“Markets can remain irrational longer than you can remain solvent,” John Maynard Keynes warned. But financial markets are not merely the irrationality of crowds and the fluctuation of prices. They are, above all, a dense web of regulations, licenses, disclosure obligations, and oversight—a system built from the lessons of successive crises.
Financial markets law in Poland provides the framework where capital and regulation meet.
Regulation as a Response to Catastrophe
Hyman Minsky, the economist who spent decades on the margins of the mainstream, formulated a thesis now known as the “Minsky moment”: stability breeds instability. The longer markets function without upheaval, the greater the risks participants assume, the more fragile the structure becomes—until it collapses.
The History of Financial Regulation
After every collapse comes a wave of regulation:
- The Great Depression gave Americans the SEC and the Glass-Steagall Act
- The fall of Enron produced Sarbanes-Oxley
- The crisis of 2008 brought Dodd-Frank, MiFID II, the entire architecture of macroprudential supervision
Financial markets law is the accumulated memory of disaster.
Polish Financial Markets Law: Regulatory Framework
Capital markets law in Poland rests on several pillars:
Act on Trading in Financial Instruments — Governs securities trading, investment firm operations, and obligations of brokers and advisors.
Act on Public Offering — Establishes conditions for admission to trading, prospectus requirements, and issuer reporting obligations.
Act on Financial Market Supervision — Defines the competences of KNF (Polish Financial Supervision Authority) as the central supervisory body.
Act on Investment Funds — Regulates the establishment and operation of asset management companies (TFI), investment funds, and alternative investment funds.
Banking Law — For credit institutions.
Act on Payment Services — For payment institutions and electronic money.
In addition, directly applicable EU regulations shape Polish financial markets law: MAR (Market Abuse Regulation), MiFID II/MiFIR, SFDR, PRIIPs, DORA, MiCA—and many others.
Regulated Activity in Polish Financial Markets
For an institution operating in this arena, compliance is not optional—it is a condition of existence. And the line between the permissible and the forbidden sometimes runs through counterintuitive terrain.
Licenses and Authorizations from the Polish Financial Supervision Authority
Financial markets law in Poland requires authorization from KNF for a broad catalogue of activities:
Brokerage activity — Execution of orders, investment advice, portfolio management, offering of financial instruments.
Banking activity — Accepting deposits, granting credits, maintaining accounts.
Insurance activity — Conducting insurance and reinsurance business.
Investment funds — Establishing and managing investment funds requires TFI authorization.
Payment institutions — Providing payment services requires registration or authorization.
Crowdfunding platforms — Crowdfunding service providers are subject to ECSP regulation.
The Licensing Process
Obtaining KNF authorization is a demanding process requiring:
- Meeting capital requirements
- Presenting a business plan and organizational structure
- Demonstrating management qualifications (fit & proper assessment)
- Implementing risk management and compliance systems
- Preparing internal regulations and procedures
Capital markets law in Poland places on applicants the burden of proving readiness to conduct regulated activity. KNF has broad discretionary powers and high expectations.
Securities Issuance in Poland: Public Offering and Private Placement
Benjamin Graham, the father of fundamental analysis and Warren Buffett’s mentor, distinguished speculation from investment: an investment is an operation that, upon thorough analysis, promises safety of principal and an adequate return. For a company entering the capital markets—whether through public offering or private placement—the distinction works in reverse: you must persuade investors that you are an investment, not a speculation.
Issuance as Transformation
The issuance process is not merely the raising of capital. It is a metamorphosis: from private entity to one subject to disclosure requirements, transparency, corporate governance.
Eugene Fama, the Nobel laureate who formulated the efficient-market hypothesis, argued that prices reflect available information. For the issuer, this means that the quality of the information supplied to the market directly affects valuation.
Prospectus Requirements Under Polish Law
Financial markets law in Poland requires preparation of a prospectus for public offerings exceeding specified thresholds. The prospectus is subject to approval by KNF (or the competent authority of another EU state under passporting arrangements).
Information memorandum — For smaller offerings where a prospectus is not required, but disclosure obligations remain.
Crowdfunding offering document — For offerings on ECSP platforms.
Issuer Disclosure Obligations
Public companies listed on the Warsaw Stock Exchange (GPW) or NewConnect are subject to ongoing disclosure obligations:
Current reports — Immediate disclosure of price-sensitive events.
Periodic reports — Quarterly, semi-annual, and annual financial statements.
Inside information — Obligations under MAR regarding identification, protection, and disclosure of inside information.
Transaction notifications — Persons discharging managerial responsibilities (PDMRs) and persons closely associated with them must notify transactions in issuer instruments.
The prospectus, the information memorandum, the current and periodic reports—these are not formalities. They are the instruments with which you build or destroy the market’s trust.
Corporate Governance of Public Companies in Poland
Michael Jensen and William Meckling, in their classic work on agency theory, described a fundamental conflict: managers have interests that diverge from those of owners. Corporate governance is the system of mechanisms designed to mitigate that conflict.
Elements of Corporate Governance
Capital markets law in Poland and WSE Best Practices require public companies to maintain:
- Supervisory boards with independent members
- Audit committees with appropriate qualifications
- Management remuneration policies
- Diversity policies
- Conflict of interest management procedures
- Whistleblowing channels
Corporate Governance as Market Signal
For a public company, the quality of corporate governance is a signal to the market. Aswath Damodaran, the professor of valuation, demonstrates in his analyses that the discount for poor governance can reach several tens of percent of value. Investors pay a premium for transparency and price in risk where transparency is absent.
Regulations, procedures, policies—this is not bureaucracy for its own sake. It is the architecture of trust.
Market Abuse Under Polish Financial Markets Law
Nassim Nicholas Taleb described the world of finance as the domain of “black swans”—events that are rare, unpredictable, and of enormous consequence. Disputes in the capital markets often partake of this character: a transaction that seemed routine becomes the source of years of conflict.
The MAR Regime
The Market Abuse Regulation (MAR) defines and prohibits market abuse:
Insider dealing — Trading on the basis of inside information or disclosing such information.
Market manipulation — Artificially influencing prices of financial instruments through false orders, dissemination of misleading information, wash trades.
Unlawful disclosure of inside information — Transmitting inside information to unauthorized persons.
Sanctions
Financial markets law in Poland provides severe sanctions for market abuse:
- Administrative fines by KNF up to 10% of revenue or EUR 5 million equivalent for natural persons
- Bans on holding positions in supervised entities
- Criminal liability (up to 5 years imprisonment for insider dealing)
- Civil liability to injured investors
Proceedings Before the Polish Financial Supervision Authority
The Polish Financial Supervision Authority (KNF) possesses broad supervisory and sanctioning powers.
Types of Proceedings
Licensing proceedings — Review of applications for authorization to conduct regulated activity.
Inspection proceedings — Planned and ad hoc inspections of supervised entities.
Sanctioning proceedings — Imposition of administrative penalties for regulatory violations.
Explanatory proceedings — Investigation of potential violations before initiating sanctioning proceedings.
Representation Before KNF
Proceedings before KNF require knowledge of:
- The specifics of administrative procedure in supervisory matters
- Administrative court jurisprudence in financial cases
- Supervisory practice and regulatory expectations
- Arguments tailored to the financial market context
A dispute with a participant in financial markets is not a quarrel with a neighbor over a fence line. It is a confrontation in an environment where the stakes are high and the professionalism of the other side is guaranteed.
Financial Markets Law in Poland for Foreign Institutions
International financial institutions operating in Poland encounter specific regulatory considerations:
Passporting from EU Member States
EU-authorized investment firms, credit institutions, and payment institutions may provide services in Poland under EU passport arrangements without separate Polish authorization. However, host-state conduct rules and certain notification requirements apply.
Third-Country Access
Institutions from outside the EU generally require Polish authorization or must operate through authorized Polish entities. Financial markets law in Poland follows EU frameworks on third-country equivalence where applicable.
Branch Establishment
Establishing a branch in Poland involves notification (for EU institutions) or authorization (for third-country institutions) procedures with KNF.
Cross-Border Offerings
Public offerings to Polish investors by foreign issuers are subject to prospectus requirements under the EU Prospectus Regulation, with potential passporting of prospectuses approved in other EU member states.
Financial Markets Law in Poland: Our Services
Regulated Activity
- Preparation and conduct of licensing proceedings before KNF
- Establishment of financial institutions (brokerage houses, TFI, payment institutions)
- Implementation of compliance and risk management structures
- Regulatory adaptation (MiFID II, MAR, DORA, MiCA)
Securities Issuance and Capital Transactions
- Preparation of prospectuses and information memoranda
- Advisory on IPO, SPO, bond issuances
- M&A transactions involving public companies
- Squeeze-out and delisting
Compliance and Disclosure Obligations
- Implementation of MAR procedures (insider lists, delayed disclosure)
- Current and periodic reports
- PDMR transaction notifications
- Compliance audits
Corporate Governance
- Management board and supervisory board regulations
- Remuneration and diversity policies
- Audit committee procedures
- Implementation of WSE Best Practices
Disputes and Proceedings
- Representation in proceedings before KNF
- Appeals against supervisory decisions to administrative courts
- Defense in market abuse cases
- Disputes with financial market participants
When You Need Support in Financial Markets Law
Signs that you should consult a lawyer specializing in financial markets law in Poland:
- You are planning to establish a financial institution or obtain KNF authorization
- You are preparing a share or bond issuance
- You are listing a company on GPW or NewConnect
- You have received notice of proceedings initiated by KNF
- You need to implement new regulatory requirements (DORA, MiCA, SFDR)
- You are managing disclosure obligations as an issuer
- You are preparing a transaction involving a public company
- You want to verify compliance at a supervised entity
- You are an EU institution seeking to passport services into Poland
- You are a third-country institution exploring Polish market entry
Summary
“In finance, history does not repeat itself, but it rhymes”—to paraphrase Mark Twain.
Financial markets law in Poland is an attempt to capture those rhymes within a framework that protects and constrains in equal measure. We understand that in financial markets the margin for error is minimal. Regulators are watching. Competitors are watching. The market prices every weakness.
Since 2006, we have advised clients operating in financial markets—from the establishment of institutions and licensing processes, through issuances and capital transactions, to proceedings before KNF and disputes with market participants.
Our task is to ensure that clients move through this environment with confidence—aware of the rules and prepared to see them enforced.
Operating in Polish financial markets or planning market entry? Contact us to analyse your regulatory position and identify optimal solutions.
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