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Polish officials urged to exempt SBL from investment act
14 February 2017
Sec lending trade body ISLA pens letter to finance minister on impacts of Polish Act
ISLA has urged finance officials in Poland to exempt
securities lending and borrowing (SBL) trades from legislation
introduced back in 2015.
The securities lending trade body penned a letter to finance
minister Mateusz Morawiecki last week, arguing that the Polish
Act has "unintended consequences" for the SBL market.
Poland’s government signed the act into law two
years ago in response to repeated acquisition attempts of
domestic companies which were perceived as contrary to national
These included a takeover attempt of Grupa Azoty, a
strategic Polish chemicals manufacturer by Acron, a Russian
Purchasing or acquiring shares in certain 'protected
companies' above a 20% threshold, for example, triggers certain
However, loan return transactions (of a previously lent
Polish equity in a protected company) are also considered an
acquisition of shares.
As such, currently, the loan return will be subject to
pre-approval if the client’s ownership is above
Those who do not comply with the rules face hefty fines.
ISLA pointed out that the legislation is at odds with most
Typically SBL activity is exempted from such requirements
and loan return transactions are agreed at very short
"For investors with significant ownership in Polish
protected companies, that are also active lender of equity
securities, the requirement to apply for approval and wait for
the approval to be granted is challenging," ISLA executives
"We ask that an exemption SBL transactions be