall promptly send the account statement relating to the obligated party s accounts to the enforcement authority.

119 The financial instruments referred to in Art shall be sold to natural persons in accordance with the provisions of Part 2, Chapter 6, Section 2. Art. 94a. The account keeper shall register the buyer s financial instruments in the buyer s account based on the order referred to in Art. 68b. Art. 94b. The provisions of Art. 71b shall apply accordingly if the account keeper makes a payment to the obligated party from the seized amounts or proceeds from the sale of the seized rights attached to financial instruments or if the account keeper executes the obligated party s instructions which render the enforcement ineffective. Art. 94c. If the seized rights attached to financial instruments and receivables credited to a cash account of the obligated party have earlier been seized by another enforcement authority, the account keeper shall promptly notify the relevant enforcement authorities of the same.. Art The following amendments are hereby made to the Personal Income Tax Act of July 26th 1991 (Dz.U. of 2000, No. 14, item 176, as amended 14) ): 1) In Art. 5a: a) Art. 5a.11 shall read as follows: 11) securities shall mean the securities referred to in Art. 3.1 of the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538)., b) Art. 5a.13 shall read as follows: 13) derivative financial instruments shall mean the financial instruments specified in Art of the Act on Trading in Financial Instruments of July 29th 2005,, c) Art. 5a.14 shall read as follows: 14) capital funds shall mean investment funds and foreign funds referred to in the regulations concerning investment funds and insurance capital funds operating under the provisions of the Insurance Activities Act, with the exception of pension funds referred to in the regulations on the organisation and operation of pension funds, ; 14) Amendments to the consolidated text of the Act have been promulgated in Dz.U. of 2000, No. 22, item 270, No. 60, item 703, No. 70, item 816, No. 104, item 1104, No. 117, item 1228 and No. 122, item 1324; Dz.U. of 2001, No. 4, item 27, No. 8, item 64, No. 52, item 539, No. 73, item 764, No. 74, item 784, No. 88, item 961, No. 89, item 968, No. 102, item 1117, No. 106, item 1150, No. 110, item 1190, No. 125, items 1363 and 1370 and No. 134, item 1509; 2002, No. 25, item 253, No. 74, item 676, No. 89, item 804, No. 135, item 1146, No. 141, item 1182, No. 169, item 1384, No. 181, item 1515, No. 200, item 1679 i No. 240, item 2058; 2003, No. 7, item 79, No. 45, item 391, No. 65, item 595, No. 84, item 774, No. 90, item 844, No. 96, item 874, No. 122, item 1143, No. 135, item 1268, No. 137, item 1302, No. 166, item 1608, No. 202, item 1956, No. 223, item 2217 and No. 228, item 2255; 2004, No. 29, item 257, No. 54, item 535, No. 93, item 894, No. 99, item 1001, No. 109, item 1163, No. 116, items 1203, 1205 and 1207, No. 120, item 1252, No. 123, item 1291, No. 151, item 1596, No. 162, item 1691, No. 210, item 2135, No. 263, item 2619 and No. 281, items 2779 and 2781; and Dz.U. of 2005, No. 25, item 202, No. 30, item 262, No. 85, item 725, No. 86, item 732, No. 90, item 757 and No. 102, item 852.

120 2) In Art. 17: a) in Art. 17.1: Art shall read as follows: 5) revenue from the participation in capital funds, subject to Art. 17.1c,, - Art b shall read as follows: b) exercise of rights attached to securities referred to in Art. 3.1b of the Act on Trading in Financial Instruments of July 29th 2005,, b) after Art. 17.1b, Art. 17.1c shall be added, which shall read as follows: 3) In Art. 23: 1c. Revenue from the redemption of units in a sub-fund of an umbrella fund shall not be recognised if units in such sub-fund are converted into units in another sub-fund of the same investment fund in accordance with the provisions of the Act on Investment Funds of May 27th 2004 (Dz.U. No. 146, item 1546). ; a) Art shall read as follows: 38) expenditure on the subscription for or acquisition of shares in or contributions to a cooperative, shares in an incorporated company and other securities, as well as expenditure on the acquisition of shares or units in capital funds; however, such expenditure shall be the taxdeductible cost of disposal against consideration of such shares, contributions and other securities, including the repurchase of securities by the issuer thereof, as well as the repurchase of shares or units in capital funds or redemption of units in, shares in or investment certificates of capital funds, subject to Art. 23.3e,, b) after Art. 23.3d, Art. 23.3e shall be added, to read as follows: 4) In Art. 30a: 3e. The provisions of Art (the sentence following the semicolon) shall not apply to the conversion of units in a sub-fund into units in another sub-fund of the same umbrella fund, effected in accordance with the provisions of the Act on Investment Funds of May 27th ; a) Art. 30a.1.5 shall read as follows: 5) on revenue from participation in capital funds,, b) Art. 30a.5 shall read as follows: 5. Income referred to in Art. 30a.1.5 shall not be reduced by the losses on participation in capital funds or other losses on cash capital and property rights incurred in a given tax year and previous years. ; 5) In Art. 30b, Art. 30b.2.2 shall read as follows: 2) the difference between the sum of revenue from the exercise of rights attached to securities referred to in Art. 3.1b of the Act on Trading in Financial Instruments of July 29th 2005, and tax-deductible cost determined based on Art a,.

121 120 Art The Corporate Income Tax Act of February 15th 1992 (Dz.U. of 2000, No. 54, item 654, as amended 15) ) shall be amended as follows: 1) Art shall read as follows: 2) In Art. 16: 18) revenue from the redemption of units in a sub-fund of an umbrella fund if units in such sub-fund are converted into units in another sub-fund of the same investment fund in accordance with the provisions of the Act on Investment Funds of May 27th 2004 (Dz.U. No. 146, item 1546). ; a) Art shall read as follows: 8) expenditure on the subscription for or acquisition of shares in or contributions to a cooperative, shares in a company or partnership and other securities, as well as expenditure on the acquisition of shares or units in capital funds; however, such expenditure shall be recognised as taxdeductible cost of disposal against consideration of such contributions, shares and other securities, including the repurchase of securities by the issuer thereof, as well as the repurchase of shares or units in capital funds or redemption of units in, shares in or investment certificates of capital funds, subject to Art. 16.7e,, b) After Art. 16.7d, Art. 16.7e and 16.7f shall be added, to read as follows: 7e. The provisions of Art (the sentence following the semicolon) shall not apply to the conversion of units in a sub-fund into units in another subfund of the same umbrella fund, effected in accordance with the provisions of the Act on Investment Funds of May 27th f. Capital funds referred to in Art shall be investment funds and foreign funds referred to in the Act on Investment Funds of May 27th ; 3) Art. 17.1e.2 shall read as follows: 2) securities or financial instruments other than securities, referred to in Art c and 2.1.2d of the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), provided that such acquisition has occurred as part of managing the portfolio referred to in Art. 75 of the Act on Trading in Financial Instruments, on condition that such securities or financial instruments are deposited in a separate account kept by the authorised entity within the meaning of the said Act, ; 4) Item 25 shall be assed in Appendix 3 to read as follows: 15) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2000, No. 60, items 700 and 703, No. 86, item 958, No. 103, item 1100, No. 117, item 1228 and No. 122, items 1315 and 1324; 2001, No. 106, item 1150, No. 110, item 1190 and No. 125, item 1363; Dz.U. of 2002, No. 25, item 253, No. 74, item 676, No. 93, item 820, No. 141, item 1179, No. 169, item 1384, No. 199, item 1672, No. 200, item 1684 and No. 230, item 1922; Dz.U. of 2003, No. 45, item 391, No. 96, item 874, No. 137, item 1302, No, 180, item 1759, No. 202, item 1957, No. 217, item 2124 and No. 223, item 2218; Dz.U. of 2004, No. 6, item 39, No. 29, item 257, No. 54, item 535, No. 93, item 894, No. 121, item 1262, No. 123, item 1291, No. 146, item 1546, No. 171, item 1800 and No. 210, item 2135, No. 254, item 2533; Dz.U. of 2005, No. 25, item 202, No. 57, item 491 and No. 78, item 684.

122 cooperatives established pursuant to Council Regulation 1435/2003/EC of July 22nd 2003 on the Statute for a European Cooperative Society (SCE) (OJ L 207, ).. Art. 190 The Act on the Banking Guarantee Fund of 14th 1994 (Dz.U. of 2000, No. 9, item 131, as amended 16) ) shall be amended as follows: 1) Art. 2.1.c shall read as follows: c) entities operating pursuant to the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), ; 2) Art. 16.4a shall read as follows: 4a. The fund may participate in trading in treasury securities also through an investment firm, and may hold a bank account for the settlement of such transactions.. Art In the Bond Act of June 29th 1995 (Dz.U. of 2001, No. 120, item 1300, as amended 17) ) item 2a shall be added after Art to read as follows: 2a) with whom the issuer has entered into an agreement on the offering of securities referred to in Art of the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538);. Art In the Act on Tax Offices and Chambers of June 21st 1996 (Dz.U. of 2004, No. 121, item 1267 and No. 273, item 2703), Art. 5.9b.4 shall read as follows: 4) entities operating pursuant to the provisions of the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), and pursuant to the regulations on investment funds;. Art In the Act on the Rules Governing the Exercise by State Treasury of its Rights of August 8th 1996 (Dz.U. No. 106, item 493, as amended 18) ), Art. 5a.3.3 shall read as follows: 16) Amendments to the consolidated text of the Act were promulgated in Dz.U. of: 2000, No. 86, item 958, No. 119, item 1252 and No. 122, item 1316; Dz.U. of 2001, No. 154, item 1802; Dz.U. of 2003, No. 60, item 535, No. 217, item 2124 and No. 223, item 2218; Dz.U. of 2004, No. 91, item 870, No. 121, item 1262 and No. 146, item ) Amendments to the consolidated text of the Act were promulgated in Dz.U. of: 2002, No. 216, item 1824; 2003, No. 217, item ) Amendments to the Act were promulgated in Dz.U. of 1996, No. 156, item 775; Dz.U. of 1997, No. 115, item 741 and No. 141, item 943; Dz.U. of 1998, No. 155, item 1014; Dz.U. of 2000, No. 48, item 550; Dz.U. of 2001, No. 4, item 26; Dz.U. of 2002, No. 25, item 253, No. 240, item 2055; Dz.U. of 2004, No. 99, item 1001, No. 123, item 1291 and No. 273, item 2703.

123 122 3) as regards disposal of shares and bonds admitted to trading on the regulated market as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538).. Art The Act on the Registered Pledge and the Pledge Register of December 6th 1996 (Dz.U. No. 149, item 703, as amended 19) ) shall be amended as follows: 1) Art shall be added, to read as follows: 7) rights attached to financial instruments other than securities as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538). ; 2) In Art. 22: a) Art shall read as follows: 1) registered pledge has been created on financial instruments registered in a securities account or in another account within the meaning of the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538),, b) Art shall read as follows: 2. Foreclosure of the assets encumbered with a registered pledge shall be effected after the lapse of the period for the performance of the obligation which has been secured with such pledge, as of the date when: 1) the financial instruments are registered in a securities account or in another account, as the case may be in the case referred to in Art , 2) the pledgee represents that it has foreclosed the assets in the case referred to in Art and ; 3) Art shall read as follows: 1. If the pledge agreement stipulates that the pledgee s claims are to be satisfied through foreclosure of the assets encumbered with the registered pledge and the pledge has been created on financial instruments referred to in Art admitted to trading on a regulated market as defined in the Act on Trading in Financial Instruments of July 29th 2005, the value of the foreclosed financial instruments shall be determined based on the price quoted as at close of trading on the foreclosure date. If such financial instruments were not traded on such a date, their value shall be determined based on the price quoted as at close of trading on the last day on which they were traded.. 19) Amendments to the Act were promulgated in Dz.U. of 1997, No. 121, item 769; Dz.U. of 1998, No. 106, item 668; Dz.U. of 2000, No. 48, item 554 and No. 60, item 702; Dz.U. of 2003, No. 228, item 2256; Dz.U. of 2004, No.146, item 1546 and No. 273, item 2703.

124 123 Art The Act on Sureties and Guarantees Issued by the State Treasury and Certain Legal Persons of May 8th 1997 (Dz.U. of 2003, No. 174, item 1689, as amended 20) ) shall be amended as follows: 1) Art shall read as follows: 3. For the purpose of separation referred to in Art. 26.1, the value of shares shall be determined based on their market value; the value of shares which are not traded in organised trading as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538) shall be determined based on the book value of the company. ; 2) Art. 28.1a shall read as follows: 1a. Shares which are a part of the resources, admitted to trading on the regulated market, shall be disposed of by a minister competent for the State Treasury at the request of a minister competent for public finances.. Art The Act on the Organisation and Operation of Pension Funds of August 28th 1997 (Dz.U. of 2004, No. 159, item 1667) shall be amended as follows: 1) Art shall read as follows: 2. At least one-third of the members of the management board should hold a university degree in law or economics or be entered in the register of investment advisors as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538). ; 2) Art shall read as follows: 6) of an entity conducting brokerage activities as defined in the Act on Trading in Financial Instruments of July 29th 2005, or other activities related to trading in broker-traded financial instruments as defined in the said Act; ; 3) Art shall read as follows: 2. Professional secrecy, as defined in Art. 49.1, shall cover the information relating to investments made by the fund, register of the fund members, fund members instructions to be followed in the event of their death as well as the representations referred to in Art. 83, the disclosure of which could compromise the interests of the fund members or of investors operating on the regulated market as defined in the Act on Trading in Financial Instruments of July 29th ; 4) Art b shall read as follows: b) a number of in the company clearing transactions executed on the capital market, whose number does not result in the emergence of the parentsubsidiary relationship as defined in the Act on Public Offering and the Terms for Introduction of Financial Instruments to Organised Trading and 20) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2004, No. 123, item 1291, No. 145, item 1537 and No. 281, item 2785; Dz.U. of 2005, No. 78, item 684.

125 124 on Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539), ; 5) Art shall read as follows: 3) the organisational rules of a pension fund company, which specify in particular the manner of preventing a disclosure of information which, if used, could compromise the interests of the fund members, or which, following such disclosure, could materially affect the price of financial instruments or derivative financial instruments related thereto as defined in the Act on Trading in Financial Instruments of July 29th 2005; ; 6) Art shall read as follows: 2. The depositary may, upon approval by the competent authority, entrust the management of the fund assets to an authorised external entity, in the scope referred to in Art of the Act on Trading in Financial Instruments of July 29th 2005, provided this is in line with the interests of the fund members. ; 7) Art shall read as follows: 3) investment firms as defined the Act on Trading in Financial Instruments of July 29th 2005; ; 8) Art shall read as follows: 8. The provisions of Art and 38.4 of the Commercialisation and Privatisation Act of August 30th 1996 (Dz.U. of 2002, No. 171, item 1397 and No. 240, item 2055; Dz.U. of 2003, No. 60, item 535 and No. 90, item 844; Dz.U. of 2004, No. 6, item 39, No. 116, item 1207, No. 123, item 1291 and No. 273, item 2703) shall not apply to the transfer of shares in public companies which are registered in collective accounts to the assets of the employee pension fund. ; 9) In Art : a) Art and shall read as follows: 4) shares in companies listed on the regulated stock exchange market, as well as pre-emptive rights, rights to shares, and bonds convertible into shares in such companies, listed on the regulated stock exchange markets; 5) shares in companies listed on the regulated over-the-counter market or dematerialised, in accordance with the Act on Trading in Financial Instruments of July 29th 2005, shares in companies which are not listed on the regulated market, and pre-emptive rights, rights to shares and bonds convertible into shares in companies which are listed on the regulated over-the-counter market or which are dematerialised but not listed on the regulated market;, b) Art and Art shall read as follows: 9) bonds and other debt securities issued by local government institutions, their associations or the capital city of Warsaw, dematerialised in accordance with the Act referred to in Art ;

126 125 10) bonds and other debt securities, other than dematerialised securities, issued by local government institutions, their associations or the capital city of Warsaw;, c) Art and Art shall read as follows: 11) bonds, dematerialised in accordance with the Act referred to in Art , issued by entities other than local government institutions, their associations, or the capital city of Warsaw, which have been secured in the amount equal to their full par value plus interest, if any; 12) bonds and other securities, other than dematerialised securities, issued by entities other than local government institutions, their associations, or the capital city of Warsaw, which have been secured in the amount equal to their full par value plus interest, if any;, d) Art a shall read as follows: 13a) bonds and other debt securities, dematerialised in accordance with the provisions of the Act referred to in Art , other than those referred to in Art and Art ;, e) Art c shall read as follows: 13c) depositary receipts, as defined in the Act on Trading in Financial Instruments of July 29th 2005, admitted to trading on the regulated market in the territory of the Republic of Poland. ; 10) Art shall read as follows: 2. A fund may lend securities traded on the regulated market in accordance with the provisions of the Act on Trading in Financial Instruments of July 29th 2005 and regulations issued thereunder. ; 11) Art shall read as follows: 1. An employee fund may entrust, within the scope and on the terms provided for in the Act on Trading in Financial Instruments of July 29th 2005, the management of the fund s assets to an entity which, pursuant to the above regulations, is authorised to conduct activities related to the management of portfolios comprising one or more broker-traded financial instruments, and which holds the Polish Securities and Exchange Commission s authorisation to conduct such activities.. Art In the Act on Court Enforcement Officers and Enforcement Proceedings of August 29th 1997 (Dz.U. No. 133, item 882, as amended 21) ) Art. 2.5 shall read as follows: 5. Public administration bodies, tax offices, pension authorities referred to in Art of the Code of Civil Procedure, banks, savings-and-loan cooperatives and entities conducting brokerage activities pursuant to the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 21) Amendments to the Act were promulgated in Dz.U. of 1999, No. 110, item 1255; Dz.U. of 2000, No. 48, item 554; Dz.U. of 2001, No. 98, items 1069 and 1070 and No. 130, item 1452; Dz.U. of 2003, No. 41, item 361 and No. 124, item 1152; 2004, No. 173, item 1808, No. 202, item 2067 and No. 236, item 2356.

127 , item 1538) shall be obliged, at the written request of a court enforcement officer, to provide such officer with any information necessary to properly conduct enforcement proceedings. The provisions of Art. 762 of the Code of Civil Procedure shall apply accordingly. In the cases concerning enforcement of alimony benefits or benefits of a similar nature, the information referred to herein shall be provided free of charge.. Art The Banking Law of August 29th 1997 (Dz.U. of 2002, No. 72, item 665, as amended 22) ) shall be amended as follows: 1) Art a shall read as follows: a) parent entity within the meaning of Art of the Act on Public Offering and the Terms for Introduction of Financial Instruments to Organised Trading and on Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539), or ; 2) Art. 28 shall read as follows: Art Shares in banks, excluding shares dematerialised in accordance with the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), shall be registered shares. Disposal of registered shares by shareholders shall require approval of the Banking Supervision Commission for a year from the bank s entry in the register of entrepreneurs. 2. Should the bank shares be excluded from trading on the regulated market or rematerialised in accordance with the regulations referred to in Art. 28.1, the bearer shares shall be converted into registered shares. ; 3) Art. 79b.2 shall read as follows: 2. The provisions of Art. 79b.1 shall not apply with respect to a shareholder holding only shares which are admitted to trading on the regulated market and which confer the right to exercise up to 5% of the total vote at the general shareholders meeting. ; 4) Art shall read as follows: 4. Banks may issue uncertificated bank securities, such securities to be registered in a depository kept by the issuer thereof, National Depository for Securities or an investment firm. 5. If bank securities are uncertificated, all the information referred to in Art should be contained in a deposit certificate or another document issued by the bank to an entitled person. 22) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2002, No. 126, item 1070, No. 141, item 1178, No. 144, item 1208, No. 153, item 1271, No. 169, items 1385 and 1387 and No. 241, item 2074; Dz.U. of 2003, No. 50, item 424, No. 60, item 535, No. 65, item 594, No. 228, item 2260 and No. 229, item 2276; Dz.U. of 2004, No. 64, item 594, No. 68, item 623, No. 91, item 870, No. 96, item 959, No. 121, item 1264, No. 146, item 1546 and No. 173, item 1808; Dz.U. of 2005, No. 83, item 719 and No. 85, item 727.

128 Rights attached to uncertificated bank securities shall accrue as of the moment such securities are first registered in a securities account and shall inure to the benefit of the account holder. 7. Transfer of rights attached to uncertificated bank securities shall be effected when a relevant entry is made in the account where such bank securities are registered, following the execution of an agreement. The benefits obtained from the bank securities before such entry is made shall inure to the buyer, unless the agreement provides otherwise. ; 5) Art. 184 shall be deleted. Art In the Act on the Social Security System of October 13th 1998 (Dz.U. No. 137, item 887, as amended 23) ) Art shall read as follows: 4) shares and bonds dematerialised in accordance with the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538),. Art The Commercial Companies Code of September 15th 2000 (Dz.U. No. 94, item 1037, as amended 24) ) shall be amended as follows: 1) Art. 88 shall read as follows: Art. 88. The persons who may become partners in a partnership shall be persons qualified to practise the following professions: solicitor, pharmacist, architect, construction engineer, auditor, insurance broker, tax adviser, securities broker, investment adviser, accountant, physician, dentist, veterinary doctor, notary public, nurse, midwife, legal counsels, patent attorney, property appraiser, and sworn translator. ; 2) Art shall read as follows: 1. Payments for shares shall be made directly or through the intermediation of an investment firm into the account of the company in the process of organisation maintained by a bank in the European Union or in a country which is a party to the European Economic Area Agreement. ; 23) Amendments to the Act were promulgated in Dz.U. of 1998, No. 162, items 1118 and 1126; 1999, No. 26, item 228, No. 60, item 636, No. 72, item 802, No. 78, item 875 and No. 110, item 1256; Dz.U. of 2000, No. 9, item 118, No. 95, item 1041, No. 104, item 1104 and No. 119, item 1249; Dz.U. of 2001, No. 8, item 64, No. 27, item 298, No. 39, item 459, No. 72, item 748, No. 100, item 1080 and 1189, No. 111, item 1194, No. 130, item 1452 and No.154, item 1792; Dz.U. of 2002, No. 25, item 253, No. 41, item 365, No. 74, item 676, No. 155, item 1287, No. 169, item 1387, No. 199, item 1673, No. 200, item 1679 and No. 241, item 2074; 2003, No. 56, item 498, No. 65, item 595, No. 135, item 1268, No. 149, item 1450, No. 166, item 1609, No. 170, item 1651, No. 190, item 1864, No. 210, item 2037, No. 223, item 2217 and No. 228, item 2255; Dz.U. of 2004, No. 19, item 177, No. 64, item 593, No. 99, item 1001, No. 121, item 1264, No. 146, item 1546, No. 173, item 1808, No. 187, item 1925 and No. 210, item 2135; 2005, No. 64, item 565, No. 86, item 732 and No. 132, item ) Amendments to the Act were promulgated in Dz.U. of 2001, No. 102, item 1117, Dz.U. of 2003, No. 49, item 408 and No. 229, item 2276, and Dz.U. of 2005, No. 132, item 1108.

129 3) Art shall read as follows: a confirmation issued by a bank or an investment firm to the effect that the payment for shares has been made into the account of a company in the process of organisation; in the event that the articles of association provide for coverage of the share capital with non-cash contributions following the registration, a representation by all members of the management board shall be enclosed, to the effect that steps have been taken to ensure that such contributions will be made as provided for in the articles of association prior to the lapse of the date specified in Art ; 4) Art shall read as follows: 6. A shareholder in a public company holding dematerialised shares shall be entitled to receive a deposit certificate issued in its name by the entity keeping the securities account in accordance with the provisions of regulations on trading in financial instruments. ; 5) Art shall read as follows: 3. Payments for shares shall be made directly or through the intermediation of an investment firm into an account of the company, maintained by the bank in the European Union or in a country which is a party to the European Economic Area Agreement. ; 6) Art shall read as follows: 3. After announcement of the numbers of invalidated documents evidencing shares or of temporary certificates the company shall issue new documents or certificates bearing the former numbers and shall sell them through the intermediation of a notary public, an investment firm, or a bank. ; 7) Art shall read as follows: 3. The provisions of Art and Art shall not apply to shares which are acquired in the case of a share capital increase and which are subject to dematerialisation in accordance with the regulations on trading in financial instruments in connection with their intended admission to trading on a regulated market, and to shares issued in connection with a merger, demerger or transformation of a company. 8) Art shall read as follows: 3. In the period when shares in a public company encumbered with a pledge or a right of usufruct, are registered in securities accounts at a brokerage house or at a bank keeping securities accounts, the voting rights attached to such shares shall inure to benefit of the shareholder. ; 9) Art shall read as follows: 1. A shareholder in relation to a company shall a person whose name is entered in the share register or who holds bearer shares, subject to regulations on trading in financial instruments. ; 10) in Art , after item 2a shall be added, to read as follows: 2a. a public company which acquires shares in order to fulfil its obligations under debt instruments convertible into shares, ; 11) Art. 403 shall read as follows:

130 129 Art. 403.The general shareholders meeting shall be held at the company s registered office. The general shareholders meeting may also be held in the city where the registered office of a company operating a stock exchange on which the shares in this company are traded is situated. The articles of association may provide for other venue for convening the general shareholders meeting, with a proviso that the meetings may be held only in the territory of the Republic of Poland. ; 12) In Art. 406: a) Art shall read as follows: 2. Certificates issued to confirm that the shares have been deposited at a notary public, bank or an investment firm with a registered office or a branch in the European Union or in a country which is a party to the European Economic Area Agreement, as specified in the notice convening the general shareholders meeting, may be submitted instead of shares., b) Art shall read as follows: 3. Shareholders in public companies holding dematerialised shares shall submit to the company deposit certificates issued in their name by the entity keeping their securities account in accordance with the regulations on trading in financial instruments. ; 13) the second sentence of Art shall read as follows: In the case of dematerialised shares in a public company, such shares shall be deemed delivered upon their registration in a securities account in accordance with the regulations on trading in financial instruments.. Art The Commodity Exchange Act of October 26th 2000 (Dz.U. of 2005, No. 121, item 1019) shall be amended as follows: 1) in Art. 2: a) Art. 2.9c shall read as follows: c. foreign investment firms or foreign legal persons referred to in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), conducting brokerage activities in the territory of the Republic of Poland, ; b) Art shall read as follows: 11. parent entity shall mean a parent entity as defined in Art of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539), ; 2) Art. 3.4 shall be added, to read as follows: 4. An offer or acquisition of property rights whose price directly or indirectly depends on foreign exchange rates or interest rates shall be effected in accordance with the provisions of the Acton Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and

131 3) in Art. 5: 130 Public Companies of July 29th 2005 and the secondary legislation issued thereunder. ; a) Art. 5.2 shall read as follows: 2. Subject to Art. 5.3 and the provisions of the Act on Trading in Financial Instruments of July 29th 2005, the business of the company referred to in Art. 5.1 shall comprise exclusively operation of a stock exchange., b) Art. 5.4 shall read as follows: 4. The authorisation referred to in Art. 5.3 shall not apply to a company operating a stock exchange on which the property rights referred to in Art. 2.2.e are traded; such a company shall be obliged to comply with the requirement referred to in Art ; 4) Art. 6.6 shall read as follows: 6. The provisions of Art. 6.1 shall not apply if a company operating a stock exchange is a public company as defined in the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th ; 5) Art. 9.2 shall read as follows: 2. Subject to Art. 5.3a, only the entities referred to in Art. 2.3, as well as an exchange clearing house and the National Depository for Securities may be parties to commodity exchange transactions, to the extent that the same is necessary to perform the responsibilities related to the use of the funds accumulated in the system referred to in Art in line with their intended purpose. ; 6) Art shall read as follows: 16. specifying the manner of clearing of transactions, including indication of an exchange clearing house competent for the clearing of transactions executed on a given commodity exchange and related to the commodities referred to in Art. 2.2.e; ; 7) in Art. 14: a) Art and 14.2 shall read as follows: 1. An authorisation to operate a stock exchange on which property rights referred to in Art. 2.2.e are traded, or an authorisation to admit property rights referred to in Art. 2.2.e to trading on an existing exchange, shall be issued subject to a condition that an exchange clearing house is established, with the applicant acting as its founder and a shareholder, and that the exchange clearing house commences operations in the specified time. 2. Subject to Art. 14.2a, an exchange clearing house may be established only in the legal form of a joint-stock company, for the purpose of providing financial services related to commodity exchange transactions in the rights referred to in Art. 2.2.e, executed on a given exchange, and for the purpose of performing the responsibilities set forth in Art and 15.6., b) Art. 14.2a shall read as follows:

132 131 2a. An exchange clearing house may also provide financial services related to commodity exchange transactions in commodities referred to in Art. 2.2b, 2.2.c, and 2.2.d. ; 8) Art shall read as follows: 2) organisation and management of a system guaranteeing proper performance of obligations under transactions -, ; 9) Art shall read as follows: 1. An application for an authorisation to operate an exchange on which rights referred to in Art. 2.2.e are traded should include, besides the information required to be included in an authorisation to operate the exchange, the information referred to in Art concerning the company operating an exchange clearing house. ; 10) in Art. 18: a) Art shall read as follows: 2. In the event that the rights referred to in Art.2.2.e are to be traded on a given exchange, with the National Depository for Securities acting as an exchange clearing house, the authorisation to operate the exchange referred to in Art may be issued if the applicant encloses an agreement concluded with the National Depository for Securities on the clearing of commodity exchange transactions along with the rules referred to in Art. 18.4, b) Art shall read as follows: 3. The provisions of Art. 15 and Art. 17 shall apply accordingly to the clearing of commodity exchange transactions by the National Depository for Securities as part of its acting as an exchange clearing house; otherwise the clearing of such transactions shall be governed by the Act on Trading in Financial Instrument of July 29th ; 11) Art shall read as follows: 3. has not been found by a final court judgment guilty of a tax offence, an offence against reliability of documents or property, business transactions or forgery of money, securities, official stamps or trademarks, offences specified in the Act on Trading in Financial Instruments of July 29th 2005, in the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th 2005, in the Act on Capital Market Supervision of July 29th 2005, offences specified herein, or in the Act on Storage Warehouses, ; 12) Art and 37.3 shall read as follows: 2. Shares in a commodity brokerage house, with the exception of shares dematerialised in accordance with the provisions of the Act on Trading in Financial Instruments of July 29th 2005, shall be registered shares. Art The funds used to finance the acquisition of or subscription for shares in a commodity brokerage house which are not dematerialised, shall not come from loans or undocumented sources. ; 13) Art shall read as follows:

133 A commodity brokerage house shall be entitled to conduct activities with respect to commodities referred to in Art. 2.2.e, subject to obtaining a licence and meeting the financial conditions, and in line with the terms and conditions set forth in the Act on Trading in Financial Instruments of July 29th Provisions of Art. 82, Art. 85, Art. 89 and Art.167 of the Act on Trading in Financial Instruments shall apply to proceedings concerning granting, revocation or expiry of the licence. ; 14) Art. 47 shall be deleted. Art In the Act on Storage Warehouses and on Amending the Civil Code, Code of Civil Procedure, and Other Statutes of November 16th 2000 (Dz.U. No. 114, item 1191 and Dz.U. of 2004, No. 173, item 1808), Art. 3.3 shall read as follows: 3. Entrepreneur s business may be managed by persons who have not been found by a final court judgment guilty of an offence against reliability of documents, property, business transactions and cash and securities transactions, a tax offence, offences referred to in the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, of July 29th 2005 (Dz.U. of 2005, No 184, item 1539), in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), in the Act on Capital Market Supervision of July 29th 2005, or for the criminal offences defined herein. Art The Act on Prevention of Money Laundering Practices and Financing of Terrorism of November 16th 2000 (Dz.U. of 2003, No. 153, item 1505, as amended 25) ) shall be amended as follows: 1) in Art. 2: a) Art. 2.1 shall read as follows: 1) obliged institutions shall mean banks, the National Bank of Poland (to the extent it keeps bank accounts for legal persons, sells numismatic objects, buys gold and replaces damaged coins and banknotes, pursuant to the Act on the National Bank of Poland of August 29th 1997 (Dz.U. of 2005 No. 1, item 2)), branches of foreign banks, electronic money institutions, branches of foreign electronic money institutions and clearing agents operating under the provisions of the Electronic Payment Instruments Act of September 12th 2002 (Dz.U. No. 169, item 1385 and Dz.U. of 2004 No. 91, item 870 and No. 96, item 959), investment firms and custodian banks as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538) referred to in Art of the Act on Trading in Financial Instruments of July 29th 2005, foreign legal persons conducting commodity brokerage activities in the territory of the Republic of Poland, commodity brokerage houses as defined in the 25 ) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2004, No. 62, item 577, Dz.U. No. 96, item 959 and No. 116, item 1203.

134 133 Commodity Exchange Act of October 26th 2000 (Dz.U. of 2005 No. 121, item 1019), commercial companies referred to in Art. 50a of the Commodity Exchange Act of October 26th 2000, the National Depository for Securities (to the extent it keeps securities accounts), entities whose business involves games of chance, bets, gaming on gaming machines and on low-value gaming machines, insurance undertakings, main branches of foreign insurance undertakings, investment funds, investment fund companies, saving-and-loan cooperatives, Poczta Polska (state-owned public utility providing postal services), notaries public (with respect to notary activities concerning trade in instruments of value), solicitors, legal counsels practising their profession on a basis other than an employment contract, foreign lawyers providing legal assistance on a basis other than an employment contract, practising auditors, practising tax advisers, entities engaged in foreign-exchange office activities, entrepreneurs running auction houses or antique shops, or involved in leasing or factoring activities, or activities related to trading in metals or precious and semi-precious stones, consignment sale, pawnbroking or real estate agency services, and foundations;, b) Art. 2.3 shall read as follows: 3) instruments of value shall mean coins and banknotes, financial instruments as defined in Art of the Act on Trading in Financial Instruments of July 29th 2005, other securities and foreign currency instruments, property rights, movables and real property; ; 2) Art shall read as follows: 3. The provisions of Art shall not apply to transactions executed on the regulated market as defined in the Act on Trading in Financial Instruments of July 29th ; 3) Art shall read as follows: 3) Polish Securities and Exchange Commission with respect to investment firms and custodian banks as defined in the Act on Trading in Financial Instrument of July 29th 2005, entities referred to in Art thereof, foreign legal persons conducting commodity brokerage activities in the territory of Republic of Poland, commodity brokerage houses as defined in the Commodity Exchange Act of October 26th 2000, investment funds, investment fund companies, and the National Depository for Securities; ; 4) Art shall read as follows: 8) Chairman of the Polish Securities and Exchange Commission or persons authorised by the Chairman with respect to investment firms and custodian banks as defined in the Act on Trading in Financial Instruments of July 29th 2005, entities referred to in Art thereof, foreign legal persons conducting commodity brokerage activities in the territory of the Republic of Poland, commodity brokerage houses as defined in the Commodity Exchange Act of October 26th 2000, investment funds, investment fund companies, and the National Depository for Securities;.

135 134 Art The Act on the Final Nature of Settlements in Payment Systems and Securities Settlement Systems, and Rules of Supervision over These Systems, of August 24th 2001 (Dz.U. No. 123, item 1351, as amended 26) ) shall be amended as follows: 1) in Art. 1: a) Art. 1.5d-f shall read as follows: d) brokerage house as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), e) foreign legal person, as referred to in Art. 115 of the Act specified in Art. 1.5d, conducting brokerage activities in the territory of the Republic of Poland, f) foreign investment firm, as defined in the Act specified in Art. 1.5d, conducting brokerage activities in the territory of the Republic of Poland,, b) Art shall read as follows: 11) securities shall mean broker-traded financial instrument as defined in Art. 2 of the Act specified in Art. 1.5d, ; 2) Art shall read as follows: 1. The provisions of Art. 4-7 and of this Act, as well as Art , Art. 66, Art. 67, Art. 80 and Arts of the Bankruptcy and Recovery Law of February 28th 2003 (Dz.U. No. 60, item 535, as amended 27) ) shall apply to the securities clearing systems operated by the National Depository for Securities ( National Depository ), exchange clearing house referred to in the Commodity Exchange Act of October 26th 2000, as well as to systems maintained by the National Bank of Poland. ; 3) Art shall read as follows: 2. With the exception of systems maintained by the National Bank of Poland, the National Depository for Securities and the exchange clearing house referred to in the Commodity Exchange Act of October 26th 2000, the operation of securities settlement systems shall require an authorisation of the Polish Securities and Exchange Commission, to be granted upon consultation with Governor of the National Bank of Poland. Art In Art of the Act on Responsibility of Group Entities for Prohibited Acts Subject to Penalty of October 28th 2002 (Dz.U. No. 197, item 1661, Dz.U. of 2004, No. 93, item 889, No. 191, item 1956 and No. 243, item 2442), a) Art b shall read as follows: 26 ) Amendments to the Act were promulgated in Dz.U. of 2003 No. 60, item 535, No. 223, item 2216, Dz.U. of 2004 No. 64, item 594, No. 96, item 959, and Dz.U. of 2005 No. 83, item Amendments to the Act were promulgated in Dz.U. of 2003, No. 217, item 2125, Dz.U. of 2004, No. 91, items 870 and 871, No. 96, item 959, No. 121, item 1264, No. 146, item 1546, No. 173, item 1808, No. 210, item 2135, and Dz.U. of 2005 No. 94, item 785.

136 135 b) Arts of the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538),, b) Art d shall be added, to read as follows: d) Arts of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539);. Art The Bankruptcy and Recovery Law of February 28th 2003 (Dz.U. No. 60, item 535, as amended 28) ) shall be amended as follows: 1) Art shall read as follows: 2. If the sale transaction concerns financial instruments admitted to trading on a regulated market as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), the judge-commissioner may agree for the sale to be executed by an investment firm. In such a case, the judge-commissioner may specify the stock exchange (or order the receiver to do so) and the minimum selling price. ; 2) Art. 466 shall read as follows: Art Subject to Art. 464, the provisions of the law governing contractual obligations and applicable to transactions executed on a regulated market, as defined in the Act on Trading in Financial Instruments of July 29th 2005, shall apply to agreements concluded as part of transactions on such a market.. Art The Insurance Activities Act of May 22nd 2003 (Dz.U. No. 124, item 1151, Dz.U. of 2004, No. 91, item 870, No. 96, item 959, Dz.U. of 2005, No. 48, item 447 and No. 83, item 719) shall be amended as follows: 1) Art.29.3 shall read as follows: 2) in Art. 34: 3) entity conducting brokerage activities as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538) or other activities related to trading in broker-traded financial instruments as defined in the said Act; ; a) Art shall read as follows: 1. Shares in insurance undertakings, other than shares dematerialised in accordance with the Act on Trading in Financial Instruments of July 29th 2005, shall only be registered shares., b) Art shall read as follows: 28 ) Amendments to the Act were promulgated in Dz.U. of 2003 No. 217, item 2125, Dz.U. of 2004, No. 91, items 870 and 871, No. 96, item 959, No. 121, item 1264, Dz.U. No. 146, item 1546, No. 173, item 1808, No. 210, item 2135, and Dz.U. of 2005 No. 94, item 785.

137 To determine the shareholder structure of an insurance undertaking, the National Depository for Securities along with investment firms and custodian banks as defined in the Act on Trading in Financial Instruments of July 29th 2005 shall provide, at the request and cost of the insurance undertaking being a public company, such insurance undertaking with information on particular shareholders holding a number of its shares conferring the right to 5% or more of the total vote at the general shareholders meeting, within 30 days from the request submission. 5. Provision of the information referred to in Art shall not be deemed a breach of the professional secrecy obligation defined in the Act on Trading in Financial Instruments of July 29th If shares of an insurance undertaking are excluded from trading on a regulated market or are rematerialised in accordance with the provisions referred to in Art. 34.5, the insurance undertaking shall, within three months from the receipt of the relevant decision, convert its bearer shares into registered shares. The bearer shares shall not be traded in the period from the date of the decision delivery to date of the conversion. ; 3) Art shall read as follows: 9. The provisions of Art shall not prejudice the provisions of the Act referred to in Art or the provisions of the Anti-Trust and Consumer Protection Act. ; 4) Art shall read as follows: 5) in Art : 4. The provisions of Art shall not prejudice the provisions of the Public Offering Act of July 29th 2005 (Dz.U. of 2005, No 184, item 1539) or the provisions of the Anti-Trust and Consumer Protection Act. ; a) Art shall read as follows: 1) 40% of the technical reserves held in the form of securities admitted to trading on a regulated market or investment fund units;, b) Art shall read as follows: 3) 10% of the technical reserves held in the form of mortgage bonds, shares, shares not admitted to trading on a regulated market and other fixedincome or variable-yield securities, provided that the insurance undertaking s share in the issuer thereof does not exceed 10% of such issuer s share capital; ; 6) Art shall read as follows: 11. The provisions of Art shall not prejudice the provisions of the Public Offering Act of July 29th 2005 (Dz.U. of 2005, No 184, item 1539) or the provisions of the Anti-Trust and Consumer Protection Act.. Art Art of the Insurance Brokerage Act of May 22nd 2003 (Dz.U. No. 124, item 1154, Dz.U. of 2004 No. 96, item 959, and Dz.U. of 2005, No. 48, item 447) shall read as follows:

138 137 4) hold shares in insurance undertakings other than shares admitted to trading on a regulated market.. Art The Act on Certain Types of Financial Collateral of April 2nd 2004 (Dz.U. No. 91, item 871, and Dz.U. of 2005, No. 83, item 719) shall be amended as follows: 1) Art shall read as follows: 2) In Art. 3: 5) an investment firm as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538); ; a) Art. 3.2 shall read as follows: 2) financial instruments shall mean securities, money market instruments, units in collective investment undertakings and other financial instruments other than securities as defined in the Act on Trading in Financial Instruments of July 29th 2005, as well as bank securities and equity interests in companies or partnerships;, b) Art. 3.7 shall read as follows: 7) security interest in uncertificated securities shall be security interest in uncertificated instruments, recorded in a securities account or another account in which financial instruments other than securities are registered, in a deposit account, or in other securities records maintained by the relevant entities. ; 3) Art shall read as follows: 3) establishing a block on the securities account or on another account in which financial instruments other than securities are registered, or on the securities deposit account, in accordance with other regulations; ; 4) Art. 6 shall read as follows: Art. 6. Regulations concerning pledge on rights to cash or on financial instruments shall apply accordingly to any collateral securing financial claims created by establishing the block referred to in Art ; 5) Art. 7.2 shall read as follows: 2. Security interest in cash shall be recorded in the account to which the cash serving as collateral is credited, while security interest in financial instruments shall be recorded in the securities account or another account in which financial instruments other than securities are registered, in a deposit account, or in other securities records maintained by the relevant entities. ; 6) Art shall read as follows: 1. If the pledge agreement stipulates that the pledgee s claims are to be satisfied through foreclosure of the assets encumbered with the pledge and the pledge has been created on financial instruments admitted to trading on a regulated market, the value of the foreclosed financial instruments shall be determined

139 138 based on the price quoted as at close of trading on the foreclosure date. If such financial instruments were not traded on such a date, their value shall be determined based on the price quoted as at close of trading on the last day on which they were traded. ; 7) Art. 13 shall read as follows: Art. 13. Agreement on the creation of financial collateral on uncertificated financial instruments, rights arising under such collateral, priority of rights, and satisfaction of claims under such collateral shall be governed exclusively by the law of the country in which the securities account, another account in which financial instruments other than securities are registered, deposit account or other securities records in which such collateral is registered, are kept. The acquisition in good faith of uncertificated financial instruments shall also be governed by such law.. Art The Act on Personal Pension Accounts of April 20th 2004 (Dz.U. No. 116, item 1205) shall be amended as follows: 1) In Art. 2: a) Art. 2.1 shall read as follows: 1) IKE account (Personal Pension Account) shall mean a separate entry in the register of an investment fund unit holders, a separate securities account or any other account in which financial instruments other than securities are registered, or of a cash account auxiliary to any such account, held with an entity conducting brokerage activities, or a separate account held with an insurance capital fund, a separate bank account held with a bank, kept in accordance with this Act, and to the extent not provided for in this Act, in accordance with the regulations applicable to such accounts and registers;, b) Art. 2.5 shall read as follows: 5) funds shall mean cash, units in an insurance capital fund, units in investment funds, securities and financial instruments other than securities referred to in Art c and 2.1.2d of the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), registered in the IKE account;, c) Art. 2.7 shall read as follows: 7) entity conducting brokerage activities shall mean a brokerage house or a bank conducting brokerage activities as defined in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538); ; 2) Art and 27.2 shall read as follows: 1. The agreements referred to in Art shall provide for investing funds in securities dematerialised in accordance with the Act on Trading in Financial Instruments of July 29th 2005, subject to Art

140 The agreements referred to in Art may permit placing orders, solely for the purpose of limiting investment risk, for financial instruments other than securities referred to in Art c and 2.1.2d of the Act referred to in Art. 27.1, if their price depends on the price of the securities registered in a given holder s IKE account, and on condition that they are traded on a regulated market. ; 3) Art. 28 shall read as follows: Art If the competent authority orders to transfer securities, financial instruments other than securities, cash and documents relating to the maintenance of securities accounts, other accounts in which such financial instruments are registered and cash accounts to another entity conducting brokerage activities, following the expiry or revocation of a brokerage licence, the entity conducting brokerage activities to which such securities, financial instruments or cash are to be transferred shall preserve the designation of the funds accumulated in the IKE account. 2. When transferring the funds accumulated in the IKE account referred to in Art the entity conducting brokerage activities shall provide the entity conducting brokerage activities indicated by the competent authority with the information referred to in Art The entity conducting brokerage activities to which the funds accumulated in the IKE account referred to in Art have been transferred, shall be obliged to request, within 14 days following the transfer, the holder of the IKE account to enter into an IKE account agreement or make an outbound transfer. 4. In the case referred to in Art the holder of the IKE account shall be obliged, within 45 days as of the receipt of the request, to enter into an IKE account agreement with the entity to which the holder s securities, financial instruments other than securities and cash have been transferred, or to effect the outbound transfer to another financial institution or a pension scheme which such holder has jointed. 5. If the entity conducting brokerage activities to which securities, financial instruments other than securities, cash and documents relating to the maintenance of securities accounts, other accounts in which such financial instruments are registered as well as cash accounts have been transferred does not operate IKE accounts, then the transfer of those funds to another financial institution shall be deemed the outbound transfer. 6. Should a holder of the IKE fail to meet the deadline referred to in Art. 28.4, the funds accumulated on the IKE account shall be returned. ; 4) Art shall read as follows: 3. After the lapse of the period referred to in Art. 39.1, an entity conducting brokerage activities, when effecting the outbound transfer of the funds accumulated on the IKE account, may charge a fee for transfer of securities, financial instruments other than securities, and cash; however,

141 140 such a fee may not exceed the fee charged on such entity by the National Depository for Securities, as defined in the rules referred to in Art. 50 of the Act on Trading in Financial Instruments of July 29th Art The Act on Investment Funds of May 27th 2004 (Dz.U. No. 146, item 1546 and Dz.U. of 2005, No. 83, item 719) shall be amended as follows: 1) in Art. 2: a) item 1 shall be deleted, b) after Art. 2.1, item 1a shall be added, to read as follows: 1a) Act on Trading in Financial Instruments shall mean the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538);, c) Art shall read as follows: 14) investment firm shall mean an investment firm as defined in the Act on Trading in Financial Instruments;, d) Art shall read as follows: 18) derivatives shall mean property rights whose market price depends directly or indirectly on the price or value of the securities referred to in Art. 3.1.a of the Act on Trading in Financial Instruments, and other property rights whose market price depends directly or indirectly on the market price of foreign currencies or the level of interest rates, e) Art shall read as follows: 22) organised market shall mean a separate, organisationally and financially, trading system, which operates on a regular basis and ensures uniform conditions for execution of transactions and universal and equal access to information on transactions, in accordance with the rules set out in the applicable laws of the country in which the trading takes place and, in particular, the organised trading referred to in the Act on Trading in Financial Instruments, f) after Art. 2.22, item 22a shall be added which shall read as follows: 22a) regulated market shall mean the market referred to in Art. 14 of the Act on Trading in Financial Instruments, g) Art and 2.28 shall read as follows: 27) discretionary management of a securities portfolio shall mean the management of portfolios as defined in Art of the Act on Trading in Financial Instruments; 28) advisory services in the area of securities trading shall mean investment advisory relating to financial instruments as defined in Art. 76 of the Act on Trading in Financial Instruments, h) Art shall read as follows:

142 141 34) securities shall mean the securities as defined in Art. 3.1 of the Act on Trading in Financial Instruments, excluding derivatives;, i) Art shall be added, to read as follows: 35) dematerialised securities shall mean the securities defined in the first sentence of Art. 5.1 of the Act on Trading in Financial Instruments; ; 2) Art. 6.1 shall read as follows: 3) In Art. 7: 1. Unit-holders of an investment fund shall be natural persons, legal persons and organisational units without legal personality: 1) in whose name units or fractional parts thereof are entered in the register of unit-holders, or 2) who hold securities accounts in which public investment certificates are registered, or 3) in the case of non-public investment certificates of a closed-end investment fund: a) persons holdings rights under certificated investment certificates, b) persons specified in the register of unit-holders as holders of uncertificated investment certificates. ; a) Art. 7.2 shall read as follows: 2. The following may be contributed to a fund: 1) dematerialised securities if provided for in the articles of association of the fund, or 2) securities other than dematerialised securities or shares in limitedliability companies if provided for in this Act and the articles of association of the fund., b) Art. 7.3 shall be deleted; 4) Art shall read as follows: 4. In the case of a closed-end investment fund issuing non-public investment certificates, the total minimum amount of payments to the fund and the manner of collecting the payments shall be defined in the articles of association of the fund. ; 5) Art and Art shall read as follows: 8) the types of dematerialised securities and their classes that may be contributed as payment, and if such contributions can only be made in the form of securities issued by a specific issuer, the name of such issuer, the period in which payments in the form of securities will be accepted, and the principles for the valuation of securities used as payment; 9) in the case of closed-end investment funds the types of securities other than dematerialised securities and their classes, as well as shares in limited liability companies that can be contributed in consideration for investment certificates; ;

143 6) Art. 27 shall read as follows: 142 Art The management company shall carry out a subscription for units and non-public investment certificates directly or through an entity conducting brokerage activities. 2. During the subscription for units, the management company shall make the prospectus and simplified prospectus of the investment fund available free of charge. 3. The management company may, with the Commission s consent, carry out a subscription for units and non-public investment certificates through an entity other than that specified in Art In such a case, the management company shall attach to the application referred to in Art. 22 the agreement concluded with such entity and the documents specified in Art regarding such entity. 4. The Commission shall refuse the consent referred to in Art if an analysis of the agreement and the documents referred to in Art shows that the entity acting as an intermediary in the subscription may perform those activities in breach of the principles of fair trading or in a manner that does not duly protect the interests of the persons subscribing for units and non-public investment certificates. ; 7) Art shall read as follows: 8) In Art. 33: 2. If the payment to the investment fund is made by contribution of securities other than dematerialised securities or in the form of shares in limitedliability companies, the person subscribing for investment certificates shall transfer, by way of an agreement, in accordance with other regulations, the rights attached to such securities or shares to the management company, and shall submit to the depositary a copy of the agreement and in the case of a contribution in the form of securities the securities or, if the securities are uncertificated, a document confirming ownership of such securities, issued pursuant to the applicable regulations. ; a) Art shall read as follows: 1. Declarations of will made in connection with the acquisition and requests for redemption of units in investment funds or foreign investment funds, open-end investment funds registered in EEA states and open-end investment funds registered in OECD states other than Member States or EEA states, including orders to buy or redeem units, may be submitted through natural persons who are bound with the management company, entity conducting brokerage activities or the entity referred to in Art. 32.2, under a mandate contract or another legal relation of a similar nature. Such natural person may not accept payments for the purchase of units, or accept and transfer redemption proceeds., b) Art shall read as follows: 2) the entity conducting brokerage activities as provided for in Art. 170 of the Act on Trading in Financial Instruments;, c) Art shall read as follows:

144 Where a person buys or redeems units in an investment fund through an entity conducting brokerage activities or an entity referred to in Art. 32.2, such entity and the management company shall be jointly and severally liable for any damage incurred by such person, unless the damage results from circumstances for which such entity is not responsible., d) Art shall be added, to read as follows: 5. The liability of the entity conducting brokerage activities or the entity referred to in Art. 32.2, as well as the liability of the domestic bank or the credit institution may not be disclaimed, limited or otherwise changed by way of an agreement. Any agreements disclaiming liability shall be null and void. ; 9) Art shall read as follows: 1. Declarations of will made in connection with the acquisition of units or redemption requests may be submitted on electronic carriers, provided that the requirements aimed at ensuring authenticity and reliability of such declarations of will are met. ; 10) In Art. 37, Art shall be added, to read as follows: 11) In Art. 46: 3. Semi-annual financial statements of investment funds, including combined semi-annual financial statements of umbrella funds, as well as semi-annual financial statements of the individual sub-funds, shall be subject to a review. ; a) Art shall read as follows: 1. A management company may commission, on the basis of an agreement, management of an investment fund s portfolio or its part only to: 1) an entity conducting brokerage activities, in the scope provided for in the Act on Trading in Financial Instruments; 2) an entity conducting brokerage activities with a registered office in another Member State; 3) an entity conducting brokerage activities with a registered office in an OECD state other than a Member State, if: a) securities or money market instruments listed on a regulated market in an OECD state are acquired for the fund s investment portfolio or for a part of such portfolio in accordance with the fund s articles of association; b) the entity conducting brokerage activities is subject to supervision by the competent capital market supervisory authority in such state; c) the Commission s cooperation with such supervisory authority is ensured on a reciprocity basis. b) Art and 46.5 shall read as follows: 4. An investment portfolio or its part whose management has been commissioned to the entities referred to in Art may not include

145 144 dematerialised securities referred to in the first sentence of Art. 5.1 of the Act on Trading in Financial Instruments. 5. The provisions of Art shall not exclude the possibility of an entity referred to in Art being commissioned, on the basis of an agreement, to make decisions as to the way of voting at a general shareholders meeting, as well as to buy and sell shares in a company whose shares were in the investment fund s portfolio or a part of such portfolio that was transferred for management, prior to the opening day of the public offering of such securities or their admission to trading on a regulated market. ; 12) Art shall read as follows: 4. A management company which conducts the activities specified in Art shall participate in the compensation scheme referred to in the Act on Trading in Financial Instruments to the same extent as a brokerage house whose sole business consists in discretionary management of securities portfolios or providing advisory services related to trading in securities. The provisions of the Act on Trading in Financial Instruments regarding the mandatory compensation scheme shall apply accordingly. ; 13) Art shall read as follows: 9. The provisions of Art shall not apply to a management company managing solely securitisation funds or private equity funds, on condition that investment certificates issued by such funds are not public investment certificates. ; 14) Art. 53 shall read as follows: Art. 53. The shares of a management company shall be registered shares, unless they are dematerialised. ; 15) Art shall read as follows: 2) the management company s organisational chart and the rules for the prevention of the disclosure of information whose use could be detrimental to the interests of unit-holders or investors acquiring securities offered in a public offering or securities traded on a regulated market; ; 16) Art shall read as follows: 17) In Art. 101: 7) shares in companies operating stock exchanges or over-the-counter markets as defined in the Act on Trading in Financial Instruments; ; a) Art shall read as follows: 2. An open end investment fund shall not invest more than 20% of the value of its assets in units of a single open-end investment fund, foreign fund or collective investment undertaking referred to in Art , and if such an open-end investment fund, foreign fund or collective investment undertaking is an umbrella fund or a fund or institution comprising subfunds, and each sub-fund has an individual investment policy more than 20% of the value of its assets in units of a single sub-fund. In the case of investments, referred to in the preceding sentence, in units of a single subfund, the fund s prospectus should specify additional risk related to such investments,

146 b) Art shall read as follows: If an open-end investment fund invests its assets in units or investment certificates of another fund or in units of a foreign fund or a collective investment undertaking referred to in Art , managed by the same management company or an entity from the management company s group, such management company or entity may not charge fees for sale or redemption of such units or investment certificates., c) Art shall be added, to read as follows: 5. An open-end investment fund that invests more than 50% of its assets in units or investment certificates referred to in Art , shall be obliged to disclose the maximum level of fees charged for the management of the open-end investment fund, foreign fund or collective investment undertaking referred to in Art , in the prospectus and in the annual and semi-annual financial statements, combined financial statements of an umbrella fund and the financial statements of the sub-funds. ; 18) Art shall read as follows: 1. An open-end investment fund may lend dematerialised securities only pursuant to Art of the Act on Trading in Financial Instruments, on condition that: 1) the fund obtains collateral in the form of cash or securities in which the fund may invest in accordance with the investment policy defined in its articles of association; 2) the value of the collateral is at least equivalent to the value of the securities lent on each asset valuation day of such fund up until the day on which the lent securities are returned; 3) securities shall be lent for a period not longer than six months. 19) Art. 116 shall read as follows: Art The articles of association of a specialised open-end investment fund may permit payments to be made into a fund in the form of dematerialised securities which the unit-holders acquired on preferential terms or free of charge, in accordance with other regulations. In such a case, the provisions of Art of the Commercialisation and Privatisation Act of August 30th 1996 (Dz.U. of 2002, No. 171, item 1397, No. 240, item 2055, Dz.U. of 2003 No. 60, item 535, No. 90, item 844, and Dz.U. of 2004, No. 6, item 39, No. 116, item 1207, No. 123, item 1291 and No. 273, item 2703) shall not apply. ; 20) In Art. 120: a) Art shall read as follows: 1. A closed-end investment fund issuing public investment certificates shall be obliged to submit an application for admission of investment certificates to trading on a regulated market within seven days of the fund being entered in the register of investment funds and of the day of the closing of each issue of certificates b) Art shall read as follows:

147 In the event that the admission of investment certificates to trading on a regulated market is refused, they may be traded in an alternative trading system referred to in the Act on Trading in Financial Instruments. 21) Art shall read as follows: 1. Investment certificates of a closed-end investment fund may be in the form of either registered or bearer securities, save that public investment certificates may only be in bearer form.. 22) Art shall read as follows: 1. A certificated non-public investment certificate shall specify: 1) the name of the closed-end fund and the registered office of the fund; 2) the number under which the fund is entered in the register of investment funds; 3) the date of the fund s registration and the date of issue of the investment certificate; 4) the duration of the investment fund, if limited; 5) the series and number of the investment certificate; 6) whether the investment certificate is issued in bearer or registered form; 7) whether the registered investment certificate carries any voting preference, with details of the scope of such preference; 8) any restrictions on the transferability of the investment certificate. ; 23) Art shall read as follows: 1. Should the closed-end investment fund s articles of association so stipulate, non-public investment certificates may be issued in an uncertificated form. In such case, all the fund s investment certificates shall be issued in such form. ; 24) Art. 124 and Art. 125 shall be repealed; 25) in Art. 126: a) the first sentence of Art shall read as follows: The following shall be provided along with an offer of non-public investment certificates:, b) Art shall read as follows: 3. The Polish Council of Ministers shall define, by way of a regulation, the detailed wording of the terms and conditions of the issue of non-public investment certificates in order to provide the buyers of the certificates with the information necessary for an assessment of the risk associated with investing in such certificates. ; 26) Art. 127 shall read as follows: Art The articles of association of a closed-end investment fund may permit a simultaneous offering of more than one issue of non-public investment certificates. ;

148 27) Art shall read as follows: If the payment to the fund is made by contribution of securities other than dematerialised securities or of shares in limited-liability companies, the person subscribing for investment certificates shall transfer, by way of an agreement, in accordance with other regulations, the rights attached to such securities or shares to the fund, and shall submit to the depositary a copy of the agreement and in the case of a contribution in the form of securities the securities or, if the securities are uncertificated, a document confirming ownership of such securities, issued pursuant to the relevant regulations. ; 28) Art shall read as follows: 2. The delivery referred to in Art shall be effected:: 1) upon registration of the certificate in the unit-holder s securities account in the case of public investment certificates; 2) in the case of non-public investment certificates: 29) Art shall read as follows: a) by handing over the certificate in the case of a certificated investment certificate, or b) upon the certificate being entered in the register of unit-holders in the case of an uncertificated investment certificate. ; 1. Should the closed-end investment fund s articles of association so stipulate, registered non-public investment certificates of a closed-end investment fund may be delivered to an investor who has not paid the full issue price of the certificates ; 30) Art shall read as follows: 7. The articles of association of the fund referred to in Art. 196, which issues non-public or public investment certificates with an issue price per certificate not lower than the złoty equivalent of EUR 40,000 may stipulate that under the circumstances specified in Art , the company managing such fund shall be entitled to charge an additional fee in order to cover the organisational costs of the fund and lost profits. ; 31) Art shall read as follows: 1. A member of the board of investors may be only a participant of a closedend investment fund who holds investment certificates representing over 5% of the total number of a given fund s certificates and who has agreed in writing to serve on the board, and: 1) has blocked a number of investment certificates representing over 5% of the total number of such certificates: a) in a securities account in the case of public investment certificates, b) in the register of fund participants in the case of uncertificated non-public investment certificates, or

149 148 2) has deposited with the depositary a number of certificated nonpublic investment certificates representing over 5% of the total number of such certificates. ; 32) Art shall read as follows: 1) The unit-holders referred to in Art who have submitted at the management company, not later than seven days prior to the investors meeting, deposit certificates issued in accordance with the Act on Trading in Financial Instruments; ; 33) in Art. 162, Art shall be added, to read as follows: 3. The conversion referred to in Art shall involve a concurrent redemption of units in an umbrella fund and acquisition of units in another sub-fund of the same investment fund with the redemption proceeds. ; 34) Art shall read as follows: 7. Deposit certificates shall be governed by the provisions of the Act on Trading in Financial Instruments. ; 35) Art. 196 shall read as follows: Art. 196.A closed-end investment fund or a specialised open-end investment fund which applies the principles and investment limits of a closedend fund may be created as a private equity fund that invests 80% or more of its assets in assets other than: 1) securities offered in a public offering or admitted to trading on a regulated market, unless such offering or admission takes place after acquisition of the securities by the fund; 2) money market instruments, unless they have been issued by a private company the shares of which are held in the fund s investment portfolio. ; 36) Art and shall read as follows: 2. The professional secrecy obligation referred to in Art shall apply to any information obtained by the persons specified in Art in connection with their professional activities performed under an employment contract, a mandate contract or as part of another legal relation of a similar nature, relating to the legally protected interests of the entities performing activities connected with the operations of an investment fund or of a collective securities portfolio and, in particular, information relating to the investments and the register of unit-holders of such fund or portfolio, or other activities performed as part of a statutorily regulated business falling within the scope of supervision by the Commission or a foreign competent authority, or information concerning the activities taken as part of such supervision. 3. The professional secrecy obligation, as defined in Art. 149 of the Act on Trading in Financial Instruments, shall apply to the provision of management company s services of discretionary management of securities portfolios or advisory services in the area of securities trading..

150 149 Art The Act on Freedom of Business of July 2nd 2004 (Dz.U. No. 173, item 1807 and No. 281, item 2777, and Dz.U. of 2005, No. 33, item 289 and No. 94, item 788) shall be amended as follows: 1) in Art. 75.1: a) Art shall read as follows: 7) the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538);, b) Art item 7a shall be added, to read as follows: 7a) the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539); ; 2) Art shall read as follows: 2) supervision over the capital market, pursuant to the Act on Capital Market Supervision of July 29th 2005 (Dz.U. of 2005, No. 183, item 1537), the Act on Trading in Financial Instruments of July 29th 2005, the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th 2005, the Act on Investment Funds of May 27th 2004 (Dz.U. No 146, item 1546, and Dz.U. of 2005, No. 83, item 719), and the Commodity Exchange Act of October 26th 2000;. Art The Act on European Grouping of Economic Interests and the European Company of March 4th 2005 (Dz.U. No. 62, item 551) shall be amended as follows: 1) Art. 2.7 shall read as follows: 7) public company shall mean a company as defined in Art of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539); ; 2) Art shall read as follows: 3. Shareholders in a public company shall submit, together with the request referred to in Art. 17.2, a deposit certificate issued in their name in accordance with the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538). ; 3) Art shall read as follows: 7. If the buy-out concerns shares admitted to public trading in securities, transfer of such shares shall be effected pursuant to an agreement concluded between the shareholder demanding that his shares be bought out and the buyer, upon an appropriate entry being made in the securities account of the buyer pursuant the provisions of the Act on Trading in Financial Instruments of July 29th

151 150 Part XII Transitional and Final Provisions Art As of the effective date hereof, the activities of the Warsaw Stock Exchange shall be governed by the provisions of this Act, with the exclusion of Art. 25 and Art The Commission shall move to the minister competent for financial institutions to prohibit the company referred to in Art to operate a stock exchange market, if such company conducts such activities in gross violation of the law. 3. As of the effective date hereof, the securities within the meaning of Art. 3.3 and Art. 4 of the Act referred to in Art. 224, which are traded on a regulated market on that date shall become financial instruments other than securities, referred to in Art c and d. 4. The securities within the meaning of Art. 3 and Art. 4 of the Act referred to in Art. 224 which are traded on a regulated market on the effective date hereof and are not registered in the depository for securities as at that date, shall become financial instruments other than securities, referred to in Art c and d, as of the date of their registration in the depository for securities, provided that the registration takes place within 30 days as of the effective date hereof. 5. As of the effective date hereof, the official stock exchange market organised by the company referred to in Art , which meets the requirements set out in the regulations issued under Art of the Act referred to in Art. 224, shall become the official listing market referred to in Art Art As of the effective date hereof, the provisions of this Act, with the exclusion of Art. 36, Art and Art and , shall apply to the activities of a company operating an OTC market. 2. The Commission shall prohibit operation of an OTC market by the company referred to in Art , if it conducts such activities in gross violation of the law. Art Brokerage licences or authorisations to keep securities accounts granted by the Commission prior to the effective date hereof shall authorise their holders to perform activities specified in Art or Art , respectively. If a brokerage house or a bank conducting brokerage activities intends to perform activities specified in Art , which before the effective date hereof were not brokerage activities, the provisions of Art. 87 and Art shall apply accordingly. 2. Entities conducting brokerage activities on the basis of licences granted by the Commission prior to the effective date hereof shall, within six month as of the effective date hereof, adjust their operations to the requirements of this Act.

152 The companies operating regulated markets on the effective date hereof shall adapt the terms of the rules referred to in Art or Art of the Act referred to in Art. 224, to the changes resulting from the provisions of this Act, within three months from its effective date. 4. Issuers of securities admitted to public trading pursuant to the provisions of the Act referred to in Art. 224, who did not conclude the agreement referred to in Art. 70 of the said Act prior to the effective date hereof, shall conclude the agreement referred to in Art within 14 days from the effective date hereof. Art The entries in the register of securities brokers and the register of investment advisers made prior to the effective date hereof shall continue to be valid. 2. The licences, authorisations and approvals granted by the Commission prior to the effective date hereof shall continue to be valid. Art Brokers entered in the register of securities brokers prior to the effective date hereof shall be required to pass a supplementary examination to obtain qualifications to perform activities related to investment advisory services. This requirement shall also apply to investment advisory services provided while performing the activities of an investment firm agent by such a broker. 2. The supplementary examination shall be conducted by the examination board qualifying brokers. The provisions of Art , and and the regulations issued pursuant to Art and shall apply accordingly to the matters related to the examination before the examination board qualifying brokers, subject to a proviso that the thematic scope of the supplementary examination shall only comprise the fields related to the performance of investment advisory services. 3. In the case of a broker entered in the register of securities brokers prior to the effective date hereof, the requirement to employ a prescribed number of investment advisers and securities brokers, referred to in Art , shall be deemed to be met if the broker passes the supplementary examination. 4. The fact of passing the supplementary examination, referred to in Art , shall be published in the Official Journal of the Polish Securities and Exchange Commission, referred to in Art. 7.4 of the Act on Capital Market Supervision. Art In the cases related to offences specified in Art of the act referred to in Art. 224, with respect to which criminal proceedings were cancelled or the instigation of such proceedings was refused due to the fact that the offence ceased to be prosecutable as a result of the provisions hereof coming into effect, the Chairman of the Commission may apply to the Court or the prosecutor for information or copies of documents related to the case, to the extent necessary for the Commission to instigate administrative proceedings in cases related to the acts, specified in Art , and Art , corresponding to such offences.

153 The provisions of the Act referred to in Art. 224 which relate to the acts specified in Art and Art hereof shall apply to the acts representing offences specified in Art of the Act referred to in Art. 224, committed prior to the effective date hereof and disclosed following that date. Art Subject to Art , the provisions of this Act shall apply to cases instigated but not concluded prior to the effective date hereof. 2. The persons who on the effective date hereof fulfil, according to the existing regulations, the criteria to be met to be entered in the register of brokers or the register of advisers, shall be entered in the register upon submitting a relevant application, subject to the three-month period referred to in Art Art Until December 31st 2005, the compensation scheme referred to in the provisions of Part V hereof secures the payment of investors funds referred to in Art ; the payment shall comprise 100% of the funds covered by the compensation scheme in the case of funds of up to the złoty equivalent of EUR 3,000, and 90% in the case of funds in excess of that amount, provided that the upper limit for the funds covered by the compensation scheme shall equal the złoty equivalent of EUR 11,000, computed at the mid-exchange rate quoted by the National Bank of Poland in the exchange-rate table for the date on which the circumstances giving grounds to the payment of compensation have occurred. Art The secondary legislation issued under Art and 23.6, Art. 31.2, Art. 59c.2, Art. 60.1, Art , Art. 60.5, Art and 90.4, Art. 97a.2 and Art. 161g of the Act referred to in Art. 224 shall continue to be valid until the secondary legislation issued provided for in this Act are issued, but in no event for a period longer than six months as from the effective date hereof. Art The provisions of this Act shall apply to the determination by the National Depository for Securities of the rates to be applied in 2006 in the calculation of contributions to the compensation scheme, in accordance with Art of the Act referred to in Art Art The Act on Public Trading in Securities of August 21st 1997 (Dz.U. of 2005, No. 111, item 937) shall hereby become null and void, with the exception of Art and Art. 123a and 123b and Art. 146a, subject to Art. 223, which shall become null and void as of December 31st Art This Act shall take effect after the lapse of 30 days from its promulgation.

154 153