The Polish Council of Ministers has adopted the draft bill on the creation a single financial regulator in Poland. The draft stipulates that the bill will take effect 14 days after the publication and, according to the government officials, further legislative works on the draft in the parliament may take around 3 months.
The new body, which will take over from present separate regulators for investment services (SEC) and insurance (KNUiFE) will likely be created in July/August. From January 1, 2007, the new regulator will take final shape by adopting the banking regulatory functions.
The draft differs from the original proposal in that the intially proposed one-person authority will be replaced with an 8-person commission and the faster consolidation of the regulators, according to ING.
The supervisory functions of the consolidated regulator will be equivalent to ones used currently by separate regulators. The present investment services regulator (SEC) and the regulator for pension funds and insurance services (KNUiFE)will be merged into the new single regulatory body- Financial Supervisory Authority (KNF) on the effective date of the new bill;
The KNF will take over from the regulator for banking supervision (KNB) from 1 January 1, 2007. However, with the creation of the new regulator in the first stage the head of the new regulator will become a head of banking regulator (KNB).
The supervisory functions will be performed by the Commission for Financial Supervis ory (KNF), which will consist of 6 persons: the chairman (appointed by the Prime Minister for a 5-year term), three deputy chairmen (appointed by the chairman), the chairman of the NBP and three other members (appointed by the Ministry of Finance, the Ministry of Labour and Social Policy, the President of Poland).
Even though the change will be structual, says ING, the new body will also be more accountable to the government (especially in case of banking services), which creates a risk that political reasons may have bearing on the decisions of the new regulator.