External drivers

Macroeconomic Conditions in 2017

According to initial estimates of the Central Statistical Office (GUS), Poland’s gross domestic product (GDP) grew by 4.6% in 2017 and 2.9% in 2016.

GDP growth was driven mainly by strong consumer demand and favourable external conditions including recovery in the eurozone which helped Polish exports. According to the Central Statistical Office, domestic demand increased by 4.7% in 2017 and 2.2% in 2016. Investments improved in H2 2017, in particular public investments. Investments increased by 5.4% in 2017 but decreased by 7.9% in 2016.

Unemployment was 6.6% in 2017, a record low level. Demand for labour in Poland remained strong with a growing shortage of employees. Wage pressures increased in H2 2017.

According to the Central Statistical Office, inflation was 2% in 2017. Inflation was mainly driven by rising fuel and food prices. Despite a faster increase of salaries paid by companies, core inflation net of food and energy prices remained relatively low at 0.7% in 2017.

Despite dynamic GDP growth, the Monetary Policy Council (RPP) kept the interest rates unchanged in 2017 on the argument that the rates kept the Polish economy on track of sustainable growth and ensured macroeconomic balance. The policy was corroborated by the position of the Polish currency on the international currency market. PLN was one of the world’s strongest currencies against EUR and USD in 2017.

On 29 September 2017, the rating agency FTSE Russell announced the annual classification of national economies. Poland was promoted from Advanced Emerging Markets to Developed Markets. The decision takes effect in September 2018, which leaves a period of time for transition. The promotion puts Poland among the world’s 25 developed economies including Germany, France, Japan, Australia, and the USA. Poland is the first Central and Eastern European economy to be named a Developed Market.

Harmonisation with MiFID2/MiFIR

MiFID2 extends the list of financial instruments, adds new regulations protecting investors, market transparency, corporate governance, as well as additional disclosure and technology requirements for algorithmic trading and trade reporting. It also introduces a new trading system: OTF (Organised Trading Facility).

MiFIR defines the requirements for publication of transaction data and reporting to supervisory authorities, regulates mandatory derivatives trade in organised systems, in particular supervisory actions for financial instruments and derivative positions, and services provided by third-country companies without a branch in the European Union.

The adoption of the MiFID2/MiFIR package largely reorganises the operation of financial markets. For Poland and the European Union, it is another step towards unification of the financial service industry and better investor protection on the capital markets.

In 2017, the preparation of GPW for MiFID2 included harmonisation in three areas:

  • modification of IT systems and amendment of regulations applicable to trading: GPW aligned its IT systems with MiFID2/MiFIR. The roll-out took place on 3 January 2018 as required. The modifications applied mainly to the trading system and related systems and included: additional capacity requirements, on-going performance monitoring, higher standards of time synchronisation, adjustment of the format and content of the system’s incoming and outgoing messages with additional information requirements under the regulations. The project developed an algorithm testing environment, implemented the kill functionality which allows GPW to cancel orders of an exchange member or its client using direct electronic access (sponsored client), and implemented pre-trade and post-trade transparency for all classes of assets.

In view of the information requirements under MiFID2/MiFIR, GPW developed mechanisms necessary to compile and archive, for the use of PFSA, orders with additional information including personal data of holders of securities accounts, and developed a dedicated personal data processing system. GPW developed IT solutions to provide PFSA and ESMA with reference data of financial instruments traded on GPW with the required format and content

In order to comply with the requirements under the regulations, GPW implemented systemic solutions and defined the terms of direct electronic access to GPW’s trading system.

  • work dedicated to issuers: including mainly alignment of the Exchange Rules with the requirements of Commission Delegated Regulation (EU) 2017/568, which imposes specific requirements of admission of all categories of financial instruments (transferable securities, ETFs, investment certificates, derivatives), and alignment of the Detailed Exchange Trading Rules with the Regulation to the extent of the standard application for admission of all instruments. GPW drafted and published on its website the procedure for verification of compliance of issuers of transferable securities with the obligations under EU law as required under Commission Delegated Regulation (EU) 2017/568. GPW implemented mechanisms necessary to comply with its new obligations under Commission Delegated Regulation (EU) 2017/1005, i.e., publication on GPW’s website and notification of PFSA in the event of the suspension or delisting of financial instruments on the exchange. GPW completed an educational campaign addressed to issuers focusing on the requirement to hold a Legal Entity Identifier (LEI).
  • implementation of organisational requirements and development of necessary regulations and procedures: In the process preparing GPW for the MiFID2/MiFIR package, we drew up a list of approximately 100 regulatory requirements and worked to draft new internal regulations and to amend existing regulations in order to ensure that the regulatory requirements are well implemented in GPW.

For more information about the impact of MiFID2 on the GPW Group, see section I.1 Development of the GPW Group in 2018 (financial and commodity market regulations).