Getting started with WSE

Briefly about us
Warsaw Stock Exchange is the most advanced market in the CEE region and one of the most dynamically growing markets in Europe. It is the leader in its region in terms of market capitalisation, trading value, number and type of traded instruments, as well as IPOs. Its growth is facilitated by its well-developed infrastructure, typical of a mature market, as well as sound regulatory environment in full compliance with EU standards. Today, the WSE is more than a local market. Medium-sized and small enterprises as well as large companies representing all sectors of the economy are present on the Warsaw bourse. At the end of September 2011 shares of 425 companies, including 36 foreign ones, were traded on the WSE Main List.

Where can we invest?
The Warsaw Stock Exchange organises trading in financial instruments on three markets:

• The WSE Main List has been in operation since 16 April 1991. This market is supervised by the Polish Financial Supervision Authority and notified to the European Commission as a regulated market. The following securities and financial instruments are traded here: equities, bonds, warrants, pre-emptive rights, rights to shares, investment certificates, structured instruments, ETFs and derivatives, i.e. futures contracts, options and index participation units.
• NewConnect is a market organised and maintained by the WSE as an alternative trading system. It was designed for start-ups and developing companies, especially from the sector of new technologies. NewConnect was launched on 30 August 2007. Instruments which may be traded under this alternative trading system include equities, rights to shares, pre-emptive rights, depository receipts, as well as other equity based instruments.
• Catalyst is a debt instruments market for municipal, corporate and mortgage bonds founded on 30 September 2009. Catalyst consists of two trading platforms organised by the WSE as a regulated market and as an alternative trading system and two analogous markets operated by BondSpot. Such a structure allows issuers of any size to raise financing and offers investors, both retail and institutional, the possibility to efficiently trade in debt instruments.

How to invest?
If you want to invest on the WSE you need to open a securities account with one of the licensed brokerage houses (List of Exchange members). The next step is to decide which securities (stocks, bonds, ETFs etc.) to purchase and place an order at your brokerage house (most often via an Internet platform provided by your broker).. The Brokerage house is responsible for the correct execution of yourorder. All orders are anonymous i.e. investors do not know who they make the deal with. Transactions on the WSE can be executed in one of the following quotation systems:

• continuous trading;
• single-price system with two auctions per day.

Additionally, for large packets of financial instruments block trades are allowed outside the trading session.

Trading
Transactions on the Exchange (with the exception of block trades) are executed from 8:30 a.m. to 5:35 p.m. from Monday to Friday. During this time trading is conducted in two systems: continuous and single-price auction. The continuous trading system applies to trading in derivatives (futures contracts starting at 8:30 a.m.) and cash market instruments, e.g. stocks (beginning at 9:00 a.m.). Single-price auctions are held twice a day at 11:00 a.m. and 3:00 p.m. The trading session is comprised of the appropriate phases for the given system of trading.

Orders
Investors place their orders through the brokerage house which runs their investment account. Most often you place your orders via an Internet platform provided by your broker. Orders are then forwarded by your broker to the WSE trading system.. Since brokers' IT systems are integrated with the WSE system, online order placement is fast and secure. When placing an order, the investor must specify:

• the type of order (buy/sell);
• the price limit (special orders without a price limit are also allowed);
• the order validity date;
• the name of the security or financial instrument to be bought or sold;
• the number of securities (volume);
• additional requirements for execution of the order.

Orders can be divided into:

• Orders with price limits;
• Orders without price limits:
  • Market order. Continuous trading;
  • Market on-opening order. Single-price auction;
  • Must-be-filled order. Both continuous trading and single price auction.

Once your order has been transmitted to the WSE, our electronic trading system will match it with an opposite order of another investor. If the transaction is made the WSE notifies all parties involved (including your Broker).

Taxation
Capital gains earned by Polish individuals are taxed at a flat rate of 19%. The same rate applies to capital gains earned by legal persons. Foreign investors are generally subject to the same regulations with their tax obligations being additionally regulated by respective double taxation avoidance treaties. Pursuant to such treaties, income realised by foreign investors on the WSE is taxed according to their country of residence (domicile). However, in order to take advantage of those provisions, foreign investors must have a certificate of residence, otherwise their income will be taxed in Poland (at 19%). There are no limitations on the transfer of capital income by foreign investors. Please note that The Warsaw Stock Exchange received the “Recognised Stock Exchange” designation from HM Revenue and Customs (HMRC). The designation awarded to the WSE Main List and the retail EU-regulated segment of Catalyst will make these markets more attractive and accessible for UK-based investors.