MAR in Poland

As of 3 July 2016 the Regulation on market abuse, the so-called MAR (Market Abuse Regulation) will be directly entered into Polish legal order, as the legislators are not under the obligation to implement it into the Polish legal order.

What is more, in the Ministry of Finance there are already works to adjust Polish legal provisions, i.e. the trading in financial instruments act and the public offer act so that they are compliant with the MAR and the MAD (Market Abuse Directive).

The regulation concern public companies in particular, due to functioning on the capital market and supervision of the Polish Financial Supervision Authority.

MAR completely changes the current definition of inside information and the rules for handling such information.

The change of approach to delaying disclosure and disclosure of inside information as well as increased reporting obligations for public companies are to prevent market rules abuse, for example the insider trading, i.e. using obtained insider information in share dealing.

For example, this may be an information that a company has been sued over a large amount of money and needs to set up a huge reserve that will negatively affect its financial result.

Inside information should be published immediately, but is not. The knowledge is in possession of a person who uses their information advantage for example by selling shares at a price not affected by the negative information – which is a classic example of insider trading.

If such an event takes place, it is subject to administrative and penal sanctions, which as of 3 July 2016 will be very severe. Until now, it was difficult to prove such incident, and that is why evidence facilitations are being introduced, for example encouraging people who know about such an incident to report the infringement to the Polish Financial Supervision Authority.

Such people are often lower in the professional hierarchy than the persons who make profit from the incident, and that is why they need greater protection, which MAR is presumed to provide.

According to the Stefan Batory Foundation, protection of the people reporting inside information is on a very low level in Poland. In the Polish legal system there is not concept of a whistleblower, and current regulations do not give effective legal protection and do not create legal environment for such actions.

MAR partly solves this problem. It introduces provisions limiting the distribution of personal information of whistleblowers, in some cases guarantying them anonymity.

MAR enables the member states to set up financial incentives if there was no statutory obligation to report such infringements and the information itself is new and results in sanctions put upon the violator.

The main aim of MAR and MAD was preventing capital market abuse and guaranteeing more market transparency. The intention to enforce compliance is also reflected by the amounts of penalties, which have been increased significantly.

Non-compliance may result for example in assigning a penalty in the amount of three times the profit earned through the infringement of regulations, if it can be estimated, or a penalty equal to 15 million euro or 15 percent of the total annual turnover of a legal person.