The Polish cabinet approved a draft bill Sept. 4 which proposes amending the composition of the Polish Financial Supervision Authority, how it is financed, along with setting up a fund to educate investors.
The Polish finance ministry aims to bolster protection for investors and strengthen oversight of the financial market through the changes, in the aftermath of debt collector GetBack SA's collapse. Over 9,000 retail investors had acquired the company's bonds prior to its collapse, with a number of anomalies reported during the sale of securities by various banks and brokerages resulting in a probe by the watchdog in April.
Under the new bill, four members representing the prime minister, the Bank Guarantee Fund, the consumer protection regulator UOKiK and the ministry overseeing law enforcement authorities will be added to the FSA's regulatory commission. Only the prime minister's representative will have voting rights during the FSA's meetings.
Additionally, the bill stipulates that the FSA will be funded directly through fees levied on financial market participants for the regulator's supervisory activities.
The bill reinforces investor protection by setting up a financial education fund, as part of Poland’s Central Securities Depositary, to increase awareness in retail investors, and by implementing compulsory dematerialization and depository registration of all corporate bonds, covered bonds, and investment fund certificates.
Previously, the bill was slated to provide compensation for bondholders who were sold securities in breach of regulations but the new draft bill published on the government website Sept. 4 made no mention of it.
Furthermore, a legal framework will be established for sharing information between the FSA and various other government entities, so as to streamline the provision of information and identify threats in a timely manner.