Market relations and dialouge

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.

"Best Practice for GPW Listed Companies 2021" project

The Corporate Governance Committee, which is comprised of representatives of the leading institutions on the Polish capital market and corporate governance experts, drafted a new code of corporate governance principles for listed companies, the “Best Practice for GPW Listed Companies 2021” (“Best Practice 2021”). Together with the draft Best Practice 2021, GPW shared clarifications of selected principles defined in the draft to ensure their correct interpretation. The clarifications will be used to draft a document accompanying the Best Practice 2021 in support of the application of the Best Practice (“Guidelines”). The clarifications presented in the Guidelines will be updated and supplemented to ensure a good understanding of the principles of corporate governance, which will improve the application of corporate governance standards by public companies and assist shareholders in defining precise expectations.

The Best Practice 2021 is designed with a view to improving the quality and transparency of the Polish capital market.

The introduction of the Best Practice 2021 will be accompanied by changes to the application of corporate governance principles by companies listed on the GPW regulated market. The new Best Practice incorporates ESG factors including climate, sustainable development, diversity in the corporate boardroom, and equal pay.

The Best Practice 2021 comes into force on 1 July 2021 after a transitional period necessary for public companies to align with the new standards and prepare for the fulfilment of the disclosure requirements under the corporate governance principles.

As a part of the project, GPW published the draft produced by the Corporate Governance Committee for public consultations which took place by the end of November 2020. In the consultations, GPW invited a broad range of stakeholders to participate in video calls and brief webinars dedicated to the project.

Publication of WIGtech TR

GPW Benchmark remains open for product consultations and initiatives ensuring that provided indices are adequate to the needs of the financial market, and has decided to launch a product based on the total return version of WIGtech. The Administrator started to publish WIGtech TR on 1 December 2020.

Similar to WIGtech, WIGtechTR covers stocks in sectors including biotechnology, gaming, IT, telecommunication, new technology. The index base value is 10,000 points as at 21 June 2019. WIGtechTR is a total return index and includes transaction prices as well as dividend payments and subscription rights. The share of the stocks in the index is capped at 10%.

GPW remains open to recommendations of market participants concerning product development, especially where the provision of new benchmarks leads to the development of financial instruments and products which make the local market more attractive.

GPW Data taxonomy consultation

GPW Data is a project under the GPW Group’s strategy which uses machine learning and artificial intelligence to help capital market participants make fast optimised investment decisions. GPW Data will facilitate quick distribution, processing, and analysis of market data and enable investors to develop their own trading algorithms based on AI. The project consists of three phases. The first phase of the project develops financial reporting models (taxonomy) under the electronic reporting standards. Further steps focus on the development of a reporting system and the provision of tools supporting investing.

Consultations were carried in 2020 with market participants: authorised advisors, chartered accountants, auditors, and IT firms in order to develop consistent taxonomy models. The consultations led to the approval of the final taxonomy model which was published on the GPW website.

Public consultations of changes to the WIG-ESG Index method

GPW Benchmark carried out the first public consultations as an authorised administrator concerning changes to the WIG-ESG index methodology which would align the WIG-ESG correction schedule with the other indices in the Exchange Index Family and apply corrections of changes in the classification of companies by quantile depending on changes to the ESG Risk Rating methodology.

To ensure transparency and compliance with the established standards of public consultations, the Administrator published a summary of the consultations of the change of the method. Following feedback from consultation participants and a positive opinion of the Oversight Committee of Capital Market Benchmarks, the Administrator approved the proposed changes by amending the Exchange Index Rules. The amendment took effect as of the quarterly index correction on 18 September 2020.

Public consultations of changes to the WIG20, mWIG40, sWIG80 and WIG30 method

With a view to ensuring resilience of the exchange index method and in compliance with the principles of transparency and acceptance of requests of third-party stakeholders regarding the representativeness and adequacy of the index method, GPW Benchmark carried out public consultations concerning changes to the WIG20, mWIG40, sWIG80 and WIG30 method. The consultations opened on 8 December 2020. The consultation paper published by the Administrator provides a review and detailed descriptions of the proposed changes defined on the basis of research. The consulted changes include:

The changes were proposed due to the interest and requests of market participants to ensure the representativeness of the flagship indices according to the purpose of their measurement as defined in the Exchange Index Family Rules.

Before the consultations were opened, available research was presented for information and opinion of competent committees to ensure the necessary expert review of the consulted methods.

Following the consultations, the Exchange Index Family Rules were amended on 12 February 2021. The amended Rules incorporate major changes to the methodology developed in the process of public consultations completed by GPW Benchmark on 9 January 2021 and defined in their summary of 10 February 2021. The changes are listed in the document history on the cover page of the Rules.

GPW Benchmark - interest-rate benchmark administrator

The Polish Financial Supervision Authority authorised GPW Benchmark as an administrator of interest-rate benchmarks including the critical benchmark WIBOR, which concluded the administrative process that harmonised the Reference Rates WIBID and WIBOR with the BMR requirements.

The PFSA authorisation secures continuity of the Reference Rates WIBID and WIBOR which are used in financial contracts and instruments. The harmonisation of the Reference Rates WIBID and WIBOR with the BMR requirements was carried out by GPW Benchmark consultation groups with the participation of banks and key local institutions involved in official working groups including mainly a working group at the Ministry of Finance.

With the authorisation, GPW Benchmark can expand its offer of interest-rate benchmarks. To pursue its mission, the critical benchmark administrator takes measures necessary to mitigate actual and potential risks to the national financial system. GPW Benchmark continues its efforts to provide alternative benchmarks in dialogue with third-party stakeholders based on surveys and consultations. GPW Benchmark is planning to continue those initiatives and to co-operate with a broad representation of financial institutions.

ESG reporting guidelines for public companies

GPW in partnership with EBRD initiated a project to develop single ESG reporting guidelines for public companies in compliance with applicable regulations (including the Green New Deal). The project produced a document defining a consistent reporting framework to help companies disclose their ESG activities and data which are useful to capital market investors.

EBRD and GPW selected their project partner in a public tender. The international consultancy Steward Redqueen has been active in sustainable development for more than 20 years and has extensive experience in helping financial institutions and global companies across many industries to develop sustainable business strategies.

In late 2020, Steward Redqueen and GPW initiated work on a report which provides ESG reporting guidelines and recommendations under national and EU law. The report was drafted with the participation of a broad representation of stakeholders, including issuers, investors, and local institutions. Clear criteria defined together with the market help public companies accommodate investors’ expectations in non-financial reporting.

The ESG reporting guidelines were published for issuers on the GPW website. The Exchange and its partners carry out educational activities addressed to listed companies.

Analyitical Coverage Support Programe

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. The Programme brought together 12 Exchange Members and 39 participants – companies covered by analytical coverage.

Twelve more companies joined the programme 2020 as each of the 12 Exchange Members (brokers) participating in the Programme nominated one additional company for coverage. In contrast to the first edition of the programme, analysts’ choices were not limited to participants of the indices mWIG40 and sWIG80. According to the regulations of the additional edition, all companies listed on the GPW Main Market were eligible for participation except WIG20 participants. The only condition was that companies were not covered by research in the last 12 months.

The Programme had been broadly consulted with capital market institutions. The pilot project was designed to run for two years. The objective of the Programme was 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.

The third edition of the GPW Analytical Coverage Support Programme 3.0 was announced in June 2021. Following broad consultations, the issuer selection criteria were modified. Eligible to participate in the Programme are companies listed on the GPW Main Market (other than WIG20 participants) and NewConnect. The Programme may cover up to 50 issuers.

GPW as a member of United Nations Global Compact

GPW is a member of the UN Global Compact since April 2020.

GPW has for many years pursued a policy of sustainable development by offering educational programmes, promoting the highest standards of corporate governance and disclosures, and maintaining collaboration and dialogue with capital market participants. As a next step and confirmation of GPW’s commitment, the Exchange Management Board decided to join the UN Global Compact and establish closer relations with its Polish office, Global Compact Network Poland.

The UN Global Compact identifies sustainable development challenges and opportunities. The organisation provides practical guidance, promotes corporate responsibility, and assists Polish members of the UN Global Compact in annual non-financial reporting. Membership of the UN Global Compact stands for participation in the world’s biggest platform of corporate leaders in sustainable development: more than 10.5 thousand companies in 166 countries of the world representing all business sectors.

GPW is planning to promote ESG knowledge of issuers and set up a competence centre for the development of strategic programmes and financial products including indices necessary to achieve the national environmental, social and governance objectives. By joining the UN Global Compact, GPW gained access to the expertise and experience of the organisation.

As an active member of the UN Global Compact, GPW and UN Global Compact Network Poland (GCNP) signed in December 2020 a Memorandum of Understanding (MoU) in support of sustainable development financing tools. The Ministry of Economic Development, Labour and Technology was the honorary patron of the initiative. The Memorandum of Understanding provides a platform for the development of joint initiatives in pursuit of strategic objectives, including programmes supporting adequate and transparent corporate reporting in accordance with global standards. The MoU is also designed to support development projects which promote new technologies and green industries, including green energy. The partnership also covers the work of the Banking Group for Sustainable Development established last year, where banking and financial experts representing among others the World Bank, EBRD, EIB, and PFR recommend tools which support the financing of green initiatives. In view of global trends and market challenges, including the current COVID-19 pandemic, it is key to ensure that investment schemes defined in the framework of the Green New Deal and the Recovery Fund are available to the broadest possible group of entities, helping them meet the new requirements imposed by climate risks which impact the investment policies of local and global investors.

In addition to ESG and responsible financing activities, the UN Global Compact and GPW hosted the sixth edition of the global initiative “Ring the Bell for Gender Equality” under the umbrella of an international initiative which aims to attract the attention of the international community to the issue of equality of women and men. The event takes place on 85 stock exchanges – members of the UN Sustainable Stock Exchange Initiative. The unique event inaugurated the initiative “Equal Opportunities in Business” as a part of the Global Compact Network Poland umbrella programme “Business and Human Rights: Standards of Ethics in Poland”. The objective of the initiative is to eliminate discrimination against women employees at the work place and to set ambitious corporate goals promoting women leadership and equality in business.

The GPW Group is taking steps to provide indices and benchmarks based on sustainable development and UN standards, in particular the Ten Principles of the United Nations Global Compact.

NewConnect manual

GPW in partnership with the NewConnect Authorised Advisors Council released the first comprehensive publication dedicated to NewConnect: “NewConnect. A Manual.” The Manual provides a detailed description of the process of issuing and introducing shares to NewConnect, the role of Authorised Advisors on NewConnect, legal aspects including recent amendments of the Alternative Trading System Rules, national and EU law, as well as key issues relevant to obtaining and holding the status of a NewConnect listed company. The Manual was prepared in partnership of GPW with representatives of Authorised Advisors on the Authorised Advisors Council, GPW’s advisory committee for the development of the alternative trading system.

The NewConnect Manual is available here.

Consultation committees

GPW is 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 2020, GPW had the following Consultation Committees:

• Alternative Trading System Development Committee - Authorised Advisers Council
• Compliance Committee
• Corporate Governance Committee

On the commodity market, in January 2020, Towarowa Giełda Energii appointed the Market Council as an advisory body for development of the commodity exchange and new projects. The Market Council was established in continuation of the experience of TGE’s collaboration with market participants on the Electricity Market Committee and the Gas Market Committee where discussions were held for information only. The new extended model of co-operation improves the process of issuing recommendations and opinions based on participation of only delegated representatives of market participants. The Market Council is comprised of representatives of ten industry associations which cover all segments of the wholesale electricity and gas market in Poland, including: Operator Gazociągów Przesyłowych Gaz-System S.A., Izba Domów Maklerskich, Izba Energetyki Przemysłowej i Odbiorców Energii, Izba Gospodarcza Gazownictwa, Polskie Towarzystwo Elektrociepłowni Zawodowych, Towarzystwo Obrotu Energią, Towarzystwo Gospodarcze Polskie Elektrownie, Stowarzyszenie Energii Odnawialnej, Polskie Stowarzyszenie Energetyki Wiatrowej, Związek Pracodawców Prywatnych Energetyki (Lewiatan), and Izba Rozliczeniowa Giełd Towarowych S.A.

The Market Council held four meetings in 2020 and issued two recommendations for the TGE Management Board concerning extension of the list of instruments traded on the Organised Trading Facility (OTF) and the implementation of 15-minute instruments on the Intra-Day Electricity Market in connection with the implementation of the Clean Energy package.

Regarding dialogue and committees of GPW Benchmark, relations with third-party stakeholders concerning index products mainly involve direct communications during public consultations as well as one-on-one consultations relating to presented product queries. Consultation procedures include dialogue both with local and international stakeholders.

From the regulatory perspective, GPW Benchmark has two independent advisory bodies which oversee the methods: the Oversight Committee of Capital Market Benchmarks which is responsible for the Exchange Indices and TBSP Index, and the Oversight Committee of Interest-Rate Benchmarks which is responsible for the Reference Rates WIBID and WIBOR. Members of both Committees have extensive experience in the overseen segment. The membership of the Committees and reports from their meetings are available on the Administrator’s website.

The GPW Group's sponsorship and charity initiatives

The sponsorship activities of the Warsaw Stock Exchange improve recognition of the GPW brand, strengthen GPW’s positive image, help GPW reach out to stakeholders, and support educational and business initiatives promoting knowledge of and interest in the Polish capital market. As a special strand of sponsorship activities, GPW and the legacy of the Polish capital market are put in the context of social events. The GPW Group members are engaged in social responsibility and decide about charity engagements in its spirit.

The Company’s sponsorship and charity policies derive from the Company’s internal regulations. Sponsorship is governed by the Warsaw Stock Exchange Sponsorship Rules of 12 February 2018 while charity engagements are governed by the Donation Procedure of 26 April 2018. The Company’s sponsorship and donation activities in 2020 followed the applicable procedures.

Sponsorship initiatives

Sponsorship expenses stood at PLN 435.9 thousand gross in 2020, including mainly support for events dedicated to the capital market. Sponsorship covered the conference organised by the Chamber of Brokerage Houses (IDM) in Bukowina Tatrzańska under the motto “Development needs capital: The capital market for infrastructure and innovation”. As a part of its sponsorship initiatives, GPW supported the 18^th Local Government Capital and Finance Forum organised by Międzykomunalna Spółka Akcyjna “MUNICIPIUM”, the biggest professional event for local governments in Poland which brings together local government managers and leaders of the biggest cities, districts and regions. GPW was also engaged in Euromoney Trading Limited publications. Following the cancellation of the Trading CEE event, GPW engaged in promotion activities targeting institutional investors and participated in the publication of 'Thought Leadership' featuring an interview with GPW’s CEO. GPW was an Organising Partner of the WallStreet24 online conference dedicated to individual investors which featured 46 lectures and debates and brought together nearly 11 thousand participants. GPW was a strategic partner of the National Individual Investor Survey 2020 and a Partner of an ebook on five principles of safe investment 5 zasad bezpiecznego inwestowania. GPW sponsored industry conferences including Wood’s Winter Wonderland EME Conference 2020 hosted by Wood&Co, the Bulls & Bears Awards hosted annually by Parkiet where leading companies, managers and institutions are awarded, and the Golden Portfolio event for top managers. GPW partnered with and supported the historical show 1920. Wdzięczni Bohaterom on the centenary of the Battle of Warsaw held at the PGE Narodowy national stadium on 15 August 2020. GPW sponsored the 16^th edition of the National Press Photo Awards – Grand Press Photo 2020 hosted by the Press magazine and the Grand Press Foundation.

GPW charity initiatives and donations

GPW’s donations in 2020 stood at PLN 3,134.7 thousand including PLN 1,350.1 thousand for the GPW Foundation. GPW donated PLN 1,680 thousand towards the fight with the COVID pandemic. The donation (PLN 1,000 thousand) paid for SARS-CoV-2 testing equipment acquired by the District Sanitary Stations in Siedlce and Radom. GPW donated its profit from trading in Allegro shares on the first day of trading (12 October 2020) amounting to PLN 680 thousand. The donation went to 13 medical centres across Poland including the University Clinical Centre of the Medical University, the Ujastek Medical Centre in Kraków, the Children’s Memorial Health Institute in Warsaw, SP ZOZ Słupca, the Regional Hospital in Poznań, and SP ZOZ Siedlce. The donation paid for nearly 3 thousand barrier tents and several photocatalytic air purifiers. In 2020, GPW donated PLN 1,350.0 thousand for the statutory activity of the GPW Foundation. The donation paid for educational projects addressed to school and university students, teachers of economics, potential exchange investors, as well as the Foundation’s current activities. GPW donated PLN 100 thousand to the Warsaw School of Economics and PLN 1,274 to Caritas Polska. GPW donated PLN 1,500 thousand to the Polish National Foundation (recognised in the costs of 2016).

GPW promotional and educational initiatives

As a key institution of the Polish capital market and a reliable and professional operator, GPW distributes informative, accessible and attractive educational and promotional materials in order to improve knowledge and raise awareness of the general public about the capital market and the role of the exchange in raising capital by issuers and in investing savings. In 2020, the Warsaw Stock Exchange was the organiser and partner of many conferences and webinars promoting the Polish capital and financial market. The Warsaw Stock Exchange focuses on promotional and educational activities addressed to the financial community and on communications regarding the financial market.

The list of promotional and educational events is presented in section 3.1.2 of the GPW Management Board Report and in the section “Educational initiatives” of the GPW Group’s Integrated Report for 2020.

TGE's sponosorship, charity and promotional initiatives

TGE’s sponsorship expenses were mainly paid in support of events dedicated to the commodity market and went to charities in connection with the pandemic. TGE’s donations in 2020 amounted to PLN 35,500 and went to the Single Mother with Child Home Foundation in Kraśniewo, the Children’s’ Phantasy Foundation, and the Pleszew Association for Children with Special Caretaking Needs in Pleszew. In 2020, TGE was a partner of many events in the energy industry, including the EuroPower conference, the European Economic Congress, the Lower Silesia Energy Congress, the Energy Economy Forum, and the research conference “Energy security, its pillars and outlook”. TGE representatives took active part in local and international debates including the Wprost debate “Green Deal and Next Steps”, the Polish-Lithuanian Business Forum, and “Poland and the Challenge of Energy Transition. Building a Partnership with Italy”.

The list of TGE’s educational initiatives in 2020 together with a detailed description is presented in the section “Educational initiatives” of the GPW Group’s Integrated Report for 2020.