Identification of shareholders upon the amendment of the Financial Instrument Trading Act

As of 3 September 2020, as part of the implementation of the EU Directive 2017/828, called SRD II (Shareholder Rights Directive II), in the Polish legal order, the provisions of the new chapter of the Financial Instrument Trading Act came into force. As stipulated by the EU legislator, listed companies can know each shareholder, whatever the size of the shareholder’s stake. The SRD II lets national legislators provide for non-disclosure of the identity of shareholders holding up to 0.5% of shares of a given company, but Poland, like most EU states, did not define the threshold. It is also worth asking the question: which companies are listed companies? The definition is set out in the new regulations: a listed company is a company that has its registered office in the member state and whose at least one share is admitted to trading in a regulated market or a foreign regulated market. This means that, with regard to Poland, the newly established privilege does not apply to markets in the alternative trading system, including NewConnect.

The information about shareholders is obtained via entities maintaining securities accounts (including, without limitation, brokerage houses, custodian banks, the Central Securities Repository of Poland), which are obliged to disclose both the identity of and the stake of shares held by a shareholder at the company’s request. Such a service is payable and, based on the act, an amount of the fee should be proportional to actual costs incurred in connection with the service provision.

As assumed by the legislator, the new regulations are to enable communication between companies and shareholders, in particular minority shareholders, which or who could be completely anonymous till then. Thanks to the changes, companies will be able to contact each shareholder to encourage them to get involved in the corporate life of a given company. New opportunities also entail new obligations: the identity of shareholders is subject to personal data protection regulations and must not be used for any other purpose than purposes specified above, i.e., to identify a shareholder, establish a personal contact with the shareholder and enable the shareholder to exercise shareholder rights.

To briefly summarise the amendment, the implementation of the SRD II in the Polish legal order is another step, after the mandatory dematerialisation of shares, towards the complete transparency of Polish financial markets.

Maksymilian Marciniak