News

GPW Benchmark announces public consultation on significant change in the methodology of some GPW Indices

PRESS RELEASE

• GPW Benchmark announces public consultation on significant change in the methodology of GPW Indices which, in the Administrator's opinion, would be a significant change to the index referred to in Art. 28 sec. 2 of the BMR Regulation
• The planned change concerns the rules for developing the GPW Indices: mWIG40 and sWIG80
• The change of the method proposed by GPW Benchmark concerns the introduction of the so-called ‘fast track’ entry to the Indices for large companies introduced to trading on the WSE Main List

GPW Benchmark invites market participants to public consultations on changes in the method of developing selected indices included in the GPW Indices Family: mWIG40 and sWIG80. Consultations initiated by GPW Benchmark are conducted in accordance with the Rules of the GPW Indices Family and the rules for introducing changes to the method.

Public consultations were preceded by a stage of consultations with an advisory body in the form of the Index Committee, associating experts active on the capital market, and the Oversight Committee of Capital Market Benchmarks - a supervisory unit within the meaning of the BMR Regulation. The performed statistical analyzes showed that the proposed change, in line with the Procedure for changing the GPW Indices Method, would be a significant change and therefore is subject to public consultation.

The consultation document contains an analysis and a detailed description of the proposed change, which have been defined on the basis of the research work carried out. The amendment presented for consultation concerns the rules of extraordinary adjustments consisting in changing the composition of the mWIG40 and sWIG80 indices during the IPOs of companies with large capitalization that meet the condition resulting from the ‘fast track’ procedure, to be introduced from March 2022, i.e. in parallel with the annual review of the composition of the indices. The proposed change arises in connection with the interest and requests of market participants to secure the representativeness of flagship Indices in accordance with the purpose of their measurement, expressed in the Rules of the GPW Indices Family.

In addition, from March 2022, i.e. in parallel with the annual revision of the composition of the Indices, GPW Benchmark plans to introduce additional changes to the Regulations of the GPW Indices Family, approved by the Oversight Committee of Capital Market Benchmarks, which, however, following statistical analyzes, did not indicate the significance of the changes and therefore, they will not be subject to public consultation, in accordance with the principles set out in the Procedure for Changing the GPW Indices Method.

For the sake of transparency of the development method, GPW Benchmark makes it publicly available in advance:

• Change in the rules of qualifying companies to the WIG20 reserve list, assuming that a company that  takes a place below 40th in the capitalization ranking, would not qualify to the index’s reserve list;
• Determining the minimum number of instruments in the portfolios of all indices for which the publication of indices makes sense (similar to the WIGdiv case);
• Clarification of the provisions regarding MTR (Monthly Turnover Ratio);
• Modification of the terms of earlier notifications of extraordinary changes in indexes (providing information about extraordinary changes, if possible 2 days in advance);
• Change of the date of qualification of the companies to the WIG and WIG-Poland indices and sector indices after a first trading day (from 3 to 7 sessions, while maintaining and taking the relevant criteria into account in this case, the introduction to the index would actually take place after 9 sessions after the IPO, taking into account the 2-day deadline for informing about extraordinary changes;
• Changing the mode or frequency of the WIGtech, WIG20TR, mWIG40TR, sWIG80TR and WIG30TR indices publication (frequency increase - publication in a continuous mode every 60 seconds).

The consultation document along with the questionnaire was sent directly to entities using the GPW Indices.

We also invite other capital market Participants to consult and submit comments and replies to inquiries in the attached questionnaire by February 6, 2022 to the following address: .

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History of the WSE
On 12 April 1991, the then Ministers of Ownership Transformation and Finance signed the Deed of Incorporation of the joint stock company "Giełda Papierów Wartościowych w Warszawie S.A." Four days later, on the day of the WSE's inaugural session, shares of five companies were traded and the turnover amounted to PLN 1990. Since 2018, the WSE has been classified as one of the 25 developed markets by the FTSE Russell agency. The history of the capital market on Polish soil dates back to the early 19th century. The first in Poland and one of the few in Europe, the Merchant Exchange, was established in Warsaw on 2 May 1817, soon became the largest market in Tsarist Russia, responsible for 5-6% of global securities trading. A thriving stock exchange, accounting for 90% of the domestic turnover, also operated in Warsaw in the interwar period. After the period of the People's Republic of Poland and the planned economy, it was not until 1989, with the political and economic transformation, that the Polish capital market was able to develop again.

Stock exchange today
The average EoB equity daily trading volume on the WSE was PLN 1,078.9 million in December 2021. The Main Market listed 430 companies (383 domestic and 47 foreign) and the NewConnect market listed 380 companies (376 domestic and 4 foreign) at the end of December 2021. Last year, the WSE Group generated record sales of PLN 403.8 million and one of the highest ever net profits of over PLN 151 million. According to the Federation of European Securities Exchanges, in 2020 the WSE ranked first in Europe in terms of percentage increase in equity turnover and third in terms of the value of initial offerings. At the end of 2020, the WSE was also the second market in Europe in terms of liquidity and achieved the status of world leader in terms of the number of listed companies in the gamedev sector.

WSE position in the region
The WSE is the leader among stock exchanges in Central and Eastern Europe by the number of listed companies and the total capitalisation of domestic companies. The WSE's share in trading on stock exchanges in the region is 81%. The WSE leads the initiative of the Three Seas Stock Exchanges and aspires to the role of a regional hub for young technological companies with huge potential, the so-called unicorns. Negotiations are currently underway for the WSE to acquire a majority stake in the Armenian Exchange.

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The Warsaw Stock Exchange Group (GPW Group) operates trading platforms for shares, Treasury and corporate bonds, derivatives, electricity and gas, and provides indices and benchmarks including WIBOR and WIBID. The index agent FTSE Russell classifies the Polish capital market as a Developed Market since 2018. The markets operated by the GPW Group are the biggest in Central and Eastern Europe. For more information, visit www.gpw.pl