Market Relations and Dialogue
Pursuant to the CSR strategy, the key objectives of the GPW Group include the development of corporate culture and behaviours of capital and commodity market participants in Poland according to high standards of corporate governance and disclosure requirements. This goal is pursued through efforts made in partnership and dialogue with capital and commodity market stakeholders.
MEMORANDUM OF UNDERSTANDING OF THE MINISTRY OF DIGITAL AFFAIRS AND GPW CONCERNING BLOCKCHAIN APPLICATIONS
On the capital market, blockchain may become an important driver of the bond and lending markets, the new private market, as well as post-trade, e-voting and online clearing systems
The Ministry of Digital Affairs and the Warsaw Stock Exchange entered into a memorandum of understanding concerning blockchain applications in the public sector. The objective of the MoU is to promote the use of blockchain on the capital markets and to implement similar solutions wherever they can improve the effectiveness, efficiency and productivity of processes in the economy and in the administration.
The co-operation between the Ministry of Digital Affairs and GPW may help to develop proposed requirements for projects using blockchain and open public data, which follows the technological megatrends (including Artificial Intelligence and the Internet of Things).
GPW committed itself to providing extensive support in the digitisation of the public administration. Up to now, only 5 percent of the world’s leading exchanges use blockchain while 70 percent are working on blockchain implementations. By focusing on blockchain implementation, we can be one of the world’s leaders. On the capital market, blockchain may become an important driver of the bond and lending markets, the new private market, as well as post-trade, e-voting and online clearing systems.
The priorities of the Ministry of Digital Affairs and GPW are to develop security standards for economic transactions and the public administration, to build a sandbox (test environment) supporting the evaluation of new solutions for the public administration and the economy, and to create requirements for solutions including the tokenisation of documents, securities and rights in order to support the security and efficiency of economic transactions and processes of the administration. Blockchain is a technology which supports secure and transparent transactions as well as storage and organisation of information. Thanks to cryptography, blockchain transactions need not be verified by intermediary institutions. Blockchain provides reliable identification systems. Blockchain applications will help to develop a friendly and secure environment for high-tech companies in Poland.
PUBLICATION OF DIVIDEND INDICES
To address the needs of market participants, the Warsaw Stock Exchange started to publish dividend indices.
The Warsaw Stock Exchange started to calculate and publish three dividend indices: WIG20dvp, mWIG40dvp, and sWIG80dvp in December 2018.
The dividend indices track cash dividends paid by the stocks participating in the underlying index (respectively: WIG20, mWIG40, sWIG80). The indices will track aggregated dividends paid by the stocks participating in the underlying index (respectively: WIG20, mWIG40, sWIG80) in the calendar year.
The publication of the new indices is an additional source of information about dividends paid in our market. Such information is particularly relevant for investors who are looking for attractive and stable returns. Dividend indices are also an important source of information for investors trading in index derivatives (futures and options) whose valuation must include dividends. In the future, GPW in planning to offer trade in dividend index futures which allow investors to hedge against the dividend risk of derivatives.
The new indices will not aggregate dividends paid in previous years and they are reset at the end of each year. Every year, the indices start at 0 (no dividend paid) and start to aggregate dividend from scratch. The index value at the year’s end will represent the sum of dividends paid by the stocks participating in the underlying index throughout the year. The indices will be reset at the first trading session after the third Friday in December.
The indices only include ordinary cash dividends, including advance dividends. The indices are recalculated to include paid dividends at the trading session when shares are first traded without dividend. The indices are published in the single-price system at 11:00. The dividend indices will be calculated back to 2 January 2007.
SUPPORT FOR DEVELOPMENT OF POLAND’S ETF MARKET
On 26 November 2018 at the headquarters of the Warsaw Stock Exchange, representatives of GPW, AgioFunds TFI, Beta Securities Poland and Dom Maklerski BOŚ have signed a memorandum of understanding to support product development on the Polish capital market and to educate investors. AgioFunds TFI will issue Poland’s first ETF. Dom Maklerski BOŚ will be the offeror and market maker of the Beta ETFs.
The Warsaw Stock Exchange is working to develop new financial products to make the Polish capital market more attractive. Development of the ETF market will attract new Polish and international investors to Poland’s capital market.
Beta Securities Poland in partnership with AgioFunds TFI and DM BOŚ are working to develop and launch Beta ETFs, GPW’s first ETFs replicating the main indices of Polish and international stocks and bonds. The Beta ETFs based on WIG20TR addresses the needs of investors. It is the first product of this kind to be issued under Polish law, developed and managed by Polish experts using the experience of Israel’s advanced ETF market. It is an easy and transparent way for investors to participate in the value and development of Polish blue chips participating in WIG20TR, the total return index which includes dividends paid to shareholders. Dividends add in the long term to the value of WIG20TR.
The objective is to offer a recognised, proven investment instrument which is popular on the markets all around the world owing to its broad range of applications. ETFs are a leading segment of the capital markets on all of the biggest stock exchanges, as well as being a central part of investment portfolios. The global ETF market is worth more than USD 5,000 billion and includes over 5,700 ETF products which replicate a range of stock, bond, and commodity indices.
GPW now lists three ETFs issued by Lyxor Asset Management (ETFSP500, ETFDAX, ETFW20L) and the Beta ETF WIG20TR issued by AgioFunds TFI in partnership with Beta Securities Poland.
INVESTMENT AGREEMENT TO SET UP A JOINT RATING AGENCY
GPW, the Polish Development Fund (PFR), Biuro Informacji Kredytowej (BIK) and Instytut Analiz i Ratingu (IAiR) signed an investment agreement which provides for a partnership between GPW, PFR and BIK to develop a recognisable, strong local rating agency based on IAiR. GPW, PFR and BIK expect that the shareholder structure of Instytut Analiz i Ratingu should correspond to the equal equity investment of each of them in IAiR (1/3 each). The planned equity injection will enable the entity to launch full-fledged operation until it breaks even. The investment agreement signed by GPW, PFR, BIK and IAiR follows an agreement signed on 28 November 2017 concerning co-operation in the development of Instytut Analiz i Ratingu in order to compile and provide credit risk ratings of entities, including mainly issuers of bonds.
The main objective of the joint rating agency will be to build a rating culture in Poland by providing services to a broad group of clients, including mainly small and medium-sized enterprises (SMEs). The mission of the agency will be to bridge a gap on the Polish market with regard to access to local risk ratings and research. The rating agency will also bolster the role of the debt market in financing the economy and help to improve the quality of the Polish capital market by facilitating the risk valuation for investors on the exchange.
An independent rating agency will improve the credibility, transparency and safety of transactions in the economy, mainly by facilitating risk assessment for financial and non-financial market players. The creation of a rating agency will open access to unique economic research and risk ratings in the segment of small and mid-sized enterprises. This is yet another initiative supporting the development of Poland’s capital market.
The development of a rating agency is a part of the Plan for Responsible Development as well as a strategic initiative of the updated strategy #GPW2022 presented by the Warsaw Stock Exchange on 27 June 2018. Furthermore, GPW acting through its subsidiary BondSpot worked to open a special Prime segment of Catalyst listing rated bonds and to take steps necessary to allow banks to trade directly in corporate bonds on Catalyst.
INDIVIDUAL INVESTOR DAY AND OPEN DOOR DAY ON GPW
GPW organised the Individual Investor Day and the Open Door Day on 20 and 21 April. The two-day event was addressed to a broad group of stakeholders, including everyone interested in discovering the inner workings of the exchange.
The GPW Open Door Day was held under the motto “Exchange Means Value.” The first day was addressed to professional investors as well as beginners. The second day was open to all visitors, including kids and youth, who wanted to visit the Exchange and understand how investing works.
The Individual Investor Day (20 April) presented GPW’s current offer and enabled an exchange of views about the market. The day featured many presentations by recognised capital market experts discussing current affairs of the exchange. GPW offered a range of meetings, lectures, debates, presentations and workshops for investors. The event was addressed to individual investors, institutional investors, existing and potential issuers, brokers, authorised advisers, consultants, other capital market institutions and the media.
The objective of the Open Door Day was to promote the exchange among the broad audience. The programme featured many attractions for families with children, including “Kids Know Better” – a debate with kids about the exchange, lectures about the exchange for children, an adventure game “Secrets of the Exchange Bell”, movies about the exchange and the capital market.
FINANCIAL MARKET WOMEN’S CLUB
The Financial Market Women’s Club was founded by three leading institutions of the financial market: CFA Society Poland, the Warsaw Stock Exchange, and the Chamber of Fund and Asset Managers. The initiative is dedicated to women who are professionals in the financial sector and auxiliary industries, in particular women managers. The Club hosts conferences and business meetings with experts and speakers from Poland and abroad.
The mission of the project is to create a valuable and smart space where participants can exchange opinions, expertise and experience and build relational capital and industrial intellectual capital. The initiative addresses the professional needs of women in finance and promotes the financial sector as a place of diversity.
The inaugural conference of the Financial Market Women’s Club took place on 6 March. Three more events were held as a part of the initiative during 2018.
CONSULTATION COMMITTEES
In addition to irregular dialogue with the stakeholders concerning material business decisions, GPW is also engaged in on-going consultations with market participants within the Consultation Committees established in 2013. The Committees are advisory bodies active in the key areas of GPW’s operation. The Committees bring together representatives of the capital market community: investors, issuers, brokers, funds, academics, lawyers, as well as representatives of the Polish Financial Supervision Authority. Consultations with the Committees on the Exchange’s business decisions help to develop solutions optimal to all GPW stakeholder groups.
As at the end of 2018, GPW had the following Committees:
- Alternative Trading System Development Committee - Board of Authorised Advisers
- Compliance Committee
- Corporate Governance Committee
- Derivatives Market Committee
- Exchange Indices Committee
Two other committees cover the commodity market:
- Gas Market Committee – an advisory body since 2014 assisting the development of solutions creating a friendly environment for the development of trade in natural gas on the exchange.
- Energy Market Committee – established in 2015, it brings together exchange members and representatives of TGE and IRGiT. Its responsibilities include giving opinions and tabling proposals for the development of exchange-traded commodities listed on TGE.
Two consultation meetings of the combined committees took place in 2018, each attended by 100 participants.
GPW BENCHMARK OVERSIGHT COMMITTEE
The Oversight Committee was appointed under the new WIBID and WIBOR documentation effective as of 1 February 2018.
The Oversight Committee was appointed by GPW Benchmark in order to supervise all aspects of the reference rates. The members of the Oversight Committee were nominated by the key institutions of the financial sector representing interests of reference rate users, including the Polish Bank Association (ZBP), the ACI Polska Association, and the Office of Competition and Consumer Protection (UOKiK).
The GPW Benchmark Oversight Committee was appointed in compliance with the requirements of Regulation (EU) 2016/1011 of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, in order to ensure substantive supervision of all aspects of the reference rates.
In order to engage many other institutions and stakeholders, the status of Oversight Committee Observer is available to institutions which actively participate in the alignment of WIBID and WIBOR with the requirements of the Regulation and the development of the offer of benchmarks for the Polish financial market. The GPW Benchmark Oversight Committee Observers include the Ministry of Finance, the National Bank of Poland, the Polish Bank Association, the ACI Polska Association, the Bank Guarantee Fund, and the Office of Competition and Consumer Protection
GPW BENCHMARK CONSULTATION PAPER
In October 2018, GPW Benchmark S.A. published a consultation paper for WIBID and WIBOR Fixing Participants concerning the considered development concepts of methodologies of WIBID and WIBOR as well as alternative benchmarks. The paper includes a number of questions about the concepts under consideration and provides extensive information. It presents the directions of work undertaken by GPW Benchmark, taking into account the specificity of the Polish money market and global trends of benchmark reform. The consultations will summarise the Fixing Participants’ opinions and comments. The summary will be published on www.gpwbenchmark.pl after a meeting with banks and leading financial institutions in Poland.
GPW Benchmark invited all stakeholders to participate in the consultations and to provide comments and feedback to questions. The comments will inform further alignment of WIBID and WIBOR with the BMR requirements and the development of new benchmarks.
Human Resources Policy
With their unique skills and experience, GPW Group employees are an important group of the Group’s stakeholders. The organisational culture of the Group is based on engagement, values and effective internal communication as well as investment in continuous employee development.
In 2018, the Company continued initiatives focused on efficient management of HR, payroll, social and bonus processes to address business needs and support the implementation of the Exchange’s strategy. GPW makes best efforts to harmonise the human resources policy across companies of the Group.
GPW is a responsible employer as it rewards and promotes employee trust and engagement by offering development opportunities at a safe and inspiring work place.
Headcount of GPW and the GPW Group as at 31 December
| 2018 | 2017 | |
|---|---|---|
| Number of GPW employees | 208 | 193 |
| Number of GPW Group employees | 363 | 341 |
GPW RECRUITMENT POLICY
The GPW Group pursues a transparent recruitment policy. GPW’s recruitment policy focuses on recruiting top-class specialists for all areas of the Company’s operation. The development of human resources and employee competences includes rotation in job positions within GPW and the Group. The success and reputation of the GPW Group depend not only on the quality of provided services but also the way that we work. Our principles and values ensure compliance of the GPW Group with laws and regulations as well as fair and ethical conduct.
GPW personnel structure by gender as at 31 December
| 2018 | 2017 | |
|---|---|---|
| Number of GPW employees | 208 | 193 |
| Number of GPW Group employees | 363 | |
| - Women | 149 | |
| - Men | 214 |
In the recruitment process, the GPW Group follows the principles of diversity and combats all forms of discrimination, in particular on grounds of sex, age, disability, race, religion, nationality, political creed, union membership, ethnicity, denomination, sexual orientation, and employment for a determined or undetermined period, full-time or part-time.
GPW employee rotation as at 31 December1
| 2018 | 2017 | |
|---|---|---|
| GPW employee rotation | 10% | 16% |
| GPW Group employee rotation | 12.13% |
GPW employed 35 new persons and terminated employment of 20 persons in 2018. By comparison, GPW employed 35 new persons and terminated employment of 29 persons in 2017. The Group employed 64 new persons and terminated employment of 42 persons in 2018.
GPW TRAINING POLICY
The GPW Group invests in employee development and supports professional advancement and learning. It inspires employees to develop and stay creative by tapping the potential of creativity and collaboration.
Training plays an important role in the process of employee professional development and improvement of qualifications. GPW intensified its training initiatives in 2018, including a programme which launched several training projects for GPW employees, key managers and other employees. As a result, 1,282 man-days of training were provided within 9 training modules to GPW employees in 2018. According to its HR policy, the Exchange co-financed post-graduate courses of employees. In order to improve their professional competences, GPW Group employees participated in conferences, congresses and seminars to improve their professional expertise. In support of employee development, GPW offered a range of initiatives which improve management competences and time and stress management skills
GPW employees received training in GDPR, which took effect in May 2018. A digital gamification project “Inspiration Trip” addressed employee development needs and spanned all of 2018.
The average number of training days per GPW FTE was 6.16 in 2018.
GPW personnel by education, as at 31 December
| 2018 | 2017 | |
|---|---|---|
| Total GPW | 208 | 193 |
|
Vocational education |
0 | 0 |
|
Secondary education |
22 | 23 |
|
University education |
186 | 170 |
| Ogółem Grupa GPW - Wykształcenie zawodowe | 363 | 193 |
|
Vocational education |
0 | 0 |
|
Secondary education |
54 | 23 |
|
University education |
309 | 170 |
GPW had 208 employees at the end of 2018, including 186 employees with university education and 22 employees with secondary education.
GPW INCENTIVE SYSTEM
GPW’s HR policy is largely based on employee engagement; hence, the Company attaches special importance to employee incentives. The basic salary offered by GPW is tied to the employee’s potential, competences and performance.
According to the Bonus Rules, the incentive system covers all GPW employees other than the Management Board. The objective is to incentivise employees’ superior performance based on individual targets. The system includes appraisal of employee attitudes. The appraisal identifies the employee’s strengths and areas for improvement.
Every Exchange employee has wide access to fringe benefits including: health care, reimbursement of commuting costs, the Employee Pension Scheme, a canteen system, loans including housing and medical loans, as well as payments from the Company Social Benefits Fund.
GPW CODE OF ETHICS
In addition to improvement of professional qualifications, GPW also takes steps to develop its value-based corporate culture which is unique in awarding and applying employee initiatives that improve the effectiveness of the organisation.
The GPW Employee Code of Ethics defines the core values applicable to all activities of the Company. The Code of Ethics outlines the principles and values to be followed by all GPW employees; it disseminates and promotes a culture of compliance with the law and decision-making based on ethical criteria in the following areas: mutual relations among employees, relations with customers and counterparties, relations with competitors, communication, promotion and advertising; and it lays down sanctions for non-compliance. The document has been signed by all GPW employees.
In 2015, pursuant to the GPW Group’s CSR strategy, the Company’s Code of Ethics was implemented in the companies Towarowa Giełda Energii and BondSpot.
OCCUPATIONAL HEALTH AND SAFETY POLICY
GPW’s priorities include a healthy, safe and friendly work environment which supports the development of the professional potential of all Exchange employees. Under its occupational health and safety policy, the Company works to prevent accidents at work, occupational diseases and potential incidents, to continuously improve occupational health and safety and fire protection, to improve employee qualifications, and to integrate their role and engagement in occupational health and safety initiatives. GPW’s occupational health and safety policy was integrated into the subsidiaries TGE and BondSpot in 2015. There was one accident at work at GPW in 2018.
EMPLOYEE VOLUNTEERING AND CHARITY INITIATIVES
Employee volunteering is one of the forms of GPW’s corporate social responsibility activities. In their volunteering work, Group companies support the youth education and care centre in Franciszków and two family children’s homes in Ruszków. Group employees prepare Christmas gifts every year. In the past years, GPW employees collected clothing and provided the centre with equipment including sports equipment.
In 2018, GPW supported the Association Wiosna, organiser of the Szlachetna Paczka campaign, by contributing towards financial support for poor families.
In summer 2018, GPW supported Caritas Diecezji Łowickiej, the organiser of summer camps for children and youth from poor and dysfunctional homes.
The GPW Group supports social engagement of employees by integrating them around volunteer initiatives.
TRAINEESHIPS AND INTERNSHIP
The Warsaw Stock Exchange puts a strong emphasis on capital market education and learning of young people.
For many years, the Exchange has offered traineeship opportunities to university students. The students major in different disciplines including Economics, Finance, and Marketing. Furthermore, GPW runs a programme addressed to Polish students of foreign universities in the GO4Poland programme.