The Securities and Exchange Commission (SEC) cleared up the requirements, which a foreign investment firms from European Union countries must comply with in order to run operations as a remote member in the Polish market.
The interpretation by the SEC follows enquiry by the custodians’ council regarding the status of remote members in Poland. The ambiguity stems from a European Commission summary record released in January 2005 titled, “1st Informal transposition meeting on MiFID.”
According to the SEC, it is a rule that foreign investment firms have to notify their intention to operate on the territory of Poland. However, operations of remote members, who only direct their services to foreign investors and complete transactions for those investors based on the Polish market, are not regarded as services rendered on the territory of Poland.
In this case, other local regulations concerning operations of remote members would not apply and such remote members are only obliged to abide by the operator’s regulations.
In the SEC’s view, the key criterion for treating services of remote brokers as rendered on a particular territory is the origin of underlying legislation in which the brokerage agreement was signed. And if services of remote members are not aimed at Polish local clients, the remote members’ operations are not on Polish territory, making notification unnecessary.
The SEC’s opinion is could to change the Warsaw Stock Exchange (WSE) requirements and ease the admittance procedures for remote members, predicts ING. The WSE regulations impose on remote member-applicants the obligation to notify prior to granting the status of “remote member”. Enquired by ING Bank Slaski, the WSE representatives admit that they will analyze the opinion of the SEC, but they will still maintain their current requirements unless the analysis indicates the necessity to change them.