Mandatory Dematerialisation of Shares as of 1 March 2021. The mandatory dematerialisation of all shares of joint-stock companies and limited joint-stock companies under the amendment of the Commercial Companies Code of 30 August 2019 has come into force on 1 March 2021. As of that date, all shares are represented by electronic records in shareholder registers or securities depositories. The dematerialisation of shares completes the elimination of certificated securities on the Polish capital market initiated with its inception in 1991.
Dematerialisation means that certificated securities are replaced with records in IT systems. Certificated shares are eliminated from trading. The dematerialisation regulations also cover subscription warrants, user certificates, founder certificates, and other corporate interests.
The amendment of the Commercial Companies Code has imposed a single registration regime. All shares of a company must be registered in a single system: either a shareholder register maintained by an authorised operator or the central securities depository operated by KDPW.
Non-public companies were required to sign a shareholder register agreement or a securities depository registration agreement by 30 September 2020. As the amendment of the Commercial Companies Code imposed a single registration regime, public companies whose shares were kept outside KDPW were required to have their shares dematerialised in KDPW.
KDPW does not offer a shareholder register service but it records shares issued by non-public companies in the securities depository in the same way as shares issued by public companies.
KDPW has signed 350 registration agreements in connection with the mandatory dematerialisation of shares.
The mandatory dematerialisation of shares of joint-stock companies and limited joint-stock companies offers many benefits to the market including:
- improved safety of equity trade – no risk of loss or destruction of shares;
- modernisation of the market with fully digital share registers;
- shareholders can be identified;
- improved market transparency and confidence;
- single terms of trade in all shares of any company (under the single registration regime);
- companies’ shareholders are identified before the shares are recorded in KDPW or a shareholder register.
Krajowy Depozyt Papierów Wartościowych (the Central Securities Depository of Poland, KDPW) has operated a register of dematerialised securities (since 1991 as a department of the Warsaw Stock Exchange and since 1994 as a stand-alone entity). Never in its history has KDPW experienced any events resulting in loss of dematerialised financial instruments or any other deficiencies.
The value of shares recorded in KDPW stands at PLN 632 billion, including 1,045 share issues.i
KDPW operates a register for bonds, including Treasury bonds (419 issues worth PLN 841 billion) and non-Treasury bonds (3,787 issues worth PLN 271 billion), as well as many other financial instruments.i
- as at 24 February 2021.