Implementation of the GPW Group Strategy in 2020

Strategic initiatives under the Strategy #GPW2022 were implemented in 2020. They reached their milestones monitored on a monthly basis at meetings of the Exchange Management Board and on a quarterly basis at meetings of the Exchange Supervisory Board.

The status of the GPW Group’s strategic initiatives in 2020 was as follows:

Stock market

• On 2 July 2020, the Exchange Management Board approved another twelve companies for the Analytical Coverage Support Programme initially launched in June 2019. The twelve companies joined the 39 existing participants of GPW’s Programme. The Programme had been broadly consulted with capital market institutions. The objective of the Programme is to improve the availability of analytical coverage of less liquid companies and consequently to facilitate investment decisions based on a credible, independent source of information about issuers. In the extension of the Programme, each of the twelve participating Exchange Members (brokers) nominated one additional company for analytical coverage.
• The implementation of the ESG Strategy started in 2020, including the drafting of single guidelines for ESG reporting by public companies.
• GPW Group representatives were appointed in 2020 to the task force of the Financial Market Development Board working on the implementation of the Capital Market Development Strategy (SRRK). The Warsaw Stock Exchange participates in seven thematic groups at different levels of engagement and collaboration in the implementation of the Strategy in the Ministry of Finance.
• In 2020, the Exchange opened the second edition of the GPW Growth Academy. The GPW Growth Academy hosted networking meetings with experts and business practitioners, workshops and case studies. The programme is addressed to CEOs, board members and directors responsible for companies’ key objectives.

Debt market

• GPW and BondSpot Simplify Catalyst. The Management Board of the Warsaw Stock Exchange (GPW) and the Management Board of BondSpot have taken regulatory measures in order to initiate the transformation of the currently dispersed Catalyst market and the simplification of its structure. The initiative will address the needs and expectations of market participants taking into account the guidance defined in Poland’s Capital Market Development Strategy. The amendment of the rules will limit the list of debt instruments eligible to be admitted and introduced to trading on the regulated market and in the alternative trading system (ATS) operated by BondSpot exclusively to Treasury bonds. The initiative will in the future help to centralise trading in Treasury bonds on the markets operated by BondSpot.
  In line with the planned modifications, GPW will eventually operate Catalyst as a market listing corporate bonds, co-operative bonds, and municipal bonds. Debt instruments will continue to be traded both on the regulated market and in ATS. The Catalyst market operated by BondSpot will only list Treasury securities.

Derivatives market

• GPW introduced new futures on shares of Biomed-Lublin, Mercator, XTB and Allegro.eu in 2020. The development of the derivatives segment is a part of the Strategy #GPW2022.
• The WIG20lev Beta ETF was newly listed on the GPW Main Market in continued development of structured instrument; it is the seventh Exchange Traded Fund to be listed on GPW and the fourth Beta ETF.

Commodity Market

• In 2020, TGE opened the Agricultural Exchange Market and introduced three commodities to trading during the year, including wheat, rye and maize. Grains are stored in authorized warehouses that ensure the quality of goods, availability and timely deliveries. As at the date of publication of the Report, there are about 50 authorized warehouses on the market, and TGE is constantly working on connecting new warehouses. It is possible operate on the market through brokerage houses. The Exchange members who act as intermediaries in transactions on the agricultural market are currently 3 brokerage houses: DM Noble Securities, DM PGE and DM BOŚ.
• In May 2020, all of TGE’s forward markets were transformed into an organised trading facility (OTF) under the MiFID II requirements.

Information services

• The Polish Financial Supervision Authority authorised GPW Benchmark as the administrator of interest-rate benchmarks including the critical benchmark WIBOR. PFSA’s decision closes the administrative process concerning the Reference Rates WIBID and WIBOR which are provided by GPW Benchmark. With the authorisation, GPW Benchmark will expand its offer of interest-rate benchmarks.

New business lines

• In the GPW Ventures project, on 14 July, the company signed a memorandum of understanding with Krajowy Ośrodek Wsparcia Rolnictwa (National Centre for Agricultural Support, KOWR) to establish the KOWR Ventures Fund which will support the development of agriculture, the food and agricultural industry and rural areas in Poland. The co-operation with KOWR will help companies which offer solutions for agriculture to go public.
• On 28 September 2020, the GPW Private Market initiative was presented together with its first phase: the Raisemana platform developed jointly with INC S.A. The initiative is addressed to local and international brokers who offer crowdfunding services. The launch of the new crowdfunding platform is the first step in the implementation of the strategic initiative GPW Private Market, one of GPW’s priority projects. GPW Private Market will become a platform for secondary trade in tokenised digital assets as a service both for established public companies and start-ups which are too young yet to be floated on NewConnect or the Main Market.
• On 25 November 2020, the subsidiary GPW Tech presented the GRC GPW Tech system: a state-of-the art solution of GRC class (Governance, Risk & Compliance) supporting management of the risk of compliance with external and internal regulations, on-going monitoring of regulatory and legal requirements, especially in public companies. The commercialisation of GPW Tech GRC substantiates GPW’s aspirations to generate revenue by exporting innovative solutions and to establish the sale of technology as an important revenue stream similar to other European and global exchanges. GRC GPW Tech will be sold starting in Q1 2021.
• The second phase of the development of the Trading Platform closed in 2020. Will offer functions dedicated to financial instruments, which will reduce trading costs and provide new functionalities for market participants.

The implementation of the Trading Platform and its subsequent implementation will translate into the following benefits:

• financial (diversification of revenues by starting the sale of the Platform and possible savings thanks to implementation in all companies from the Capital Group),
• introducing new functionalities of the system, enabling the development of the WSE's offer and increasing its attractiveness for capital market participants,
• increasing the prestige of the WSE and the possibility of establishing strategic partnerships with other exchanges,
• the ability to freely customize the product to the needs of own and external buyers,
• independence from external, foreign system suppliers.

The platform is to be ready by the end of 2023. The work of the Project has been divided into eight stages, including industrial research and development works. Currently, the project is at the stage of industrial research, which began in September 2019 and is scheduled to end in the first half of 2022.

Currently, the WSE employs about 40 specialists implementing the project in our laboratory and cooperates with Polish research centers. The works are in progress according to the planned schedule.

• In 2020, GPW became the co-ordinator of the project Polski Cyfrowy Operator Logistyczny (Polish Digital Logistics Operator, PCOL) which aims to improve and facilitate TSL (Transport, Shipping and Logistics) processes and to protect the security of the Polish transport industry. It is the first initiative and a reference project of the Synergia team at the Ministry of State Assets. We are preparing a business plan and discussing the terms of co-operation with potential partners.
• The business incubator operated in partnership with Idea Global, which targets start-ups, currently has six participants whose project co-financing amounts to PLN 1.2 million. The incubator supports innovative solutions including Big Data, AI and robotisation.
• In mid-September 2020, the Management Board of the Warsaw Stock Exchange signed a term sheet with the Central Bank of Armenia (CBoA) concerning negotiations to acquire a 65% majority stake in the Armenia Securities Exchange (AMX). GPW is preparing the project business plan in partnership with the European Bank for Reconstruction and Development.  The purchase of the Armenian stock exchange is conditional on a due diligence process, which will include the identification of the existing and potential risks associated with the planned transaction. The GPW is yet to make financial decisions in this matter. The decision to proceed with the purchase process was supported by the European Bank for Reconstruction and Development.