The National Depository
for Securities (KDPW S.A.)
4 Książęca Street
00-498 Warsaw, Poland
T. +48 22 537 93 43
F. +48 22 627 31 11
Giovannini barrier three polish working group
As part of efforts to create a harmonised securities market in the EU, a significant contribution involved work prepared by the Giovannini Group of experts at the request of the European Commission. The result of their work was presented in two reports published in 2001 and 2003. The Group identified 15 barriers in their first report, which prevent or impede efficient cross-border clearing and settlement in EU securities markets. The second report presented proposals for action to remove the barriers and indicated institutions or organisations - and in the case of some barriers, national governments - as entities responsible for removing the barriers. The barriers generally cover three areas -
- technical requirements,
- market practice,
- legal barriers and tax barriers.
The European Credit Sector Associations (ECSA) and the European Central Securities Depository Association (ECSDA) were nominated as organisations responsible for the removal of the so-called Third Giovannini Barrier (known as Barrier 3) relating to differing market practices for processing corporate actions. These associations, working jointly with the European Securities Forum (ESF) and the European Association of Listed Companies (EALIC), are working to define recommendations and standards to eliminate Barrier 3. Special working groups have been established at local European market level, which have set themselves the task of preparing and monitoring national initiatives for the implementation of the standards relating to Barrier 3.
In Poland, as part of a joint initiative by the Custodian Bank Council at the of Polish Bank Association and KDPW, the Giovannini Barrier Three Polish Working Group was formed in August 2006. Representatives of KDPW, the Custodian Bank Council at the Association of Polish Banks, the Warsaw Stock Exchange, the Association of Stock Exchange Issuers, the Polish Financial Supervision Authority and the National Bank of Poland all play an active role in the Group.
The Group in its monthly working meetings is preparing an implementation plan for the Polish market to introduce standards and recommendations relating to corporate payments from securities. The Group has identified those market practices in the Polish market that are not compliant with the recommendations proposed by ECSDA and ECSA and has prepared a list of necessary changes that will need to be implemented to eliminate these differences, along with those institutions that are responsible for introducing the changes.
It would be correct to say that the Polish market meets the majority of the ECSDA/ECSA recommendations. The proposed changes relate above all to the communication system used between issuers and KDPW, as the central securities depository. According to the recommendations, this communication should take the form of electronic messages that are ISO 6166 and ISO 15022/20022 compliant. As part of the issuer public information policy, as defined in the recommendations, issuers need to make information on corporate events available on their websites, at least in English. This particular feature has been proposed by the Group in line with the Corporate Governance Handbook, as a form of best practice for issuers, meeting the needs of a transparent public information policy.
