OFFERING OF SECURITIES OF BULGARIAN COMPANY IN POLAND AND LISTING ON WARSAW STOCK EXCHANGE (WSE) SELECTED LEGAL ISSUES Prof. Marek Wierzbowski Sofia, 28 October 2010
Prof. Marek Wierzbowski & Partners - Advocates and Legal Counsellors who we are? Strong team of 20 experienced lawyers including 4 partners, specializing in capital markets; among them: Prof. Marek Wierzbowski member of Advisory Committee to the Polish SEC; Marcin Marczuk former officer of Polish Securities and Exchange Commission; Slawek Jakszuk former deputy head of the Legal Department of WSE
Prof. Marek Wierzbowski & Partners Advocates and Legal Counsellors who we are? According to independent rankings: 2010 Polish Capital Markets Law Firm of the Year Award; largest number of the Initial Public Offerings (IPO) of securities in 2007 2009 in Poland; ranked by Chambers Europe, Legal 500 among top law firms in Poland; Prof. Wierzbowski is listed as top securities lawyer in Poland.
REGULATIONS LAW IN FORCE COMMISSION REGULATION (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements; Polish Acts of Parlament of 29 July 2005, (as amended): Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to organised Trading, and Public Companies Act on trading in Financial Instruments Act on Capital Market Supervison Act of 21 July 2006 on Financial Market Supervision SOFT LAW RECOMMENDATION CESR SOFT LAW WSE WSE CORPORATE GOVERNANCE BEST PRACTICES (2010)
Role of Polish Legal Counsel to the Company Law Firm is an Issuer s Counsel or Transaction Counsel, responsible inter alia for: advising the Company in the entire process concerning Polish law & legal practice; representation of the Company before Polish SEC, The National Depository for Securities, WSE, including drafting and submission of the required applications and other documents, participation in the meetings, responding to any inquires made by these authorities; negotiating agreements to be entered by the Company, including: - mandate letter with an investment firm, - underwriting agreement with an investment firm, - agreement with Authorized Advisor in case of listing on New Connect - other agreements to be entered with other entities (The National Depository for Securities, Market Maker, PR company etc.); drafting or reviewing drafts of corporate documents including resolutions of the corporate bodies of Bulgarian Company; delivery of legal opinions to the banks/investment firms ( being in fact assurances concerning accuracy and legality of actions/documents of the Company)
OFFERING OF SECURITIES - SINGLE PASSPORT RULE POLISH SEC MARKETING OFFER NOTIFICATION TO THE POLISH SEC PRESENTATION FOR ANALITICS PRE-MARKETING PROCEEDINGS IN POLISH SEC PUBLICATION OF THE ANALITICAL REPORT DECISION ON THE PRICE SPREAD PUBLICATION OF THE PROSPECTUS PR OF THE OFFERING ROADSHOW RELATIONS WITH POLISH SEC CONCERING THE PROSPECTUS SUBSCRIPTION PRICING AND ALLOCATION OF SHARES
PROCEEDINGS BEFORE POLISH KNF INITIATION OF THE PROCEEDINGS The receiving by Polish SEC (Financial Supervision Authority) of: a notification document from competent authority in the home country of the Company a copy of the approved issue prospectus along with the translation Responding to any SEC s request or inquiry.
ACTIONS TAKEN BY THE COMPANY/ITS ADVISORS NEXT STEPS Publication of the prospectus Duty to publish prospectus not later than on the day of commencement of subscription for or sale of the securities. In case of IPO not later than six business days prior to the closing of subscription for or sale of the shares. Standard methods of publication of the prospectus. Duty to submit approved supplements to the prospectus.
RESPONSIBILITIES OF PUBLIC COMPANIES AND ITS SHAREHOLDERS NEXT STEPS Validity period of an issued prospectus shall be 12 months from the date it is first made available to the public (exceptions). issue price or selling price of the securities, or the final number of securities offered, consequences of the violation of the terms of promotional action reaction of SEC violations of the law during the offering - reaction of SEC
LISTING ON NEW CONNECT (WITHOUT PUBLIC OFFERING) agreement with Authorized Advisor Information Document like short prospectus (may be substituted by a valid notified prospectus; in case securities are listed on other regulated market Information Document may be simplified); no approval of Polish SEC needed agreement with Market Maker application to The National Depository for Securities, agreement with The National Depositoryfor Securities applications to WSE, agreement with WSE placing of securities on the market
RESPONSIBILITIES OF PUBLIC COMPANIES AND ITS SHAREHOLDERS Information and Notification obligations DISCLOSURE OF CHANGE OF SHAREHOLDINGS CHANGE IN SHAREHOLDINGS - Tender Offers INSIDER INFORMATION DISCLOSURE AND USE OF INSIDER INFORMATION ACQUISITION OF SHARES BY MANAGEMENT
DISCLOSURE OF THE SHAREHOLDINGS Duty of an investor to inform the Company and SEC about achieving or exceeding a certain threshold number of the total votes in a public company (for example 5%, 10, 15%, 33% or 75%), or about changing in the holding of the total number of votes. Extension of the information duty - Art. 69a of the Act on Public Offering The deadline to inform - 4 working days. Obligations of a public company in connection with the disclosure of shareholdings.
DISCLOSURE OF SHAREHOLDING - TENDER OFFERS Conditions for a tender offer: acquisition of a number of shares in a public company which increases a shareholder's share in the total vote by more than 10% (or 5%) within a period shorter than 60 days (or 12 months) - in the case of a shareholder holding less than 33% of the total vote at the company; exceeding 33% of the total vote in a public company; exceeding 66% of the total vote in a public company;
INSIDE INFORMATION Definition Limits Inside information 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 (art. 154 Act on trading). The prohibition of using of inside information; The prohibition of disclosure of such information; The prohibition of recommendation or induce another person on the basis of inside information to acquire or dispose of financial instruments, to which such information relates.
INSIDE INFORMATION PERSONS OBLIGED Anyone who gains inside information by virtue of membership in the governing bodies of the company, by virtue of an interset 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 contact or any other contact of a similar nature. Persons obliged not to use an inside information Anyone who gains inside information through criminal activities. Anyone who gains inside information in a manner other than described above, if such person has known or, acting with due diligence, could have known such information to be inside information.
USE OF INSIDE INFORMATION Use of inside information - definition Acquisition or disposal of financial instruments for one s own account (or a third party), effected on the basis of inside information held by a given person, or any other legal transaction, which leads or might lead to disposal of such financial instruments, if such instruments : are admitted to trading on a regulated market or alternative trading system in the territory of the Republic of Poland or another Mamber State, (irrespective of whether the transaction in such instruments is executed on such market) are not admitted to trading, but their price or value depends, whether directly or indirectly, on the price of the financial instrument refered above.
DISCLOSURE OF INSIDE INFORMATION Disclosure of inside information - definition Disclosure of inside information shall be explained as transferring, enabling or faciliating gaining such information concerning: one or more issuers of financial instruments, one or more financial instruments, acquisition or disposal of any financial instruments, by unauthorised person.
ACQUISITION OF SHARES - INFORMATION OBLIGATIONS OF MEMBERS OF BODIES Persons under a duty persons included in the management or supervisory bodies of the issuer or its proxies; other persons performing management functions in the organizational structure of the issuer's, which have regular access to insider information and are competent to make decisions affecting the development and prospects of the issuer's business Scope of the duty The obligation to notify the Polish SEC and 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 instruments related to the issuer shares admitted or sought to be admitted to trading on a regulated market.
TAXATION The listing of shares on the WSE does not have any impact on the tax residence of a Bulgarian company. Selling and purchasing shares at the WSE is tax exempt from the Polish stamp duty Proceeds from the sale of shares of a Bulgarian company by the Polish individuals or companies are subject to taxation in Poland. On the basis of the Bulgaria-Poland DTC dividends paid by a Bulgarian company to Polish individuals are subject to a 10% withholding tax (the withholding tax is creditable against tax liability in Poland). On the basis of the EU Directive dividends paid to Polish companies may benefit from exemption provided that certain criteria are met.
Thank you for your attention Prof. zw. dr hab. Marek Wierzbowski office@wierzbowski.com UL. MOKOTOWSKA 15A LOK. 17 00-640 WARSZAWA TEL. 022 312 41 10 FAX: 022 312 41 12
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