Is there any legislation or proposed legislation in your jurisdiction under which financial institutions are prohibited from dealing in investments as a principal?
In Poland banks are generally allowed to deal in investments as principals. However, the Polish banking regulator – the Financial Supervision Commission (Komisja Nadzoru Finansowego or KNF) – has recently published an announcement on its website to the effect that it is considering issuing a recommendation concerning potential risks related to the investment activity of banks. The recommendation would impose an obligation to separate investment activity from the banking activity if certain volume thresholds of investment activity are exceeded. Recommendations of the KNF are in fact binding on banks.
The details of the recommendation remain unknown; therefore we do not expect the recommendation to be issued in the near future.
To which financial institutions do the prohibitions relate?
No draft recommendation has been released yet, so it is difficult to predict which financial institutions will be affected.
What exceptions to the ban on proprietary trading are contemplated by the legislation?
No draft recommendation has been released yet, so it is difficult to predict what exceptions there may be.
Can any other entity within the relevant financial institution’s group of companies carry on the prohibited activity?
No draft recommendation has been released yet, so it is difficult to predict whether it will apply to the group or the financial institution only.
When will the proposed legislation come into effect?
The details of the recommendation remain unknown; therefore we would not expect that the recommendation will be issued in the near future.
Links to the proposed legislation and any other relevant material
No draft legislation or other material has been published so far.