Implementation pains

A year has now passed since Directive 2004/109/EC of the European Parliament and of the Council of December 15, 2004 on the harmonization of transparency requirements for stock-listed firms came into force. Poland was to implement the law into its legal system by October 31, 2007 but last year's political crisis and the subsequent parliamentary elections prevented the Sejm from taking the necessary measures.

According to Łukasz Dajnowicz, spokesman for the Polish Financial Supervision Authority, the Sejm is now finally set to start the implementation process. "A respective legal act should be enacted within months," he said.

When the legislation finally does come into force, listed Polish businesses will have to make their best effort to disseminate information which could affect their stock prices to the widest possible audience.

The directive is meant to facilitate the creation of a more efficient and transparent financial services market. It also marks a new approach to the supervision of that market with the substitution of restrictive laws related to the making of a public offer with ones that ensure greater transparency and thus better protection of the shareholders.

The law specifies the information that listed companies should disseminate to the public in their financial reports as well as the period of time that those reports should cover. It also requires that the yearly reports be published not later than four months after the end of the financial year and encourages companies to reveal the level of managerial remunerations.

In July 2007, in a bid to amend and supplement the directive, the EU also adopted Directive 2007/36/EC, which deals with shareholders' voting rights and ensures their equal exercise for all EU citizens who are shareholders of companies having a registered office in one of the member states. That law is expected to be implemented by August 2009.