Market relations and dialogue

Pursuant to the CSR strategy, the key objectives of the GPW Group include the development of corporate culture and behaviours of capital and commodity market participants in Poland according to high standards of corporate governance and disclosure requirements. This goal is pursued through efforts made in partnership and dialogue with capital and commodity market stakeholders.

Publication of macrosector indices

To address the needs of market participants, GPW started to publish macrosector indices.

On 18 March 2019, GPW started to publish WIG.GAMES (game developer index) and macrosector indices including: banking-insurance-capital market-debt collection, fuels-gas-chemicals, and energy-mining-resources. The macroindices will be the underlying of futures, in line with GPW’s published strategic initiative.

The new indices group companies in selected sectors of similar specificity. The number of companies participating in the indices will be fixed, based on classification by liquidity, with a cap on the share of the biggest participants. The introduction of the new indices which may be the underlying of futures helps to develop the derivatives market.

On 24 June 2019, GPW started to publish WIGtech. The index covers high-tech companies listed on the Main Market active in biotechnology, games, IT, telecommunication, and new technologies. The index may in the future be the underlying of financial instruments including futures. The new index addresses current trends in the economy and on the capital market. High-tech companies play an increasing role in the economy and on the exchange. GPW provides funding opportunities to innovative companies which are instrumental to technological progress.

Publication of the Three Seas Exchanges - CEEplus

The CEOs of exchanges in the Visegrad Group countries (Poland, Czech Republic, Slovakia, Hungary), Croatia, Romania and Slovenia signed a letter of intent concerning the publication of a new index of the Three Seas exchanges, CEEplus, at the Economic Forum in Krynica Zdrój on 4 September 2019. The letter of intent concerning the new regional index is a part of collaboration among the capital markets of the region. The project will ensure that the CEE exchanges speak in a stronger voice in debates concerning the EU capital markets. The initiative opens the European Union to a coherent position of the entire region.

The index portfolio includes more than 100 most liquid stocks of domestic companies listed on the Central and Eastern European exchanges in Bratislava, Bucharest, Budapest, Ljubljana, Prague, Warsaw, and Zagreb. Stocks participating in the index have to meet the liquidity criterion: average value of trading per session of at least EUR 90 thousand within six months. The participation of stocks in the index will depend on their free float and will be capped according to the 5/10/40 rule (participation of the biggest stock capped at 10%, aggregate participations of stocks weighing more than 5% capped at 40%). The participation of stocks from any single country in the index portfolio will be capped at 50%.

The index is published on a daily basis according to closing prices converted at the exchange rate of the National Bank of Poland for local currencies, the euro, and the US dollar. CEEplus is a price index and the underlying of a TFI PZU passive fund inPZU CEEplus. GPW was responsible for the calculation and publication of the index until the end of 2019. As of 1 December 2019, GPW Benchmark is the administrator of exchange indices of the GPW Main Market, NewConnect and TBSP, including WIG20, mWIG40 and sWIG80, and starting on 1 January 2020 also WIG-ESG and CEEplus.

Programme supporting technological development of the capital market

The Programme was developed following consultations with brokers. It offers discounts on some exchange fees to brokers who invest in their technological capacity and thus improve the quality of their service.

The initiative is designed to improve the competitiveness of Exchange Members and make the capital market more attractive.

Technological development is a part of the long-term growth strategy of the Warsaw Stock Exchange and the capital market. Guided by this objective, the GPW management in communication with the broker community decided to launch an innovative Programme for Exchange Members as of 1 March 2019.

The Programme will cover a range of investments, including the acquisition of licences, improvement of the technological capacity of market makers and the institutional sell-side, the development and acquisition of applications for retail investors. The Programme is addressed to all GPW members operating directly on the Main Market in shares and derivatives and on NewConnect as at 28 February 2019 who applied for participation in the Programme.

Analytical coverage support pilot programme

GPW launched the Analytical Coverage Support Pilot Programme in March 2019. The objective of the Programme is to extend the analytical coverage of companies participating in mWIG40 and sWIG80. The Programme is addressed to companies and Exchange Members who meet the criteria laid down in the regulations.

Analytical reports are a key tool of risk assessment in investment decisions. They are a source of information about the business and the financial standing of companies listed on the exchange.

The Exchange’s Analytical Coverage Support Programme was developed in consultation with brokerage houses, which will prepare analytical reports financed by GPW. To join the Programme, companies needed to present an application to GPW and meet specific criteria, including participation in mWIG40 or sWIG80 (as at 25 March 2019), a capitalisation of more than PLN 50 million and a free float over 20 percent.

44 companies and 12 brokers enrolled in the Programme. According to the rules of the Programme, 40 companies were eligible as participants. Ten of them were never covered by analysts and another 12 only worked with a single analyst. Eight companies participate in mWIG40 and 32 in sWIG80.

The Programme will increase the number of published analyses of companies participating in mWIG40 and sWIG80 while providing local and international investors with broader access to up-to-date analyses. Together with the technology support programme, this is a part of a package of measures developed by GPW in partnership with brokers.

Twelve Exchange Members joined the Programme and will be covered by research.

On July 2, 2020, the GPW Management Board approved the admission of another 12 companies to the Program, a supplementary edition of the Program, which was launched in June 2019. The idea of launching the Program was widely consulted with market institutions, and its pilot phase was planned for 2 years. As part of the Program extension, each of the 12 Exchange Members (brokerage houses) participating in the Program selected one additional company to be covered.

Survey: Impact of ESG factors on investment decisions

GPW carried out a fourth survey of capital market participants concerning the impact of ESG factors on investment decisions. The survey results were compiled in a report published on the GPW website.

According to the survey, nearly 70% of respondents can see an increase of ESG investments in the last three years. 88% of respondents believe that companies whose strategies are based on good ESG practice may be considered by investors as lower risk.

According to respondents, adoption of legislation is the best way to encourage investors and shareholders to consider good ESG practice. More than half of respondents know GPW’s new index WIG-ESG.

A high 88% of respondents believe that companies whose strategy is based on good ESG practice (environmental, social, governance) may be perceived as lower risk and thus better investment targets, according to the survey of capital market participants concerning the impact of ESG factors on investment decisions carried out by the Warsaw Stock Exchange. That figure represents a strong increase compared to the survey completed three years ago, when 65% of respondents stressed the importance of ESG factors. GPW carried out the survey for the fourth time.

Respondents appreciate the indices provided by GPW which track share prices of socially responsible companies. All survey participants are aware of the RESPECT Index and more than half know about the newly launched index  WIG-ESG.

Survey participants mentioned circumstances which would prompt them to consider ESG factors more broadly in their investment decisions and exercise of shareholders’ rights. Capital market experts participating in the survey consider the key issues in both those areas to include the adoption of necessary legislation as well as more extensive reporting by companies, such as social responsibility reports and non-financial reporting.

Event "ring the bell for gender equality"

On the occasion of the International Women’s Day, securities exchanges around the world hosted events to attract the attention of the international community to the issue of equality of women and men. Last year’s event brought together 85 exchanges globally!

Similar to previous years, GPW participated in the project in 2019.

The event “Ring the Bell for Gender Equality” was held on 8 March 2019 in the presence of ambassadors and representatives of international organisations including UNFPA and the World Bank, as well as regional and local CEOs.

“Ring the Bell for Gender Equality” is an initiative of the United Nations Global Compact, UN Women, the Sustainable Stock Exchanges Initiative, the International Finance Corporation, the World Federation of Exchanges and Women in ETFs. Ringing the bell is symbolic as it draws attention to the key role of the private sector in promoting gender equality and equal rights for women, both in the job market and in society at large. Last year’s motto “Think equal, build smart, innovate for change” was initiated by UN Women to inspire business in innovative steps towards gender equality and empowerment of women across the different areas of social life.

The key recommendations for responsible companies include: to raise awareness within and outside the organisation by introducing gender equality standards at the work place; to deliver training and host educational meetings; to communicate business benefits of general equality to companies.

The Warsaw event was dedicated to the implementation of standards of ethics in companies as a tool of enforcing women’s rights in organisations.

The event was a part of the programme “Standards of Ethics in Poland” operated by Global Compact Network Poland with partners and experts over the last five years.

The event featured a presentation of “CEOs for Ethics”, a compilation of best practice of companies which implement standards of ethics, conceived at a meeting hosted by the international CEO Roundtable.

Financial Market Woman's Club

The Financial Market Women’s Club was founded by three leading institutions of the financial market: CFA Society Poland, the Warsaw Stock Exchange, and the Chamber of Fund and Asset Managers. The initiative is dedicated to women who are professionals in the financial sector and auxiliary industries, in particular women managers. The Club hosts conferences and business meetings with experts and speakers from Poland and abroad.

The mission of the project is to create a valuable and smart space where participants can exchange opinions, expertise and experience and build relational capital and industrial intellectual capital. The initiative addresses the professional needs of women in finance and promotes the financial sector as a place of diversity.

The inaugural conference of the Financial Market Women’s Club took place on 6 March 2018. Meetings are held regularly throughout the year (once per quarter).

IR Excellence Progamme - evaluating the quality of investor relations in public companies

GPW carried out the IR Excellence Programme in 2019, which evaluated the quality of investor relations in public companies. The Programme covered 160 companies, including all companies participating in WIG20, mWIG40, sWIG80, as well as 20 companies from the gaming industry

In Phase 1 of the IR Excellence Programme, GPW delivered dedicated individual reports to issuers. The programme also included a re-evaluation of investor relations (Phase 2, December 2019).

The initiative was carried out by GPW in partnership with Closir, the provider of investor relations research based on an innovative online platform, who jointly launched an IR policy quality review programme for public companies. The IR Excellence Programme was developed to evaluate IR activities from the perspective of availability of information, especially to foreign investors. The programme covered 160 companies participating in WIG20, mWIG40, sWIG80, as well as 20 selected companies from the gaming industry (listed on the Main Market and NewConnect) which are aligning their business with the regulatory requirements applicable on the capital market.

The programme looked into the availability of selected information, in particular in English, on the corporate websites of issuers listed on GPW. The investor relations website introduces the company and provides key corporate information, in particular to foreign investors.

As a part of the IR Excellence Programme, GPW delivered training in successful IR policies to companies that wish to improve their score.

The next step is a re-evaluation of the IR activity of listed companies compared to their scores in Phase 1. The re-evaluation will review the implementation of recommendations and provide the final quality assessment of GPW-listed companies’ IR policies. The Programme will be wrapped up in March 2020.

Consultation committees

In addition to irregular dialogue with the stakeholders, in the event of material business decisions, GPW is also engaged in on-going consultations with market participants within the Consultation Committees established in 2013. The Committees are advisory bodies active in the key areas of GPW’s operation. The Committees bring together representatives of the capital market community: investors, issuers, brokers, funds, academics, lawyers, as well as representatives of the Polish Financial Supervision Authority. Consultations with the Committees on the Exchange’s business decisions help to develop solutions optimal to all GPW stakeholder groups.

As at 31 December 2019, GPW had the following Consultation Committees:

• Alternative Trading System Development Committee - Board of Authorised Advisers
• Compliance Committee
• Corporate Governance Committee (change of name, Resolution No. 352/2019 of the Exchange Management Board)
• Derivatives Market Committee

Two other committees cover the commodity market:

• Gas Market Committee – an advisory body since 2014 assisting the development of solutions creating a friendly environment for the development of trade in natural gas on the exchange.
• Energy Market Committee – established in 2015, it brings together exchange members and representatives of TGE and IRGiT. Its responsibilities include giving opinions and tabling proposals for the development of exchange-traded commodities listed on TGE.

Two consultation meetings of the combined committees took place in 2019, each attended by 100 participants.

Oversight committees BMR

The Oversight Committee for the WIBID and WIBOR Reference Rates was appointed under the new WIBID and WIBOR documentation effective as of 1 February 2018.

The Oversight Committee was appointed by GPW Benchmark in order to supervise all aspects of the reference rates. The members of the Oversight Committee were nominated by the key institutions of the financial sector representing interests of reference rate users, including the Polish Bank Association (ZBP), the ACI Polska Association, and the Office of Competition and Consumer Protection (UOKiK).

The GPW Benchmark Oversight Committee was appointed in compliance with the requirements of Regulation (EU) 2016/1011 of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, in order to ensure substantive supervision of all aspects of the reference rates.

In order to engage many other institutions and stakeholders, the status of Oversight Committee Observer is available to institutions which actively participate in the alignment of WIBID and WIBOR with the requirements of the Regulation and the development of the offer of benchmarks for the Polish financial market. The GPW Benchmark Oversight Committee Observers include the Ministry of Finance, the National Bank of Poland, the Polish Bank Association, the ACI Polska Association, the Bank Guarantee Fund, and the Office of Competition and Consumer Protection

GPW Benchmark also has an Oversight Committee for Capital Market Benchmarks established on 1 December 2019.

The Oversight Committee was appointed in compliance with the requirements of Regulation (EU) 2016/1011 of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, in order to ensure substantive supervision of all aspects of regulated data benchmarks and non-interest-rate benchmarks, including the Exchange Indices of the GPW Main Market, New Connect and TBSP.

The Committee was appointed on 1 December 2019. Its rules of procedure are defined in the Rules of the Oversight Committee for Capital Market Benchmarks.