Companies & corporate law

UKNF is moving forward with relief for entities supervised in connection with SARS-CoV-2?

The UKNF Communication on the Package can be read that, in the current situation, UKNF sees a particular need to ensure the proper functioning of this market, including security, fair trading rules and investor protection. UKNF has prepared a package of proposals to make it easier for supervised entities to operate in the current market environment. The package is open-ended and its elements will be implemented depending on developments. In this respect, UKNF will cooperate with the Ministry of Finance, NBP and the Polish Audit Supervision Agency. The dialogue will also be conducted with the Chamber of Brokerage Houses, the Chamber of Fund and Asset Management and the Custodian Banks Council.

The objective and expected impact of the package is to adopt solutions to reduce the regulatory burden on supervised entities to allow them to respond adequately to the challenges they face and to support the organisation of financing of the economy. UKNF declares its openness to bottom-up solutions from market participants, who are best able to identify their urgent needs in connection with the COVID-19 explosion.

Although there are not many specifics so far, the UKNF declares, among others legislative proposals to postpone reporting deadlines. These proposals include:

  1. extension of the deadlines for preparation, approval and publication of annual financial statements and annual consolidated financial statements of entities subject to KNF’s supervision;
  2. extension of the deadline for submission of quarterly reports and consolidated quarterly reports of issuers for the first quarter of the financial year commencing on January 1, 2020;
  3. extension of the deadline for the General Meeting of Shareholders;
  4. extension of the deadline for approval of the remuneration policy;
  5. changes in information memoranda leading to significant facilitation and acceleration of the procedure of offering documents required for raising capital by entrepreneurs;

Moreover, UKNF declares a pragmatic approach to selected supervisory activities, including, among others

  1. will review the information obtained in order to minimize the obligations imposed on the supervised entities and will be expected to accept a postponement of their implementation;
  2. will postpone the planned actions towards the supervised entities (e. g. The Commission will not be able to take into account the following factors),
  3. update the control plan (verification of the control activities carried out in the near future) while maintaining the supervisory objectives);
  4. demonstrate flexibility in the case of capital adequacy standards, including limits of large exposures;
  5. demonstrate flexibility in the postponement of particular dates, e. g. implementation of audit recommendations (also in relation to the original deadlines);
  6. simplify the formula of supervisory assessments carried out in 2020;
  7. postpone by half a year the deadline for brokerage houses to comply with the EBA guidelines on outsourcing;
  8. individually address the issue of exceeding investment limits applicable to investment funds;
  9. take and support actions to create or launch tools to support liquidity in the area of treasury securities;
  10. broaden the scope of communication channels with supervised entities, including through the PORTAL system, e-PUAP and e-mail.

We are curious how the discussed postulates and the change of approach will translate into legislation and enforcement of supervised entities.

Author team leader DKP Legal Piotr Glapiński
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