Costs of a flotation on the Warsaw Stock Exchange set to increase – As of the New Year, companies preparing an IPO must have an audit committee

Beginning in 2020, companies seeking admission of their securities to trading on the Warsaw Stock Exchange will need to have an audit committee. This requirement will entail higher costs for future issuers, and more formalities.

The raft of amendments to the legislative Act regarding certified auditors, audit firms and public supervision comes into force on 1 January 2020. The changes thus introduced shall apply also to future issuers, who – as they plan their IPO on the Warsaw Stock Exchange – will need to comply with the rules governing maintenance of an audit committee and its operations.

The goal: to improve public oversight

The legislature has adopted the aim of fortifying public supervision over certified auditors and audit firms operating in Poland, first and foremost through establishment of a new, centralised institution – the Polish Audit Supervision Agency, which will replace the existing Audit Supervision Commission. Also, the scope of activities of audit firms subject to public supervision shall be extended (…)

New Issuers face new duties 

The legislative changes are bound to have significant implications for future issuers. As of the New Year, all companies seeking admission of their securities to trading on the main floor of the Warsaw Stock Exchange must have an audit committee. According to Magdalena Szeplik, managing associate at GESSEL, the additional duties imposed by the Polish legislature depart beyond the framework of Directive 2006/43/EC of 17 May 2016 which the new laws are meant to implement.

“As with many other legislative acts, what we have here is a case of gold plating, i.e. of excessive transposition by the Polish legislature. According to the justification submitted for the governmental draft of the statute, these changes are meant to provide investors with more dependable information disclosed during the IPO process”, Magdalena Szeplik explains to Strefa Inwestorów (…)

The full text of this article (in Polish) is available at strefainwestorow.pl