POLAND

ACT ON TRADING IN FINANCIAL

INSTRUMENTS

Important Disclaimer

This translation has been generously provided by the Polish Financial Supervision Authority. This does not

constitute an official translation and the translator and the EBRD cannot be held responsible for any inaccuracy

or omission in the translation. The text should be used for information purposes only and appropriate legal

advice should be sought as and when appropriate.

The present English text is furnished for information purposes only.The original Polish text published in the Journal of Laws is binding in all respects.

ACT

on Trading in Financial Instruments1)

dated July 29th 2005

1) This Act implements, within the scope of its regulation, the following Directives:

1) Council Directive 93/6/EEC of March 15th 1993 on the capital adequacy of investment firms andcredit institutions (OJ L 141, 11.06.1993)

2) Council Directive 93/22/EEC of May 10th 1993 on investment services in the securities field (OJL 141, 11.06.1993; OJ L 168, 18.07.1995; OJ L 290, 17.11.2000; and OJ L 35, 11.02.2003);

3) Directive 97/9/EC of the European Parliament and of the Council of March 3rd 1997 on investor-compensation schemes (OJ L 84, 26.03.1997);

4) Directive 2001/34/EC of the European Parliament and of the Council of May 28th 2001 on theadmission of securities to official stock-exchange listing and information to be published on thosesecurities (OJ L 184, 06.07.2001; OJ L 96, 12.04.2003; OJ L 345, 31.12.2003; and OJ L 390,31.12.2004);

5) Directive 2002/87/EC of the European Parliament and of the Council of December 16th 2002 on thesupplementary supervision of credit institutions, insurance undertakings and investment firms in afinancial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC,92/96/EEC, 93/6/EEC and 93/22/EEC and Directives 98/78/EC and 2000/12/EC of the EuropeanParliament and of the Council (OJ L 35, 11.02.2003);

6) Directive 2003/6/EC of the European Parliament and Council of January 28th 2003 on insiderdealing and market manipulation (market abuse) (OJ L 96, 12.04.2003);

7) Commission Directive 2003/124/EC of December 22nd 2003, implementing Directive 2003/6/ECof the European Parliament and of the Council as regards the definition and public disclosure ofinside information and the definition of market manipulation (OJ L 339, 24.12.2003);

8) Council Directive 2003/125/EC of December 22nd 2003 implementing Directive 2003/6/EC of theEuropean Parliament and of the Council, as regards the fair presentation of investmentrecommendations and the disclosure of conflicts of interest (OJ L 339, 24.12.2003);

9) Commission Directive 2004/72/EC of April 29th 2004 implementing Directive 2003/6/EC of theEuropean Parliament and of the Council as regards accepted market practices, the definition ofinside information in relation to derivatives on commodities, the drawing up of lists of insiders, thenotification of managers’ transactions and the notification of suspicious transactions (OJ L 162,30.04.2004).

The data contained herein and relating to the promulgation of EU legal acts relate as of the date ofPoland’s accession to the European Union to the promulgation of such legal acts in the Official Journal ofthe European Union – special edition.

This Act amends the following statutes: Act on Acquisition of Real Estate by Foreign Nationals ofMarch 24th 1920, Code of Civil Procedure of November 17th 1964, Act on Administrative EnforcementProcedure of June 17th 1966, Personal Income Tax Act of July 26th 1991, Corporate Income Tax Act ofFebruary 15th 1992, Act on the Banking Guarantee Fund of December 14th 1994, Bond Act of June 29th1995, Act on Tax Offices and Chambers of June 21st 1996, Act on Rules Governing the Exercise of StateTreasury’s Rights of August 8th 1996, Act on the Registered Pledge and the Pledge Register ofDecember 6th 1996, Act on Sureties and Guarantees Issued by the State Treasury and Certain LegalPersons of May 8th 1997, Act on the Organisation and Operation of Pension Funds of August 28th 1997,Act on Court Enforcement Officers and Enforcement Proceedings of August 29th 1997, Banking Law ofAugust 29th 1997, Act on the Social Security System of October 13th 1998, Commercial CompaniesCode of September 15th 2000, Commodity Exchange Act of October 26th 2000, Act on StorageWarehouses and on Amending the Civil Code, Code of Civil Procedure and Other Statutes of November16th 2000, Act on Prevention of Money Laundering Practices and Financing of Terrorism of November16th 2000, Act on the Final Nature of Settlements in Payment Systems and Securities Clearing Systems,and Rules of Supervision over Such Systems of August 24th 2001, Act on Responsibility of Group

2

Part I

General Provisions

Art. 1.

1. This Act defines the rules, manner and conditions for commencing and conductingbusiness which involves trading in securities and other financial instruments, therights and obligations of entities engaged in such trading and the supervisionthereof.

2. The provisions of this Act shall not apply to promissory notes and cheques withinthe meaning of the Promissory Note and Cheque Act.

Art. 2.

1. Within the meaning of this Act, financial instruments shall include:

1) securities;

2) any of the following instruments other than securities:

a) units in collective investment undertakings,

b) money market instruments,

c) futures contracts and other equivalent cash-settled financial instruments,forward interest-rate agreements, equity, interest-rate and currency swaps,

d) options to buy or sell any financial instruments, interest rate options,currency options, options on such options and other equivalent cash-settled financial instruments;

e) property rights whose price depends whether directly or indirectly, on thevalue of items of specified type, specified types of energy, measurementsand allowances of production or pollution emissions (derivatives oncommodities)

f) any other instruments admitted or sought to be admitted to trading ona regulated market in the territory of a Member State.

2. Broker-traded financial instruments shall be the financial instruments referred to inArt. 2.1.1 and Art. 2.1.2a-d.

Art. 3.

Any reference in this Act to:

Entities for Prohibited Acts Subject to Penalty of October 28th 2002, Bankruptcy and Recovery Law ofFebruary 28th 2003, Insurance Activities Act of May 22nd 2003, Insurance Brokerage Act of May 22nd2003, Act on Certain Types of Financial Collateral of April 2nd 2004, Act on Personal Pension Accountsof April 20th 2004, Act on Investment Funds of May 27th 2004, Act on Freedom of Business of July 2nd2004 and Act on European Grouping of Economic Interests and on the European Company of March 4th2005.

3

1) “securities” shall mean:

a) shares, pre-emptive rights within the meaning of the CommercialCompanies Code of September 15th 2000 (Dz.U. No. 94, item 1037, asamended2)), rights to shares, subscription warrants, depositary receipts,bonds, mortgage bonds, investment certificates and other transferablesecurities, including securities incorporating property rights equivalent torights attached to shares or debt, issued under pertinent provisions ofPolish or foreign laws;

b) other transferable property rights created by issuance, which incorporate aright to acquire or subscribe for securities referred to in Art. 3.1a or areexercisable by way of cash settlement (derivative rights);

2) “alternative trading system” shall mean a multilateral trading system organisedby an investment firm or a company operating a regulated market, which isused for trading in securities and money market instruments outside aregulated market and ensures concentration of supply and demand so as toenable transactions between participants of the system; a market organisedunder and in accordance with an agreement with an issuer of securities shallnot be deemed an alternative trading system if the issuer is the State Treasuryor the National Bank of Poland;

3) “units in collective investment undertakings” shall mean securities andfinancial instruments other than securities, which represent property rights ofunit holders of collective investment undertakings, including in particularinvestment fund units, issued under pertinent provisions of Polish or foreignlaws;

4) “Public Offering Act – shall mean the Act on Public Offering, ConditionsGoverning the Introduction of Financial Instruments to Organised Trading,and Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539)

5) “public offering” shall mean a public offering as defined in the PublicOffering Act, which concerns securities governed by the provisions of thePublic Offering Act;

6) “primary trading” shall mean primary trading as defined in the Public OfferingAct;

7) “secondary trading” shall mean:

a) a public offering made by an entity other than an issuer or a firmcommitment underwriter, or acquisition of securities from such entity, or

b) an offer of financial instruments other than securities made by an entityother than an issuer in accordance with Art. 3 of the Public Offering Act,or acquisition of such financial instruments from such entity;

7) “initial public offering” shall mean an initial public offering as defined in thePublic Offering Act;

2) Amendments to the Act were promulgated in the Journal of Laws (Dziennik Ustaw) of 2001 No. 102,

item 1117, Dz.U. of 2003, No. 49, item 408, and No. 229, item 2276, and Dz.U. of 2005 No. 132, item1108.

4

8) “organised trading” shall mean trading in securities or other financialinstruments on a regulated market or in an alternative trading system in theterritory of the Republic of Poland;

10) “stock exchange” shall mean a stock exchange where securities are traded;

11) “issuer of securities” shall mean an issuer as defined in the Public Offering Act;

12) “issuer of financial instruments other than securities” shall mean an entityissuing, in its own name, financial instruments other than securities, whichholds rights or has obligations thereunder;

13) “selling shareholder” shall mean a selling shareholder as defined in the PublicOffering Act;

14) “standby underwriting” shall mean a standby underwriting agreement withinthe meaning of the Public Offering Act;

15) “firm commitment underwriting” shall mean a firm commitment underwritingagreement within the meaning of the Public Offering Act;

16) “parent entity” shall mean a parent entity as defined in the Public Offering Act;

17) “subsidiary” shall mean a subsidiary as defined in the Public Offering Act;

18) “group” shall mean a parent entity and its subsidiaries;

19) “total vote” shall mean the total vote as defined in the Public Offering Act orthe sum of all votes attached to all shares in a limited liability company;

20) “National Depository” shall mean Krajowy Depozyt Papierów WartościowychSA;

20) “depository for securities” shall mean a system maintained by the NationalDepository for registration of dematerialised securities, comprising securitiesaccounts and deposit accounts kept by entities authorised to do so under thisAct;

22) “Member State” shall mean a state which is a member of the European Unionor the Agreement on the European Economic Area;

23) “another Member State” shall mean a Member State other than the Republic ofPoland

24) “OECD states” shall mean members of the Organisation for Economic Co-operation and Development other than the Member States;

25) “WTO members” shall mean members of the World Trade Organisation otherthan the Member States;

25) “public company” shall mean a public company as defined in the PublicOffering Act;

27) “money market” shall mean a system for trading in financial instruments whichrepresent solely monetary claims and mature within a year from the date oftheir issuance or acquisition in primary trading;

28) “money market instruments” shall mean securities or financial instrumentsother than securities, issued under pertinent provisions of Polish or foreignlaws, which may be traded on the money market;

5

29) “rights to shares” shall mean securities conferring the right to receiveuncertificated new issue shares in a public company, which are created uponthe allotment of such shares and expire after the shares are registered inthe depository for securities or after a decision of the registry court refusing theentry of a share capital increase in the register of entrepreneurs becomes final;

30) “depositary receipts” shall mean securities issued by a financial institution witha registered office in the territory of a Member State or any other OECD state:

a) outside the territory of the Republic of Poland, in connection withsecurities admitted to trading on a regulated market in the territory ofthe Republic of Poland or securities issued outside this territory, or

b) in the territory of the Republic of Poland, in connection with securitiesissued outside this territory, which are traded on a foreign regulatedmarket in a Member State or an OECD state

– incorporating a right to exchange such securities for specific securities ina proportion specified in the terms and conditions of the issue, transfer to theowner of such securities of property rights comprising benefits from thesecurities or the equivalent thereof, and, in the case of shares, the right of theowner of such securities to give the issuer thereof a binding instruction as tovoting at the general shareholders meeting

31) “foreign credit institution” shall mean any credit institution referred to inArt. 4.1.17 of the Banking Law of August 29th 1997 (Dz.U. of 2002, No. 72,item 665, as amended3)), which conducts, on the basis of a licence granted bya competent authority and in the territory of another Member State, brokerageactivities, or keeps, on the basis of an authorisation granted by a competentauthority and in the territory of another Member State, accounts in whichsecurities admitted to trading on a foreign regulated market are registered;

32) “foreign investment firm” shall mean a legal person or an organisational unitwithout legal personality, having its registered office in the territory of anotherMember State, and if the laws of a given country do not require registration ofoffices – with a head office in the territory of another Member State, or anatural person resident in the territory of another Member State, whichconducts brokerage activities in the territory of another Member State on thebasis of a licence granted by a competent authority, as well as a foreign creditinstitution;

33) “investment firm” shall mean a brokerage house, a bank conducting brokerageactivities, a foreign investment firm conducting brokerage activities in theterritory of the Republic of Poland or any foreign legal person with a registeredoffice in the territory of an OECD state or WTO member state, which conductsbrokerage activities in the territory of the Republic of Poland;

34) “Act on Capital Market Supervision” shall mean the Act on Capital MarketSupervision of July 29th 2005 (Dz.U. of 2005, No. 183, item 1537);

3) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2002 No. 126, item

1070, No. 141, item 1178, No. 144, item 1208, No. 153, item 1271, No. 169, items 1385 and 1387 andNo. 241, item 2074, Dz.U. of 2003 No. 50, item 424, No. 60, item 535, No. 65, item 594, No. 228, item2260 and No. 229, item 2276, Dz.U. of 2004 No. 64, item 594, No. 68, item 623, No. 91, item 870, No.96, item 959, No. 121, item 1264, No. 146, item 1546 and No. 173, item 1808 and of 2005 No. 83, item719 and No. 85, item 727.

6

35) “Commission” shall mean the Polish Securities and Exchange Commissionreferred to in the Act on Capital Market Supervision;

36) “custodian bank” shall mean a domestic bank authorised by the Commission tokeep securities accounts;

37) “regulated entity” shall mean a regulated entity as defined in the Act on CapitalMarket Supervision;

38) “foreign bank” shall mean a bank with a registered office outside the territoryof the Republic of Poland other than a foreign credit institution;

39) “insurance undertaking” shall mean a domestic insurance undertaking referredto in Art. 2.1.5 of the Insurance Activities Act of May 22nd 2003 (Dz.U. No.124, item 1151, Dz.U. of 2004, No. 91, item 870 and No. 96, item 959, andDz.U. of 2005, No. 48, item 447 and No. 83, item 719) or a foreign insuranceundertaking referred to in Art. 2.1.16 of the Insurance Activities Act whichconducts its activities in the territory of the Republic of Poland;

40) “civil liability insurance agreement” shall mean the agreement referred to inArt. 822 of the Civil Code of April 23rd 1964 (Dz.U. No. 16, item 93, asamended.4));

41) “Chairman of the Commission” shall mean the Chairman of the Commissionreferred to in the Act on Capital Market Supervision.

Art. 4.

1. Securities accounts shall be accounts in which dematerialised securities areregistered, kept solely by:

1) brokerage houses and banks conducting brokerage activities, custodian banks,foreign investment firms and foreign legal persons conducting brokerageactivities in the territory of the Republic of Poland through their branches, theNational Depository, and the National Bank of Poland, if such accounts aredesignated in such a way as to enable identification of the holders of rightsattached to such securities;

2) other participants of the depository for securities or of a system for registrationof securities maintained by the National Bank of Poland, which act as agents inthe disposal of securities issued by the State Treasury or the National Bank of

4) The amendment to the Act were promulgated in Dz.U. of 1971 No. 27, item 252, Dz.U. of 1976

No. 19, item 122, Dz.U. of 1982 No. 11, item 81, No. 19, item 147, No. 30, item 210, Dz.U. of 1984,No. 45, item 242, Dz.U. of 1985, No. 22, item 99, Dz.U. of 1989, No. 3, item 11 and No. 33, item 175,Dz.U. of 1990, No. 34, item 198, No. 55, item 321 and No. 79, item 464, Dz.U. of 1991, No. 107, item464 and No. 115, item 496, Dz.U. of 1993, No. 17, item 78, Dz.U. of 1994, No. 27, item 96, No. 85,item 388 and No. 105, item 509, Dz.U. of 1995, No. 83, item 417 and No. 141, item 692, Dz.U. of1996, No. 114, item 542, No. 139, item 646 and No. 149, item 703, Dz.U. of 1997, No. 43, item 272,No. 115, item 741 and No. 117, item 751, Dz.U. of 1998, No. 106, item 668 and No. 117, item 758,Dz.U. of 1999, No. 52, item 532, Dz.U. of 2000 No. 22, item 271, No. 74, item 855 and 857, No. 88,item 983 and No. 114, item 1191, Dz.U. of 2001, No. 11, item 91, No. 71, item 733, No. 130, item1450 and No. 145, item 1638, Dz.U. of 2002, No. 113, item 984 and No. 141, item 1176, Dz.U.of 2003, No. 49, item 408, No. 60, item 535, No. 64, item 592 and No. 124, item 1151, Dz.U. of 2004,No. 91, item 870, No. 96, item 959, No. 162, item 1692, No. 172, item 1804 and No. 281, item 2783and Dz.U. of 2005 No. 48, item 462.

7

Poland, if the entries they make relate to such securities and enableidentification of the holders of rights attached to such securities.

2. Beginning from the registration of securities under the agreement referred toin Art. 5.3 or 5.4, entries relating to such securities which are made in connectionwith their subscription or sale in primary trading or an initial public offering by:

1) entities conducting brokerage activities or

2) custodian banks;

shall also be deemed securities accounts, if they identify the holders of rightsattached to such securities.

3. Any reference in this Act to securities accounts shall also include accounts inwhich broker-traded financial instruments other than securities, admitted toorganised trading, are registered.

Art. 5

1. Securities which are:

1) offered in a public offering or

2) admitted to trading on a regulated market, or

3) introduced to an alternative trading system, or

4) issued by the State Treasury or the National Bank of Poland

– shall exist in uncertificated form as of the date of their registration under theagreement referred to in Art. 5.3-5 (dematerialisation). Securities may also exist inuncertificated form if permitted under other regulations concerning the issue ofsuch securities.

2. Securities which are:

1) offered in a public offering but are not to be admitted to trading on a regulatedmarket, or

2) introduced only to an alternative trading system

– may exist in certificated form if so determined by the issuer or the sellingshareholder. Under such circumstances, Art. 5.3-5 shall not apply.

3. Before the commencement of a public offering, an issuer shall conclude with theNational Depository an agreement to register the securities offered in a publicoffering in the depository for securities.

4. If the securities to be admitted to trading on a regulated market or introduced to analternative trading system were not offered earlier in a public offering, the issuershall conclude an agreement with the National Depository to register in thedepository for securities the securities sought to be admitted to trading ona regulated market or introduced to an alternative trading system before applyingfor admission of the securities to trading on a regulated market or for introductionto an alternative trading system.

5. If the system for registration of securities issued by the State Treasury or securitiesrepresenting disposable property rights incorporated in such securities ismaintained by the National Bank of Poland, the State Treasury, as the issuer, is

8

obligated to conclude an agreement with the National Bank of Poland to registerthe securities in such a system before the commencement of the public offeringand, if the securities were not offered in a public offering before their admission totrading on a regulated market or introduction to an alternative trading system –before applying for admission of the securities to trading on a regulated market orfor introduction to an alternative trading system.

6. Before applying for admission of financial instruments other than securities totrading on a regulated market, the entity seeking such admission shall conclude anagreement with the National Depository to register such financial instruments in thedepository for securities.

7. In the case of securities issued outside of the Republic of Poland, only the portion ofsuch securities which is to be offered in a public offering, admitted to trading ona regulated market or introduced to an alternative trading system in the Republic ofPoland, shall be subject to registration.

8. Conclusion of the agreement to register securities, referred to in Art. 5.3 and 5.4,shall require the authorisation, in the form of a resolution adopted by theappropriate decision-making body of the issuer, and if the issuer is a joint-stockcompany (spółka akcyjna) – in the form of a resolution of the general shareholdersmeeting of the company.

Art. 6.

1. Prior to the conclusion of the agreement referred to in Art. 5.3-5 in relation tocertificated securities, the issuer shall place such securities in a deposit maintainedin the Republic of Poland by an investment firm or the National Depository. Suchinvestment firm or the National Depository shall create a register of holders ofrights attached to the certificated securities.

2. In the case of registration of certificated securities in the depository for securities,the entries made in the register referred to in Art. 6.1 shall have the legal effect ofentries in securities accounts, and the documents placed in the deposit shall losetheir legal force as of the moment the securities are registered in the depository forsecurities.

3. In the case of certificated securities issued outside of the Republic of Poland, theobligation defined in Art. 6.1 shall be deemed fulfilled by the registration of suchsecurities prior to the conclusion of the agreement referred to in Art. 5.3-5 by alegal person or another organisation which conducts outside of the Republic ofPoland activities relating to the centralised registration of securities or the clearingof transactions in securities.

4. Documents evidencing securities registered by the entity referred to in Art. 6.3 shalllose their legal force in the Republic of Poland as of the moment the securities areregistered in the depository for securities.

Art. 7.

1. The rights attached to dematerialised securities shall accrue as of the moment suchsecurities are first registered in a securities account and shall inure to the benefit ofthe account holder.

9

2. Under an agreement on the transfer of dematerialised securities, such securitiesshall be transferred as of the moment the relevant entry is made in the securitiesaccount. If the record date as at which the holders of rights to benefits fromdematerialised securities are determined falls on or after the date on which thetransaction should be cleared at the depository for securities, and the securitiescontinue to be registered in the transferor’s account, the benefits shall inure to thebenefit of the transferee and shall accrue as of the moment the securities areregistered in the securities account of the transferee.

3. If the dematerialised securities are acquired by virtue of a legal event which resultsin the transfer of such securities by operation of this Act, such securities shall beregistered in the transferee’s account at the request of the tranferee.

4. The registration of securities in a securities account under the agreement referred toin Art. 7.2 shall be effected after the registration of the transfer of the securitiesbetween the relevant deposit accounts referred to in Art. 57.1.1.

5. Provisions of Art. 7.1-4 shall not preclude the right to assume an obligation todispose of securities prior to their registration in the transferee’s securities account,as long as such securities have been acquired as a result of a transaction whosesettlement is guaranteed by the fund referred to in Art. 65 or Art. 68.

6. Provisions of Art. 7.1-5 shall apply to securities issued outside of the Republic ofPoland which are offered in a public offering, admitted to trading on a regulatedmarket, or introduced to an alternative trading system, provided such securities areregistered in the depository for securities.

Art. 8.

Provisions of Art. 7 shall apply accordingly to broker-traded financial instruments otherthan securities, admitted to organised trading.

Art. 9.

1. At the request of a holder of a securities account, the entity keeping the account(“certificate issuer”) shall issue a written deposit certificate in the name of theholder (“certificate”) separately for each type of securities. The account holder mayrequest that the certificate specify either a portion of or all the securities registeredin the account.

2. The certificate shall confirm the holders’ entitlement to exercise such rightsattached to the securities specified in the certificate as are not or cannot beexercised solely on the basis of registration in the securities account.

3. In order to participate in a general shareholders meeting of a public company withits registered office in the Republic of Poland, a certificate issued to confirm theright of a holder of dematerialised shares to participate at the general shareholdersmeeting must be submitted at the company’s registered office not later than a weekprior to the date of the general shareholders meeting. The relevant provisions ofArt. 406.2 of the Commercial Companies Code of September 15th 2000 shall notapply.

10

Art. 10.

1. The certificate shall specify:

1) Company name, registered office and address of the certificate issuer, and thecertificate number;

2) number of securities;

3) type and code of securities;

4) company name, registered office and address of the issuer;

5) par value of securities;

6) name (company name) and registered office and address of the holder of thesecurities account;

7) information on any restrictions on transferability of the securities or on anyencumbrances thereon;

8) date and place of certificate issuance;

9) purpose for which the certificate has been issued;

10) certificate validity period;

11) if a certificate issued earlier for the same securities has been annulled,destroyed or lost prior to the lapse of its validity period – an indication that it isa new certificate document;

12) signature of a person authorised to issue the certificate on behalf of thecertificate issuer and the seal of the certificate issuer.

2. In the case of securities of an issuer with a registered office in the Republic ofPoland, registered in a deposit account kept by the National Depository for a legalperson or another organisation conducting outside of the Republic of Polandactivities relating to the centralised registration of securities or the clearing oftransactions in securities which is a participant of the National Depository pursuantto Art. 51.3-4, a document which specifies the items defined in Art. 10.1, issued byan entity indicated to the National Depository by such participant, shall also bedeemed a certificate.

3. Any deposit certificate made or issued in breach of Art. 10.1.1-3, 10.1.6, 10.1.8,10.1.10, 10.1.12 or 10.2, shall be null and void.

Art. 11.

1. As of the date the certificate is issued, the number of securities specified in thecertificate shall not be traded until the lapse of the certificate’s validity period or itsearlier return to the certificate issuer. The certificate issuer shall block the relevantnumber of securities in the account for the duration of the certificate validityperiod.

2. In the period referred to in Art. 11.1 the same securities may be specified in morethan one certificate, provided that each certificate is issued for a different purpose.In such a case, subsequent certificates shall also include, pursuant to Art. 10.1.7,information on securities having been blocked in connection with earliercertificates.

11

Art. 12.

1. A certificate shall cease to be valid:

1) upon the lapse of its validity period;

2) upon the transfer of securities encumbered with a pledge in order to satisfyclaims of the pledgee – in the case of a certificate issued for the pledgor inrelation to such securities;

3) upon the transfer of securities as part of enforcement proceedings conductedunder other regulations – in the case of a certificate issued for the debtor inrelation to securities subject to enforcement;

4) upon its destruction or loss.

2. The lapse of the certificate’s validity period or its earlier return to the certificateissuer shall preclude the use of the certificate to exercise the rights attached tosecurities evidenced by the certificate for the purpose for which the certificate hasbeen issued.

3. The certificate issuer shall promptly notify the public company concerned of thecessation of validity, for reasons specified in Art. 12.1.2-3, of a certificate issuedfor the purpose of participation in a general shareholders meeting of such company.

4. If a certificate ceases to be valid for the reason specified in Art. 12.1.4, thecertificate issuer, at the request of the account holder made prior to the lapse of thecertificate’s validity period, shall issue a new certificate after the account holdersubmits a written representation stating that the account holder had held thecertificate and describing the circumstances in which it has been destroyed or lost.

Art. 13.

1. Declarations of will referring to performance of actions connected with publictrading in securities or other financial instruments under this Act, or other actionsperformed by regulated entities within the scope of this Act may be made inelectronic form, provided that the parties concerned have decided accordingly byway of an agreement.

2. Documents connected with the actions referred to in Art. 13.1 may be drawn up onelectronic carriers, provided that such documents are duly created, recorded,relayed, stored, and secured.

3. A declaration of will made in electronic form and incorporated in the documentreferred to in Art. 13.2 shall be deemed to meet the requirement of written formalso in cases where the written form has been stipulated on pain of nullity.

4. The minister competent for financial institutions shall define, by way of aregulation, the rules governing creation, recording, relay, storage, and securing ofthe documents relating to the activities referred to in Art. 13.1 so as to ensure thesecurity of trading and the protection of investors’ interests.

12

Part II

Secondary Trading in Financial Instruments

Chapter 1

General Provisions

Art. 14.

Within the meaning of this Act, a regulated market is a system for trading in financialinstruments admitted to trading, which operates on a continuous basis and providesinvestors with universal, equal and concurrent access to market information whenmatching the offers to acquire and to sell financial instruments, and ensures equal termsfor the acquisition and disposal of such instruments; such market to be organised andsupervised by a competent authority pursuant to the provisions of this Act, recognisedby a given Member State as compliant with the abovementioned requirements, andnotified to the European Commission as a regulated market.

Art. 15.

1. The regulated market in the Republic of Poland shall comprise:

1) stock exchange market;

2) over the counter (OTC) market;

3) commodity exchange market.

2. The regulated market referred to in:

1) Art. 15.1.1 – shall be organised by a company operating a stock exchange;

2) Art. 15.1.2 – shall be organised by a company operating an OTC market;

3) Art. 15.1.3 – shall be organised by a commodity exchange as defined in theCommodity Exchange Act of October 26th 2000 (Dz.U. of 2005, No. 121, item1019) and it shall be used only for trading in financial instruments referred toin Art. 2.1.2c and d.

3. The provisions of Art. 16, Art. 18, Art. 29.3 and Art. 32 shall apply to thecommodity exchange market and to the commodity exchange operating suchcommodity exchange market. The provisions of Art. 28.2.15 shall apply to the rulesof the commodity exchange operating a commodity exchange market.

Art. 16.

1. A company operating a stock exchange and a company operating an OTC marketmay organise separate markets for different types of securities or financialinstruments other than securities or for various types of issuers.

2. When organising the stock exchange market, a company operating a stockexchange may create a separate official stock-exchange listing market, hereinafterreferred to as the “official listing market,” that shall meet requirements concerningthe issuers of securities and the securities traded on such market which areadditional to the minimum conditions for regulated markets.

13

Art. 17.

1. The minister competent for financial institutions shall define, by way of aregulation:

1) conditions to be met by the regulated market, including the rules fordissemination of information on transactions and trading volumes on suchmarket,

2) detailed conditions to be met by the official listing market and by the issuers ofsecurities admitted to trading on such market.

– taking into account the need to ensure the security of trading and the protection ofinvestors’ interests on such markets.

2. The minister competent for financial institutions shall recognise the regulatedmarket by way of a regulation.

3. The Commission shall forward to the European Commission and to other MemberStates:

1) the regulation referred to in Art.17.1.1 and the information on any amendmentsthereto;

2) the rules referred to in Art. 28.1 and Art. 37.1.

Art. 18.

1. A company operating a stock exchange and a company operating an OTC marketshall ensure:

1) concentration of supply of and demand for the financial instruments traded ona given market with a view to shaping a common price of such instruments;

2) security and efficiency of transactions;

3) dissemination of uniform information on the prices and trading volumes of thefinancial instruments traded on a given market organised by such company.

2. If the financial instruments traded on a regulated market are at the same time tradedin an alternative trading system or in direct transactions referred to in Art. 74.1,a company operating a regulated market for such instruments may disseminate theinformation referred to in Art. 18.1.3, to the extent such information pertains tosuch transactions, based on the information provided by the investment firmorganising the alternative trading system or being a party to direct transactions.

3. The information referred to in Art. 18.2 shall be disseminated as provided in theregulations issued under Art. 17.1.1.

Art. 19.

1. Unless this Act provides otherwise:

1) securities covered by an approved issue prospectus may be traded on theregulated market only after they have been admitted to trading on such amarket;

14

2) public offerings of or trading in securities or other financial instruments on theregulated market in the Republic of Poland shall require the intermediation ofan investment firm;

3) financial instruments referred to in Art. 2.1.2c and d which incorporate theright to acquire the securities referred to in Art. 3.1a may be offered underArt. 3.1 of the Public Offering Act only on the regulated market;

4) financial instruments referred to in Art. 2.1.2c and d which incorporate theright to acquire the securities referred to in Art. 3.1a, may be offered underArt. 3.1 of the Public Offering Act only if the such securities have beenadmitted to trading on the regulated market.

2. A transaction involving the acquisition or disposal of financial instruments otherthan securities, admitted to trading on the regulated market, or a transactionwhereby such instruments are created, shall not be deemed a game or a bet withinthe meaning of the Civil Code of April 23rd 1964, or a game of chance or bettingwithin the meaning of the laws on games of chance and betting, even if the actualperformance of the mutual obligations has been waived by the express or impliedwill of the parties to such a transaction and only one party remains obliged to paythe difference between the agreed selling price and the market price prevailing atthe time of the performance of the agreement.

3. Lending of broker-traded financial instruments with the participation of investmentfirms or custodian banks shall be carried out in accordance with the regulationsissued under Art. 94.1.3. Lending of broker-traded financial instruments with theparticipation of investments firms or custodian banks shall not be subject to theprovisions of the Civil Code concerning loan agreements.

Art. 20.

1. If justified by the security of trading on the regulated market or a threat toinvestors’ interests, at the demand of the Commission a company operating aregulated market shall withhold the admission to trading on the regulated market orthe listing of the securities or other financial instruments indicated by theCommission for up to ten days.

2. If the trading in specified securities or other financial instruments is carried out incircumstances which indicate a possible threat to the proper operation of theregulated market, the security of trading on such a market, or a possiblecompromise of investors’ interests, at the demand of the Commission, a companyoperating a regulated market shall suspend the trading in such securities orinstruments for up to one month.

3. At the demand of the Commission, a company operating a regulated market shallexclude from trading the securities or other financial instruments indicated by theCommission, if the trading in such securities or other financial instrumentsmaterially threatens the proper operation of the regulated market or the security oftrading on such a market, or compromises investors’ interests.

4. The demand referred to in Art. 20.1-3 shall be accompanied by a detailedjustification.

5. A company operating a regulated market shall promptly disclose to the public,through the information agency referred to in Art. 58.1 of the Public Offering Act,

15

the information on the withholding, suspension or exclusion from trading ofspecified securities or other financial instruments. The provisions of Art. 19 of thePublic Offering Act shall apply accordingly.

6. If given financial instruments are traded also in an alternative trading system, theentity organising such alternative trading system, having received the informationpublished pursuant to Art. 20.5, shall take steps in order to comply with the demandof the Commission referred to in Art. 20.1, 20.2 or 20.3 with respect to suchfinancial instruments.

7. A company operating a regulated market shall not bear the cost of the services ofthe information agency related to the publication of the information referred to inArt. 20.5.

Chapter 2

Regulated Market

Section 1

Stock Exchange Market

Art. 21.

1. A stock exchange may be operated only by a joint-stock company.

2. The business of a company operating a stock exchange shall consist exclusively inthe operation of a stock exchange or other activities related to the organisation oftrading in financial instruments and trade-related activities, subject to Art. 21.3.

3. A company operating a stock exchange may be involved in activities related toeducation, promotion and provision of information connected with the operation ofthe capital market.

4. A company operating a stock exchange may organise an alternative trading systemupon a prior notification to the Commission and approval of the rules of such asystem by the Commission.

5. A company operating a stock exchange shall have an obligation and the exclusiveright to include the words “stock exchange” in its company name.

6. The provisions of Art. 78.1-2, 78.5 and 78.6 shall apply accordingly to the rules ofthe alternative trading system organised by a company operating a stock exchange.

7. The share capital of a company operating a stock exchange shall amount to no lessthan PLN 40,000,000.

Art. 22.

1. A company operating a stock exchange may issue only registered shares.

2. The shares of a company operating a stock exchange may only be acquired by theState Treasury, investment firms, banks, investment fund companies, insuranceundertakings, pension fund companies and issuers of securities listed on such stock

16

exchange. The shares of a company operating a stock exchange may be acquired byother domestic and foreign legal persons subject to the Commission's approval.

3. The provisions of Art. 22.1 and 22.2 shall not apply if a company operating a stockexchange is a public company.

Art. 23.

1. No shareholder of a company operating a stock exchange, with the exception of theState Treasury, shall have the right to exercise more than 5% of the total vote insuch company. In justified cases, the Commission may, at the shareholder's request,authorise the shareholder to exercise a greater percentage of the voting rights,subject to Art. 23.2.

2. The shareholders of a company operating a stock exchange which are notinvestment firms or banks shall have the right to exercise in aggregate no more than50% of the total vote. This restriction shall not apply to the State Treasury or anyshareholder who obtained the authorisation referred to in Art. 23.1 to exercise 20%or more of the total vote.

3. The detailed rules for the exercise of voting rights shall be defined in the articles ofassociation of a company operating a stock exchange.

4. The shares of a company operating a stock exchange shall not confer the right todividend as long as the State Treasury is entitled to exercise more than 50% of thetotal vote.

5. The provisions of Art. 23.1-2 and Art. 23.4 shall not apply if a company operating astock exchange is a public company.

Art. 24.

1. The Commission shall be notified of any intended direct or indirect acquisition orsubscription for any number shares in a company operating a stock exchangewhich:

1) represent 10% or more of the total vote or the share capital, or

2) which would result in reaching or exceeding 10%, 20%, 33% or 50% of thetotal vote or the share capital,

– with the proviso that the holding of shares in a company operating a stockexchange by entities belonging to the same group shall be deemed the holding ofsuch shares by a single entity.

2. Indirect acquisition of shares in a company operating a stock exchange shall be theacquisition or subscription for shares in an entity which holds, whether directly orindirectly, shares in such company operating a stock exchange, if the acquisition orsubscription results in reaching or exceeding 50% of the total vote or 50% of theshare capital of such entity.

3. The Commission shall have the right to raise objections to any intended direct orindirect acquisition of or subscription for a specified number of shares in acompany operating a stock exchange, within three months from the notificationreferred to in Art. 24.1, if there is a reasonable suspicion that the entity proposing toacquire shares in such company operating a stock exchange could exert detrimental

17

influence on the management of such company. If no objection is raised, theCommission may set a final date by which the shares in a company operating astock exchange may be acquired.

4. Any exercise of the voting rights attached to shares acquired despite the objectionreferred to in Art. 24.3 shall be deemed null and void.

5. If shares in a company operating a stock exchange are to be acquired by a foreigninvestment firm, foreign bank or foreign insurance undertaking authorised toconduct its activities by the competent authority of another Member State, theCommission shall seek an opinion on such entity from the competent authority thathad granted the authorisation.

6. The provisions of Art. 24.5 shall apply accordingly where the entity acquiringshares in a company operating a stock exchange is the parent entity of the entityreferred to in Art. 24.5 or an entity exerting significant influence within themeaning of Art. 96.3 on the entity referred to in Art. 24.5, or where as a result of anindirect acquisition the target entity would become a subsidiary of the acquirer oran entity over which the acquirer would gain significant influence within themeaning of Art. 96.3.

7. The notification referred to in Art. 24.1 shall specify the number of shares to beacquired, their share in the share capital, and the number of votes which theacquirer will obtain at the general shareholders meeting, and shall includea statement, subject to criminal liability, on the source of funds to be used to payfor the shares in a company operating a stock exchange.

8. If the Commission has not raised an objection within the timeframe referred to inArt. 24.3, the same shall be deemed an approval of the acquisition of shares in acompany operating a stock exchange on the terms and conditions set forth in thenotification.

Art. 25.

1. Subject to Art. 25.4, the operation of a stock exchange shall require anauthorisation by the minister competent for financial institutions, to be grantedupon an application of the party concerned, on which the Commission has issued itsopinion.

2. To obtain such an authorisation, the company concerned shall file an applicationthrough the intermediation of the Commission, indicating:

1) name and registered office of the company;

2) personal details of the members of the management board and the supervisoryboard of the company operating a stock exchange, hereinafter referred to as the„stock exchange management board” and the „stock exchange supervisoryboard”, and of other persons who are responsible for the launch of the stockexchange or who will manage the stock exchange;

3) expected amount of own funds and loans allocated to the financing of thelaunch of the stock exchange, and information on how its operations would befinanced;

4) information on the amount and structure of shareholders’ equity and itssources;

18

5) information on the intended location of the stock exchange and the technicalmeans to be used to facilitate its operations, in particular the means ensuringongoing communication with the National Depository;

6) commitment of at least ten investment firms to conduct operations on the stockexchange.

3. The application should be accompanied by the company’s articles of association,the stock exchange rules and a study of the economic and financial feasibility of thestock exchange operations. If the company also intends to organise an alternativetrading system, the rules of such system should also be attached to the application.

4. If any formal deficiencies are found in the application, the Commission shall issuea decision that the application shall not be considered.

5. By granting the authorisation, the minister competent for financial institutions shallapprove the company’s articles of association and the stock exchange rules.

Art. 26.

The minister competent for financial institutions shall refuse an authorisation to operatea stock exchange, if following the analysis of the application and the attacheddocuments the applicant is found to be unable to conduct its operations in a mannerwhich would guarantee the security of trading in financial instruments and duly protectthe interests of trade participants.

Art. 27.

Any changes in the composition of the stock exchange management board shall requirean approval by the Commission, to be granted at the request of the body authorised toappoint and remove members of the stock exchange management board. TheCommission shall refuse such approval, if the proposed changes do not ensure theconduct of operations in a manner which would guarantee the security of trading infinancial instruments or duly protect the interests of trade participants.

Art. 28.

1. At a request of the stock exchange management board, the stock exchangesupervisory board shall adopt the stock exchange rules and any amendmentsthereto.

2. The stock exchange rules shall define in particular:

1) criteria and conditions for the admission of securities and other financialinstruments to trading on each of the markets of the stock exchange, includingsecurities admitted to trading on a regulated market in another Member State;

2) method and procedure for resolving disputes related to the execution of stockexchange transactions;

3) types of transactions to be executed on the stock exchange;

4) order of trading in securities and other financial instruments on the stockexchange;

19

5) conditions and procedure for listing, suspending and delisting of securities andother financial instruments on or from the stock exchange;

6) method for determination and publication of prices;

7) trading days and trading hours;

8) rules for cancellation of transactions;

9) classification of securities and other financial instruments listed on the stockexchange;

10) information system of the stock exchange;

11) amount of the fixed annual fee for using the stock exchange's facilities;

12) amount of trading fees and the methods of their calculation;

13) disclosure requirements applicable to the issuers whose securities are traded ona stock exchange market other than the official listing market;

14) procedure to be followed if issuers fail to comply with the disclosurerequirements specified in the rules;

15) provisions intended to prevent and reveal any market manipulation referred toin Art. 39.

3. The stock exchange rules may specify additional conditions for admission ofsecurities to trading, whose sole purpose will be the protection of investors’interests. In such a case, the entity applying for admission of given securities totrading should be advised on such conditions before it submits its application.

Art. 29.

1. Any amendment to the articles of association of a company operating a stockexchange and the stock exchange rules shall be subject to the Commission’sapproval. The Commission shall refuse such approval if the proposed amendmentsare in conflict with the law or could adversely affect the security of trading.

2. A company operating a stock exchange shall notify the Commission of any changesin the data referred to in Art. 25.2.

3. A company operating a stock exchange shall make available to the tradeparticipants the stock exchange rules and any amendments thereto, as well as anyother regulations adopted by the company which are effective on the market itoperates, at least two weeks before the effective date of such rules, amendments orregulations.

Art. 30.

1. The Chairman of the Commission or a person authorised by the Chairman shallhave the right to:

1) enter the registered office and premises of a company operating a stockexchange to inspect the books, documents and information stored in otherforms;

2) participate in meetings of the stock exchange supervisory board and generalshareholders meetings.

20

2. At a request of the Chairman of the Commission or a person authorised by theChairman, the authorised representatives of a company operating a stock exchange,or members of its management or supervisory boards, or persons bound by anemployment relation with such company, shall promptly prepare and deliver, at thecost of the company, copies of documents and other data carriers and shall providewritten or oral explanations.

3. The obligation referred to in Art. 30.2 shall also apply to the qualified auditor andthe authorised representatives of the auditing firm (qualified auditor of financialstatements) or persons bound by an employment relation with such firm – to theextent related to actions undertaken by such persons or firm in connection with anaudit of the financial statements of a company operating a stock exchange orprovision to such company of other services specified in Art. 10.3 of the Act onQualified Auditors and their Self-Government of October 13th 1994 (Dz.U. of2001, No. 31, item 359, as amended5)). The above shall not be deemed a breach ofthe secrecy obligation referred to in Art. 4a of the Act on Qualified Auditors andtheir Self-Government.

4. At a written request of the Commission, the management board of a companyoperating a stock exchange shall:

1) convene an extraordinary general shareholders meeting, or

2) include the matters indicated by the Commission in the agenda of the generalshareholders meeting.

5. In the event of failure to perform the obligations referred to in Art. 30.4, theprovisions of Art. 401.1 and Art.401.3 of the Commercial Companies Code ofSeptember 15th 2000 shall apply accordingly to the Commission’s request.

6. The Commission may order the stock exchange supervisory board to promptly, andin any case no later than within 10 business days, adopt a resolution on a specificmatter.

7. The Commission may appeal to the court against a resolution of the generalshareholders meeting or supervisory board of the stock exchange within 30 days ofbecoming aware of such resolution, by way of an action for repeal of suchresolution, if such resolution is in conflict with the law, the articles of association,the stock exchange rules or the principles of secure trading, or if it has beenadopted in violation of the law, the articles of association or the stock exchangerules.

8. If there are any doubts as to the accuracy or reliability of the financial statements orother financial information which are required to be prepared under otherregulations or as to the proper maintenance of accounting books, the Commissionmay order an audit of such statements, information or accounting books to beperformed by a qualified auditor of financial statements. If any materialirregularities are found during the audit, a company operating a stock exchangeshall reimburse the costs of the audit to the Commission.

5) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2002, No. 240, item

2052; Dz.U. of 2003, No. 124, item 1152; and Dz.U. of 2004, No. 62, item 577, No. 96, item 959,No. 173, item 1808, and No. 213, item 2155.

21

Art. 31.

1. Only investment firms and, in the case referred to in Art. 59.3, the NationalDepository may be parties to transactions on a stock exchange market.

2. The parties to transactions executed on a stock exchange market may also be,subject to the terms and conditions set forth in the stock exchange rules, otherentities which acquire and dispose of financial instruments in their own name andfor their own account and:

1) are participants of the National Depository;

2) are not participants of the National Depository but have designated aparticipant of the National Depository who has agreed to perform theobligations related to the clearing of the executed transactions.

3. A legal transaction which consists in a transaction executed on a stock exchangemarket by entities other than indicated in Art. 31.1-2 shall be null and void.

Art. 32.

1. A resolution on admission of financial instruments to trading on a stock exchangemarket shall be adopted by the stock exchange management board within 14 daysfrom the date of submission of the application.

2. If the submitted application is incomplete or if additional information needs to beprovided, the stock exchange management board or supervisory board, as the casemay be, may – to the extent necessary to determine whether financial instrumentscovered by the application meet the criteria and conditions referred to in Art. 28.2.1– demand that the application be supplemented or additional information beprovided. In such a case, the timeframes specified in Art. 32.1 and 32.3 shall becounted from the day on which the applicant satisfies the demand.

3. The stock exchange management board shall refuse admission of financialinstruments to trading on a stock exchange market if the criteria and conditionsreferred to in Art. 28.2.1 are not met. If the admission is refused, the applicant shallhave the right to appeal to the stock exchange supervisory board within thetimeframe specified in the stock exchange rules. The appeal shall be consideredwithin one month from the date of its submission.

4. A resolution of the stock exchange supervisory board which does not grant theapplicant’s appeal may be appealed against by the applicant to the court havingterritorial jurisdiction over the registered office of a company operating a stockexchange, within 14 days of the applicant becoming aware of the resolution, if therefusal of admission is in breach of the stock exchange rules. The court judgementgranting an appeal shall substitute a resolution on admission of financialinstruments to trading on a stock exchange market.

5. Convertible bonds or bonds with pre-emptive rights may be admitted to trading onthe official listing market, provided that the shares to be issued or issued in order toenable the holders of rights attached to such bonds to exercise such rights are alsocovered by an application for admission to trading on an official listing market orare already listed on the same or another official listing market or on a regulatedmarket in another Member State.

22

6. A company whose shares are admitted to trading on the given official listing marketshall be required to apply for admission to trading on such market with respect toany new issue shares of the same type offered in a public offering, no later thanwithin 12 months from the closing of the subscription period or from the end of thelock-up period, if any, during which the transferability of such shares was limited.

Section 2

Over the Counter Market

Art. 33.

1. An over the counter (OTC) market may be operated only by a joint-stock company.

2. The business of a company operating an OTC market shall consist exclusively inthe operation of an OTC market or other activities related to the organisation oftrading in financial instruments and trade-related activities, subject to Art. 33.3.

3. A company operating an OTC market may be involved in activities related toeducation, promotion and provision of information connected with the operation ofthe capital market.

4. A company operating an OTC market may organise an alternative trading systemupon a prior notification to the Commission and approval of the rules of sucha system by the Commission.

5. The provisions of Art. 78.1-2 and 78.5-6 shall apply accordingly to the rules of thealternative trading system organised by a company operating an OTC market.

6. The share capital of a company operating an OTC market shall amount to no lessthan PLN 7,500,000.

Art. 34.

1. A company operating an OTC market may issue only registered shares.

2. The shares of a company operating an OTC market may only be acquired byinvestment firms, banks, investment fund companies, insurance undertakings,pension fund companies and issuers of securities traded on such OTC market. Theshares of a company operating an OTC market may be acquired by other domesticand foreign legal persons subject to the Commission's approval.

3. The provisions of Art. 34.1-2 shall not apply if a company operating an OTCmarket is a public company.

Art. 35.

1. No shareholder of a company operating an OTC market shall have the right toexercise more than 10% of the total vote in such company. In justified cases, theCommission may, at the shareholder's request, authorise the shareholder to exercisea greater percentage of the voting rights, subject to. Art. 35.2.

23

2. The shareholders in a company operating an OTC market which are issuers ofsecurities traded on such market shall be entitled to exercise in aggregate no morethan 25% of the total vote. This restriction shall also apply to investment fundcompanies, pension fund companies, and insurance undertakings.

3. The detailed rules for the exercise of voting rights shall be defined in the articles ofassociation of a company operating an OTC market.

4. The provisions of Art. 35.1 and 35.2 shall not apply if a company operating anOTC market is a public company.

Art. 36.

1. The operation of an OTC market shall require an authorisation by the Commission,to be granted upon an application of the party concerned. The provisions ofArt. 25.2-3 shall apply accordingly.

2. The Commission shall consider the application within two months from itssubmission.

3. The Commission shall refuse the authorisation to operate an OTC market if theapplication fails to meet conditions specified therefor or if the informationfurnished implies that the applicant cannot ensure operation of the market ina manner which would guarantee the security of trading in financial instruments orduly protect the interests of trade participants.

Art. 37.

1. At a request of the management board, the supervisory board of a companyoperating an OTC market shall approve the trading rules of such market.

2. By granting the authorisation referred to in Art. 36.1, the Commission shallapprove the company’s articles of association and the trading rules of the OTCmarket.

3. The provisions of Art. 27-30 and Art. 32.1-4 shall apply accordingly to a companyoperating an OTC market and to the supervision over such company.

Art. 38.

1. The provisions of Art. 31 shall apply accordingly to the execution of transactionson an OTC market.

2. Investment firms which are parties to transactions on an OTC market and whichconduct activities related to the organisation of a regulated market as specified inthe trading rules referred to in Art. 37.1, may execute buy or sell transactions insecurities directly with an entity placing an order.

24

Section 3

Market Manipulation

Art. 39.

1. Manipulation involving financial instruments, hereinafter referred to as “marketmanipulation”, shall be prohibited.

2. Market manipulation shall mean:

1) placing orders or executing transactions which are or may be misleading as tothe actual supply of, demand for or price of a financial instrument, unless thereasons behind such activities have been legitimate, and the placed orders orexecuted transactions have not been in breach the established market practiceon the relevant regulated market;

2) placing orders or executing transactions which result in the price of one ormore financial instruments moving to an abnormal or artificial level, unless thereasons behind such activities have been legitimate, and the placed orders orexecuted transactions have not been in breach of the established marketpractice on the relevant regulated market;

3) placing orders or executing transactions with the intention to produce legalconsequences other than the actual objective of a given legal transaction;

4) dissemination, through the media, including the Internet, or by any othermeans, of false or inaccurate information or rumours which are or may bemisleading as regards financial instruments:

a) by a journalist – if he/she has failed to exercise due professional care or ifhe/she has obtained financial or personal benefits for himself/herself oranother person by disseminating such information, even acting with dueprofessional care,

b) by another person – if the person has known or, acting with due care couldhave known, such information to be false or misleading;

5) placing orders or executing transactions while simultaneously misleadingmarket participants, or using the fact that the market participants are beingmisled, as regards the price of a financial instrument;

6) securing control over demand for or supply of a financial instrument in breachof the principles of fair trading or in a manner resulting in a direct or indirectfixing of the purchase or selling prices of financial instruments;

7) acquisition or disposal of financial instruments at the close of trading with theeffect of misleading investors acting on the basis of closing prices;

8) deriving financial benefits from the influence of opinions concerning financialinstruments or their issuers, expressed in the media on an occasional ora regular basis, on the price of the financial instruments held, unless an existingconflict of interest has been fully and reliably disclosed to the public.

3. The provisions of Art. 39.2 shall not apply to:

1) acquisition of own shares in “buy-back programmes” by a public company oran entity acting for its account or in its name, provided that the acquisition is

25

carried out in the manner, time and on the terms specified in CommissionRegulation (EC) No. 2273/2003 of December 22nd 2003 implementingDirective 2003/6/EC of the European Parliament and of the Council as regardsexemptions for buy-back programmes and stabilisation of financial instruments(OJ L 336, 23.12.2003);

2) transactions carried out in performance of statutory responsibilities concerningthe monetary, foreign currency or public debt-management policies of a state,executed by authorised representatives of relevant governmental authorities orthe National Bank of Poland, as well as by the European System of CentralBanks;

3) acquisition of financial instruments with a view to stabilising their prices intrading on a regulated market, provided that the acquisition is carried out in themanner, time and on the terms specified in the regulations referred to inArt. 39.3.1.

4. The prohibitions and requirements referred to in Art. 39.1-3 shall apply to:

1) behaviour occurring in the territory of the Republic of Poland or anotherMember State and relating to financial instruments admitted or sought to beadmitted to trading on a regulated market in the territory of the Republic ofPoland;

2) behaviour occurring in the territory of the Republic of Poland and relating tofinancial instruments admitted or sought to be admitted to trading ona regulated market in the territory of another Member State;

3) financial instruments introduced to an alternative trading system in the territoryof the Republic of Poland.

Art. 40.

1. The regulated entities referred to in Art. 5.1-3 and 5.12-13 of the Act on CapitalMarket Supervision shall be obliged to promptly deliver to the Commission (if theCommission is the competent body for the authorisation to conduct regulatedactivities or the registered office of the entity or its branch) information on eachreasonable suspicion that an instance of market manipulation has occurred. Subjectto Art. 40.2, such information shall include:

1) detailed information on the suspected transaction, including:

a) the financial instrument involved in the transaction,

b) transaction type and manner of its execution,

c) transaction date and place,

d) transaction price and volume,

e) type of market and trading system to which the transaction relates,

f) description of the order covering the financial instruments to which thetransaction relates, including the type and size of the order,

g) the person who has placed the order or executed the transaction, includingin particular information whether the person has acted for his/her ownaccount or a third party’s account;

26

2) reasons justifying the suspicion;

3) information enabling the identification of the persons for whose account theorder has been placed or transaction executed, as well as of other personsconnected with the transaction;

4) nature of the regulated entity’s relation with the suspected transaction and thepersons referred to in Art. 40.1.3 which results from the nature of actionsperformed by this entity, including in particular the actions specified inArt. 69.2.2 or 69.2.3;

5) any other information which in the opinion of the regulated entity referred to inArt. 5.1-3 and 5.12-13 of the Act on Capital Market Supervision may berelevant for examination of the reported suspicion;

6) date when and place where the information has been prepared and the signatureof the person delivering the information.

2. If while performing the obligation referred to in Art. 40.1 the regulated entity doesnot have all the information required, then it shall deliver the information known toit at the time being, including at least the reason for its suspicion that an instance ofmarket manipulation has occurred. The regulated entity shall deliver any otherinformation which may become available to it at a later time promptly after suchentity becomes aware thereof.

3. The regulated entity may prepare and deliver the information referred to inArt. 40.1-2 in a form other than the written form, including on electronic datacarriers and by means of remote communication, provided that the confidentialityof such information is maintained. In such a case, at the Commission’s request, theregulated entity shall present a document confirming in writing that the informationhas been conveyed.

4. Upon the receipt of the information referred to in Art. 40.1-2, the Commission shallpromptly forward it to the relevant authority in another Member State competentfor the regulated market to which the information relates.

5. The obligation referred to in Art. 40.1 shall also apply to other non-regulateddomestic banks and branches of credit institutions, as defined in the Banking Lawof August 29th 1997.

6. The information on the notification having been made and the contents of thenotification may not be provided by the entity performing the obligation referred toin Art. 40.1 to any entity other than the Commission, including in particular thepersons for whose account the suspected transaction has been executed or entitiesrelated to such persons, unless the obligation to deliver such information arisesunder other statutory regulations.

Art. 41.

1. When considering whether placing given orders or executing given transactionsmay be deemed an instance market manipulation referred to in Art. 39.2.1-2, theCommission and market participants shall in particular take into account thefollowing:

1) significance of the share of given orders or transactions in the daily volume oftrade in a given financial instrument on the relevant regulated market,

27

including in particular whether such orders or transactions cause a materialchange in the price of such a financial instrument;

2) to what extent the orders with a significant share in buy or sell offers of, ortransactions with a significant share in buy or sell transactions, in a givenfinancial instrument cause a material change in the price of:

a) such a financial instrument or

b) a derivative of the financial instrument referred to in item a, or

c) the specific right underlying the issuance of such a financial instrumentand admitted to trading on a given regulated market;

3) whether given transactions cause a change in the actual holding of a givenfinancial instrument admitted to trading on a given regulated market;

4) if a share of orders or transactions in buy offers or buy transactions changes atshort intervals into a share in sell offers or sale transactions, or vice versa, andsuch orders or transactions have a significant share in the daily volume oftrading in a given financial instrument on a given regulated market – to whatextent such changes cause, whether directly or indirectly, a material change inthe price of such a financial instrument;

5) to what extent orders placed or transactions executed at short intervals cause ashort-lived change in the price of a financial instrument, which then movesback to its earlier level;

6) to what extent orders which are placed and then cancelled prior to theirexecution cause a change of the best-price buy offers or best-price sell offers,or of other buy or sell offers for a financial instrument admitted to trading on agiven regulated market;

7) to what extent orders placed or the transactions executed in or before a periodwhich is a measurement period used to determine the settlement price,execution price, reference price or valuation of a given financial instrumentaffect the price of a given financial instrument which serves as a basis for thedetermination of such settlement price, execution price, reference price orvaluation.

2. When considering whether orders are placed or transactions are executed whilesimultaneously misleading market participants, or using the fact that the marketparticipants are being misled, as regards the price of a financial instrument, theCommission and market participants shall in particular take into account thefollowing:

1) whether placing orders or executing transactions by given persons precedes orfollows dissemination of false or misleading information by such persons orpersons related to them;

2) whether placing orders or executing transactions by given persons precedes orfollows the preparation and dissemination, by such persons or persons relatedto them, of recommendations which are incorrect, biased or obviously intendedto obtain financial or personal benefits by such persons.

28

Art. 42.

1. Persons preparing recommendations concerning financial instruments or issuersthereof, for dissemination among investors, as well as persons disseminating suchrecommendations, shall be obliged to exercise due diligence, ensure reliability ofthe recommendations prepared by them and disclose any legitimate interests andconflicts of interest existing at the time of such preparation or dissemination.

2. The minister competent for financial institutions may, by way of a regulation,define the types of information constituting a recommendation concerning financialinstruments or issuers thereof, the manner for the preparation and dissemination ofsuch recommendations and the detailed conditions to be met by theserecommendations, taking into account the need to ensure fair presentation of suchinformation and disclosure of legitimate interests and conflicts of interest, as wellas to ensure the security of trading and to prevent any compromise of the interestsof trade participants.

3. The prohibitions and requirements referred to in Art. 42.1 and those resulting fromthe regulations issued under Art. 42.2 shall apply to the cases specified in Art. 39.4.

Art. 43.

1. The provisions of this Section shall apply to financial instruments admitted totrading on a regulated market in the territory of the Republic of Poland or of anyother Member State, or sought to be admitted to trading on such a market,irrespective of whether the transactions in such an instrument are executed on suchmarket or not, subject to Art. 43.2.

2. The provisions of Art. 39.2.4b shall also apply to securities which are offered ina public offering and are to be admitted to trading on a regulated market orintroduced to an alternative trading system.

Section 4

Established Market Practice

Art. 44.

1. Established market practice shall mean any behaviour which can reasonably beexpected on one or more financial markets and which is approved, by way ofa resolution, by the Commission in accordance with the guidelines set forth inArt. 45.1.

2. The resolution referred to in Art. 44.1 shall be published in the Official Journal(Dziennik Urzędowy) of the Polish Securities and Exchange Commission.

Art. 45.

1. While determining whether a given behaviour is an established market practice, theCommission shall in particular take into account the following:

1) transparency and comprehensibility of such market practice to marketparticipants;

29

2) need to protect the proper operation of the market and proper interaction ofsupply and demand forces;

3) effect of a given market practice on market liquidity and efficiency;

4) extent to which trading rules applicable on a given market are followed andwhether a given market practice enables market participants to performappropriate actions at appropriate time in response to market developmentscaused by such market practice;

5) with respect to financial instruments – the risk posed by a given marketpractice to the proper operation of related, whether directly or indirectly,regulated or non-regulated markets in any Member State;

6) outcome of proceedings relating to a specific market practice, conducted by thecompetent authority and other authorities qualified to conduct proceedingsconcerning instances of abuse in financial instrument trading, in particular ifsuch practice has violated legal regulations enacted to prevent abuse on a givenmarket or market(s) related, whether directly or indirectly, to any market ofa Member State, or has violated regulations containing rules to be followed onsuch markets;

7) profile of a given regulated or non-regulated market, types of financialinstruments traded on such market, categories of market participants, includingthe share of retail investors in trading on a given market.

2. The Commission shall on review a regular basis the established market practices,taking into account material changes in market operation, such as changes intrading rules or market organisation rules.

3. Considering the need to protect the principles of fair trading and proper interactionof supply and demand forces, a given market practice should in particular bereviewed in terms of its effect on the main market parameters, such as:

1) conditions prevalent on a given market;

2) average price during a trading session;

3) price fixed at the close of trading.

4. A market practice, especially a new or developing one, may be followed even if notyet approved by the Commission.

5. Prior to approving a given behaviour as established market practice, theCommission shall hold a consultation process to obtain the opinion of:

1) relevant entities which are participants of any of the following markets: themarket of securities or other financial instruments, commodities or investmentfund services, as well as associations and organisations of such entities;

2) competent authority in another Member State where the regulated market hassimilar characteristics, especially in terms of its organisation, size andtransaction types.

6. The implementation of a change in established market practice shall be conditionalupon prior consultation with the entities and organisations referred to in Art. 45.5.

7. The Commission shall deliver to the Committee of European Securities Regulatorsand publish the contents of the resolution referred to in Art. 44.1, indicating the

30

guidelines followed while approving a given behaviour as established marketpractice.

8. If administrative, explanatory or criminal proceedings have been instituted in a caserelating to the Commission’s supervision over behaviour which is subject of theopinions referred to in Art. 45.5, the Commission may suspend the consultationprocess until such proceedings are completed.

Part III

National Depository for Securities

Depository and Clearing System

Art. 46.

1. The National Depository shall be a joint-stock company.

2. The National Depository may issue only registered shares.

3. The following entities shall be allowed to hold shares in the National Depository:companies operating a stock exchange, companies operating an OTC market,investment firms, banks, the State Treasury, the National Bank of Poland as wellas legal persons and other organisations whose scope of business includessecurities registration, clearing or settlement of transactions in securities ororganising a regulated market, whose registered offices are situated in the territoryof a Member State or an OECD state and which are subject to supervision bya competent authority of such state.

4. The shares of the National Depository shall not confer the right to dividend.

5. With respect to matters related to the National Depository directors’ reports,business plans and financial plans, reports of the operation of the compensationscheme referred to in Art. 146.1 of the rules referred to Art. 50.1, Art. 66.2 andArt. 134.1 and other regulations issued by the National Depository on the basis ofsuch rules, the management and supervisory boards of the National Depositoryshall consult an advisory body comprising:

1) two delegates of representative associations or organisations of the entitiesreferred to in Art. 9.1.4d of the Act on Capital Market Supervision;

2) two delegates of representative associations or organisations of the entitiesreferred to in Art. 9.1.4e of the Act on Capital Market Supervision;

3) two delegates of commercial chambers referred to in Art. 92.1;

4) two delegates of the entities referred to in Art. 51.3-4;

5) one delegate of each company operating a regulated market.

6. The advisory body may on its own initiative issue and deliver to the management orsupervisory board of the National Depository opinions regarding issues referred toin Art. 46.5.

Art. 47.

1. The Commission shall be notified of any intended direct or indirect acquisition orsubscription for any number of shares in the National Depository which:

31

1) represents 10% or more of the total vote or the share capital; or

2) would result in reaching or exceeding 10%, 20%, 33% or 50% of the totalvote or the share capital

– with the proviso that the holding of shares in the National Depository by entitiesbelonging to the same group shall be deemed the holding of such shares by a singleentity.

2. Indirect acquisition of shares in the National Depository shall be the acquisition orsubscription for shares in an entity which holds, whether directly or indirectly,shares in the National Depository, if the acquisition or subscription results inreaching or exceeding 50% of the total vote or 50% of the share capital of suchentity.

3. The Commission shall have the right to raise objections to any intended direct orindirect acquisition of or subscription for a specified number of shares in theNational Depository, within three months from the notification referred to inArt.47.1, if there is a reasonable suspicion that the entity proposing to acquireshares in the National Depository could exert detrimental influence on itsmanagement. If no objection is raised, the Commission may set a final date bywhich the shares in the National Depository may be acquired.

4. Any exercise of the voting rights attached to shares in the National Depositoryacquired despite the objection referred to in Art. 47.3 shall be deemed null andvoid.

5. If shares in the National Depository are to be acquired by a foreign investment firm,foreign bank or foreign insurance undertaking authorised to conduct its activities bythe competent authority of another Member State, the Commission shall seek anopinion on such entity from the competent authority that had granted theauthorisation.

6. The provisions of Art. 47.5 shall apply accordingly in cases where the entityacquiring shares in the National Depository for Securities is the parent entity of theentity referred to in Art. 47.5 or an entity exerting significant influence within themeaning of Art. 96.3 on the entity referred to in Art. 47.5, or where as a result ofan indirect acquisition the target entity would become a subsidiary of the acquireror an entity over which the acquirer would gain significant influence within themeaning of Art. 96.3.

7. The notification referred to in Art.47.1 shall specify the number of shares to beacquired, their share in the share capital and the number of votes which the acquirerwill obtain at the general shareholders meeting, and shall include a statement,subject to criminal liability, on the source of funds to be used to pay for the shares.

8. If the Commission has not raised an objection within the timeframe referred to inArt. 47.3, the same shall be deemed an approval of the acquisition of shares in theNational Depository on the terms and conditions set forth in the notification.

Art. 48.

1. The National Depository’s responsibilities shall include: operation of the depositoryfor securities, settlement and clearing of transactions in securities, operation of asystem ensuring liquidity of settlements, and activities related to the operation of

32

a system for registration, clearing and settlement of transactions in financialinstruments other than securities.

2. The National Depository’s responsibilities shall include in particular:

1) registration, subject to Art. 49, of dematerialised securities and otherfinancial instruments admitted to trading on a regulated stock exchange orOTC market or introduced to an alternative trading system;

2) supervision over whether the size of an issue registered in the depositoryfor securities is consistent with to the number of traded securities;

3) provision of services supporting issuers in performance of their obligationstowards the holders of rights attached to securities registered in thedepository for securities;

4) clearing, subject to Art. 49, of the transactions executed on regulated stockexchange and OTC markets;

5) clearing of transactions executed in an alternative trading system in respectof dematerialised securities;

6) activities related to deregistration of securities from the depository forsecurities;

7) settlements of financial instruments and cash in connection with thetransactions referred to in Art. 48.2.4-5;

8) operation of the system ensuring liquidity of settlements, including asettlement guarantee system for transactions executed on regulated stockexchange and OTC markets;

9) ensuring the proper operation of the mandatory compensation schemedescribed in Art. 133.1.

3. Furthermore, the National Depository may also:

1) register financial instruments other than those specified in Art. 48.2.1;

2) clear and settle transactions other than the transactions specified inArt. 48.2.4-5, including in particular transactions executed on thecommodity exchange market;

3) operate a system ensuring liquidity of settlements of transactions referredto in Art. 48.3.2.

4. The National Depository may provide services related to trading in securities otherthan dematerialised securities. Unless this Act provides otherwise, regulations onthe maintenance of a depository for securities shall apply accordingly to suchservices.

5. The National Depository may keep cash accounts, settle payments in cash,advance loans and participate in transaction settlements conducted by the NationalBank of Poland on the terms applied in inter-bank settlements to the extent it isnecessary for the fulfilment of its responsibilities referred to in Art. 48.1-3.

6. The responsibilities specified in Art. 48.2.1, 48.2.2 and 48.2.9 shall remain theexclusive domain of the National Depository.

33

7. Upon the prior consent granted by the Commission the National Depository maydelegate, by way of an agreement, certain activities connected with the fulfilmentof its responsibilities specified in Art. 48.2.3-5 to another entity.

8. To the extent provided for in such agreement, the National Depository shallsupervise the activities conducted by the entity referred to in Art. 48.7, inparticular it shall establish the rules and procedures governing the performance ofthe delegated activities, determine their scope and supervise the performance.

9. The Commission shall revoke the consent referred to above in the event thecontinuing performance of such activities might pose a threat to the security oftrading or in the event the agreement referred to in Art. 48.7 is terminated.

10. The clearing referred to in Art. 48.1 shall consist in determining the amount ofcash and non-cash liabilities due under executed transactions from the participantsof the National Depository (hereinafter referred to as the “participants”) who areparties to such transactions or other participants who have undertaken to fulfilobligations arising in connection with such clearing (each “a clearing participant”).

11. The settlement referred to in Art. 48.1 shall consist in the debiting or crediting thedeposit account or the securities account, as the case may be, kept by the NationalDepository, in connection with disposal or acquisition of financial instruments,and the crediting or debiting of the bank account indicated by a clearingparticipant with the appropriate amount determined during the clearing.

Art. 49.

Registration and clearing of transactions in securities:

1) issued by the State Treasury or the National Bank of Poland,

2) representing transferable property rights attached to securities issued by theState Treasury or the National Bank of Poland

– may, should the issuer so decide, be effected through a separate system operatedby the National Bank of Poland.

Art. 50.

1. At the request of the management board, the supervisory board of the NationalDepository shall adopt the rules of the National Depository.

2. The rules of the National Depository and amendments thereto shall be subject tothe Commission’s approval.

3. The Commission shall refuse to approve amendments to the rules of the NationalDepository if the proposed amendments are in conflict with the law or couldadversely affect the security of trading.

4. The rules of the National Depository shall define in particular:

1) rights and obligations of participants, procedure and detailed rules governingthe acquisition or loss of the status of a participant;

2) manner of registration of financial instruments in the National Depository aswell as the manner of keeping by participants of securities accounts and otheraccounts auxiliary to securities accounts;

34

3) rules governing the reduction of value or number of shares and the issuer’sprocedure for returning monies in respect of the shares affected by thereduction referred to in Art. 56;

4) manner and procedure of transaction clearing;

5) manner of providing services related to participants’ cash accounts;

6) manner of providing services supporting issuers in performance of theirobligations towards the holders of rights attached to securities;

7) procedure for the issuance of certificates by the National Depository;

8) manner of computation and the amount of fees referred to in Art. 63;

9) disciplinary and procedural measures to be used with respect to participantswho breach their obligations arising from participation in the NationalDepository, as well as the rules and procedure governing the applicationthereof;

10) actions to be taken and measures to be applied in connection with:

a) supervision over whether the size of an issue registered in the NationalDepository is consistent with to the number of traded securities;

b) supervision over participants’ activities relating to securities trading;

11) manner of operation of the clearing and settlement system;

12) manner of organisation of a system ensuring liquidity of settlements, definingin particular a settlement guarantee system for transactions executed onregulated stock exchange and OTC markets;

13) rules governing the work of the advisory body referred to in Art. 46.5.

5. The National Depository shall make available to participants the rules of theNational Depository, amendments thereto and other regulations concerningparticipants’ rights and obligations issued on the basis of the rules, at least twoweeks before the effective date of such rules, amendments or regulations.

6. If amendments to the rules of the National Depository do not limit the participants’rights or increase the scope of their obligations, the Commission may grant itsconsent to the shortening of the notice period preceding their effective date.

Art. 51.

1. The responsibilities referred to in Art. 48.1 and Art. 48.2 shall be performed by theNational Depository in collaboration with participants.

2. The participants shall include only those entities whose business includes keepingsecurities accounts, issuers of dematerialised securities, and other financialinstitutions, provided that the purpose of their participation is to collaborate withthe National Depository in the performance of its responsibilities.

3. The participants may also include legal persons or other organisations withregistered offices outside the Republic of Poland which conduct activities relatingto the centralised registration of securities or the clearing of transactions insecurities, with the proviso that those entities whose activities are not supervised bya relevant authority competent for financial institutions in a Member State or in an

35

OECD state, may become participants subject to the approval of and on the termsand conditions defined by the Commission.

4. The participants may also include foreign investment firms and foreign legalpersons conducting brokerage activities in the Republic of Poland.

Art. 52.

1. The status of a participant shall be acquired upon the conclusion with the NationalDepository of an agreement on the participation in the depository for securities,hereinafter referred to as the “participation agreement”.

2. An entity which has obtained the Commission’s authorisation for keeping securitiesaccounts or which keeps such accounts pursuant to Art. 117 and meets therequirements provided for in the rules of the National Depository, shall be entitledto demand conclusion of a participation agreement.

3. The conclusion of a participation agreement shall be effected following the lapse oftwo weeks from the submission of a representation by an entitled entity to the effectthat it intends to conclude a participation agreement, unless the management boardof the National Depository resolves, within the said timeframe, to refuse conclusionof such an agreement.

4. The applicant shall have the right to appeal to the supervisory board of the NationalDepository against such a resolution. The supervisory board shall consider theappeal within two weeks from the date of its submission.

Art. 53.

1. Should a given entity’s participation in the National Depository be limited orcancelled in the cases provided for in the rules of the National Depository,a company operating a stock exchange and a company operating an OTC marketshall be obliged to limit or suspend such participant’s activities on the regulatedmarket, unless the responsibilities relating to transaction clearing are performed byanother participant.

2. The National Depository shall promptly inform a company operating a stockexchange and a company operating an OTC market of any such limited or cancelledparticipation.

Art. 54.

With respect to its performance of the responsibilities referred to in Art. 48.2.3 andArt. 48.2.6, the National Depository may receive from the participants identificationdetails of such participants’ customers holding rights attached to specific securities andinformation on the number of securities held by such customers at the time being, and inconnection with the performance of the responsibilities referred to in Art. 48.2.8, theNational Depository may demand that a participant provides it with such details andinformation.

36

Art. 55.

1. Securities of a given issue which confer the same rights and are of the same statusin trading, shall be assigned a separate designation by the National Depository,hereinafter referred to as the “code”.

2. At an issuer’s request, securities of various issues which confer the same rights totheir holders and which are of the same status in trading may be assigned a singlecode by the National Depository, provided that it had previously notifieda company operating the regulated market on which such securities are traded, oran entity which organises an alternative trading system for such securities.

3. An issuer may not attach different rights to securities which are assigned the samecode. Any change with respect to the rights attached to securities which areassigned the same code requires that they be assigned a separate code.

Art. 56.

1. If:

1) a court’s decision on the entry of the increase in the share capital of a publiccompany in the register of entrepreneurs has been repealed; or

2) a general shareholders meeting’s resolution on a share capital increase hasbeen repealed or invalidated

– and the shares issued as a result of such share capital increase had previouslybeen assigned the same code as other shares in such a company, a reduction of thepar value of all the shares assigned that code shall be effected at the depository forsecurities.

2. If the reduction referred to in Art. 56.1 cannot be effected, then a reduction of thetotal number of securities assigned a given code shall be effected at the depositoryfor securities.

3. Based on the notification of such reduction having been completed, submitted bythe National Depository, a competent registry court shall make a relevant change inthe register of entrepreneurs, and shall subsequently order the company to amend,within a specified timeframe, the wording of its articles of association to reflect thenew legal status.

4. A public company shall be obliged to return to shareholders the proceeds from theissue of shares registered in the shareholders’ accounts which are affected by thereduction referred to in Art. 56.1 and Art. 56.2. The share of particular shareholdersin the amount of funds to be returned by the issuer shall be determined based on theratio of the post-reduction par value of the shares registered in such shareholders’securities accounts to the par value of all the shares affected by the reduction, orbased on the ratio of the number of shares registered in such shareholders’securities which are affected by the reduction to the total post-reduction number ofshares.

Art. 57.

1. The National Depository shall register securities in:

37

1) deposit accounts, in the case of which identification of the holder of thesecurities account in which such securities have been registered is not possible;

2) securities accounts.

2. Balances on securities accounts kept by the participants should correspond with thebalance on a relevant deposit account kept at the National Depository.

Art. 58.

An issuer’s obligation to deliver securities shall be satisfied upon the receipt of suchsecurities by the participant keeping the securities account for the entitled person, andan issuer’s obligation to make a cash payment shall be satisfied upon the transfer of thecash to the bank account indicated by such participant.

Art. 59.

1. When arranging and effecting the clearing of transactions referred to in Art. 48.2.4,the National Depository shall specify in particular the scope of obligations of theparties to transactions or, if the parties to a transaction perform their obligationsthrough other entities, of the clearing participants, in order to ensure properdischarge by the parties of their monetary or non-monetary obligations under theexecuted transactions.

2. The National Depository shall organise and operate a system guaranteeing properperformance of obligations under transactions.

3. The National Depository may be a party to a transaction executed on a regulatedstock exchange or OTC market solely in connection with the use of the funds of thesystem referred to in Art. 59.2 in line with its purpose.

Art. 60.

If settlement of a transaction consists in the delivery by a party to the transaction or aclearing participant of cash or non-cash instruments representing an excess over thevalue of cash or non-cash instruments owed to such party or clearing participant, anobligation of a participant to deliver such cash or non-cash instruments in the amount ofsuch excess shall arise upon the execution of the transaction; the above shall notexclude the possibility of setting a different amount of cash or non-cash instruments inthe cases referred to in Art. 62.

Art. 61.

1. In the event any bankruptcy, recovery, or enforcement proceedings are instituted, orliquidation is opened, or other legal remedies are taken against a participant oranother entity operating directly on the regulated market, including the suspensionof a bank’s operations under the Banking Law of August 29th 1997, and as a resultof such proceedings, liquidation or remedies such participant or entity ceases orsuspends repayment of its debts or its ability to freely administer its assets isrestricted, such proceedings, liquidation or remedies shall be of no legal effect inrelation to the funds registered in the deposit account, securities account, cashaccount or bank account of such a participant or another entity operating on the

38

regulated market which is used for the purpose of performing transactionsettlements, to the extent such funds are necessary to settle transactions at theNational Depository, even if such proceedings have been instituted, liquidationopened, or another legal remedy has been taken prior to the settlement of such atransaction.

2. Legal remedies referred to in Art. 61.1 shall be of no legal effect in relation to thesecurity established, in accordance with the rules of the National Depository, by aparticipant or another entity operating directly on the regulated market for thebenefit of another participant or the National Depository as part of the systemensuring liquidity of settlements.

3. The provisions Art. 61.1 shall also apply when the system for registration ofsecurities referred to in Art. 49 is maintained by the National Bank of Poland.

Art. 62.

1. If in the deposit account or the bank account indicated by a clearing participant, orin the securities account or cash account of a participant who is a party to thetransaction or a clearing participant, there are no sufficient funds to settletransactions, the National Depository shall specify the transactions whosesettlement will be suspended.

2. The rules of the guarantee system referred to in Art. 59.2 may provide for non-delivery of cash or non-cash instruments owed to a participant who caused thesuspension of transactions settlement.

Art. 63.

The National Depository shall charge fees for the actions performed for the benefit ofits participants.

Art. 64.

1. Chairman of the Commission or a person authorised by the Chairman shall have theright to:

1) enter the registered office of the National Depository in order to inspect thebooks, documents and information stored in other forms;

2) participate in meetings of the supervisory board of the National Depository andin general shareholders meetings.

2. At a request of the Chairman of the Commission or a person authorised by theChairman, the authorised representatives of the National Depository, or members ofits management or supervisory board, or persons bound by an employment relationwith the National Depository, shall promptly prepare and deliver, at the cost of thecompany, copies of documents and other data carriers and shall provide written ororal explanations.

3. The obligation referred to in Art. 64.2 shall also apply to the qualified auditor andthe authorised representatives of the auditing firm (qualified auditor of financialstatements) or a person bound by an employment relation with such firm – to theextent related to actions undertaken by such persons or firm in connection with an

39

audit of the financial statements of the National Depository or provision to theNational Depository of other services referred to in Art. 10.3 of the Act onQualified Auditors and their Self-Government of October 13th 1994. The aboveshall not prejudice the secrecy obligation referred to in Art. 4a of the Act onQualified Auditors and their Self-Government.

4. At a written request of the Commission, the management board of the NationalDepository shall:

1) convene an extraordinary general shareholders meeting; or

2) include the matters indicated by the Commission in the agenda of the generalshareholders meeting.

5. In the event of failure to perform the obligations referred to in Art. 64.4, theprovisions of Art. 401.1 and Art.401.3 of the Commercial Companies Code ofSeptember 15th 2000 shall apply accordingly to the Commission’s request.

6. The Commission may order the supervisory board of the National Depository topromptly, and in any case no later than within ten business days, adopt a resolutionon a specific matter.

7. The Commission may appeal to the court against a resolution of the generalshareholders meeting or of the supervisory board of the National Depository within30 days of becoming aware of such resolution, by way of an action for repeal ofsuch resolution, if such resolution is in conflict with the law, the articles ofassociation, the rules or the principles of secure trading, or if it has been adopted inviolation of the law, the articles of association or the rules.

8. If there are any doubts as to the accuracy or reliability of the financial statements orother financial information which are required to be prepared under otherregulations or as to the proper maintenance of accounting books, the Commissionmay order an audit of such statements, information or accounting books to beperformed by a qualified auditor of financial statements. If any materialirregularities are found during the audit, the National Depository shall reimbursethe costs of the audit to the Commission.

Art. 65.

1. The participants shall be obliged to make contributions to the National Depository.The fund thus created, hereinafter referred to as the “settlement guarantee fund”,shall serve the purpose of securing proper settlement of transactions.

2. The settlement guarantee fund shall ensure the settlement of transactions executedon the regulated market, within the scope specified in the rules of such fund.

3. The National Depository may manage the monies accumulated in the settlementguarantee fund.

Art. 66.

1. The amount of contributions to the settlement guarantee fund shall be determinedby the National Depository, depending on the liabilities which may arise as a resultof the settlement of a participant’s activities, within the scope referred to in

40

Art. 65.2. The amount of contributions may also depend on the financial standingof a given participant.

2. At the management board’s request, the supervisory board of the NationalDepository shall adopt the rules for the creation and use of the settlement guaranteefund. The rules and amendments thereto shall be subject to the Commission’sapproval.

Art. 67.

1. The assets of the settlement guarantee fund shall represent joint property of theparticipants, which does not exclude a possibility of defining individually the dutiesof a participant in connection with the use of the settlement guarantee fund onaccount of the actions of such a participant.

2. The settlement guarantee fund may consist of parts separated by function, each ofwhich comprises funds for securing the settlement of transactions executed onparticular markets or for securing the settlement of particular types of transactions.

3. Provisions of Art. 61 shall apply accordingly to the funds of the settlementguarantee fund.

Art. 68.

The National Depository may also, under an agreement with an entity organising analternative trading system, manage a fund securing proper settlement of transactions insuch trading.

Part IV

Participation in Financial Instruments Trading

Chapter 1

Activities of Investment Firms

Section 1

General Provisions

Art. 69.

1. The conduct of brokerage activities shall require a licence, to be granted by theCommission upon application referred to in Art. 82 and submitted by the partyconcerned.

2. Subject to Art. 70 and 71, brokerage activities shall encompass the followingactivities:

1) acceptance and transfer of orders to acquire or dispose of broker-tradedfinancial instruments;

41

2) execution of the orders referred to in Art. 69.2.1 for the account of thecustomer,

3) acquisition or disposal, for the broker’s account, of broker-traded financialinstruments,

4) management of portfolios including one or more broker-traded financialinstruments,

5) offering broker-traded financial instruments,

6) provision of services under standby underwriting agreements and firmcommitment underwriting agreements or execution and performance of othersimilar agreements on broker-traded financial instruments.

3. The following activities shall also be considered as brokerage activities:

1) keeping securities accounts and cash accounts auxiliary to the securitiesaccounts, with the exception of securities accounts kept by a custodian bank;

2) investment advisory on broker-traded financial instruments admitted toorganised trading;

3) organising alternative trading systems, subject to Art. 21.3 and Art. 33.3.

4. The following actions by an investment firm shall also be considered as brokerageactivities:

1) safekeeping of broker-traded financial instruments and registering changes inthe holdings of such instruments,

2) recording and keeping accounts in which broker-traded financial instrumentsare registered, except for securities accounts, and keeping cash accountsauxiliary to the accounts in which broker-traded financial instruments areregistered, except for services related to securities accounts, as well as clearingtransactions in such instruments, except for transactions in dematerialisedsecurities or other broker-traded financial instruments admitted to organisedtrading,

3) making available safety-deposit boxes,

4) advancing loans to finance transactions in one or more broker-traded financialinstruments, if the transaction is effected through the intermediation of theinvestment firm advancing the loan,

5) advising companies on capital structure, corporate strategy and other mattersrelated to such structure or strategy,

6) advisory and other services relating to mergers, demergers and acquisitions ofcompanies,

7) investment advisory on matters concerning broker-traded financial instruments,except for financial instruments admitted to organised trading,

8) additional services related to standby underwriting and firm commitmentunderwriting,

9) providing foreign-exchange services where these are connected with thebrokerage activities, as provided for in Art. 69.2

42

Art. 70.

1. The provisions of this Part shall not apply to:

1) insurance undertakings,

2) entities performing the activities referred to in Art. 69.2 solely for the benefitof undertakings belonging to the same group as the entity performing suchactivities,

3) entities conducting operations other than brokerage business and performingthe activities referred to in Art. 69.2 on an incidental basis in connection withtheir business, provided that such business is regulated by laws which do notpreclude the possibility of performing such activities,

4) entities engaged solely in the activities referred to Art. 69.2.3, provided that itis not done on a regular basis and as part of professional activities, and inparticular if such activities are not the core business of a given entity,

5) central banks of Member States and other domestic entities performing similarfunctions, as well as other public bodies established to manage public debt,

6) investment funds within the meaning of the Act on Investment Funds of May27th 2004 (Dz.U. No. 146, item 1546 and Dz.U. of 2005, No. 83, item 719),

7) pension funds within the meaning of the Act on the Organisation andOperation of Pension Funds of August 28th 1997, (Dz.U. of 2004 No. 159,item 1667),

8) safekeeping of the assets of the funds referred to in Art. 70.1.6 or 70.1.7, andmanagement of such funds,

9) entities whose core business activity consists in investing, for their ownaccount, in commodities, within the meaning of the Commodity Exchange Actof October 26th 2000, and which provide their services to manufacturers of thecommodities or entities using the commodities in their core business activity,

10) entities which enter, as part of their business activity, into transactions onfutures or options markets, for their own account or for the account of otherparticipants of such markets, provided that the responsibility for theperformance of the obligations under such transactions rests with clearingparticipants of such markets,

2. A bank with a registered office in the Republic of Poland may, without a brokeragelicence, perform – in accordance with the rules defined in other regulations – theactivities specified in:

1) Art. 69.2.1-5, provided that the activities concern securities referred to inArt. 4.1.2 or other broker-traded financial instruments not admitted to organisedtrading;

2) Art. 69.2.6.

3. Performance of the activities specified in Art. 69.2 by a bank in accordance with theprovisions of Art. 70.2 shall not be deemed brokerage activities.

43

Art. 71.

1. Activities which involve solely acceptance and transfer of orders to acquire ordispose of securities or units in collective investment undertakings shall not beconsidered brokerage activities, provided that the entity performing such activitiesis not authorised to provide services consisting in safekeeping of cash or securitiesbelonging to a third-party, and that the activities are performed by an entityinvolved in business activity regulated by other regulations.

2. Orders accepted in accordance with Art. 71.1 may be transferred solely toinvestment firms or collective investment undertakings operating in the Republic ofPoland.

3. Performance of the activities referred to in Art. 71.1 shall require notification tothe Commission no later than one month prior to their commencement. Theprovisions of Art. 88 and Art. 90.1-4, as well as provisions issued underArt. 94.1.1 and Arts 26-37 of the Act on Capital Market Supervision shall applyaccordingly to the entity performing the activities referred to in Art. 71.1.

Art. 72.

1. In the agreement on offering broker-traded financial instrument, an investment firmshall agree to act as an agent in:

1) issuers’ offers of new issue securities or disposal of such securities,

2) issuers’ offers of broker-traded financial instruments other than securities ordisposal of such instruments as a result of such offers,

3) selling shareholders’ offers of securities or disposal of such securities as aresult of such offers, or

4) offers of broker-traded financial instruments other than securities by entitiesintroducing such instruments to trading on a regulated market or to analternative trading system, or disposal of such instruments as a result of suchoffers.

2. The agreement on offering financial instruments shall be in writing under pain ofnullity.

Art. 73.

1. Subject to Art. 74, an investment firm shall execute orders to acquire or dispose ofsecurities admitted to organised trading on the basis of brokerage servicesagreement.

2. In the brokerage services agreement, the investment firm:

1) shall agree to accept and execute, in accordance with the terms defined in theagreement, orders to acquire or dispose of – in the name of the investment firmbut for the customer’s account – securities:

a) traded on a regulated market, or

b) traded in an alternative trading system;

2) may also agree to:

44

a) accept and transfer orders to acquire or dispose of securities admitted toorganised trading, or

b) keep a securities account or a cash account auxiliary to the securitiesaccount, and to provide services supporting discharge of other obligationsof the investment firm towards the customer, or the customer’s obligationstowards the investment firm, which may arise from provision of servicesby the investment firm to the customer.

3. By accepting the order referred to in Art. 73.1, the investment firm shall makea commitment towards the customer to acquire or dispose of specific securities inits own name but for the customer’s account. The investment firm shall beresponsible towards the customer for payment of the price by the entity thatacquired the securities.

4. The agreement and orders referred to in Art. 73.1 shall be in writing under pain ofnullity.

5. To the extent not provided for in Art. 73.1-4:

1) the provisions of the Civil Code of April 13th 1964 concerning mandatecontract (umowa zlecenie), with the exception of Art. 737, shall applyaccordingly to brokerage services agreements;

2) the provisions of the Civil Code of April 13th 1964 concerning consignmentagreement, with the exception of Art. 768.3, shall apply accordingly toexecution of the orders referred to in Art. 73.1.

6. The provisions of Art. 725–733 of the Civil Code of April 13th 1964, excluding theright of temporary use of free cash, shall apply accordingly to the cash accountsauxiliary to securities accounts. This shall not prejudice the Commission’s rightsunder Art. 88.

7. The provisions of Art. 73.1-5 shall apply accordingly to the execution of orders toacquire or dispose of broker-traded financial instruments other than securities by aninvestment firm for the customer’s account in organised trading, provided that theapplication of the said provisions is possible given the structure of suchinstruments.

Art. 74.

1. An investment firm may execute orders to acquire or dispose of securities admittedto organised trading by entering, for its own account, into a sale agreement (directtransaction) with the customer.

2. Execution of orders as provided for in Art. 74.1 shall be effected on the basis ofa brokerage services agreement.

3. An investment firm shall accept and transfer orders to acquire or dispose of broker-traded financial instruments by way of:

1) accepting and transferring orders to acquire or dispose of broker-tradedfinancial instruments to another entity with a view to their execution, or

2) taking steps to find an entity interested in entering into a purchase agreementwith the customer concerning such broker-traded financial instruments.

45

Art. 75.

1. In the agreement on management of a portfolio which includes one or more broker-traded financial instruments, the investment firm shall agree to make andimplement, for a consideration and for the customer’s account, investmentdecisions concerning the cash or broker-traded financial instruments left by thecustomer at the manager’s disposal.

2. The agreement referred to in Art. 75.1 shall be in writing under pain of nullity.

Art. 76.

1. In the agreement on investment advisory services concerning broker-tradedfinancial instruments admitted to organised trading, the investment firm shall agreeto prepare, taking into account the customer’s needs and standing, and to present tothe customer a written or oral recommendation to acquire or dispose of specificbroker-traded financial instruments or to refrain from transactions in suchinstruments.

2. The agreement referred to in Art. 76.1 shall be in writing under pain of nullity.

Art. 77.

1. Foreign-exchange services shall mean acceptance of foreign currencies by aninvestment firm and their sale for the customer’s account or purchase of foreigncurrencies for the customer’s account, in connection with the services supportingdischarge of the obligations of the investment firm towards the customer, or thecustomer’s obligations towards the investment firm, which may arise fromprovision of services by the investment firm to the customer, obligations of thecustomer towards the issuer of securities where the investment firm acts in thename and for the account of the issuer, or the obligations of the issuer of securitiestowards the customer where the investment firm acts in the name and for theaccount of the customer with respect to the activities specified in Art. 69.2.

2. The provision of foreign-exchange services by an investment firm shall not bedeemed foreign-exchange office activities within the meaning of the ForeignExchange Act of July 27th 2002 (Dz.U. No. 141, item 1178, as amended6).

Art. 78.

1. An investment firm shall organise an alternative trading system in accordance withthe rules, which shall be subject to the Commission’s approval. The rules of thealternative trading system shall specify in particular:

1) type of broker-traded financial instruments to be traded;

2) criteria and conditions for admission of financial instruments referred to inArt. 78.1.1 to trading;

3) procedure and conditions for executing transactions;

6) Amendments to the Act were promulgated in Dz.U. of 2003, No. 228, item 2260 and Dz.U. of 2004,

No. 91, item 870 and No. 173, item 1808.

46

4) procedure for resolution of disputes concerning execution and clearing oftransactions;

5) procedure and conditions for listing, suspension of trading or delistingfinancial instruments referred to in Art. 78.1.1;

6) trading days and hours of trading;

7) manner for determining and publishing prices or quotations of the financialinstruments referred to in Art. 78.1.1;

8) classification, if any, of the financial instruments referred to in Art. 78.1.1;

9) procedure and conditions for dissemination of information on the offers andtransactions made;

10) description of a settlement guarantee system for transactions in the alternativetrading system, if the investment firm organising the alternative trading systemhas developed or participates in such a system;

11) means to prevent and reveal any market manipulation.

2. If a transaction concerns financial instruments admitted to trading on a regulatedmarket, performance of the obligation to disseminate the information specified inArt. 78.1.9 by the entity organising an alternative trading system shall includeforwarding such information to the regulated market so that it can be published inaccordance with the regulations issued under Art. 17.1.1. In such a case, the rulesreferred to in Art. 78.1 shall specify the procedure and conditions for forwardinginformation on the offers and transactions made to a company operating a regulatedmarket on which a given financial instrument is traded.

3. If the scope of activities referred to in Art. 82.1.7 includes organisation of analternative trading system, when granting the brokerage licence the Commissionshall approve the rules of such a system.

4. An investment firm which intends to start organising an alternative trading systemshall make a relevant notification in accordance with the procedure provided for inArt. 87, and shall request for the Commission’s approval of the rules of thealternative trading system.

5. Any amendments to the rules of the alternative trading system shall be subject to theCommission’s approval.

6. The Commission shall refuse approval of the rules of the alternative trading systemor amendments thereto, if such rules or amendments are in conflict with the law ordo not guarantee the security of trading.

7. The provisions concerning the obligation to obtain the Commission’s approval ofthe rules of the alternative trading system or amendments thereto shall not apply toforeign investment firms.

Art. 79.

1. An investment firm may, under a written agreement, commission a natural or legalperson or an organisational unit without legal personality to perform, on an ongoingor temporary basis, in the name and for the account of the investment firm, agencyservices related to the activities of the investment firm (investment firm agent).

47

2. On the basis of the agreement referred to in Art. 79.1 the investment firm agentmay perform activities which are related to the execution of agreements forprovision of services by the investment firm, or which facilitate performance ofsuch agreements, in particular activities involving advising a customer or apotential customer on the services offered by such investment firm, accepting theorders referred to in Art. 69.2.1, and collecting other declarations of will for theinvestment firm. The agreement referred to in Art. 79.1 may not provide for thecommissioning of brokerage activities.

3. It shall be prohibited to maintain contractual relations under the agreement referredto in Art. 79.1 with more than one investment firm.

4. An investment firm agent shall be prohibited to accept any payments in respect ofactivities performed under the agreement referred to in Art. 79.1 from persons towhom the investment firm provides its services or any payments made by theinvestment firm to such persons.

5. The liability for any damage caused by an investment firm agent as a result of itsperformance of activities in the name and for the account of the investment firmshall rest jointly and severally with such investment firm and the agent whichcaused the damage. The liability shall be excluded if the damage is caused by forcemajeure or sole fault of a third party.

6. An investment firm agent shall be required to present power of attorney issued bythe investment firm on behalf of which it acts while performing each action for theinvestment firm. If an investment firm agent is a person practicing the profession ofa securities broker or an investment adviser, such a person shall also be required toproduce a document confirming its qualifications to practice the profession ofa securities broker or an investment adviser.

7. With respect to investment firm agents the Commission shall have supervisionpowers provided for in the Act on Capital Market Supervision as regards theactivities performed for the investment firm and documents prepared in connectionwith such activities.

8. The Commission shall maintain a register of investment firm agents.

9. The Commission shall delete an investment firm agent from the register referred toin Art. 79.8, if it performs activities referred to in Art. 79.2 in violation of the lawor without exercising due care. The provisions of Art. 130.2 and 130.3 shall applyaccordingly.

10. The entity which has been deleted from the register of investment firm agents forreasons referred to in Art. 79.4 may not be re-entered into the register for ten yearsfrom the date of deletion, and if an investment firm agent has been deleted inconnection with an offence it has committed – also before the cancellation of anentry of sentence for such offence in the register of convictions.

Art. 80.

An investment firm agent that concluded with an investment firm the agreementreferred to in Art. 79.1 shall be an entrepreneur within the meaning of Art. 4 of the Acton Freedom of Business of July 2nd 2004 (Dz.U. No. 173, item 1807 and No 281, item.2777, and Dz.U. of 2005, No. 33, item 289 and No. 94, item 788).

48

Art. 81.

1. When a natural person is to be an investment firm agent, the Commission, uponapplication of the party concerned, shall enter it into the register of investment firmagents, provided that such person has the adequate level of knowledge andprofessional experience in the area of financial agency services, applicable lawsand regulations and standards of operations of investment firms, as confirmed bythe Commission by way of an examination conducted pursuant to Art. 128.An application for registration shall be submitted within 30 days from the date ofpassing an examination for investment firm agents.

2. The conditions referred to in Art. 81.1 shall be deemed to be met in the case ofpersons qualified to practice the profession of a securities broker or an investmentadviser.

3. When a legal person or an organisational unit without legal personality is to be aninvestment firm agent, the Commission, upon application of the party concernedshall enter it into the register of investment firm agents, provided that its experiencein the area of trading in broker-traded financial instruments and its organisationalstructure guarantee the performance of the activities referred to in Art. 79.2 in acorrect manner and with due care.

4. When investment firm agent’s services are to be provided by an entity conductingbusiness activities regulated under other regulations by an authority with whom theCommission entered into the agreement referred to in Art. 20.2 of the Act onCapital Market Supervision, the Commission, upon receipt of the applicationreferred to in Art. 81.1, shall apply to the competent authority to obtain an opinionon such entity’s financial standing and the manner in which it conducts itsoperations. If the competent authority issues a positive opinion, the entity applyingfor registration in the register of investment firm agents shall be deemed to meet theconditions referred to in Art. 81.3.

5. The Commission shall refuse registration in the register of investment firm agents ifa natural person applying for registration or a person managing the entity referredto in Art. 81.3 which applies for registration has been found by a final courtjudgment guilty of a tax offence, an offence against reliability of documents,property, business transactions and cash and securities transactions, offencesspecified in Art. 305, Art. 307 or Art. 308 of the Industrial Property Law of June30th 2000 (Dz.U. of 2003, No. 119, item 1117, Dz.U. of 2004, No. 33, item 286,and Dz.U. of 2005, No. 10, item 68), offences specified in the CommodityExchange Act or offences specified herein.

6. The Commission shall also refuse to enter the entity referred to in Art. 81.3 into theregister of investment firm agents, if the performance of activities referred to inArt. 79.2 by such entity could pose a threat to the security of trading or compromisethe interests of the investment firm’s customers.

7. An application for registration in the register of investment firm agents shall besubmitted through the intermediation of the investment firm for the benefit ofwhich the activities referred to in Art. 79.2 are to be performed, and shall contain:

1) in the case of a natural person – personal details and information on theprofessional career or conducted business activities, representation that suchperson has not been found guilty of the offences specified in Art. 81.5 and

49

a certificate confirming that such person has passed the examination forinvestment firm agents;

2) in the case of legal persons and organisational units without legal personality –information on the name and address of the registered office, description of thebusiness activities, a valid excerpt from the relevant register, personal detailsof such entity’s management staff and their representation to the effect thatthey have not been found guilty of the offences specified in Art. 81.5.

8. An entity entered into the register of investment firm agents shall promptly notifythe Commission in writing of:

1) any changes of the information contained in the application for registration inthe register of investment firm agents;

2) conclusion of the agreement referred to in Art. 79.1, with an indication of theexecution date and the investment firm with which the agreement has beenconcluded;

3) termination of the agreement referred to in Art. 79.1, with an indication of thetermination date, the reasons for termination, and the investment firm withwhich the agreement has been terminated.

Art. 82.

1. The application for a brokerage licence shall contain the following:

1) personal details of the members of the management board, or partners orgeneral partners in a partnership, the members of the supervisory board and theaudit committee, if such a committee is established, and other persons who areresponsible for launching brokerage activities by the applicant or will managesuch operations, information on their professional qualifications and careers;

2) list of shareholders holding shares of the applicant, whether directly orindirectly through subsidiaries, specifying the number of shares held and thepercentage of the total vote conferred by such shares;

3) in the case of shareholders who are natural persons and hold the right to 10%or more of the total vote or 10% or more of the applicant’s share capital –personal details of such persons, information on their professional careers or onbusiness activities conducted by them;

4) in the case of shareholders who are legal persons and hold the right to 10% ormore of the total vote or 10% or more of the share capital of the joint-stockcompany which makes the application – information on their businessactivities, a valid excerpt from the relevant register, and the most recentfinancial statements together with an auditor’s opinion and the audit report, ifsuch an audit is required by the law;

5) information on the entities of the same group as the applicant; the informationshall include the company name or the first name and surname, address of theregistered office or address of residence, description of business, and, in thecase of legal person being the parent entity with respect to the applicant, list ofmembers of their governing bodies;

6) information specified in Art.82.1.5 with respect to shareholders of the parententity of the group of which the applicant is a member;

50

7) description of the first activities to be performed by the applicant as part of itsbrokerage activities;

8) information on the amount of initial capital, specifying its source, orinformation on a concluded insurance agreement referred to in Art. 98.9,including in particular the name if the insurance undertaking and the suminsured;

9) study of the economic and financial feasibility of conducting brokerageactivities for a year from the date of their launch;

10) representations by the persons specified in Art. 82.1.1, with the exclusion ofpartners or general partners in a partnership, to the effect that they have notbeen found by a final court judgment guilty of a tax offence, an offence againstreliability of documents, property, business transactions and cash and securitiestransactions, offences specified in Art. 305, Art. 307 or Art. 308 of theIndustrial Property Law of June 30th 2000, offences specified in theCommodity Exchange Act or offences specified herein.

11) information on the proposed organisation of the business, with an indication ofthe address of its head office and branches, if any, and on thetelecommunications equipment owned and the offices occupied;

12) information on the business activities conducted previously by the applicantand the reasons for discontinuation;

13) information on parent entities and subsidiaries of the shareholders holding theright to 10% or more of the total vote or 10% or more of the share capital ofthe applicant, including the name of the company or first name and surname,the address of the registered office or the address of residence, anda description of their business activities.

2. The following shall be attached to the application:

1) articles of association and an excerpt from the register of entrepreneurs or, ifthe applicant is a foreign entity, from the relevant register;

2) rules specifying how the operations involving the activities referred to inArt. 82.1.7 shall be performed;

3) organisational rules and internal audit rules;

4) rules for the protection of the flow of inside information and the internalprocedures aimed at:

a) money laundering, and

b) counteracting and revealing market manipulation;

5) the rules for investing in broker-traded financial instruments by members of themanagement board and the supervisory board, partners in a general partnership(spółka jawna) or limited-liability partnership (spółka partnerska), or generalpartners in a limited partnership (spółka komandytowa) or limited joint-stockpartnership (spółka komandytowo-akcyjna), and employees of a brokeragehouse, for their own account;

6) procedures for monitoring and control of interest-rate risk related to the entirebusiness of the applicant;

51

7) list of securities brokers or investment advisers employed by the applicantpursuant to Art. 83;

8) in the case of applicants taking advantage of the exemption under Art. 98.9 –a copy of the insurance agreement referred to in that article;

9) representations, subject to criminal liability, made by shareholders who arenatural persons and hold the right to 10% or more of the total vote or sharecapital of the applicant, concerning the source of funds used to pay for theshares of the applicant subscribed for or acquired, if the applicant applies fora licence to conduct brokerage activities in the form of a brokerage house.

3. The application referred to in Art. 82.1 shall not include the information specifiedin Art. 82.1.5 and 82.1.6, if it relates to:

1) an entity which is an issuer of securities or other financial instruments admittedto trading on a regulated market, an investment firm, a commodity brokeragehouse, a bank, an insurance undertaking, an investment fund, a pension fund,a foreign fund or a foreign management company within the meaning of theregulations on investment funds, or another foreign entity regulated by a bodywith which the Commission has executed an agreement described in Art. 20.2of the Act on Capital Market Supervision or an agreement referred to in theregulations on investment funds;

2) parent entity or a subsidiary of the undertaking referred to in Art. 82.3.1, or

3) subsidiary of the parent entity of the undertaking referred to in Art. 82.3.1.

4. To determine the influence of an entity holding, whether directly or indirectly,a number of the applicant’s shares representing 10% or more of the total vote onthe conduct of brokerage activities, compliance with the principles of fair trading,or due protection of the customers’ interests, the Commission may demand otherinformation concerning the legal or financial situation of such entity.

5. The provisions of Art. 82.1, Art. 82.2.9 and Art. 82.4 relating to shares orshareholders in joint-stock companies shall apply accordingly to shares orshareholders in limited-liability companies, if the applicant is a limited-liabilitycompany (spółka z ograniczoną odpowiedzialnością). The provisions of Art. 82.2.9relating to the representation on the source of funds used to finance the acquisitionof subscription for shares shall apply accordingly to the representation on thesource of funds contributed to a partnership, if the applicant is a generalpartnership, a limited-liability partnership or a limited partnership.

Art. 83.

1. An investment firm shall be required to employ at least:

1) one securities broker – to perform each of the activities specified in Art. 69.2.1,69.2.2 and 69.2.5, Art. 69.3.1 and 69.3.3, and Art. 69.4.1 and 69.4.2, and toperform the activities specified in Art. 69.2.3, if they are related to theorganisation of organised trading;

2) two investment advisers – to perform the activities specified in Art. 69.2.4;

3) one investment adviser or one securities broker – to perform the activitiesspecified in Art. 69.3.2 and Art. 69.4.7.

52

2. The conditions referred to in Art. 83.1 shall be deemed to be met if the activitiesspecified in Art. 83.1 are performed by a securities broker or an investment adviserwho is a general partner in a limited joint-stock partnership or limited partnership,or a partner in a general partnership or limited-liability partnership operating as aninvestment firm.

3. The provisions of Art. 83.1 shall not apply to foreign investment firms conductingbrokerage activities in the Republic of Poland which are not required to opena branch for this purpose.

Art. 84.

1. The Commission shall consider an application for a brokerage licence within twomonths of its submission.

2. The brokerage licence shall specify:

1) company name, registered office and the address of the investment firm;

2) list of all activities specified in Art. 69.2-4;

3) date of commencing brokerage activities, which shall no later than 12 monthsfrom the date on which the decision granting the licence became final.

Art. 85.

The Commission shall refuse the licence if:

1) the application does not meet the requirements set out in Art. 82;

2) the application or the documents attached thereto do not comply, in the termsof their content, with the law or are inconsistent with the actual state of affairs;

3) the applicant does not meet the requirements set out in Art. 95 or Art. 98;

4) due to the nature of links between the entities of the same group as theapplicant it is impossible to determine the group’s actual structure, its actualowners or to exercise effective supervision over the applicant’s operations;

5) the persons referred to in Art. 103, Art. 111.6 or Art. 115.5 do not meet therequirements specified therein;

6) the opinion referred to in Art. 96.1, Art. 96.2 or Art. 115.3 is negative;

7) following the analysis of the application and the attached documents theapplicant is found to be unable to conduct its operations in a manner whichdoes not pose any threat to the security of trading in financial instruments andduly protects the customers’ interests;

8) the applicant fails to provide, at the request of the Commission, the informationspecified in Art. 82.4 and 82.5;

9) the funds used to finance the acquisition of or subscription for shares in theapplicant or the funds contributed to an applicant which is a generalpartnership, a limited-liability partnership or a limited partnership come fromloans or undocumented sources, if the applicant applies for a licence to conductbrokerage activities in the form of a brokerage house;

53

10) the entities holding, whether directly or indirectly through subsidiaries,applicant shares representing in aggregate 10% or more of the total vote or theshare capital do not guarantee that the applicant will conduct brokerageactivities in a proper manner.

Art. 86.

An investment firm shall promptly notify the Commission of:

1) any changes of the information contained in the application for a licence andthe documents attached thereto, subject to Art. 86.2, and any changes in theinformation contained in the notification referred to in Art. 87;

2) any changes in the composition of shareholders that hold, whether directly orindirectly through subsidiaries, the right to 10% or more of the total vote or10% or more of the share capital;

3) any acquisition of a number of shares in another company which confers theright to 5% or more of the total vote.

Art. 87.

1. Once it has obtained the licence, an investment firm shall notify the Commission ofits intention to commence brokerage activities other than those indicated in theapplication referred to in Art. 82, at least 30 days prior to the commencement ofsuch activities.

2. The notification referred to in Art. 87.1 shall specify:

1) scope of brokerage activities the investment firm intends to conduct;

2) rules for the conduct of the planned activities;

3) personal details of the persons responsible for launching the planned activitiesand persons who will manage such activities, information on their professionalqualifications and careers and opinions related to the positions they have held;

4) the rules referred to in Art. 82.2.3 and 82.2.4, adapted to the scope of theplanned activities;

5) documents confirming employment of the number of securities brokers orinvestment advisers which is required to conduct the planned activities;

6) information on the amount of the brokerage house’s initial capital or theamount of the funds designated to finance brokerage activities in the case ofthe foreign legal person referred to in Art. 115.1, if conducting the plannedactivities would require an increase in the existing amount of such initialcapital or funds, and an indication of their sources;

7) representations by persons specified in Art. 87.3 to the effect that they have notbeen found by a final court judgment guilty of a tax offence, an offence againstreliability of documents, property, business transactions and cash and securitiestransactions, offences specified in Art. 305, Art. 307 or Art. 308 of theIndustrial Property Law of June 30th 2000, offences specified in theCommodity Exchange Act of October 26th 2000, or offences specified herein;

54

8) information on the organisation of the business or a branch proposed inconnection with the expansion of the company’s activities and, in particular,information on the telecommunications equipment to be used for that purposeand on the premises occupied.

Art. 88.

At the demand of the Commission or a person authorised by the Chairman, theauthorised representatives of an investment firm, or persons who are members of itsgoverning bodies provided for in its articles of association, or persons bound by anemployment relation with such investment firm, shall be required to promptly prepareand deliver, at the cost of the investment firm, copies of documents and otherinformation carriers, and to provide written or oral explanations related to the regulatorytasks performed by the Commission.

Art. 89.

1. The brokerage licence shall expire:

1) if the investment firm fails to commence brokerage activities by the datespecified in the decision granting the licence,

2) upon declaration of the investment firm’s bankruptcy;

3) if liquidation proceedings are opened with respect to the investment firm –following three months from the proceedings opening date, subject to Art.89.2.

2. If it is necessary to protect the public interest, the Commission may, by way of itsdecision, shorten the period specified in Art. 89.1.3.

3. Unless otherwise specified in the decision to revoke the brokerage licence or thedecision referred to in Art. 89.2, in the case of opening of the liquidationproceedings – until expiry of the licence, or in the case of licence revocation – untildiscontinuation of the activities, the investment firm shall conduct only thoseactivities which are related to the keeping of securities accounts, the accountsspecified in Art. 69.4.2, cash accounts, or agreements for managing portfolios ofbroker-traded financial instruments – without the ability to conclude newagreements, and activities related to the broker-traded financial instruments referredto in Art. 2.1.2.c or d acquired for the customer’s account if such activities areperformed with a view to closing such investments by the customers.

4. In the event of expiry or revocation of the licence, or discontinuation of the keepingof securities accounts, the accounts specified in Art. 69.4.2, and cash accounts byan entity conducting brokerage activities, the Commission may order a transfer ofsecurities, other broker-traded financial instruments and any cash and documentsrelated to the keeping of securities accounts, the accounts specified in Art. 69.4.2,and cash accounts to another investment firm, subject to such firm’s prior consent.In all other cases, the handling of the documents related to the conduct of brokerageactivities shall be regulated by the provisions of Art. 476.3 of the CommercialCompanies Code of September 15th 2000. The competent court shall promptlynotify the Commission of the entity which has been designated to store suchdocuments.

55

Art. 90.

1. An investment firm which discontinued brokerage activities shall be obliged toarchive and store, in the territory of the Republic of Poland, for a period of fiveyears from the date of discontinuation of the activities, all documents and otherinformation carriers related to such activities. The obligation shall be deemed to befulfilled if such investment firm ensures that the documents and other informationcarriers are stored by a third party which meets the requirements set out in otherregulations.

2. An authorised representative of the Commission shall have the right to enter theregistered office or the premises of the entity which stores the documents and otherinformation carriers to inspect such documents and information carriers.

3. At a written demand of the Commission or its authorised representative, the entitywhich stores the documents shall be obliged to promptly prepare, at its own cost,and deliver copies of such documents and information carriers.

4. The provisions of Art. 90.1 shall not prejudice the provisions of the AccountancyAct of September 29th 1994 (Dz.U. of 2002, No. 76, item 694, as amended7)).

5. The provisions of Art. 90.1-4 shall not apply to foreign investment firmsconducting brokerage activities in the Republic of Poland without opening abranch.

Art. 91.

1. The Commission shall maintain an open register of investment firms, containinginformation on the names, addresses of the registered offices and scopes of businessactivities conducted by each of the firms in the territory of the Republic of Polandon the basis of the authorisations they hold.

2. The register of investment firms shall be available on the web pages of theCommission.

Art. 92.

1. A group of at least 25 investment firms may establish, on the terms provided for inother regulations, a commercial chamber (“the commercial chamber”).

2. The organisation of the commercial chamber’s governing bodies, the procedure fortheir appointment, the commercial chamber’s scope of powers and responsibilitiesshall be defined in the commercial chamber’s by-laws.

3. Investment firms whose only area of activities is the management of portfolios ofbroker-traded financial instruments or investment advisory services related tobroker-traded financial instruments admitted to organised trading may becomemembers of the commercial chamber referred to in Art. 92.1 or the commercialchamber specified in the regulations on investment funds.

7) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2003, No. 60, item 535,

No. 124, item 1152, and No. 229, item 2276; Dz.U. of 2004, No. 96, item 959, No. 145, item 1535,No. 146, item 1546, and No. 213, item 2155; and Dz.U. of 2005, Nr 10, item 66.

56

Art. 93.

1. The provisions of Art. 82, Art. 84-87 and Art. 89.1 and 89.2 shall not apply toforeign investment firms.

2. The provisions of Art. 89.3 and 89.4 shall apply accordingly to foreign investmentfirms – if the brokerage activities conducted by such investment firms in theRepublic of Poland are suspended or prohibited, in full or in part, pursuant to Art.169.3.1 or 169.3.2.

Art. 94.

1. The minister competent for financial institutions shall define by way ofa regulation:

1) the procedures and conditions to be followed by investment firms andcustodian banks in the course of their activities related to:

a) promoting their brokerage services and maintaining relations withpotential customers,

b) executing and clearing transactions,

c) providing brokerage services, including brokerage services forprofessional customers,

d) recording the executed transactions and archiving documents and otherinformation carriers prepared in connection with brokerage or custodianbank activities,

e) creating and realising collateral for loans advanced to finance theacquisition of broker-traded financial instruments, and creating securityinterests in broker-traded financial instruments to secure claims, if creationof such security interest is possible given the structure of such instruments,

f) transferring securities in direct transactions referred to in Art. 74.1,including activities related to disseminating information on the investmentfirm’s services and on the transactions it executes,

g) organising alternative trading systems, including activities related toproviding information on such systems,

– while ensuring due care, protection of the customer and the security andefficiency of the process of executing and clearing transactions, as well as thetransparency and security of trading;

2) the scope and the detailed rules for determination of the capital requirementsfor brokerage houses and banks conducting brokerage activities (excludingentities conducting brokerage activities only in the area specified in Art. 69.2.1or Art. 69.3.2), and the maximum ratio of loans and issued debt securities tocapitals of brokerage houses and banks conducting brokerage activities, takinginto account the need to ensure adequate capital cover in relation to each of therisks incurred in brokerage activities, the amount of fixed costs and liabilities,and the initial capital;

3) the procedures and conditions to be followed while lending broker-tradedfinancial instruments, with the participation of investment firms and custodian

57

banks outside the system ensuring liquidity of settlements, referred to in Art.50.4.12, taking into account the need to ensure secure and efficient operation ofthe clearing system;

4) the scope, procedure, form and dates for provision of information other thanspecified in Art. 86 concerning the activities of investment firms and custodianbanks and the financial standing of brokerage houses, banks conductingbrokerage activities and foreign legal persons conducting brokerage activitiesin the Republic of Poland, taking into account the need to enable theCommission to exercise supervision over the operations of such entities, to theextent provided for in the statute;

5) the technical and organisational requirements for the conduct of brokerageactivities by an investment firm and keeping securities accounts by a custodianbank, taking into account the need to ensure secure and efficient conduct ofsuch activities;

6) the reporting requirements for brokerage houses, banks conducting brokerageactivities, foreign investment firms conducting brokerage activities in theRepublic of Poland through a branch, and foreign legal persons referred to inArt. 115 conducting brokerage activities in the Republic of Poland, related tothe performance of agency services in the area of acquisition and disposal ofbroker-traded financial instruments traded on foreign regulated markets, takinginto account the need to enable the Commission to exercise supervision overthe operations of such entities, to the extent provided for in the statute;

7) the procedures and conditions to be followed by investment firms whileadvancing loans to finance the acquisition of broker-traded financialinstruments, taking into account the need to ensure conditions which wouldguarantee that the funds allocated to the loans would not be funds deposited byinvestors in cash accounts auxiliary to the accounts in which broker-tradedfinancial instruments are registered, and that appropriate collateral exists forsuch loans in order to ensure security of the lenders, as well as the need toexamine the credibility and solvency of the borrowers.

2. The minister competent for financial institutions shall define, by way ofa regulation, the reporting requirements for brokerage houses, banks conductingbrokerage activities, foreign investment firms conducting brokerage activities in theRepublic of Poland through a branch and foreign legal persons referred to inArt. 115 conducting brokerage activities in the Republic of Poland througha branch, custodian banks, the entities referred to in Art. 4.1.2, and the NationalDepository, related to trading in securities issued by the State Treasury so that thefinancial statements prepared by such entities make it possible to perform analysesof the condition, dynamics and structure of the state budget’s debt under treasurysecurities by groups of investors and types of such securities.

Section 2

Brokerage Houses

Art. 95.

1. A brokerage house may operate only in the form of:

58

1) a joint-stock company,

2) a limited joint-stock partnership with at least two general partners, each generalpartner being a person qualified to practice the profession of a securities brokeror investment adviser,

3) a limited-liability company,

4) a limited partnership with at least two general partners, each general partnerbeing a person qualified to practice the profession of a securities broker orinvestment adviser,

5) a limited-liability partnership with at least two partners, each partner beinga person qualified to practice the profession of a securities broker orinvestment adviser,

6) a general partnership with at least two partners, each partner being a personqualified to practice the profession of a securities broker or investment adviser

– with a registered office in the territory of the Republic of Poland, hereinafterreferred to as a “brokerage house”.

2. Brokerage activities conducted by a partnership referred to in Art. 95.1.2 maycomprise exclusively the activities indicated in Art. 69.2.1, 69.2.4, 69.3.2, 69.4.1and 69.4.5-8.

3. Brokerage activities conducted by a partnership referred to in Art. 95.1.4-6 maycomprise exclusively the activities specified in Art. 69.2.1, 69.3.2 and 69.4.5-7.

4. Shares in a brokerage house shall be only registered shares, unless they aredematerialised.

5. Payment for the acquisition or subscription for non-dematerialised shares ina brokerage house may not be financed with a loan or funds derived fromundocumented sources.

6. Funds contributed to a brokerage house which is a general, limited-liability orlimited partnership may not be a loan or funds derived from undocumented sources.

7. If a brokerage house operating ad a joint-stock company has a single founder, suchfounder may only be a legal person.

8. If a brokerage house operating as a limited-liability company has a single founder,such founder may only be a legal person or a natural person qualified to practicethe profession of a securities broker or investment adviser.

9. A supervisory board shall be appointed in a limited joint-stock partnership anda limited-liability company conducting brokerage activities.

10. If the number of general partners or partners meeting the condition stipulated inArt. 95.1.2 or 95.1.4-6, respectively, falls below two, then, subject to Art. 83,a given brokerage house shall be obliged to promptly restore compliance with theprovisions of Art. 95.1, in no event later than six (6) months from the day on whichsuch a brokerage house ceased to meet the condition stipulated in Art. 95.1. Untilcompliance with Art. 95.1 is restored, such a brokerage house shall only act underbrokerage services agreements which are then in force, but shall not conclude newagreements.

59

Art. 96.

1. The Commission shall grant a brokerage licence to a company or partnershipwhich:

1) is a subsidiary of a foreign investment firm or a legal person conductingbrokerage activities in the territory of an OECD state or WTO member state, ora subsidiary of a foreign bank, or

2) is a subsidiary of the parent entity with respect to a foreign investment firm ora legal person conducting brokerage activities in the territory of an OECD stateor WTO member state, or with respect to a foreign bank, or

3) is under a significant influence of the same natural or legal persons which exertsignificant influence on a foreign investment firm or a legal person conductingbrokerage activities in the territory of an OECD state or WTO member state, oron a foreign bank

– upon obtaining a written opinion from the competent authority of anotherMember State, an OECD state or WTO member state which has granted theauthorisation to conduct activities in that state; the opinion shall concern themanner of conducting such activities, including in particular their compliance withlegal regulations applicable in such state.

2. The Commission shall grant a brokerage licence to a company or partnershipwhich:

1) is a subsidiary of a credit institution, within the meaning of Art. 4.1.17 of theBanking Law of August 29th 1997, or of a foreign insurance undertakingauthorised to conduct its activities by the competent authority of anotherMember State,

2) is a subsidiary of a parent entity with respect to a credit institution, within themeaning of Art. 4.1.17 of the Banking Law of August 29th 1997, or withrespect to a foreign insurance undertaking authorised to conduct its activitiesby the competent authority of another Member State,

3) is under a significant influence of the same natural or legal persons who/whichexert significant influence on a credit institution, within the meaning ofArt. 4.1.17 of the Banking Law of August 29th1997, or on a foreign insuranceundertaking authorised to conduct its activities by the competent authority ofanother Member State

– only upon the receipt of a written opinion to be issued by the competent authorityof another Member State which granted the company or partnership referred to inArt. 96.2.1-3 an authorisation to conduct activities in that state; such an opinionshall serve to assess the shareholders of the company or partnership belonging tothe same group as the applicant, as well as to assess the reliability and experienceof members of the management board of the company or partnership belonging tothe same group as the applicant, or other persons which may exert influence on themanagement of such a company or partnership.

3. Exerting significant influence shall mean the holding of no less than 20% and nomore than 50% of total vote at the general shareholders meeting (in the case ofa joint-stock company, limited joint-stock partnership or limited-liability company)

60

or a power to adopt decisions concerning the financial policy or day-to-dayoperations of such a legal person.

Art. 97.

1. With respect to a brokerage house, the initial capital shall be the aggregate of: theshare capital (to the extent it has been paid up), reserve funds, retained profitbrought forward, current-profit net profit (net of any dividend which is beingsubject to approval and only if such profit has been audited by persons responsiblefor auditing financial statements), and capital reserves other than the revaluationcapital reserve, less accumulated loss brought forward.

2. With respect to a general, limited-liability or limited partnership, the share capitalshall mean the aggregate of the contributions made by all partners.

Art. 98.

1. The initial capital of a brokerage house to finance the business activities specifiedin Art. 69.2 and 69.3 shall, subject to Art. 98.2-9, amount to at least PLN 625,000but no less than the equivalent of EUR 125,000.

2. If a brokerage house conducts solely the business activities specified in Art. 69.2.1or 69.3.2, the initial capital shall amount to at least PLN 250,000 but no less thanthe equivalent of EUR 50,000.

3. If a brokerage house conducts solely the business activities specified in Art. 69.2.4,the initial capital shall amount to at least PLN 500,000 but no less than theequivalent of EUR 100,000.

4. If a brokerage house conducts solely the business activities specified in Art. 69.2.4and 69.3.2, the initial capital shall amount to at least PLN 500,000 but no less thanthe equivalent of EUR 100,000.

5. If a brokerage house conducts the business activity specified in Art. 69.2.3 or69.2.6, the initial capital shall, subject to Art. 98.8, amount to at leastPLN 4,000,000 but no less than the equivalent of EUR 800,000.

6. If the brokerage house conducts activities referred to in Art. 69.2.4 or 69.3.2, andactivities referred to in Art. 69.4.1, 69.4.2 or 69.4.3, the initial capital shall amountto at least PLN 625,000 but no less than the equivalent of EUR 125,000.

7. If the brokerage house conducts activities referred to in Art. 69.3.3, the initialcapital shall amount to at least PLN 4,000,000 but not less than the equivalent ofEUR 800,000.

8. The initial capital in the amount specified in Art. 98.5 shall not be required if theactivities referred to in Art. 69.2.3 conducted by a brokerage house compriseexclusively long-term transactions which meet the criteria stipulated in theregulations issued under Art. 98.11.

9. The initial capital shall not be required if the brokerage house conducts solely theactivities referred to in Art. 69.2.1 or 69.3.2 and has concluded with an insuranceundertaking a civil liability insurance agreement for any damage caused in thecourse of brokerage activities and providing for the minimum sum insured in theamount of the złoty equivalent of EUR 1,000,000 per occurrence and the złoty

61

equivalent of EUR 1,500,000 for all occurrences of events covered by the insuranceagreement. The minimum sum insured shall be calculated at the relevant midexchange rate first quoted by the National Bank of Poland in the year during whichsuch an insurance agreement has been concluded.

10. The equivalents of the euro amounts specified in Art. 98.1-7 shall be calculated atthe mid exchange rate quoted by the National Bank of Poland in effect on the dayimmediately preceding the date of the application for a brokerage licence.

11. The minister competent for financial institutions shall, by way of a regulation,define the criteria to be met by long-term transactions which the brokerage housemay execute without holding the initial capital in the amount specified in Art. 98.5,taking into account the need to guarantee that its brokerage activities are conductedin a secure manner.

Art. 99.

1. In the event that the own funds held by a brokerage house, referred to in theregulations issued under Art. 94.1.2, hereinafter referred to as “own funds”, fallbelow the required level, the Commission shall order the brokerage house to takeappropriate measures to rectify the situation and shall set a deadline by which theown funds must be restored to the level required by the law.

2. If the deadline referred to in Art. 99.1 lapses and the situation is not rectified, theCommission may impose one of the sanctions referred to in Art. 167.1. Theprovisions of Art. 167.4-5 and 167.7-8 shall apply accordingly.

Art. 100.

1. If there are any doubts as to the accuracy or reliability of the financial statements orother financial information which are required to be prepared by a brokerage houseunder other regulations or as to the proper maintenance of accounting books, theCommission may order an audit of such statements, information or accountingbooks to be performed by a qualified auditor of financial statements. If any materialirregularities are found during the audit, the brokerage house shall reimburse thecosts of the audit to the Commission.

2. With respect to a brokerage house’s branch situated in another Member State theCommission shall have the powers specified in Art. 100.1 and Art. 88. TheCommission may exercise its powers subject to a prior written notification to thecompetent authority in the state in which the brokerage house’s branch is situated.

3. The qualified auditors of financial statements who audit financial statements ofa brokerage house, the parent entity of a brokerage house or the entity exertingsignificant influence on a brokerage house, within the meaning of Art. 96.3, shallpromptly report to the Commission any information they become aware of inconnection with their activities which relates to any circumstances resulting in:

1) reasonable suspicion of any breach of the law or principles of fair trading, orany compromise of customers’ interests by the brokerage house, members ofits management board or its employees,

2) any threat to the continued operation of the brokerage house, or,

62

3) refusal to issue an opinion on the financial statements of the brokerage house,or issuance of a negative or a qualified opinion on the financial statements ofthe brokerage house.

4. Fulfilment of the obligation referred to in Art. 100.3 shall not be deemed a breachof the secrecy obligation referred to in Art. 4a of the Act on Qualified Auditors andtheir Self-Government of October 13th 1994.

Art. 101.

1. If a brokerage house which is a limited joint-stock partnership intends to expand itsexisting activities to include activities other than those specified in Art. 69.2.1,69.2.4, 69.3.2 and 69.4.5-7, the notification referred to in Art. 87.1 shall besubmitted upon the transformation of such partnership into a joint-stock companyor a limited-liability company. The notification shall be accompanied by documentscertifying the completion of such transformation.

2. If a brokerage house which is a general, limited-liability or limited partnershipintends to expand its existing activities to include activities other than thosespecified in Art. 69.2.1, 69.3.2 and 69.4.5-7, the notification referred to in Art. 87.1shall be submitted upon the transformation of such partnership into a joint-stockcompany or a limited-liability company. The notification shall be accompanied bydocuments certifying the completion of such transformation.

Art. 102.

1. A brokerage must have a head office in the territory of the Republic of Poland.

2. The head office of a brokerage house shall be the organisational unit of thebrokerage house at which members of the management board of the brokeragehouse, general partners (where the brokerage house is a limited joint-stockpartnership or limited partnership) or partners (where the brokerage house isa general or limited-liability partnership) perform their duties on a regular basis.

Art. 103.

1. The management board of a brokerage house shall include at least two personsholding a university degree, having at least three-year experience of work forfinancial market institutions, and enjoying a good opinion with respect to thepositions they have held.

2. Where a brokerage house operates in the legal form of a partnership, therequirements specified in Art. 103.1 shall apply to general partners or partners (asthe case may be) authorised to manage the affairs of the partnership, pursuant to theprovisions of the Commercial Companies Code of September 15th 2000.

Art. 104.

1. Subject to Art. 104.2-10, the brokerage licence shall authorise a brokerage house toconduct brokerage activities through a branch or without establishing a branch inthe territory of all other Member States as regards such activities as are conductedunder the licence in the territory of the Republic of Poland.

63

2. A brokerage house shall be obliged to notify the Commission of its intention toopen a branch or conduct brokerage activities without establishing a branch in theterritory of another Member State.

3. The notification referred to in Art. 104.2 shall include:

1) name of the Member State where a branch is planned to be opened or activitiesare to be conducted without establishing a branch,

2) anticipated scope of operations and organisational structure,

3) address where the documents relating to the conducted operations will beavailable,

4) personal details of persons managing the operations.

4. The provisions of Art. 104.3.3-4 shall not apply if the brokerage activities areconducted without establishing a branch.

5. The Commission shall forward the information referred to in Art. 104.3, withinthree months – if the activities are to be conducted through a branch, or within onemonth – if the activities are to be conducted without establishing a branch – of itsreceipt, to the competent authority of the Member State in which the branch is tooperate or in which activities are to be conducted. If the activities are to beconducted through a branch, then, along with the information referred to inArt. 104.3, the Commission shall provide the information on the general rules ofthe compensation scheme effective in Poland.

6. The Commission shall inform the brokerage house concerned about providing theinformation referred to in Art. 104.3 to the competent authority of the MemberState.

7. In the event of a change in the rules of the compensation scheme, the Commissionshall inform the competent authority of the Member State where the brokeragehouse operates of such changes.

8. The brokerage house shall provide the information on any changes in the datacontained in the notification to the Commission and the competent authority of theMember State in which a branch operates or in which activities are conductedwithout opening a branch, not later than one month prior to the effective date ofsuch changes.

9. The Commission may, within three months – if the activities are to be conductedthrough a branch, or within one month – if the activities are to be conductedwithout establishing a branch – of the notification, raise an objection to theintention to establish a branch or commence activities without establishing a branchoutside of the Republic of Poland, if such actions could pose a threat to theoperation of a given brokerage house in the territory of the Republic of Poland.

10. Brokerage activities in the territory of another Member State may be commencedupon receipt of information specifying the terms and conditions for conductingsuch activities from the competent authority of the state, or, following the lapse oftwo months from the day of receipt by the competent authority in the state in whichthe activities are to be conducted of the notification referred to in Art. 104.2. Theactivities which are to be conducted without establishing a branch may becommenced upon receipt by the brokerage house of the information referred to inArt. 104.6.

64

11. The Commission shall promptly inform the competent authority of another MemberState where the brokerage house operates of any revocation or expiry of thebrokerage licence which serves as a basis for conducting business in a given state.

12. The Commission shall inform the European Commission of the number of cases inwhich objections referred to in Art. 104.9 have been raised.

13. The provisions of Art. 104.1-12 shall not apply to a brokerage house conductingbrokerage activities exclusively in the scope defined in Art. 69.3 or 69.4.

14. A brokerage house may apply for an authorisation to open a branch or conductbrokerage activities in another form in a state which is not a Member State,provided that the Commission has concluded the agreement referred to in Art. 20.2of the Act on Capital Market Supervision with the competent authority in the statein which such activities are to be conducted. The provisions of Art. 104.2-4 and104.9 shall apply accordingly.

Art. 105.

1. The following shall require a Commission’s authorisation, to be granted uponapplication of a brokerage house:

1) early repayment (repayment before the agreed repayment date) by thebrokerage house of liabilities:

a) under securities or other financial instruments of unspecified maturity,

b) under a loan which gave rise to subordinated liabilities;

2) inclusion of liabilities under securities and other financial instruments ofunspecified maturity in the brokerage house’s capital;

3) using by a brokerage house of a model other than that prescribed on theregulated market to calculate the ratio of a change in an option’s value toa change in the value of the underlying instrument;

4) calculation of capital requirements to cover particular risks on the basis ofinternal risk management models used by the brokerage house.

2. The minister competent for financial institutions shall define, by way of aregulation, the requirements to be met by the applications referred to in Art. 105.1,taking into account the fact that such applications are to serve as a basis for theevaluation of possible effects of the activities covered by the applications on thefinancial standing of the brokerage house.

Art. 106.

1. The Commission shall be notified of any intended direct or indirect acquisition orsubscription for any number of shares in a brokerage house which:

1) represents 10% or more of the total vote or the share capital; or

2) would result in reaching or exceeding 10%, 20%, 33% or 50% of the totalvote or the share capital

– with the proviso that the holding of shares in the brokerage house by entitiesbelonging to the same group shall be deemed the holding of such shares by a singleentity.

65

2. Indirect acquisition of shares in a brokerage house shall be the acquisition orsubscription for shares in an entity which holds, whether directly or indirectly,shares in such brokerage house, if the acquisition or subscription results in reachingor exceeding 50% of the total vote or 50% of the share capital of such entity.

3. The Commission shall have the right to raise objections to any intended direct orindirect acquisition of or subscription for a specified number of shares in abrokerage house, within three months from the notification referred to in Art.106.1, if there is a reasonable suspicion that the entity proposing to acquire sharesin such brokerage house could exert detrimental influence on its management. If noobjection is raised, the Commission may set a final date by which the shares ina brokerage house may be acquired.

4. Any exercise of the voting rights attached to shares in a brokerage house acquireddespite the objection referred to in Art. 106.3 shall be deemed null and void.

5. If shares in a brokerage house are to be acquired by a foreign investment firm,foreign bank or foreign insurance undertaking authorised to conduct its operationsby the competent authority of another Member State, the Commission shall seek anopinion on such entity from the competent authority that had granted theauthorisation. The opinion shall concern the manner of conducting activities by theentity proposing to acquire shares in a brokerage house, including in particular itscompliance with legal regulations.

6. The provisions of Art. 106.5 shall apply accordingly in cases where the entityacquiring shares in a brokerage house is the parent entity of the entity referred to inArt. 106.5 or an entity exerting significant influence within the meaning ofArt. 98.3 on the entity referred to in Art. 106.5, or where as a result of an indirectacquisition the target entity would become a subsidiary of the acquirer or an entityover which the acquirer would gain significant influence within the meaning of Art.96.3.

7. The notification referred to in Art. 106.1 shall specify the number of shares to beacquired, their share in the share capital and the number of votes which the acquirerwill obtain at the general shareholders meeting, and shall include a statement,subject to criminal liability, on the source of funds to be used to pay for the shares.

8. If the Commission has not raised an objection within the timeframe referred to inArt. 106.3, the same shall be deemed an approval of the acquisition of shares in thebrokerage house on the terms and conditions set forth in the notification.

9. The provisions of Art. 106.1-8 referring to shares in a brokerage house operating inthe legal form of a joint-stock company shall apply accordingly to shares in abrokerage house operating in the legal form of a limited-liability company.

Art. 107.

1. The Commission shall be notified of any intended disposal of shares in a brokeragehouse:

1) if the number of shares to be disposed of represents 10% or more of the totalvote or the share capital; or

2) by an entity holding such a number of shares in the brokerage house whichconfers the right to exercise at least 10%, 20%, 33% or 50% of the total vote orrepresents at least 10%, 20%, 33% or 50% of the share capital, if as a result of

66

the disposal the disposing entity shall hold shares conferring the right to lessthan 10%, 20%, 33% or 50%, respectively, of the total vote, or representingless than 10%, 20%, 33% or 50%, respectively, of the share capital

– with the proviso that the holding of shares in the brokerage house by entitiesbelonging to the same group shall be deemed the holding of such shares by a singleentity. The disposing entity shall submit the notification no later than two weeksprior to the intended disposal of shares.

2. The notification referred to in Art. 107.1 shall specify the number of shares to bedisposed of, their share in the total vote and the share capital, and the number ofvotes which the disposing entity will obtain at the general shareholders meeting.

3. The notification to the Commission of the intended disposal of shares ina brokerage house shall not prejudice the obligation to make the notificationreferred to in Art. 106.1.

4. The provisions of Art. 106.1 shall not apply to shares in a brokerage house whichhave been admitted to trading on a regulated market.

5. The provisions of Art. 106.1-3 concerning shares in a brokerage house operating inthe legal form of a joint-stock company shall apply accordingly to shares in abrokerage house operating in the legal form of a limited-liability company.

Art. 108.

1. If a shareholder or shareholders of a brokerage house who hold shares whichrepresent 10% or more of the total vote or 10% or more of the share capital exertdetrimental influence on the management of such brokerage house, the Commissionmay order that such detrimental influence be discontinued, specifying the finaldate, the conditions for and the scope of appropriate measures to be taken, and inthe event of non-compliance with such an order it may prohibit, for a period of upto two years, the exercise of voting rights attached to the shares.

2. If following the lapse of the period of prohibition referred to in Art. 108.1 thegrounds for the prohibition of the exercise of voting rights do not cease to exist, theCommission may order the shareholder or shareholders to whom the prohibitionapplies to dispose of all or some of the shares they hold by a final date set in thedecision.

3. If persons who indirectly acquired shares in a brokerage house exercise detrimentalinfluence on the management of such brokerage house, the Commission may orderthat the exercise of such detrimental influence be discontinued, specifying the finaldate, the conditions for and the scope of appropriate measures to be taken.

4. The provisions of Art. 108.1-3 concerning shareholders of or shares in a brokeragehouse operating in the legal form of a joint-stock company shall apply accordinglyto shareholders of or shares in a brokerage house operating in the legal form of alimited-liability company.

Art. 109.

1. A brokerage house shall not acquire in its own name shares issued by entities withrespect to which such brokerage house is a subsidiary.

67

2. The provisions of Art. 109.1 shall not apply to any acquisition of shares inorganised trading for the purpose:

1) specified in Art. 39.3.3, or

2) of reselling a number of such shares representing in aggregate up to 5% of theshare capital.

Art. 110.

1. The Commission shall notify the European Commission of:

1) any brokerage licence granted to a legal person which is a direct or indirectsubsidiary of an entity that is subject to the laws of a non-Member State –within one month from the grant of such licence,

2) any acquisition of a block of shares in an entity conducting brokerageactivities, where the buyer is subject to the laws of a non-Member State andwhere as a result of the transaction the buyer becomes the parent entity of theentity whose shares it has acquired.

2. The Commission shall enclose with the notifications referred to in Art. 110.1,a description of the structure of the group, with the proviso that in the case of thenotification referred to in Art. 110.1.2, the description shall present the structureafter the acquisition of the shares in the entity conducting brokerage activities.

3. The Commission shall notify the European Commission of any legal, regulatory, ororganisational obstacles encountered by brokerage houses or banks conductingbrokerage activities in connection with such activities conducted in the territory ofnon-Member States.

Section 3

Banks Conducting Brokerage Activities

Art. 111.

1. A bank with a registered office in the territory of the Republic of Poland mayconduct brokerage activities upon obtaining the Commission’s licence.

2. A bank’s application for a brokerage licence shall also include:

1) name of the bank’s organisational unit which is to conduct brokerageactivities;

2) in the case of a bank which is a joint-stock company – list of the shareholdersholding 10% or more of the total vote or 10% or more of the share capital;

3) information on parent entities of the applicant;

4) information on the amount of own funds;

5) information of the amount of the initial capital referred to in Art. 112.1;

6) information specified in Art. 82.1.1, 82.1.7 and 82.1.9-11.

68

3. In the case of a bank’s application for a brokerage licence, the rules referred to inArt. 82.2.5 shall mean the rules of investing in broker-traded financial instrumentsby employees of the bank’s organisational unit conducting brokerage activities andby the management and supervisory staff of this such for their own account.

4. The application referred to in Art. 111.1 shall be also accompanied by informationon the procedures for monitoring and control of interest-rate risk related to theentire business of the applicant.

5. A pre-requisite for obtaining the licence shall be separation of brokerage activitieswithin the bank’s structures, which shall consist in:

1) conducting brokerage activities in a manner which makes it possible to keepthem organisationally separate from the bank’s other operations, subject toArt. 113 (organisational separation);

2) maintaining separate accounting books and preparing separate financialstatements in accordance with the rules provided for in other regulations(financial separation).

6. The composition of the governing bodies of the organisational unit referred to inArt. 2.1 shall include at least two persons holding a university degree, having atleast three-year experience of work for financial market institutions, and enjoyinga good opinion with respect to the positions they have held.

7. The regulations on financial separation of brokerage activities within the structureof a bank shall not apply to a bank whose brokerage activities compriseexclusively accepting and transferring orders for acquisition or disposal of broker-traded financial instruments.

8. A bank conducting brokerage activities shall have its head office in the territory ofthe Republic of Poland.

9. The head office referred to in Art. 111.8 shall be the organisational unit of a bankwhich conducts the brokerage activities and at which the persons managing thebrokerage activities perform their duties on a regular basis.

10. The minister competent for financial institutions shall define, by way of aregulation, detailed rules governing organisational separation of banks’ brokerageactivities, taking into account the need to ensure confidentiality of information atthe separated organisational unit of a bank, while ensuring security and efficiencyof brokerage activities.

Art. 112.

1. The initial capital of a bank conducting brokerage activities shall be the fundsappropriated for the financing of brokerage activities from the own funds, asdefined in the Banking Law of August 29th 1997, of such bank, increased by thecapital reserves created by the bank conducting brokerage activities other than therevaluation capital reserve.

2. The following shall require a Commission’s authorisation, to be granted uponapplication of a bank conducting brokerage activities:

1) repayment by the bank of liabilities under securities and other financialinstruments of unspecified maturity;

69

2) inclusion of liabilities under securities and other financial instruments ofunspecified maturity in the brokerage house’s capital;

3) using by a bank of a model other than that prescribed on the regulated marketto calculate the ratio of a change in an option’s value to a change in the valueof the underlying instrument;

4) calculation of capital requirements to cover particular risks on the basis ofinternal risk management models used by the bank.

3. The minister competent for financial institutions shall define, by way of aregulation the requirements to be met by the applications referred to in Art. 112.2,taking into account the fact that such applications are to serve as a basis for theevaluation of possible effects of the activities covered by the applications on thefinancial standing of the bank.

Art. 113.

1. Activities which are related to the execution of agreements for provision ofservices by the bank as part of its brokerage activities, or which facilitateperformance of such agreements, in particular activities involving advising acustomer or a potential customer on the brokerage activities conducted by thebank, accepting and transferring the orders referred to in Art. 69.2.1, and collectingother declarations of will for the bank as part of brokerage activities, may beperformed outside the bank’s separated unit which conducts brokerage activities.

2. The basis for performing the activities referred to in Art. 113.1 outside the bank’sunit conducting brokerage activities shall be the bank’s internal regulations,specifying in particular the detailed scope of such activities and the manner of theirperformance. No later than within one month before the commencement of theactivities referred to in Art. 113.1 outside the organisational unit conductingbrokerage activities, the bank shall deliver to the Commission the internalregulations which describe the adopted procedures.

3. In the event that the procedures adopted by the bank might threaten the security oftrading or compromise interests of the bank’s customers, the Commission may raiseobjections to their implementation within one month from the date of notification.

4. With respect to the bank’s units performing activities referred to in Art. 113.1, theCommission shall have supervision powers provided for in the Act on CapitalMarket Supervision as regards such activities and documents prepared inconnection with such activities.

Art. 114.

1. In all matters not provided for in this Section, the provisions of Section 2, exceptArt. 95, Art. 96, and Arts 106-109, shall apply accordingly to a bank conductingbrokerage activities and the exercise of supervision over such bank.

2. The provisions of Art. 100.1 shall apply exclusively to the financial statements ofthe bank’s organisational unit which conducts brokerage activities. The provisionsof Art. 100.3 shall apply to the financial statements of the bank to the extent suchfinancial statements concern only brokerage activities.

70

3. The notification referred to in Art. 104.2 prepared by a bank conducting brokerageactivities shall be transferred by the Commission, through the intermediation ofthe Banking Supervision Commission, to the competent authority in anotherMember State in the territory of which the bank intends to establish a branch orconduct brokerage activities without establishing a branch.

Section 4

Foreign Entities Conducting Brokerage Activitiesin the Territory of the Republic of Poland

Art. 115.

1. A foreign legal person conducting brokerage activities and having its registeredoffice in the territory of an OECD state or a WTO member state may conductbrokerage activities in the territory of the Republic of Poland through a branch.

2. A branch of a foreign legal person referred to in Art. 115.1 shall be anorganisational unit without legal personality separated within the organisationalstructure of such legal person, which conducts brokerage activities in the territoryof the Republic of Poland. All organisational units of a legal person referred to inArt. 115.1, which are situated in the territory of the Republic of Poland and whichconduct brokerage activities, shall be regarded as a single branch.

3. The Commission shall grant a brokerage licence to a foreign legal person referredto Art. 115.1 upon obtaining a written opinion from the competent authority whichhas granted the authorisation to conduct activities in the state where such legalperson has its registered office. The opinion shall concern the manner ofconducting such activities, including in particular their compliance with legalregulations applicable in such state.

4. The Commission shall grant a brokerage licence to a foreign entity referred to inArt. 115.1 on the following conditions:

1) there are solutions in place which enable the Commission to obtain informationnecessary in the context of the Commission’s supervision over brokerageactivities conducted in the territory of the Republic of Poland, including inparticular an agreement referred to in Art. 20.2 of the Act on Capital MarketSupervision, concluded with the competent authority which has granted suchlegal person a brokerage licence in the state where it has its registered office;

2) in the state where the legal person has its registered office such legal person issubject to capital requirements equivalent to the requirements specified in theregulations issued under Art. 94.1.2; and

3) where the business is to be conducted through a branch – the legal person hasseparated funds for conducting brokerage activities in the territory of theRepublic of Poland, whose amount is not lower than the amount specified inthe regulations governing the initial capital of a brokerage house.

5. The composition of the governing bodies of a branch shall include at least twopersons holding a university degree, having at least three-year experience of workfor financial market institutions, and enjoying a good opinion with respect to thepositions they have held.

71

6. The provisions of Art. 100.1 and 100.3 shall apply accordingly to the supervisionover a foreign legal person referred to in Art. 115.1 which conducts brokerageactivities in the territory of the Republic of Poland through a branch if branches ofsuch legal person are required under other regulations to prepare financialstatements.

Art. 116.

1. A foreign investment firm or a foreign legal person referred to in Art. 115.1 mayopen a representative office in the territory of the Republic of Poland.

2. A representative office shall be an organisational unit without legal personalityseparated within the organisational structure of an investment firm or legal person,whose activities comprise exclusively advertising and promoting such foreigninvestment firm or foreign legal person referred to in Art. 115.1 in the territory ofthe Republic of Poland.

3. A foreign investment firm or a foreign legal person referred to in Art. 115.1 shallpromptly notify the Commission of the opening of a representative office in theterritory of the Republic of Poland.

Art. 117.

1. Without the licence referred to in Art. 69.1, a foreign investment firm may performin the territory of the Republic of Poland any brokerage activities within themeaning of Art. 69.2-4, provided that such investment firm has been authorised toconduct such activities by the competent authority of the state where it has itsregistered office. Brokerage activities may be conducted in the territory of theRepublic of Poland through a branch, as defined in Art. 115.2, or withoutestablishing a branch.

2. The provisions of Art. 117.1 shall not apply to activities performed under anagreement with the National Bank of Poland, the State Treasury or a governmentalauthority performing activities concerning the monetary, exchange-rate or publicdebt-management policies or a policy of managing State Treasury’s free cash.

3. A condition for commencing brokerage activities in the territory of the Republic ofPoland by a foreign investment firm within the scope defined in Art. 117.1 shall bethe receipt by the Commission of a notification of the intended commencement ofactivities from the competent authority which has granted such investment firm abrokerage licence. A foreign legal person may commence brokerage activitieswithout establishing a branch upon the Commission’s receipt of the relevantinformation from the foreign competent authority, and if such activities are to beconducted through a branch – upon the Commission’s specifying the conditions forthe conduct of such brokerage activities or upon the lapse of two months from thedate of the Commission’s receipt of the relevant information from the foreigncompetent authority.

4. Within two months from receiving the notification referred to in Art. 117.3, theCommission shall prepare for supervision of the activities of the investment firmand shall advise it of the conditions for the conduct of such activities in the territoryof the Republic of Poland.

72

5. The conditions for the conduct of brokerage activities referred to in Art. 117.4 shallinclude in particular:

1) if such activities are to be conducted through a branch – the rules specified inArt. 83 and in the regulations issued under Art. 94.1.1,

2) if such activities are to be conducted without establishing a branch – the rulesspecified in the regulations issued under Art. 94.1.1.

6. The provisions of the Act on Freedom of Business of July 2nd 2004, except Art. 14,shall not apply to the establishment and the activities of branches of foreigninvestment firms.

Art. 118.

A foreign investment firm which conducts brokerage activities in the territory of theRepublic of Poland shall be subject to supervision in another Member State bya competent authority which has granted it a brokerage licence, with the proviso that theCommission shall supervise compliance with the rules for brokerage activities providedfor in Polish law.

Chapter 2

Special Forms of Participation in Financial Instruments Trading

Section 1

Custodian Banks

Art. 119.

1. Subject to obtaining a Commission’s authorisation, a bank with the registeredoffice in the territory of the Republic of Poland may keep securities accounts(custodial activities).

2. Keeping securities accounts by a bank in the territory of another Member Stateshall require an authorisation referred to in Art. 119.1.

3. The authorisation referred to in Art. 119.1 may be granted even if the bank hasalready obtained a brokerage licence, in which case the securities accounts shall bekept outside the bank’s organisational unit which conducts brokerage activities.

4. The application for the authorisation referred to in Art. 119.1 shall contain:

1) personal details of the members of the management board and thesupervisory board of the bank, and of other persons who are responsible forthe launch of activities covered by the application or who will manage suchactivities, as well as information on their professional qualifications andcareers;

2) in the case of a bank which is a joint stock company – list of theshareholders holding 10% or more of the total vote or 10% or more of theshare capital;

3) information on the parent entities and subsidiaries of the applicant;

73

4) information on the amount of own funds;

5) information on telecommunications equipment and offices which arenecessary for keeping securities accounts, owned and occupied by theapplicant;

6) information on the proposed organisational framework for keepingsecurities accounts;

7) representations by the persons who will manage the activities covered bythe application to the effect that they have not been found by a final courtjudgment guilty of a tax offence, an offence against reliability ofdocuments, property, business transactions and cash and securitiestransactions, offences specified in Art. 305, Art. 307 or Art. 308 of theIndustrial Property Law of June 30th 2000, offences specified in theCommodity Exchange Act or offences specified herein.

5. The following shall be attached to the application:

1. the bank’s articles of association and an excerpt from the relevant register;

2. rules for the keeping of securities accounts;

3. rules for the protection of the flow of inside information;

4. the most recent annual financial statements together with an auditor’sopinion and report, and

5. internal audit rules.

6. A bank’s activities related to the keeping of securities accounts should be managedby at least two persons holding a university-degree, having at least three-yearexperience of work for financial market institutions, and enjoying a good opinionwith respect to the positions they have held.

7. The initial capital of a custodian bank shall amount to or exceed the initial capitalas provided for in Art. 32.1 of the Act on Banking Law of August 29th 1997.

8. Custodian banks must have their head offices in the territory of the Republic ofPoland.

9. The head office of a custodian bank shall be the organisational unit of the bank atwhich persons managing the bank’s activities related to the keeping of securitiesaccounts perform their duties on a regular basis.

10. A custodian bank shall employ at least one securities broker to conduct activitiesconsisting in keeping securities accounts.

Art. 120.

The authorisation referred to in Art. 119.1 shall specify the bank’s name, the address ofits registered office and the date of commencing the activities covered by theauthorisation, which shall fall within 12 months from the date on which the decisiongranting the authorisation becomes final.

74

Art. 121.

1. In an agreement on keeping a securities account, a customer of the custodian bankmay reserve that a transaction which has been executed at the customer’s order canbe settled in the customer’s account only upon the bank’s receiving from thecustomer a document confirming the execution of the said transaction.

2. The securities acquired in the transaction referred to in Art. 121.1 shall beregistered in a securities account:

1) of an investment firm – if the order referred to in Art. 121.1 has beenplaced directly with such investment firm; or

2) of a foreign investment firm or a foreign legal person referred to inArt. 115.1 which does not conduct brokerage activities in the territory ofthe Republic of Poland – if such firm or person serves as an intermediary intransferring orders placed by customers to the entities specified in Art.121.2.1

– maintained for the purpose of keeping a record of securities acquired anddisposed of on behalf of customers specified in Art. 121.1.

3. Transfer of securities in connection with the transaction referred to in Art. 121.1from the account of the entity referred to in Art. 121.2 to the customer’s securitiesaccount shall be made at the time specified in the confirmation submitted by thecustomer, after the customer and the abovementioned entity deliver to the bankdocuments which are consistent and which confirm the execution of suchtransaction.

4. Securities disposed of in the transaction referred to in Art. 121.1 shall continue tobe registered in the customer’s securities account until the time specified in theconfirmation submitted by the customer.

5. In the event of failure to submit documents which are consistent and whichconfirm the execution of the transaction referred to in Art. 121.1 by the date onwhich the transaction should be cleared in the depository for securities, the entitymentioned in Art. 121.2.2 shall be responsible to the entity which executed thetransaction for the customer’s account on a regulated market for paying the priceand delivering the securities for settlement. In the event that the customer placesan order directly with the entity referred to in Art. 121.2.1, such entity shall beresponsible for settling the executed transaction.

6. The provisions of Art. 121.1-5 shall not apply to cases when prior to the clearingof the transaction referred to in Art. 121.1 in the depository for securities the legalrelation between the entity referred to in Art. 121.2 and the customer whereby suchentity provided its services has expired or ceased to exist, or to cases when suchentity no longer holds a brokerage licence.

7. Transfer of securities in connection with the transaction referred to in Art. 121.1,and transfer of benefits from such securities, between the securities accounts ofa custodian bank’s customer and of the entity referred to in Art. 121.2, andbetween the accounts of entities referred to in Art. 121.2, shall be deemed to beeffected on a regulated market.

7. Acquisition of securities in the transaction referred to in Art. 121.1 by the entityreferred to in Art. 121.2 shall place such entity under the obligations stipulated inChapter 4 of the Public Offering Act only if the securities continue to be registered

75

in such entity’s securities account referred to in Art. 121.2 on the day followingthe clearing of such transaction in the depository for securities.

8. Provisions of Art. 121 2-8 shall apply accordingly to broker-traded financialinstruments other than securities admitted to trading on a regulated market.

Art. 122.

1. At the demand by the Commission or its authorised representative, authorisedrepresentatives of a custodian bank, persons who are members of its governingbodies or persons employed with such custodian bank, shall be required toimmediately prepare and deliver, at the custodian bank’s cost, copies of documentsand other information carriers and to provide written or oral explanations inconnection with the custodial activities conducted by such bank, as regards theCommission’s supervision over compliance of such custodial activities with therules for keeping securities accounts.

2. At the demand of the Commission or its authorised representative a custodian bankshall be also required to promptly deliver information concerning the crediting tothe accounts kept by such bank of cash serving as collateral, as defined in theregulations issued under Art. 94.1.3, and of cash provided as margin with respectto transactions in broker-traded financial instruments if the structure suchinstruments requires provision of a margin.

3. With respect to a branch of a custodian bank situated in the territory of anotherMember State, the Commission within the scope of its supervision over custodialactivities shall have the powers specified in Art. 122.1. Such powers shall beexercised subject to a prior written notification to the competent authority of thestate in whose territory the custodian bank’s branch is situated.

Art. 123.

1. The provisions of Art. 85, Art. 86, Art. 89, Art. 90, Art. 92 and Art. 99 shall applyaccordingly to any matters which are not provided for in this Section and whichrelate to a custodian bank and the exercise of supervision over such bank.

2. The notification referred to in Art. 99.2 submitted by a custodian bank shall bedelivered by the Commission through the intermediation of Banking SupervisionCommission to the competent authority of another Member State in whoseterritory the bank intends to keep securities accounts.

Section 2

Investor Clubs

Art. 124.

1. Natural persons which have full capacity to enter into legal transactions may,based on an agreement to be concluded in writing under pain of nullity, associatein investor clubs. No fewer than three and no more than 20 persons may beassociated in one investor club.

2. In the agreement referred to in Art. 124.1, members of the investor club shallundertake to:

76

1) act together with a view to gaining knowledge on the rules of investing inorganised trading, in particular by jointly investing in dematerialised securitiesor other broker-traded financial instruments admitted to trading on theregulated market;

2) not participate in any other investor clubs;

3) not to contract in connection with the activities of the investor club anyliabilities whose total amount would exceed the value of the assets registered inthe securities accounts held for the investor club and credited to the cashaccounts auxiliary to such securities accounts.

3. Each member of the investor club shall have the right to credit to the cash accountsauxiliary to the securities accounts kept for the club funds totalling up to PLN20,000.

4. Neither the investor club nor its members shall be entrepreneurs within the meaningof the Act on Freedom of Business of July 2nd 2004.

5. To the extent not provided for in Art. 124.1-4, the agreement referred to inArt. 124.1. shall be governed by the provisions of Arts. 860-864, Art. 865.1 andArts. 866-875 of the Civil Code of April 13th 1964.

Chapter 3

Securities Brokers and Investment Advisers

Art. 125.

1. The practising of the profession of a securities broker (hereinafter referred to as the“broker”) or of an investment adviser (hereinafter referred to as the “adviser”) shallmean the holding of positions in the management or supervisory bodies of aninvestment firm, or the conduct or supervision of conduct of:

1) brokerage activities,

2) activities related to the financial market other than brokerage activities,

3) other activities connected with customer service or access to customers’accounts

– as part of a legal relation under an employment contract, a mandate contract or aspart of another legal relation of a similar nature between a given person and aninvestment firm.

2. The following situations shall also be understood as practising of the profession ofa broker or adviser:

1) the broker or the adviser is bound by a legal relation under an employmentcontract, a mandate contract or another legal relation of a similar nature withthe custodian bank regarding the conduct or supervision of conduct ofactivities related to maintenance of securities accounts;

2) the broker or the adviser is bond by a legal relation under an employmentcontract, a mandate contract or another legal relation of a similar nature withthe entity which is required on the basis of other laws to hire brokers or

77

advisers for the conduct or supervision of conduct of the activities specified insuch laws;

3) the broker or the adviser conducts the activities referred to in Art. 79.2;

4) the broker or the adviser conducts the activities referred to in Art. 71 as part ofsuch broker’s or adviser’s sole trader activities or under an employmentcontract, a mandate contract or any other legal relation of a similar nature withan entity which conducts such activities as part of its business.

Art. 126.

1. In practicing their profession, the broker and the adviser shall act in compliancewith the law and the principles of fair trading, and to take into account thelegitimate interests of their customers.

2. The professional titles of a „securities broker” and „an investment adviser” shall besubject to legal protection.

3. The persons authorised to practice the profession of a broker or an adviser shall bethe persons who are entered in the register of brokers or advisers, as the case maybe, unless such authorisation has been suspended as provided for in Art. 130.1.

Art. 127.

1. Any natural person may be entered in the register of brokers or advisers if suchperson:

1) has the full capacity to enter into legal transactions;

2) enjoys full civic rights;

3) has not been found by a final court judgment guilty of a tax offence, an offenceagainst reliability of documents, property, business transactions and cash andsecurities transactions, offences specified in Art. 305, Art. 307 or Art. 308 ofthe Industrial Property Law of June 30th 2000, offences specified in theCommodity Exchange Act of October 26th 2000, or offences specified herein;

4) subject to Art. 129.2-3, passed an examination before an examination boardqualifying brokers or advisers.

2. In the case of a person who is not a Polish citizen the fact of such person enjoyingfull civic rights shall be ascertained in the light of the law of the country of whichsuch person is a citizen.

Art. 128.

1. The examinations for brokers, advisers and investment firm agents shall check thecandidates’ theoretical knowledge in the following fields:

1) civil law;

2) commercial law;

3) tax and foreign exchange law;

78

4) law of securities, financial instruments and trading in financial instruments;

5) brokerage and custodial activities;

6) the deposit and clearing system for trading in financial instruments;

7) financial market;

8) creation and operation of investment funds;

9) commercialisation and privatisation of enterprises;

10) accounting standards;

11) commodities market;

12) financial mathematics;

13) financial analysis;

14) investment strategies;

15) professional ethics.

2. The examination for advisers shall additionally check the candidates’ theoreticalknowledge in the following fields: economics, statistics, public finance, corporatefinance and management of portfolios comprising one or more broker-tradedfinancial instruments.

3. The proficiency test referred to in Art. 129.3 shall check the candidates’ theoreticalknowledge in the following fields:

1) civil law;

2) commercial law;

3) tax and foreign exchange law;

4) law of securities, financial instruments and trading in financial instruments;

5) brokerage and custodial activities;

6) the deposit and clearing system for trading in financial instruments;

7) financial market;

8) creation and operation of investment funds;

9) commercialisation and privatisation of enterprises;

10) accounting standards;

11) commodities market;

12) professional ethics.

4. The thematic scope of the examination or of the proficiency test referred to inArt. 129.3, determined by the examination board, shall be published at least 90days prior to the planned examination/proficiency test date together with such datein the Official Journal of the Polish Securities and Exchange Commission and onthe Commission’s website.

5. The examination for brokers shall be held by the examination board qualifyingbrokers, the examination for advisers – by the examination board qualifyingadvisers, and the examination for investment firm agents – by the examination

79

board qualifying investment firm agents. The proficiency test referred to inArt. 129.3 shall be held by the examination board qualifying advisers.

6. An examination board shall be composed of six members, appointed and removedby the Chairman of the Commission. From among the members of the examinationboard the Chairman of the Commission shall appoint the chairman of theexamination board and – at the request of the chairman of the examination board –the deputy chairman of the examination board and the secretary of the examinationboard.

7. The administrative and office work for the examination boards shall be handled bythe office of the Commission.

8. The chairman of an examination board shall organise the board’s work anddetermine the dates of the examinations. The chairman of the examination boardqualifying advisers shall determine the dates of the proficiency tests referred to inArt. 129.3.

9. Members of an examination board shall be entitled to remuneration for their workon the examination board.

10. Fees shall be charged for the examinations and the proficiency test referred to inArt. 129.3; such fees shall constitute revenue of the state budget.

11. By way of a regulation, the minister competent for public finances shall define:

1) the level of the fees referred to in Art. 128.10, taking into account the costs ofholding the examination or the proficiency test referred to in Art. 129.3 and theexpenses related to the operation of examination boards;

2) the rules for the conduct of the examination for brokers, the examination foradvisers and the examination for investment firm agents as well as the rules forthe administration of the proficiency test referred to in Art. 129.3, taking intoaccount the need to ensure equal treatment of the persons taking theexamination or the proficiency test referred to in Art. 129.3, confidentiality ofthe examination or the proficiency test and their efficient organisation, and

3) the manner of determination and the level of the remuneration due to membersof the examination boards for the participation in the examination boardmeetings, administering the examinations or the proficiency test referred to inArt. 129.3 and the preparation of drafts of questions to be answered andproblems to be solved during the examinations or the proficiency test, takinginto account the scope of duties of each examination board member.

Art. 129.

1. Entries in the register of brokers or advisers shall be made by the Commissionfollowing application of the party concerned, to be filed within three months fromthe passing of the examination, the date of recognition by the Commission of thequalification to practice the profession or the date of passing the proficiency test.

2. Any person may be entered in the register of brokers or advisers without the need topass the examination if such person’s qualifications are ascertained according to theprinciples defined in the Act on the Principles of Recognition of Qualifications to

80

Perform Regulated Professions Acquired in Member States of April 26th 2001(Dz.U. No. 87, item 954, as amended8)).

3. Persons who do not have the qualifications referred to in Art. 129.2 but hold a titlespecified in the regulations issued under Art. 129.4, awarded by a foreigninstitution upon checking a given person’s knowledge within the scope similar tothe scope of the examination for advisers, may be entered in the register of adviserswith no need to take the examination, provided that their qualifications, asascertained in a proficiency test, guarantee that they will practise their profession inthe territory of the Republic of Poland in a due manner.

4. The minister competent for financial institutions shall define, by way of aregulation, a list of titles awarded by specified foreign institutions which authorisetheir holders to apply, pursuant to Art. 129.3, for the entry in the register ofadvisers with no need to take the examination; the minister shall take intoconsideration exclusively titles awarded by those foreign institutions which in theirown qualification procedures recognise the results of examinations held before theexamination board qualifying advisers.

5. A person entered in the register of brokers or in the register of advisers shall beobliged to promptly notify the Commission in writing:

1) when such person commences the practising of the profession, specifying thedate of such commencement, the basic scope of duties and the place where theprofession is practised;

2) whenever there is any change in the data covered by the application referred toin Art. 129.1 and the information referred to in Art. 129.5.1.

6. Registers of brokers and advisers, deletions from the registers and suspensions ofthe authorisation to practice the profession of a broker or adviser shall be subject topublication in the Official Journal of the Polish Securities and ExchangeCommission.

7. The minister competent for financial institutions shall define, by way ofa regulation, the form of the application referred to in Art. 129.1; the applicationshould contain a reference to the information referred to in Art. 127.1, and – withrespect to the information concerning the criminal record and the result of theexamination, the proficiency test or the ascertainment of the qualification topractice the profession – relevant documents or their copies should be attached. Theinformation required to be included in the application should enable theCommission to check whether the applicant meets the requirements specified inArt. 129.1.

Art. 130.

1. The Commission may delete a broker or an adviser from the register or suspend hisor her authorisation to practice the profession for a period from three months to twoyears, as a result of infringement by such broker or adviser in the performance oftheir professional duties of the law or rules and other internal regulations that suchbroker or adviser is obliged to comply with in practicing their profession.

8) Amendments to the Act were promulgated in Dz.U. of 2002, No. 71, item 655; Dz.U. of 2003, No. 190,

item 1864 and Dz.U. of 2004, No. 96, item 959.

81

2. The Commission shall issue a decision to delete a broker or an adviser from theregister or to suspend the authorisation to practice a profession after a relevantinvestigation is held.

3. In the case of a need to protect public interest the Commission may suspend thebroker’s or the adviser’s authorisation to practice the profession from the momentof commencement of the proceedings relating to the matters referred to in Art.130.1 until a decision is issued on such matters, but in any case for no longer thansix months. The provisions of Art. 130.2 shall not apply.

4. If a decision is issued to suspend a broker’s or an adviser’s authorisation to practicea profession, the suspension period referred to in Art. 130.3 shall be countedtowards the suspension period referred to in Art. 130.1.

5. Subject to Art. 130.6, a person deleted from the register of brokers or advisers forthe reasons referred to in Art. 130.1 or Art. 131.3, may not be re-entered in suchregister prior to the lapse of ten years from the date on which the decision on thedeletion was issued. If the deletion was a result of the circumstances referred to inArt. 131.3, the broker or adviser may not be re-entered in the register prior to thecancelling of an entry of sentence for the offence the commitment of which servedas the basis for the issuance of the decision on the deletion from the register.

6. In the case referred to in Art. 130.1, in issuing the decision on the deletion from theregister of brokers or advisers, the Commission may shorten the period referred toin Art. 130.5.

Art. 131.

Deletions from the registers of brokers and advisers shall be made:

1) at the request of the person entered in such register;

2) in the case of complete or partial legal incapacitation;

3) if the person entered in such register has been found by a final court judgmentguilty of a tax offence, an offence against reliability of documents, property,business transactions and cash and securities transactions, offences specified inArt. 305, Art. 307 or Art. 308 of the Industrial Property Law of June 30th2000, offences specified in the Commodity Exchange Act of October 26th2000, or offences specified herein;

4) as a result of death of the person entered in the register;

5) in the cases specified in Art. 130.1.

Part V

Protection of Investors’ Interests; Compensation Scheme

Art. 132.

1. Within the meaning of this Part:

1) an investor shall be a natural or a legal person, or an organisational unitwithout legal personality, for whom or which a brokerage house provides anyof the services referred to in Art. 69.2, 69.3.1, 69.3.3, 69.4.1-2, except for:

82

a) the State Treasury,

b) the National Bank of Poland, banks whose registered offices are situated inthe Republic of Poland, and foreign banks,

c) investment firms,

d) companies operating regulated markets,

e) the National Depository,

f) entities operating pursuant to the Insurance Activities Act of May 22nd2003,

g) entities operating pursuant to the Act on Investment Funds of May 27th2004,

h) entities operating pursuant to the Act on the Organisation and Operation ofPension Funds of August 28th 1997,

i) companies operating commodity exchanges or exchange clearing houses,commodity brokerage houses, foreign legal persons conducting brokerageactivities related to trading in commodities, operating pursuant to theCommodity Exchange Act of October 26th 2000,

j) communes/municipalities (gminy) and their associations, counties(powiaty) and their associations, and provinces (województwa),

k) states and their territorial sub-divisions having legal personality,

l) entities whose parent entity is the same as the parent entity of a brokeragehouse,

m) persons holding 5% or more of the total vote or the share capital ofa brokerage house, and persons who are a parent entity or a subsidiary of abrokerage house,

n) members of the management board, supervisory board and an auditcommittee of a brokerage house and persons holding the posts of directorsand deputy directors of departments of a brokerage house, as well asdirectors and deputy directors of branches of a brokerage house, if suchpersons held such posts on: the date of bankruptcy of a brokerage house orof the dismissal of bankruptcy petition on the grounds that the assets of thebrokerage house are insufficient to cover the cost of the proceedings; onthe date of the Commission’s ascertaining that the circumstances referredto in Art. 133.2.3 have occurred; or in the current or previous financialyear,

o) persons responsible for the audit of financial statements of a brokeragehouse, persons holding the post of a chief accountant at a brokerage house,and persons responsible for the preparation and keeping of accountingdocuments of a brokerage house,

p) members of the management and supervisory boards, persons holding 5%or more of the total vote or of the share capital, and persons responsiblefor the audit of financial statements of the parent entity or a subsidiary ofa brokerage house,

r) persons related through blood or marriage in the first or second degree tothe persons referred to in Art. 132.1.1m−p,

83

s) investors whose failure to perform their obligations towards the brokeragehouse contributed to its bankruptcy or to the Commission’s ascertaining ofthat the circumstances referred to in Art. 133.2.3 have occurred;

2) investors’ cash shall be the cash credited to cash accounts and other cashpayable to investors by a brokerage house in connection with the servicesrendered to such investors, to the extent such services relate to the activitiesreferred to in Art. 69.2, 69.3.1, 69.3.3, 69.4.1 and 69.4.2;

3) a brokerage house shall be a brokerage house, a bank conducting brokerageactivities or a custodian bank;

4) the management board of a brokerage house shall include general partners ofthe brokerage house referred to in Art. 95.1.2. 95.1.4, or authorisedrepresentatives of a brokerage house referred to in Art. 95.1.5-.6;

5) persons holding an interest in the share capital of a brokerage house shallinclude accordingly partners making contributions to the brokerage housereferred to in Art. 95.1.4-6.

2. The provisions of this Part shall apply accordingly to branches of foreign legalpersons referred to in Art. 115.1, if such persons are not participants of thecompensation scheme of the state where they have their registered offices or thecompensation scheme in such state fails to provide compensation in the amountstated in this Act.

3. In the case of custodian banks, the compensation scheme shall cover securities andother broker-traded financial instruments traded on an organised market registeredin securities accounts kept by such custodian banks.

Art. 133.

1. The National Depository shall create and manage a mandatory compensationscheme in order to gather funds to be used to pay compensation to investors fromthe contributions referred to in Art. 137.1 and 137.5.

2. The purpose of such compensation scheme shall be to ensure payments of cash toinvestors up to the statutorily defined level, and compensation for the value of lostbroker-traded financial instruments accumulated by such investors in brokeragehouses or their branches outside of the Republic of Poland in connection withservices provided to them, to the extent such services relate to the activities referredto in Art. 69.2, 69.3.1, 69.3.3, 69.4.1-2, in the event that:

1) a brokerage house is declared bankrupt, or

2) a bankruptcy petition is dismissed by virtue of a final decision on the groundsthat the assets of the brokerage house are insufficient to cover the costs of theproceedings, or

3) the Commission ascertains that due to reasons closely related to the financialstanding of the brokerage house, the brokerage house is, and will continue tobe in the near future, unable to fulfil its obligations under investors’ claims.

3. The costs of managing the compensation scheme by the National Depository andthe fees for the management thereof shall be covered from the assets of the scheme.

84

Art. 134.

1. At the management board’s request, the supervisory board of the NationalDepository shall adopt the rules of the compensation scheme. The rules andamendments thereto shall require the Commission’s approval. The Commissionshall refuse to approve such rules or amendments if the wording of the rules or theproposed amendments conflicts with the law or could impair the security of thecompensation scheme management or of the compensation payments.

2. The rules referred to in Art. 134.1 shall define in detail the operation of thecompensation scheme, including in particular:

1) manner of the management of the compensation scheme assets;

2) manner of ensuring the performance of obligations by entities covered by thecompensation scheme;

3) manner and procedure for making contributions to the compensation schemeby entities covered by the scheme;

4) conditions and procedure for the return of the overpaid annual contributionsmade by brokerage houses, as referred to in Art. 137.20;

5) procedure for making payments to investors;

6) if an entity which is covered by the compensation scheme is released from theobligation to participate in such scheme – the manner of making settlementswith such entity and the length of period following release of such entity fromthe obligation to participate in the scheme during which emergence ofcircumstances giving grounds for the payment of compensation results in noreturn to such entity of its share in the scheme;7) amount of fees payable to theNational Depository for its performance of obligations related to the operationof the compensation scheme, and the manner of settling the costs incurred inconnection with the operation of the scheme with the entities covered by suchscheme;

8) disciplinary and procedural measures to be used with respect to entitiescovered by the compensation scheme which breach their obligations under thescheme, the rules and procedure governing the application of such measures aswell as the procedure for notifying the Commission of the breach.

Art. 135.

1. The participation of brokerage houses in the compensation scheme shall bemandatory.

2. A brokerage house shall be released from the obligation to participate in thecompensation scheme as of the moment when:

1) it ceases to conduct the activities specified in a decision concerninga revocation or annulment of the licence referred to in Art. 69.1, or ina decision concerning a revocation or annulment of an authorisation forkeeping securities accounts by a bank;

2) the expiry of a licence in the cases referred to in Art. 89.1.

85

Art. 136.

1. If the compensation scheme of the state where a foreign investment firm whichconducts brokerage activities through a branch in the Republic of Poland has itsregistered office does not provide compensation in the amount or to the extentprovided for in this Act, such branch of the foreign investment firm may apply tothe National Depository to join the compensation scheme provided for herein, inorder to guarantee its investors compensation payments in the amount and to theextent provided for in this Act. Filing such application shall be tantamount to thebranch’s joining of the scheme.

2. The aim of the annual contributions referred to in Art. 137.1 made by branches offoreign investment firms is to make the amount and extent of the compensationunder the scheme in its home country equal to those under the compensationscheme provided for herein.

3. The National Depository shall promptly inform the Commission of any case of non-performance or undue performance by a foreign investment firm’s branch of itsobligations arising from participation in the compensation scheme. TheCommission shall forward the information received from the National Depositoryto the competent authority which granted the brokerage licence to the foreigninvestment firm, specifying the period, no longer than 12 months from the day ofthe forwarding of the information, after which the foreign investment firm’s branchmay be excluded from the compensation scheme.

4. The National Depository shall cooperate with the competent authority referred to inArt. 136.3 in taking measures by such authority to ensure due performance of theobligations arising from participation in the compensation scheme by a foreigninvestment firm’s branch.

5. If, after lapse of the period referred to in Art. 136.3 and despite taking the measuresreferred to in Art. 136.4, the non-performance or undue performance by the foreigninvestment firm’s branch of its obligations arising from the participation in thecompensation scheme continues, the National Depository may, subject to approvalby the competent authority referred to in Art. 136.3, exclude such branch from thecompensation scheme.

6. The share of the foreign investment firm’s branch in the compensation scheme shallnot be returned in the event of exclusion from the scheme if within the period,defined in the rules referred to in Art. 134.1, following such exclusioncircumstances emerge which give grounds for the payment of compensation toinvestors who are customers of such branch.

7. The compensation scheme shall ensure payment to investors of compensation inconnection with the services rendered to such investors by a foreign investmentfirm through its branch in the Republic of Poland prior to the date of its exclusionfrom the scheme, to the extent such services relate to the activities referred to inArt. 69.2, 69.3.1, 69.3.3, 69.4.1 and 69.4.2.

8. The foreign investment firm’s branch shall promptly notify its customers of itsexclusion from the compensation scheme, specifying in particular the exclusiondate.

9. In the case referred to in Art. 136.1, the National Depository shall define the rulesand procedure for payment to investors of compensation in connection with theservices rendered to such investors by a foreign investment firm conducting

86

brokerage activities through a branch in the Republic of Poland, to the extent suchservices relate to the activities referred to in Art. 69.2, 69.3.1, 69.3.3, 69.4.1 and69.4.2.

10. The rules and procedure referred to in Art. 136.9 shall be defined in cooperationwith the entity managing a compensation scheme effective in the state where theregistered office of the foreign investment firm is situated.

11. The rules and procedure referred to in Art. 136.9 should ensure in particular:

1) a possibility for the National Depository to demand that the foreign investmentfirm provide information necessary for due performance of the obligationsarising from participation in the compensation scheme, and a possibility torequest verification of such information by a competent authority in the statewhere the registered office of the foreign investment firm is situated;

2) payment of compensation equal to the difference between the amount ofcompensation paid under the scheme of the state where the registered office ofthe foreign investment firm is situated and the amount of compensationpayable to investors under the scheme provided for herein, upon receipt ofinformation on the events referred to in Art. 133.2 from the competentauthority of the state where the registered office of the foreign investment firmis situated;

3) the right for the National Depository to revise the rights of investors withrespect to the services rendered to such investors by a foreign investment firmthrough its branch in the Republic of Poland;

4) close cooperation between the National Depository and the entity managing thecompensation scheme in the state where the registered office of the foreigninvestment firm is situated, with a view to ensuring efficient payment ofcompensation to investors in the amounts they are entitled to.

12. The rules and procedure referred to in Art. 136.9 should provide for the manner ofdetermining the amount of compensation payable under each of the compensationschemes to investors entitled to counterclaims against the foreign investment firmconducting brokerage activities through a branch in the Republic of Poland.

13. To the extent not provided for in Art. 136.1-12, the other provisions of this Partshall apply accordingly to all matters concerning participation of a foreigninvestment firm’s branch in the compensation scheme.

Art. 137.

1. Subject to Art. 137.5 and 137.18-20, each calendar year brokerage houses shallmake annual contributions, hereinafter referred to as the “annual contributions”, tothe compensation scheme; such contributions shall be equal to the sum of:

1) the product of a rate of up to 0.4% and the average balance of investors’ cash;

2) the product of a rate of up to 0.01% and the average value of broker-tradedfinancial instruments held by investors over the last 12 months.

2. The value of broker-traded financial instruments held by investors shall be theircurrent price established in accordance with the rules prescribed in the regulationson special accounting rules for brokerage houses.

87

3. The average balance of investors’ cash shall be the ratio of: the sum of the balancesof investors’ cash on each business day during the 12-month period to the numberof business days in such period.

4. The average value of broker-traded financial instruments held by investors shall bethe ratio of: the sum of the values of broker-traded financial instruments held byinvestors on each business day during the 12-month period to the number ofbusiness days in such period.

5. Each year custodian banks shall be obliged to make annual contributions to thecompensation scheme in the amount equal to the product of the rate specified inArt. 137.1.2 and the average value of broker-traded financial instruments traded onthe organised market which are registered in investors’ accounts over the last 12months, computed in accordance with Art. 137.2 and 137.4.

6. The exception referred to in Art. 132.1.1s shall not apply in the case of computationof the average balance of cash referred to in Art. 137.3, and the average valuereferred to in Art. 137.4 and 137.5.

7. The National Depository shall determine the rates referred to in Art. 137.1 for thenext calendar year, and shall provide them to brokerage houses not later than by theend of the calendar year preceding the year in which contribution is to be made.

8. Brokerage houses shall, subject to Art. 137.18-20, make annual contributions infour instalments, to be made by the last business day of the last month in eachcalendar quarter, with the proviso that the instalments for the first and the secondquarter shall be equal and their amounts shall be determined as specified inArt. 137.1 and 137.5, whereas the instalments for the third and the fourth quartershall be also equal and their amounts shall be determined as specified in Art. 137.1and Art. 137.5 based on the average balance of investors’ cash and the averagevalue of broker-traded financial instruments held by investors in the second half ofthe previous calendar year and in the first half of the calendar year in which thecontributions are to be made, subject to Art. 137.9-10.

9. If the aggregate value of investors’ claims for compensation exceeds the fundsaccumulated by the compensation scheme, the annual contribution instalments fora given calendar year which are due but have not been paid yet shall be paid withinseven days of the National Depository’ announcement, circulated nationwide in aletter requesting brokerage houses to make the payment.

10. If the aggregate value of investors’ claims for compensation exceeds the amount offunds accumulated by the compensation scheme and of the instalments for a givencalendar year which are due but not paid yet, the amount of the annualcontributions to be made in a given calendar year may be increased through theapplication of a rate of up to 1.8%.

11. Upon consultation with the Commission and the National Depository, the ministercompetent for financial institutions shall increase, by way of a regulation, theamount of the annual payments referred to in Art 137.10, and shall determine thedate for the payment thereof, taking into account the need to satisfy investors’claims.

12. In the event of delay with the payment of any of the instalments referred to inArt. 137.8 and 137.9, or of the amount referred to in Art. 137.11, the NationalDepository shall be entitled to demand payment of interest to the compensationscheme, in the amount calculated at the rate applicable to default interest on tax

88

arrears. Excerpts from the records of the National Depository, signed by authorisedmembers of the management board of the National Depository and bearing its seal,certifying the existence of an obligation of an entity covered by the compensationscheme, and containing a statement that the claims based on such excerpts are dueand payable, shall be deemed writs of execution and shall not require to beendorsed with an enforcement clause.

13. The National Depository shall promptly inform the Commission of any event ofnon-performance or undue performance by a brokerage house of its obligationsarising from the participation in the compensation scheme. In the event of undueperformance by the brokerage house of its obligations arising from the participationin the compensation scheme, the Commission shall take the measures referred to inArt. 167.1 or 167.2.

14. In the event of non-performance or undue performance by a branch of a brokeragehouse conducting activities in another Member State of its obligations arising fromthe participation in the compensation scheme it has jointed, the Commission shall,upon receipt of information on the occurrence of such circumstances from theentity managing the scheme, cooperate with such entity and take measures referredto in Art. 167.1 or Art. 167.2 in connection with undue performance by thebrokerage house’s branch of the obligations arising from the participation in thescheme.

15. If, despite taking the measures referred to in Art. 167.1 and 167.2, the brokeragehouse’s branch continues the non-performance or undue performance of itsobligations arising from the participation in the compensation scheme of anotherMember State after the lapse of 12 months following the notification to theCommission by the relevant entity managing the compensation scheme, theCommission may, at a request by the entity managing the compensation scheme ofsuch another Member State, agree to the exclusion of such branch from thecompensation scheme.

16. The brokerage house’s branch shall promptly notify its customers of its exclusionfrom the compensation scheme of another Member State, specifying in particularthe exclusion date.

17. The Commission shall notify the relevant entity managing the compensationscheme in another Member State, which has been joined by the brokerage house’sbranch of the occurrence of any of the circumstances referred to in Art. 133.2.

18. The brokerage house’s obligation to make annual contributions to the compensationscheme shall be suspended if payments made by the brokerage house to the schemereach the amount specified in Art. 137.19. The above shall not prejudice thebrokerage house’s obligation to make the contribution to the scheme in connectionwith the rate increase referred to in Art. 137.10.

19. The amount triggering the suspension of brokerage house’s contributions to thecompensation scheme shall be determined respectively, in line with the rules for thecomputation of the annual contributions, using a rate equal to ten times the ratereferred to in:

1) Art. 137.1.1 − with respect to investors’ cash;

2) Art. 137.1.2 − with respect to broker-traded financial instruments held byinvestors.

89

20. If the brokerage house makes the annual contributions to the compensation schemein excess of the amount due, the National Depository shall return the overpayment.The overpayment shall not be returned if its results from the discontinuation of theactivities conducted by the brokerage house which are subject to the requirement tomake contributions to the scheme.

21. The provisions of Art. 137.18-20 shall not apply if payments have been made toinvestors under the compensation scheme, until the value of the compensationscheme assets reaches the level required by law.

Art. 138.

1. Funds paid by brokerage houses as the annual contributions, and the interestreferred to in Art. 137.12, as well as the benefits obtained in connection with themanagement of such funds, shall be common property of the scheme participants. Ifthe brokerage house is released from the obligation to participate in thecompensation scheme, such brokerage house shall be returned its interest in thecommon property, in the amount to which it would be entitled if the ownership incommon has been terminated or has expired. Such interest shall be returnedprovided that during the period defined in the rules of the compensation scheme nocircumstances emerge which would give grounds for payment of compensation toinvestors who are such brokerage house’s customers.

2. In connection with their participation in the compensation scheme, brokeragehouses shall create provisions of up to the value of the contributions made to thescheme and shall charge them to costs. In the event of return of any overpayments,the brokerage house shall reduce the provision by the amount of the overpayment.

3. Funds paid by the brokerage house as annual contributions and the interest referredto in Art. 137.12, as well as the benefits obtained in connection with themanagement of such funds, shall not be subject to enforcement against the assets ofa scheme participant.

Art. 139.

1. The compensation scheme shall secure the payment of the investors’ funds referredto in Art. 133.2, less the amounts due from the investor to the brokerage house forthe services provided according to the balance as at the date of the occurrence ofany of the circumstances referred to in Art. 133.2; the payment shall comprise100% of the funds covered by the compensation scheme in the case of funds of upto the złoty equivalent of EUR 3,000, and 90% in the case of funds in excess of thatamount, provided that the upper limit for the funds covered by the compensationscheme shall equal the złoty equivalent of EUR 22,000, subject to Art. 139.2.

2. The upper limit for the funds covered by the compensation scheme shall be:

1) a złoty equivalent of EUR 15,000, effective January 1st − December 31st 2006;

2) a złoty equivalent of EUR 19 000, effective January 1st − December 31st 2007.

3. The złoty equivalent of the amounts expressed in the euro shall be calculated usingthe mid exchange rate quoted by the National Bank of Poland on the date ofoccurrence of the circumstances which give grounds for compensation payment, asspecified in the exchange rate table.

90

4. The amounts referred to in Art. 139.1-2 are the maximum amount of the investor’sclaims, regardless of the amount of funds and the number of the accounts in whichthe funds referred to in Art. 133.2 have been kept, or the number of claims underwhich a given investor is entitled to receive monies from the brokerage house.

5. If the broker-traded financial instruments and cash are co-owned, each of the co-owners shall have the right to file claims against the scheme in the amountproportionate to such co-owner’s share but not higher than the amount specified inArt. 139.1-2. In the case of ownership in common, the amount of co-owner’s shareshall be determined by regulations applicable to expiry or termination of suchownership in common.

6. The compensation shall be paid as provided for in the compensation paymentschedule, however not later than within three months from the date the NationalDepository approves such schedule.

7. If particularly justified by circumstances which prevent the payment ofcompensation within three months, the Commission may, at the request of theNational Depository, postpone the payment date by up to another three months.

8. The National Depository shall file the request referred to in Art. 139.7 not later than14 days prior to the date set for compensation payment.

9. Claims for compensation shall be subject to a ten-year statute of limitationscounting from the occurrence of the circumstances which give grounds for thecompensation payment.

10. Investors shall have the right to enforce claims in excess of the amount referred toin Art. 139.1-2 against the bankruptcy estate or a brokerage house.

Art. 140.

1. Within 30 days from the declaration of bankruptcy of a brokerage house, a receiveror trustee shall determine, based on the books of such a brokerage house, and shallsubmit in writing to the National Depository the following:

1) a list of investors entitled to receive compensation, specifying the amounts inrespect of which the compensation is to be paid;

2) the a brokerage house’s liquid assets included in the bankruptcy estate as at thedate the bankruptcy is declared;

3) the expenses related to the payment of salaries and wages to the employees ofthe bankrupt brokerage house, and current expenses related to the bankruptcyproceedings, incurred by the date of preparation of the list of investors,increased by the amount of necessary expenses related to the payment ofcompensation, along with the current value of the brokerage house’s liquidassets administered by the receiver or trustee;

4) the payment schedule.

2. Within 14 days the National Depository shall check the list of investors submittedby the receiver or the trustee, the compliance of the compensation amountscomputation with the provisions of this Act and the requirements referred to in Art.140.1.1, and the payment schedule referred to in Art. 140.1.4.

91

3. In the event of reasonable doubts as to the amount of expenses referred to inArt. 140.1.3, as determined by the receiver or trustee, the National Depository shallrequest the judge-commissioner to approve the expenses in accordance with theprocedure provided for in Art. 168 of the Bankruptcy and Recovery Law ofFebruary 28th 2003 (Dz.U. No. 60, item 535, as amended9)); the above shall notprevent the adoption by the National Depository of a resolution on theappropriation of amounts to be paid as compensation.

4. If the National Depository finds that the list of investors is not compliant with therequirements provided for in Art. 140.1.1, it shall refuse to accept such a list andshall return the list to the receiver or trustee, of which it shall promptly notify thejudge-commissioner.

5. The receiver or trustee shall remove the defects indicated by the NationalDepository within seven days.

6. After the receiver, court-appointed supervisor or trustee draws up a list of claims orafter claims are recognised by virtue of a final court decision, the list referred to inArt. 140.1.1 shall be supplemented with claims of investors not included in theformer list.

7. The provisions of Art. 140.1-6 shall not prejudice the investor’s right to lodgeclaims with the National Depository for compensation not included in the listreferred to in Art. 140.1.1.

Art. 141.

1. The management board of the National Depository shall, within seven days as ofthe acceptance of the list referred to in Art. 140.1.1, adopt and publish, by way ofan announcement placed in two daily newspapers with nationwide circulation,a resolution on the transfer to the receiver or trustee of the amounts to be paid ascompensation, subject to Art. 141.3.

2. The resolution referred to in Art. 141.1 shall define:

1) the amount of the funds to be transferred to the receiver or trustee for paymentof compensation, which shall represent the difference between the totalcompensation payable to the investors and the value of the liquid assets of thebrokerage house, less the expenses referred to in Art. 140.1.3;

2) manner of payment of the compensation by the receiver or trustee, includingthe dates and place of such payment.

3. The amount to be paid as compensation shall be determined based on the entireshare of the bankrupt brokerage house in the scheme.

4. The amounts for the payment of compensation, transferred to the receiver or trusteeby virtue of the resolution of the management board of the National Depository,shall not be included in the bankruptcy estate and may not be used by the receiveror trustee for any purpose other than the payment of compensation.

9) Amendments to the Act were promulgated in Dz.U. of 2003, No. 217, item 2125; Dz.U. of 2004, No.

91, items 870 and 871, No. 96, item 959, No. 121, item 1264, No. 146, item 1546, No. 173, item 1808and No. 210, item 2135; and Dz.U. of 2005, No. 94, item 785.

92

Art. 142.

Fr the funds transferred to the receiver or trustee, the National Depository shall acquirerights to a claim against the bankruptcy estate for the return to the compensation schemeof amounts transferred, which shall fall within Category 1 of claims as specified in Art.342.1.1 of the Bankruptcy and Recovery Law of February 28th 2003, satisfiable directlyafter the costs of the bankruptcy proceedings and salaries. The provisions of Art. 343.1,first sentence, of the Bankruptcy and Recovery Law shall apply accordingly. The claimfor the return shall not include the portion of the amounts transferred which correspondsto the bankrupt brokerage house’s share in the compensation scheme.

Art. 143.

1. The receiver or trustee shall be obliged to pay the compensation on the terms andconditions provided for in this Act and in the resolution of the management boardof the National Depository, referred to in Art. 141.1, in line with the paymentschedule.

2. After all the payments are made, the receiver or trustee shall account for theamounts paid and shall prepare a report to be submitted to the National Depositorywithin 21 days following the completion of payments. Within the said timeframe,the receiver or trustee shall transfer to the National Depository the amounts whichhave not been paid to investors, together with the interest accrued at the bankkeeping the account in which the amount transferred by the National Depository forpayment of compensation has been held, which are to be returned to thecompensation scheme.

3. The National Depository shall supervise compliance by the receiver or trustee ofthe brokerage house with the terms and conditions for compensation paymentprovided for in this Act and in the resolution of the management board of theNational Depository referred to in Art. 141.1.

4. The National Depository shall notify the judge-commissioner of any irregularitiesfound while exercising such supervision, and shall request the receiver or trustee toremedy such irregularities.

Art. 144.

1. The investors’ claims against the bankruptcy estate, equal to the amounts paid ascompensation, shall be transferred by operation of law to the National Depository,which shall enforce them for the benefit of the compensation scheme.

2. The amounts returned to the National Depository by the receiver or trustee asprovided for Art. 143.2 shall not reduce the amount of claims of the NationalDepository against the bankruptcy estate to be raised in connection with the transferof funds for the payment of compensation.

Art. 145

1. In the event the bankruptcy petition is dismissed by virtue of a final decision on thegrounds that the assets of the brokerage house are insufficient to cover the costs ofthe proceedings, or in the event that own administration referred to in Art. 76.1 ofthe Bankruptcy and Recovery Law of February 28th 2003 is established with

93

respect to all of the assets of the brokerage house, or the Commission ascertainsoccurrence of the circumstances referred to in Art. 133.2.3:

1) the actions referred to in Art. 140.1, 140.5, Art. 141.4, Art. 143.1 and 143.2 tobe performed by the receiver or trustee, shall be performed by the managementboard of the compensation scheme participant, by the general partners of thecompensation scheme participant referred to in Art. 95.1.2 and 95.1.4, or byauthorised representatives the compensation scheme participant referred to inArt. 95.1.5 and 95.1.6;

2) the provisions of Art. 140.2-4 and Art. 140.6-7, Art. 141.1-3, Art. 142,Art. 143.3-4, and Art. 144 shall apply accordingly.

2. In the event of declaration of a brokerage house’s bankruptcy with an arrangementoption, the investors’ claims against the bankrupt brokerage house with respect tothe services provided to such investors (to the extent such services relate to theactivities referred to in Art. 69.2, 69.3.1, 69.3.3, 69.4.1 and 69.4.2), up to thecompensation amounts to which such investors are entitled, shall not be included inthe arrangement. Investors shall be entitled to participate, along with othercreditors, in the voting on the arrangement only to the extent such investors’ claimsagainst the bankrupt brokerage house exceed the compensation to which they areentitled.

Art. 146.

1. The National Depository shall submit to the Commission an annual report on theoperation of the compensation scheme in the previous year, within three monthsfrom the last day of the previous financial year.

2. The report on the operation of the compensation scheme shall be subject to an auditby a qualified auditor of financial statements.

Part VI

Access to Information of Special Nature

Chapter 1

Professional Secrecy

Art. 147.

Professional secrecy shall apply to any information obtained by the person specified inArt. 148.1 in connection with the performance of such persons’ professional dutiesunder an employment or a mandate contract or another legal relation of a similar nature,relating to the legally protected interests of the entities performing activities related totrading in financial instruments, or any other activities performed as part of a statutorilyregulated business falling within the scope of supervision by the Commission ora foreign competent authority, or information concerning the activities taken as partsuch supervision, in particular any information comprising:

1) personal details of a party to an agreement or another legal transaction;

94

2) the contents of an agreement or the subject of a legal transaction;

3) information on the economic standing of a party to an agreement, including thedesignation of a securities account, any other account in which financialinstruments other than securities are registered, or of a cash account auxiliaryto any such accounts, the number and designation of financial instruments andthe value of funds credited to any such accounts.

Art. 148.

1. The following persons shall be bound by the professional secrecy obligation:

1) brokers and advisers;

2) members of the governing bodies, established pursuant to the articles ofassociation, of:

a) an investment firm,

b) an entity performing the activities referred to in Art. 71,

c) a custodian bank,

d) a commodity brokerage house which engages in activities related totrading in financial instruments other than securities,

e) companies operating stock exchanges and companies operating over-the-counter markets,

f) the National Depository,

g) the commercial chamber,

h) the associations and the organisations referred to in Art. 9.1.4 of the Act onCapital Market Supervision;

3) persons employed by the entities enumerated in Art. 148.1.2;

4) persons bound by a legal relation under a mandate contract or in any otherlegal relation of a similar nature with the entities referred to in Art. 148.1.2;

5) persons employed by the entities bound by a legal relation under a mandatecontract or in any other legal relation of a similar nature with the entitiesreferred to in Art. 148.1.2;

6) members of the advisory body referred to in Art. 46.5;

7) any other persons, if their professional secrecy obligation results from otherstatutory provisions.

2. The professional secrecy obligation shall survive the termination of the legalrelations referred to in Art. 148.1.

Art. 149.

Subject to Arts. 150-153 and Art. 20, Art. 21, Art. 23 and Art. 25 of the Act on CapitalMarket Supervision, information covered by the professional secrecy obligation whichis held by the natural persons enumerated in Art. 148.1, shall be revealed exclusively atthe demand of:

95

1) a court or a prosecutor, in connection with pending criminal proceedings orproceedings regarding a tax offence;

2) a court or a prosecutor, in connection with a request for legal assistance madeby a foreign country which, on the basis of a ratified international agreementbinding on the Republic of Poland, has the right to request to be provided withinformation covered by the professional secrecy obligation;

3) a court, in connection with pending civil proceedings in a case to which anentity being a party to an agreement or another legal transaction covered by theprofessional secrecy obligation is a party – as regards information related tosuch entity;

4) the General Tax Supervision Inspector, in connection with proceedingspending before a tax supervision authority regarding:

a) a tax offence or a tax misdemeanour against a natural person who is aparty to an agreement or another legal transaction covered by theprofessional secrecy obligation – as regards information concerning suchperson,

b) a tax offence committed in the performance of activities related to theactivity of a legal person or an organisational unit without legalpersonality which is a party to an agreement or another legal transactioncovered by the professional secrecy obligation – as regards informationconcerning such legal person or an organisational unit without legalpersonality;

5) the President of the Supreme Chamber of Control or an inspector authorised bysuch President – as regards information concerning the entity which is subjectto inspection, if such information is necessary to establish the facts in theinspection proceedings, as defined in the Act on the Supreme Chamber ofControl of December 23rd 1994 (Dz.U. of 2001, No. 85, item 937, asamended10);

6) the qualified auditor of financial statements who audits the financial statementsof the entity referred to in Art. 148.1.2 on the basis of an agreement – asregards information specified in the accountancy laws;

7) the state security services and their officers or soldiers holding a writtenauthorisation – as regards information necessary to conduct vettingproceedings on the basis of the laws on the protection of classified information;

8) the police, where necessary to prevent commitment of an offence, to detect anoffence or to determine the perpetrator and gain the evidence – in compliancewith the rules and pursuant to the procedure specified in the Act on the Policeof April 6th 1990 (Dz.U. of 2002, No. 7, item 58, as amended11));

10) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2001, No. 154, item

1800, Dz.U. of 2002, No. 153, item 1271, Dz.U. of 2004, No. 123, item 1291 and Dz.U. of 2005, No.10, item 71 and No. 14, item 114.

11) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2002, No. 19, item 185,No. 74, item 676, No. 81, item 731, No. 113, item 984, No. 115, item 996, No. 153, item 1271,No. 176, item 1457 and No. 200, item 1688, Dz.U. of 2003, No. 90, item 844, No. 113, item 1070,No. 130, items 1188 and 1190, No. 137, item 1302, No. 166, item 1609, No. 192, item 1873 andNo. 210, item 2036, Dz.U. of 2004, No. 171, item 1800, No. 179, item 1842, No. 210, item 2135,No. 273, item 2703 and No. 277, item 2742, and Dz.U. of 2005, No. 10, item 70.

96

9) a court enforcement officer, in connection with pending proceedings tosafeguard claims or enforcement proceedings concerning claims against theentity which is a party to an agreement or another legal transaction covered bythe professional secrecy obligation – as regards he information concerningsuch entity;

10) an enforcement authority, in connection with the conduct of administrativeenforcement proceedings regarding duties of an entity which is a party to anagreement or another legal transaction covered by the professional secrecyobligation – as regards information concerning such entity.

Art. 150.

1. The professional secrecy obligation shall not be deemed breached by disclosure ofinformation covered by professional secrecy:

1) directly to the person to which such information relates or to another entitywhom such person authorised in writing to receive such information, subject toArt. 150.2;

2) in a notification of an offence and any documents submitted in connection withsuch notification;

3) to the General Inspector for Financial Information – to the extent and on theterms defined in the Act on Prevention of Money Laundering Practices andFinancing of Terrorism of November 16th 2000 (Dz.U. of 2003, No. 153, item1505 and Dz.U. of 2004, No. 62, item 577, No. 96, item 959 and No. 116, item1203);

4) to the General Tax Supervision Inspector or persons authorised by the GeneralTax Supervision Inspector – to the extent such information is necessary for theperformance of the Inspector’s statutory duties;

5) to the Head of the National Centre for Crime-Related Information – inaccordance with the rules specified in other regulations, to the extent suchinformation is necessary for the performance of the Head’s statutory duties;

6) to tax authorities – in accordance with the rules specified in other regulations,to the extent such information is necessary for the performance of theirstatutory duties;

7) by a brokerage house to the bank which is its parent entity within the meaningof Art. 4.1.8 of the Banking Law of August 29th 1997 – for the purpose ofpreparation of consolidated financial statements, and to the BankingSupervision Commission to the extent such information is necessary for thepurpose of exercising supervision over such bank on a consolidated basis inline with the rules determined in the aforementioned Banking Law;

8) by investment firms and custodian banks:

a) in the case referred to in Art. 54 and Art. 152,

b) to the extent and in accordance with the rules provided for in the Act onthe Availability of Business Information of February 14th 2003 (Dz.U.No. 50, item 424 and Dz.U. of 2004, No. 68, item 623 and No. 116, item1203);

97

9) by a brokerage house, a foreign legal person referred to in Art. 115.1 ora foreign investment firm:

a) to the ultimate parent entity as defined in Art. 4.5 and Art. 4.6 of the Acton the Supplementary Supervision of Credit Institutions, InsuranceUndertakings and Investment Firms in a Financial Conglomerate, datedApril 15th 2005 (Dz.U. No. 83, item 719), hereinafter referred to as the“Supplementary Supervision Act”,

b) to a coordinator, as defined in Art. 3.19 of the Supplementary SupervisionAct,

c) to a foreign coordinator, as defined in Art. 3.20 of the SupplementarySupervision Act

– in performance of the obligations specified in the Supplementary SupervisionAct;

10) by the National Depository, brokerage houses, banks conducting brokerageactivities and custodian banks – to the extent specified in Art. 34.4 of theInsurance Activities Act of May 22nd 2003;

11) by the participants of the National Depository to a public company, in the casereferred to in Art. 91.11 of the Public Offering Act;

12) between the Commission or a competent authority in another Member State,and:

a) a qualified auditor of financial statements who audits the financialstatements of a brokerage house, a bank conducting brokerage activities ora bank keeping securities accounts; or the qualified auditor of financialstatements who audits the financial statements of a foreign investmentfirm,

b) a judge-commissioner, court-appointed supervisor, receiver, trustee, orliquidator of a brokerage house, a bank conducting brokerage activities ora bank keeping securities accounts; or an authority responsible forconducting bankruptcy or liquidation proceedings of a foreign investmentfirm,

– if such information is necessary for the performance of supervisoryresponsibilities by the Commission or the competent authority in anothermember State, or for an efficient conduct of bankruptcy proceedings,administration of bankruptcy estate or conduct of liquidation, or – with respectto information specified in the accountancy regulations – for the purpose ofauditing financial statements of such brokerage houses, banks, or foreigninvestment firms;

13) to the National Depository – if such information is necessary for theperformance of its statutory duties, particularly those related to theestablishment, organisation and management of the compensation scheme;

14) by the Commission or its authorised representative:

a) to the public – as regards the contents of the adopted resolutions anddecisions, including those concerning individual cases, on the basis ofwhich administrative decisions are issued – if the Commission finds the

98

disclosure of such information to be justified by the interest of thesecurities market, the commodity market or the investment funds market,

b) to the public – in line with the procedure and on the terms specified inArt. 25.1 of the Act on Capital Market Supervision,

c) in explanatory proceedings – in the case referred to in Art. 38.5 of the Acton Capital Market Supervision,

d) in performance of the agreements referred to in Art. 20 and Art. 23 of theAct on Capital Market Supervision,

e) in the cases specified in Art. 151 and in Art. 21.1 of the Act on CapitalMarket Supervision and in Art. 96.11 of the Public Offering Act;

15) by the Commission:

a) to an exchange clearing house operating pursuant to the Act onCommodity Exchanges of October 26th 2000, as regards the clearing oftransactions in broker-traded financial instruments – if such information isnecessary for the performance of statutory duties of such clearing house,particularly those related to ensuring proper performance by such housemembers of their obligations under such transactions,

b) to the Governor of the National Bank of Poland, if such information isnecessary for the performance of statutory duties of the National Bank ofPoland with respect to monetary policy and supervision over the paymentsystem;

16) in the cases specified in Art. 40 and 89.4.

2. Persons referred to in Art. 148.1 shall be obliged to keep confidential theinformation regarding the provision of information to the police under Art. 20.4-10of the Act on the Police of April 6th 1990, as well as the information regarding thenotification referred to in Art. 20.13 of the Act on the Police. The confidentialityobligation shall remain effective with respect to the persons to whom suchinformation relates and with respect to third parties, with the exception ofCommission’s representatives and employees of the office of the Commission towhom such information is conveyed in connection with the performance of thestatutory supervisory responsibilities.

Art. 151.

The Commission may also provide the information held by it which is covered by theprofessional secrecy obligation:

1) to the disciplinary ombudsman or the disciplinary court of the associationreferred to in Art. 9.1.4.a-b of the Act on Capital Market Supervision,exclusively to the extent necessary to ascertain, for the purposes of initiation orconduct of disciplinary proceedings, whether a broker or an adviser hasviolated the principles of professional ethics;

2) a chamber court ombudsman or a chamber court, solely to the extent necessaryto ascertain, for the purposes of ongoing proceedings, whether a member of thecommercial chamber has violated the principles of ethics or fair businesspractice;

99

3) the National Depository, a company operating a stock exchange or a companyoperating an OTC market, to the extent such information is necessary for theperformance of their statutory duties.

Art. 152.

Investment firms and custodian banks may exchange information covered by theprofessional secrecy obligation and concerning the debt owed to them by customers towhom they provide services, to the extent to which such information is necessary toprotect their interests against unreliable customers.

Art. 153.

1. The professional secrecy obligation shall also apply to the persons to whominformation covered by such obligation has been disclosed in the cases referred toin Arts 149-152 or Art. 20, Art. 21 and Art. 23 of the Act on Capital MarketSupervision, unless the disclosure of such information by such persons is permittedunder other provisions of the law.

2. Persons referred to in Art. 148.1 and those referred to in Art. 153.1, shall be liablefor any damage inflicted as a result of unlawful disclosure of information coveredby the professional secrecy obligation and the use of such information for anillegitimate purpose.

3. Persons referred to in Art. 148.1 shall not be liable for any damage inflicted as aresult of disclosure and illegitimate use of the information covered by theprofessional secrecy obligation by the persons to whom such information has beenprovided on the basis of Arts. 149-152 or Art. 20, Art. 21 and Art. 23 of the Act onCapital Market Supervision.

Chapter 2

Inside Information

Art. 154.

Inside information within the meaning of this Act shall be any information of a precisenature, relating, whether directly or indirectly, to one or more issuers of financialinstruments, one or more financial instruments, or acquisition or disposal of suchinstruments, which has not been made public and which, if made public, would be likelyto have a significant effect on the prices of financial instruments or related derivativefinancial instruments, with the proviso that such information:

1) shall be considered of a precise nature if such information disclosescircumstances or events which have happened or may reasonably be expected tohappen, and such information is sufficient to assess the potential effect of suchcircumstances or events on the price or value of financial instruments or relatedderivative financial instruments;

2) shall be considered to be likely, if made public, to have a significant effect on theprice or value of such financial instruments or the price of related derivative

100

financial instruments if such information is likely to be taken into account bya reasonable investor in making an investment decision;

3) shall be considered inside information in relation to persons executing ordersconcerning financial instruments also if it is disclosed to such person by aninvestor or another person who is aware of such orders and it relates to investor’sorders to acquire or dispose of financial instruments, provided that the premisesspecified in Art. 154.1 and 154.2 are satisfied.

Art. 155.

In the case of derivatives on commodities, inside information shall be understood tomean any information of a precise nature, relating, whether directly or indirectly, to oneor more derivatives on commodities traded on commodity exchanges which has notbeen made public and which could be expected by the market participants to be madepublic in line with the established market practice. The market participants may inparticular expect the disclosure of such information which should be disclosed tomarket participants on a regular basis or whose disclosure is required under regulations,agreements and practice applicable on such commodity exchanges markets.

Art. 156.

1. Anyone who:

1) gains inside information by virtue of membership in the governing bodies ofthe company, by virtue of an interest in the capital of the company, or as aresult of having access to inside information in connection with employment,practised profession, or a mandate contract or any other contract of a similarnature, and in particular:

a) the members of the management board, supervisory board, proxies orattorneys-in-fact of the issuer, its employees, qualified auditors or otherpersons related to the issuer under any mandate contract or any legalrelation of a similar nature, or

b) shareholders of a public company, or

c) persons employed or holding posts referred to in Art. 156.1a in thesubsidiary or parent entity of the issuer of financial instruments admittedor sought to be admitted to trading on the regulated market, or bound withsuch entity under a mandate contract or any other legal relation of asimilar nature, or

d) brokers or advisers, or

2) gains inside information through criminal activities, or

3)gains inside information in a manner other than described in Art. 156.1.1 and156.1.2 if such person has known or, acting with due diligence, could haveknown such information to be inside information,

– is prohibited from using such information.

2. The persons referred to in Art. 156.1 shall not:

1) disclose inside information;

101

2) recommend or induce another person on the basis of inside information toacquire or dispose of financial instruments to which such information relates.

3. If inside information is gained by a legal person or an organisational unit withoutlegal personality the prohibition specified in Art. 156.1 shall also apply to thenatural persons who participate in investment decisions made in the name or for theaccount of such legal person or an organisational unit without legal personality.

4. Use of the inside information shall consist in acquisition or disposal of financialinstruments for one’s own account or for the account of a third party effected on thebasis of inside information held by a given person, or any other legal transactionundertaken for one’s own account or for the account of a third party which leads ormight lead to disposal of such financial instruments, if such instruments:

1) are admitted or sought to be admitted to trading on a regulated market in theterritory of the Republic of Poland or another Member State (irrespective ofwhether the transaction in such instruments is executed on such market), or

2) are not admitted to trading on a regulated market in the territory of theRepublic of Poland or another Member State but their price or value depends,whether directly or indirectly, on the price of the financial instrument referredto in Art. 156.4.1.

5. Disclosure of inside information shall consist in communicating to an unauthorisedperson, or enabling such unauthorised person to gain, or facilitating the gaining bysuch person of, inside information concerning:

1) one or more issuers of financial instruments referred to in Art. 156.4.1;

2) one or more financial instruments referred to in Art. 156.4.1;

3) acquisition or disposal of any financial instruments referred to in Art. 156.4.1.

6. The prohibition of disclosure of inside information shall not apply to the disclosureof such information:

1) by persons referred to in Art. 156.1, if such disclosure is made as part of theordinary course of such person’s employment, practising such person’sprofession or performing such person’s duties, provided that relevant measureshave been taken to ensure that such information will be kept confidential by thepersons to whom it has been disclosed;

2) in under and in accordance with Art. 25.1 of the Act on Capital MarketSupervision;

3) on the basis of:

a) Art. 160.3 and 160.4;

b) Art. 24 of the Act on Capital Market Supervision;

c) Art. 66 of the Public Offering Act;

4) by the Commission or its authorised representative to the General Inspector forFinancial Information, to the extent and on the terms defined in otherregulations;

5) in connection with the activities described in Art. 156.7.1-3.

7. The following actions shall not be deemed the use of inside information:

102

1) transactions carried out in performance of the statutory responsibilitiesconcerning the monetary, exchange-rate or public debt-management policies ofa state, executed by authorised representatives of relevant governmentalauthorities, including the National Bank of Poland, as well as by the EuropeanSystem of Central Banks;

2) acquisition of financial instruments with a view to stabilising their prices ona regulated market, provided that such acquisition is made in the manner, timeand on the terms specified in the regulations referred to in Art. 39.3.1;

3) acquisition of own shares by a public company or an entity acting for itsaccount, provided that such acquisition is made in the manner, time and on theterms specified in regulations referred to in Art. 39.3.1;

4) transactions carried out to discharge an obligation to dispose of or acquirefinancial instruments, where such obligation results from a written agreementwith the date certified by a notary public, concluded before the personconcerned gained the inside information.

8. The prohibition of recommending or inducing another person to acquire or disposeof financial instruments on the basis of inside information which relates to suchinstruments shall not apply to the disclosure of information made in connectionwith the actions enumerated in Art. 156.7.1-3.

Art. 157.

If in the course of the activities specified in Art. 156.6.1 the issuer of financialinstruments admitted to trading on a regulated market in the territory of the Republic ofPoland or another Member State, irrespective of whether transactions in a giveninstrument are executed on such market, or any person acting in the name or on behalfof the issuer, discloses inside information to an unauthorised person, the issuer shall – ifthe disclosure was intentional – simultaneously disclose such information to theCommission, a company operating a regulated market where the issuer securities aretraded, and shall make it available to the public as provided for in Art. 56.1 of thePublic Offering Act, and – if the disclosure was unintentional – shall promptly disclosesuch information, unless the person who has obtained such information is bound by anobligation to keep it confidential under the provisions of other laws, a relevantagreement or articles of association.

Art. 158.

1. The issuer of financial instruments admitted to trading on a regulated market in theterritory of the Republic of Poland or another Member State, irrespective ofwhether transactions in a given instrument are executed on such market, shallprepare and maintain separate lists of natural persons who have access to specificinside information and who are employed, mandated or otherwise legally engagedby the issuer (including members of the issuer’s supervisory bodies) or other entityacting in its name and on its behalf.

2. On entering the name of a person who gains access to specific inside informationinto the list referred to in Art. 158.1, the issuer shall advise such person of criminaland administrative sanctions for illegal disclosure of inside information, includingdisclosure caused by inadequate protection of such information or by use thereof.

103

3. At the demand of the Commission or its authorised representative, the issuer shallpromptly submit the lists referred to in Art. 158.1, shall provide information aboutnew entries in the list made after the date as at which it was prepared and about anychanges of the data included therein.

Art. 159.

1. During a restricted period persons enumerated in Art. 156.1.1a may not acquire ordispose of, for their own account or for the account of a third party, any of theissuer shares, derivative rights attached thereto or other financial instrumentsrelated to such shares, and may not take for their own account or for the account ofa third party any other legal transactions which lead or might lead to the disposal ofsuch financial instruments.

2. Restricted period shall mean:

1) the period between the time when a natural person referred to in Art. 156.1.1agains inside information concerning the issuer or the financial instrumentsreferred to in Art. 159.1 which meet the conditions specified in Art. 156.4 andthe time when such information is made public;

2) in the case of an annual report – the period of two months preceding thepublication of such report or, if shorter, the period between the end of a givenfinancial year and the publication of such report, unless a natural personreferred to in Art. 156.1.1a had no access to the financial data on the basis ofwhich such report was prepared;

3) in the case of a semi-annual report – the period of one month preceding thepublication of such report or, if shorter, the period between the end of a givenhalf year and the publication of such report, unless a natural person referred toin Art. 156.1.1a had no access to the financial data on the basis of which suchreport was prepared;

4) in the case of a quarterly report – the period of two weeks preceding thepublication of such report or, if shorter, the period between the end of a givenquarter and the publication of such report, unless a natural person referred to inArt. 156.1.1a had no access to the financial data on the basis of which suchreport was prepared.

Art. 160.

1. Persons:

1) who are members of the issuer’s management and supervisory bodies or whoare issuer’s proxies,

2) other persons who hold management posts in the organisational structure of theissuer, have permanent access to inside information related, whether directly orindirectly, to the issuer, and are authorised to make decisions concerning theissuer’s development and economic prospects

– shall notify the Commission or the issuer of any transactions executed by them orby persons related to them for their own account, whereby they acquire or disposeof any issuer shares, derivative rights attached thereto and other financial

104

instruments related to the issuer shares admitted or sought to be admitted to tradingon a regulated market.

2. Related persons of the person referred to in Art. 160.1 shall be:

1) such person’s spouse or cohabitating partner;

2) such person’s dependant children and persons related through adoption,custody or guardianship;

3) other persons related through blood or marriage who are members of the samehousehold with such person for at least one year;

4) entities:

a) in which the person referred to in Art. 160.1 or such person’s relatedperson referred to in Art. 160.2.1-3 is a member of the management orsupervisory body or holds a management post within the organisationalstructure of such entity, has permanent access to inside information relatedto such entity and is authorised to make decisions concerning such entity’sdevelopment and economic prospects, or

b) which are directly or indirectly controlled by the person referred to inArt. 160.1 or such person’s related person referred to in Art. 160.2.1-3, or

c) from whose activities the person referred to in Art. 160.1 or such person’srelated person referred to in Art. 160.2.1-3 derives profits, or

d) whose economic interests are equivalent to the economic interests of theperson referred to in Art. 160.1 or such person’s related person referred toin Art. 160.2.1-3.

3. Entities described in Art. 160.2.4 shall be obliged to provide the persons referred toin Art. 160.1 or their related persons with any information required to ensure dueperformance of the obligation specified in Art. 160.1

4. The issuer shall be obliged to promptly disclose any information which wasdisclosed to him pursuant to Art. 160.1 simultaneously to a company operating aregulated market where the issuer securities are traded and to the public as providedfor in Art. 56.1 of the Public Offering Act.

5. The minister competent for financial institutions shall define, by way of aregulation:

1) the detailed scope of the information referred to in Art. 160.1 as well as themanner and time for disclosing such information by the obliged persons,

2) the detailed scope, manner and time for disclosing such information by theissuers,

3) the detailed information to be included in the list of persons having access toinside information referred to in Art. 158, the manner of keeping and updatingsuch list and the for which it must be stored

– taking into account the proper performance by the Commission of its supervisoryresponsibilities and the need to provide market participants with access toinformation.

105

Art. 161.

1. The regulated entities specified in Art. 5.1-3, 5.12 and 5.13 of the Act on CapitalMarket Supervision shall promptly notify the Commission of any reasonablesuspicion of illegal disclosure or use of inside information to the extent, by way ofa procedure and on the terms provided for in Art. 40.

2. The obligation mentioned in Art. 161.1 shall also apply to:

1) domestic banks and branches of credit institutions as defined in the BankingLaw of August 29th 1997, which are not regulated entities and which conductactivities specified in Art. 69.2;

2) entities which conduct activities specified in Art. 70.1.2, 70.1.9-10 and in Art.71.1.

3. The prohibitions and requirements referred to in Arts 156-160, including thoseresulting from the regulations issued under Art. 160.5, shall apply to cases specifiedin Art. 39.4.

Part VII

Fees and Charges

Art. 162.

Granting licences, authorisations and approvals provided for in this Act shall be subjectto the payment of a fee of up to the złoty equivalent of EUR 4,500.

Art. 163.

1. Each company operating the regulated market and the National Depository shall payregulatory fees totalling up to 0.03% of the value of rights transfer agreementsconcluded on the regulated market.

2. Each entity organising an alternative trading system shall pay regulatory feestotalling up to 0.03% of the value of rights transfer agreements concluded as part ofsuch a system, with the exception of agreements concerning securities issued by theState Treasury or the National Bank of Poland, or securities incorporatingtransferable property rights attached to securities issued by the State Treasury orthe National Bank of Poland.

3. Each investment firm entering into the transactions referred to in Art. 74.1 shall payregulatory fees totalling up to 0.015% of the value of rights transfer agreements.

4. Each investment firm entering, for its own account, into a sale agreement with thecustomer placing an order to acquire or dispose of broker-traded financialinstruments other than securities, admitted to organised trading, shall payregulatory fees totalling up to 0.015% of the rights transfer agreements.

4. Each foreign investment firm conducting brokerage activities in the territory of theRepublic of Poland and each foreign legal person conducting such activities in theterritory of the Republic of Poland through a branch shall pay the fees referred toin Art. 163.2, unless, on a reciprocal basis, such fees are not charged on Polish

106

entities conducting brokerage activities in the countries where such foreign entitieshave their registered offices.

Art. 164.

The application and distribution of proceeds from the fees and charges referred to inArt. 162 and Art. 163, as well as determination of the amount, the manner of chargingand the payment thereof shall be performed in accordance with the procedure and on theterms and conditions stipulated in Art. 17 of the Act on Capital Market Supervision.

Part VIII

Administrative Sanctions for Infringement of Regulations

Art. 165.

1. If a company operating a stock exchange violates the provisions of the law, fails tocomply with the principles of fair trading or compromises the interest of tradeparticipants, the Commission may impose a pecuniary penalty of up toPLN 1,000,000.

2. The relevant decision shall be issued following a hearing .

3. The Commission may also apply to the minister competent for financial institutionsfor revoking the authorisation to operate a stock exchange if the company operatesthe stock exchange in breach of the provisions of the law, fails to comply with theprinciples of fair trading or compromises the interest of trade participants.

Art. 166.

1. If a company operating an OTC market violates the provisions of the law, fails tocomply with the principles of fair trading or compromises the interest of tradeparticipants, the Commission may:

1) impose a pecuniary penalty of up to PLN 1,000,000,

2) revoke the authorisation referred to in Art. 36.1, or

3) revoke the authorisation and impose the pecuniary penalty referred to inArt. 166.1.1.

2. The relevant decision shall be issued following a hearing .

Art. 167.

1. Subject to Art. 167.2, the Commission may revoke the brokerage licence or limit itsscope if an investment firm:

1) grossly violates the provisions of the law, in particular the regulations issuedunder Art. 94.1.1-2 and 94.1.5;

2) fails to comply with the principles of fair trading;

3) compromises the customer’s interest;

107

4) has discontinued the activities specified in the licence for at least six months;

5) no longer meets the conditions on the basis of which the licence was granted,subject to Art. 95.10;

6) has been granted the licence on the basis of misrepresentations or falsedocuments.

2. In the cases referred to in Art. 167.1-3 or Art. 167.1.6, the Commission may also:

1) choose not to apply the sanctions referred to in Art. 167.1 but imposea pecuniary penalty of up to PLN 500,000 on the investment firm, or

2) impose one of the sanctions referred to in Art. 167.1 and the pecuniary penaltyreferred to in Art. 167.2.1

– if justified by the nature of the investment firm misconduct.

3. The Commission may also impose the sanctions referred to in Art. 167.1 or 167.2on an investment firm which has commissioned an agent to perform the activitiesreferred to in Art. 79.2 if, in connection with its services for the investment firm,the agent violates the provisions of the law or the principles of fair trading orcompromises customers’ interests.

4. The entity whose brokerage licence has been revoked shall not reapply for sucha licence for five years from the date when the decision revoking the licencebecame final, unless the Commission agrees to shorten this period.

5. If justified by the need to protect the public interest, the Commission may suspend,in whole or in part, the authorisation to conduct brokerage activities for up to onemonth from the initiation of the proceedings concerning matters referred to inArt. 167.1.

6. The Commission may impose a pecuniary penalty of up to PLN 500,000 on theentity performing the activities referred to in Art. 71.1. in breach of the regulationsissued under Art. 94.1.1.

7. The relevant decision shall be issued following a hearing.

8. The Commission’s resolution serving as a basis for the decision referred to inArt. 167.7 shall be published in the Official Journal of the Polish Securities andExchange Commission. The Commission may order that the resolution bepublished in two daily newspapers with nationwide circulation at the cost of theentity referred to in Art. 167.1 or 167.6.

9. The provisions of Art. 167.1-3, 167.7 and 167.8 shall apply accordingly if theCommission becomes aware of an infringement of the regulations governingbrokerage activities in another Member State by a brokerage house conductingbrokerage activities in such a state. In this case, the Commission shall inform thecompetent authority in the Member State about the sanctions imposed.

Art. 168.

1. If the custodian bank:

1) grossly violates the provisions of the law, in particular the regulations issuedunder Art. 94.1.1-2 and 94.1.5,

2) fails to comply with the principles of fair trading, or

108

3) compromises the customer’s interest,

– the Commission may impose a pecuniary penalty of up to PLN 500,000 on thecustodian bank, subject to Art. 168.2.

2. If justified by the nature of the custodian bank’s misconduct, the Commission mayrevoke the authorisation to conduct custodial activities.

3. The provisions of Art. 167.4, 167.5 and 167.7-9 shall apply accordingly tocustodian banks.

Art. 169.

1. If the Commission ascertains that a foreign investment firm or an investment firm’sagent representing a foreign investment firm violates the provisions of the lawsregulating brokerage or custodial activities binding in the Republic of Poland, itshall order, by way of a decision, that the foreign investment firm discontinue theviolation and shall determine the deadline for remedying such violation.

2. The Commission shall notify the authority competent for the foreign investmentfirm of the violation referred to in Art. 169.1 and failure to meet the deadline forremedying such violation.

3. If the foreign investment firm referred to in Art. 169.1 fails to discontinue orremedy the violation within the set timeframe, then following the lapse of onemonth from the time the competent authority was notified in accordance withArt. 169.2, the Commission may take the following steps:

1) prohibit, in whole or in part, the conduct of brokerage or custodial activities inthe Republic of Poland, or

2) suspend, in whole or in part, the right to conduct brokerage or custodialactivities in the Republic of Poland for up to six months, or

3) impose a pecuniary penalty of up to PLN 500,000, or

4) impose one of the sanctions referred to in Art. 169.3.1 and 169.3.2 and thepecuniary penalty specified in Art. 169.3.3;

and shall concurrently inform the authority competent for the foreign investmentfirm that such steps have been taken.

4. The relevant decision shall be issued following a hearing.

5. The Commission’s resolution serving as the basis for the decision referred to inArt. 169.4 shall be published in the Official Journal of the Polish Securities andExchange Commission. The Commission may order that the resolution bepublished in two daily newspapers with nationwide circulation at the cost of theforeign investment firm.

6. If a foreign investment firm is prohibited from conducting brokerage or custodialactivities in the Republic of Poland, it shall not resume such activities for five yearsfrom the date when the decision prohibiting such activities became final, unless theCommission agrees to shorten this period.

7. If justified by the need to protect the public interest, before taking the steps referredto in Art. 169.1-3, the Commission may, suspend, in whole or in part, the right toconduct brokerage or custodial activities by a foreign investment firm in theRepublic of Poland for up to one month, and shall notify accordingly the European

109

Commission and competent authority in another Member State which has grantedthe authorisation to the foreign investment firm.

8. The Commission shall notify the European Commission of the sanctions imposedin accordance with Art. 169.3.

9. The provisions of Art. 167 shall not apply to foreign investment firms conductingbrokerage activities in the Republic of Poland.

Art. 170.

1. If the National Depository violates the provisions of the law, fails to comply withthe principles of fair trading or compromises the interest of trade participants, theCommission may impose a pecuniary penalty of up to PLN 1,000,000.

2. The relevant decision shall be issued following a hearing.

Art. 171.

1. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 500,000 on anyone who fails to make the notification referred to in Art. 24.1,Art. 47.1, Art. 106.1 or Art. 107.1, or fails to do so acting in the name or interest ofa legal person or an organisational unit without legal personality.

2. By way of a decision, the Commission may also impose the pecuniary penaltyreferred to in Art. 171.1 on any person who acquires or subscribes for sharesdespite the objections referred to in Art. 24.3, Art. 47.3 or Art. 106.3, or does so inthe name or interest of a legal person or an organisational unit without legalpersonality.

3. The decision referred to in Art. 171.1 or 171.2 shall be issued following a hearing.4. The Commission’s resolution serving as the basis for the decision referred to inArt. 171.1 or 171.2 shall be published in the Official Journal of the PolishSecurities and Exchange Commission. The Commission may order that theresolution be published in two daily newspapers with nationwide circulation at thecost of the party concerned.

Art. 172.

1. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 200,000 or a pecuniary penalty of up to ten times the financial benefit gained,or both, on anyone who engages in the market manipulation referred to inArt. 39.2.4b or 39.2.8.

2. The same penalties shall be imposed on anyone who engages in collusion withother persons for the purpose of market manipulation.

3. The relevant decision shall be issued following an hearing.

4. The resolution serving as a basis for the decision referred to in Art. 172.1 shall bepublished, in whole or in part, by the Commission in its Official Journal, or theCommission may order that the resolution be published in two daily newspaperswith nationwide circulation at the cost of the party concerned, unless suchpublication could cause disproportionate damage to trade participants or pose aserious threat to financial markets.

110

Art. 173.

1. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 1,000,000 on anyone who stabilises the prices of financial instruments, ororders such stabilisation, in breach of the rules laid down in the relevant issueprospectus or of the regulations referred to in Art. 39.3.1.

2. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 1,000,000 on any entity which acquires its own shares in breach of theprovisions of Art. 39.3.1.

3. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 1,000,000 on anyone who acquires shares in a company operating a stockexchange market or an OTC market without being entitled to do so.

4. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 1,000,000 on anyone who fails to deliver the information referred to in Art. 40or delivers such information in breach of the provisions of Art. 40.

5. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 1,000,000 on anyone who fails to deliver the information referred to inArt. 161 or delivers such information in breach of the provisions of Art. 161.

6. The same penalty may be imposed on anyone who commits the acts specified inArt. 173.1-5 while acting in the name or interest of a legal person or anorganisational unit without legal personality.

7. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 1,000,000 on anyone who prepares recommendations concerning financialinstruments or issuers thereof, for dissemination among investors, or whodisseminates such recommendations, in breach of the regulation referred to inArt. 42.2, or who in doing so fails to exercise due care, ensure reliability of therecommendations, disclose legitimate interests or conflicts of interests existing atthe time such recommendations are prepared or disseminated.

8. In the decision imposing a penalty, the Commission may determine a deadline forthe performance of the obligation or act which is required under applicableregulations the breach of which was the reason for imposing the pecuniary penalty.If the obligation or act is not performed by such deadline, the Commission mayagain, by way of a decision, impose a pecuniary penalty.

9. The relevant decision shall be issued following a hearing.

Art. 174.

1. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 200,000 on any of the persons enumerated in Art. 156.1.1a if during therestricted period they commit the actions set forth in Art. 159.1, unless such personhas commissioned an authorised entity conducting brokerage activities to managesuch person’s securities portfolio in a manner which excludes such person’sinfluence on the decisions made for its account.

2. The relevant decision shall be issued following a hearing.3. The resolutionserving as a basis for the decision referred to in Art. 174.1 shall be published, inwhole or in part, by the Commission in its Official Journal, or the Commission mayorder that the resolution be published in two daily newspapers with national

111

circulation at the cost of the party concerned, unless such publication could causedisproportionate damage to trade participants or pose a serious threat to financialmarkets.

4. The Commission’s powers referred to in Art. 174.1 shall apply in the casesspecified in Art. 39.4.

Art. 175.

1. By way of a decision, the Commission may impose a pecuniary penalty of up toPLN 100,000 on any person who fails to perform or unduly performs the obligationreferred to in Art. 160.1, unless such person:

1) has commissioned an authorised entity conducting brokerage activities tomanage such person’s securities portfolio as a result of which such person hasno knowledge of the transactions executed by the portfolio manager;

2) did not or could not know, despite exercising due care, of the execution of thetransaction.

2. The relevant decision shall be issued following a hearing.

Art. 176.

1. If the issuer or the selling shareholder fails to perform or unduly performs theobligations referred to in Art. 157 and Art. 158, or the obligations under regulationsissued under Art. 160.5, the Commission may:

1) issue a decision that the relevant securities be excluded from trading on theregulated market,

2) impose a pecuniary penalty of up to PLN 1,000,000, or

3) issue a decision that the securities be, for a definite or indefinite period,excluded from trading on the regulated market and impose the pecuniarypenalty referred to in Art. 176.1.2.

2. The provisions of Art. 19, Art. 96.5-8, 96.10 and 96.11 of the Public Offering Actshall apply accordingly.

Part IX

Civil Liability

Art. 177.

1. The certificate issuer shall be liable for any damage caused by the issuance of aninvalid certificate, issuance of a certificate to a person who is not entitled to suchcertificate, or failure to block securities in connection with the issuance ofa certificate, unless such damage is caused by an occurrence of force majèure or theexclusive fault of the party which has suffered the damage or a third party forwhich the certificate issuer is not responsible.

2. If the issuer of a certificate has acted upon another person’s instruction, the liabilityof the issuer and such person shall be joint and several and may not be limited ordisclaimed in advance.

112

Part X

Penalties

Art. 178.

Anyone who engages in trading in broker-traded financial instruments without therequired a licence or an authorisation provided for in other regulations, or any otherstatutory authorisation, shall be liable to a fine of up to PLN 5,000,000.

Art. 179.

Anyone who is bound by the professional secrecy obligation and who discloses or usesinformation covered by such obligation in securities trading shall be liable to a fine ofup to PLN 1,000,000 or a penalty of imprisonment for up to three years, or to both thesepenalties jointly.

Art. 180.

Anyone who, in violation of the prohibition referred to in Art. 156.2.1, discloses insideinformation shall be liable to a fine of up to PLN 2,000,000 or a penalty ofimprisonment for up to three years, or to both these penalties jointly.

Art. 181.

1. Anyone who, in violation of the prohibition referred to in Art. 156.1, uses insideinformation shall be liable to a fine of up to PLN 5,000,000 or a penalty ofimprisonment for a period from three months to five years, or to both thesepenalties jointly.

2. If the act referred to in Art. 181.1 is perpetrated by a person referred to inArt. 156.1.1a, the perpetrator shall be liable to a fine of up to PLN 5,000,000 ora penalty of imprisonment for a period from six months to eight years, or to boththese penalties jointly.

Art. 182.

Anyone who, in violation of the prohibition referred to in Art. 156.2.2, issuesa recommendation or induces another person to acquire or dispose of financialinstruments to which inside information relates shall be liable to a fine of up toPLN 2,000,000 or a penalty of imprisonment for up to three years, or to both thesepenalties jointly.

Art. 183.

1. Anyone who engages in the market manipulation referred to in Art. 39.2.1-3,39.2.4a or 39.2.5-7 shall be liable to a fine of up to PLN 5,000,000 or a penalty ofimprisonment for a period from three months to five years, or to both thesepenalties jointly.

113

2. Anyone who engages in collusion with other persons for the purpose of the marketmanipulation referred to in Art. 39.2.1-3, 39.2.4a or 39.2.5-7 shall be liable to a fineof up to PLN 2,000,000.

Art. 184.

1. Anyone who prevents or obstructs the performance of the actions referred to inArt. 30.1-3, Art. 37 in conjunction with Art. 30 and Art. 64, Art. 88, Art. 90.2-3 andArt. 122 shall be liable to a penalty of a detention or restriction of freedom, or toa fine.

2. The same penalty may be imposed on anyone who, acting in the name or interest ofa legal person or an organisational unit without legal personality:

1) fails to perform the transfer of securities, other broker-traded financialinstruments and cash or documents relating to the keeping of the relevantaccounts, contrary to the order referred to in Art. 89.4;

2) fails to archive or store documents or other data carriers related to theconducted brokerage or custodial activities in breach of the obligation referredto in Art. 90.1.

3. Adjudication in the cases specified in Art. 184.1-2 shall be governed by theregulations pertaining to proceedings concerning minor offences.

Part XI

Amendments to Legislation in Force

Art. 185.

In the Act of March 24th 1920 on Acquisition of Real Estate by Foreign Nationals(Dz.U. of 2004, No. 167, item 1758, and Dz.U. of 2005, No. 94, item 788), Art. 3e.3shall read as follows:

“3. The provisions of Art. 3e.1-2 shall not apply where the company shareshave been admitted to trading on a regulated market or where the companyis the owner or perpetual usufructuary of the real estate specified inArt. 8.1.1, 8.1.1a and 8.1.5, subject to Art. 8.3.”.

Art. 186.

The following amendments are hereby made to the Code of Civil Procedure ofNovember 17th 1964 (Dz.U. No. 43, item 296, as amended 12)):

12) Amendments to the Code were promulgated in Dz.U. of 1965, No. 15, item 113; Dz.U. of 1974,

No. 27, item 157, No. 39, item 231; 1975, No. 45, item 234; Dz.U. of 1982, No. 11, item 82 andNo. 30, item 210; Dz.U. of 1983, No. 5, item 33; Dz.U. of 1984, No. 45, item 241; Dz.U. of 1985,No. 20, item 86; Dz.U. of 1987, No. 21, item 123; Dz.U. of 1988, No. 41, item 324; Dz.U. of 1989,No. 4, item 21 and No. 33, item 175; Dz.U. of 1990, No. 14, item 88, No. 34, item 198, No. 53,item 306, No. 55, item 318 and No. 79, item 464; Dz.U. of 1991, No. 7, item 24, No. 22, item 92 andNo. 115, item 496; Dz.U. of 1993, No. 12, item 53; Dz.U. of 1994, No. 105, item 509; Dz.U. of 1995,No. 83, item 417; Dz.U. of 1996, No. 24, item 110, No. 43, item 189, No. 73, item 350 and No. 149,item 703; Dz.U. of 1997, No. 43, item 270, No. 54, item 348, No. 75, item 471, No. 102, item 643,No. 117, item 752, No. 121, items 769 and 770, No. 133, item 882, No. 139, item 934, No. 140,

114

1) Art. 7521 shall read as follows:

„Art. 7521. In the case of security comprising seizure of rights attached tofinancial instruments registered in a securities account or anotheraccount as defined in the regulations on trading in financialinstruments, the obligated party may, within three months from theseizure date, order the financial instruments to be sold. The proceedsfrom such sale shall be deposited to a court’s escrow account. Theobligated party may also order that cash maintained in such party’saccount be paid to the court’s escrow account. The provisions ofArt. 752 shall apply accordingly.”;

2) Art. 901.4 shall read as follows:

“Art. 901.4. The enforcement officer may sell seized securities not registeredin a securities account through the agency of an investment firm, asdefined in the regulations referred to in Art. 7521. Such sale may beexecuted within one month from the seizure date. Upon the debtor’sconsent, such sale may also be executed at a later time. An expert shouldbe appointed for the determination of the selling price. Upon the debtor’srequest, the sale may be executed at a price specified by the debtor.”;

3) Art. 9118 shall read as follows:

“Art. 9118.1. The enforcement officer shall commence enforcement againstfinancial instruments registered in a securities account or anotheraccount with the seizure thereof. To this end, the enforcement officershall:

1) notify the debtor that he must not collect any benefits from ordispose of the seized securities or other assets accumulated inthe account, unless under orders referred to in Art. 9118.2;

2) call upon the entity conducting brokerage activities which keepsthe debtor’s account to refrain from executing the debtor’sinstructions with the exception of orders referred to inArt. 9118.2, as well as from paying out to the debtor any fundsdeposited in the debtor’s account, and to deliver to theenforcement officer the seized funds, up to the value of theenforced claim, or credit the same to the court escrow account.

2. If the funds in the debtor’s account are insufficient to cover theenforced claim, the entity conducting brokerage activities which keeps

item 940 and No. 141, item 944; Dz.U. of 1998, No. 106, item 668 and No. 117, item 757; Dz.U. of1999, No. 52, item 532; Dz.U. of 2000, No. 22, items 269 and 271, No. 48, items 552 and 554, No. 55,item 665, No. 73, item 852, No. 94, item 1037, No. 114, item 1191 and No. 122, items 1314, 1319 and1322; Dz.U. of 2001, No. 4, item 27, No. 49, item 508, No. 63, item 635, No. 98, items 1069, 1070 and1071, No. 123, item 1353, No. 125, item 1368 and No. 138, item 1546; Dz.U. of 2002, No. 25,item 253, No. 26, item 265, No. 74, item 676, No. 84, item 764, No. 126, items 1069 and 1070,No. 129, item 1102, No. 153, item 1271, No. 219, item 1849 and No. 240, item 2058; Dz.U. of 2003,No. 41, item 360, No. 42, item 363, No. 60, item 535, No. 109, item 1035, No. 119, item 1121,No. 130, item 1188, No. 139, item 1323, No. 199, item 1939 and No. 228, item 2255; Dz.U. of 2004,No. 9, item 75, No. 11, item 101, No. 68, item 623, No. 91, item 871, No. 93, item 891, No. 121,item 1264, No. 162, item 1691, No. 169, item 1783, No. 172, item 1804, No. 204, item 2091, No. 210,item 2135, No. 236, item 2356 and No. 273, item 2384; and Dz.U. of 2005, No. 13, item 98, No. 22,item 185, No. 86, item 732 and No. 122, item 1024.

115

such debtor’s account shall promptly call upon the debtor to place,within three days, a sell order so as to secure satisfaction of thecreditor for one month, indicating which of the deposited financialinstruments are to be the subject of such a sell order. If the financialinstruments thus seized have earlier been seized under a claimssafeguarding decision, the debtor’s sell order pertaining to suchfinancial instruments shall be executed following the seizureperformed in the course of enforcement, provided that the debtor hasplaced the sell order by the date specified in Art. 7521.

3. If the debtor fails to perform the action referred to in Art. 9118.2 or,despite performing this action the financial instruments are not sold,the entity keeping the account shall within three days notify the debtorthrough the enforcement officer of the financial instruments depositedin the account. The creditor shall then place a sell order for selectedfinancial instruments.

4. If the creditor fails to place a sell order referred to in Art. 9118.3within two weeks or if the sale ordered by the creditor has not beeneffected within one year, the enforcement shall be discontinued.

5. If the seizure has been made for the benefit of two or more creditors,the order referred to in Art. 9118.3 shall be placed by a custodianappointed under Art. 908, unless the creditors have unanimouslyrequested that the financial instruments be sold. If a custodian isappointed, the two-week period shall count from the appointmentdate.”.

Art. 187.

The following amendments are hereby made to the on the Act on AdministrativeEnforcement Proceedings of June 17th 1966 (Dz.U. of 2002, No. 110, item 968, asamended 13)):

1) Art. 1a.12a shall read as follows:

“a) in enforcement proceedings concerning financial claims, the enforcementagainst:

– cash,

– remuneration for work,

– old-age pension and social security benefits, as well as social pension,

– bank accounts,

– other financial claims,

– rights attached to financial instruments, as defined in the regulations ontrading in financial instruments, registered in a securities account or

13) Amendments to the consolidated text of the Act have been promulgated in Dz.U. of: 2002, No. 113,

item 984, No. 127, item 1090, No. 113, item 984, No. 141, item 1178, No. 153, item 1271, No. 169,item 1387, No. 199, item 1672, No. 200, item 1679 and No. 216, item 1824; Dz.U. of 2003, No. 80,item 718, No. 135, item 1268, No. 137, item 1302, No. 193, item 1884, No. 217, item 2124 andNo. 228, item 2255; Dz.U. of 2004, No. 68, item 623, No. 91, items 870 and 871, No. 96, item 959 andNo. 116, item 1203; and Dz.U. of 2005, No. 86, item 732.

116

another account, as well as receivables credited to a cash account auxiliaryto such accounts,

– securities not deposited in any securities account,

– promissory note,

– economic copyright and neighbouring rights, as well as industrial propertyrights,

– shares in a limited-liability company,

– other property rights,

– movables,

– real estate,”;

2) In Part 2, Chapter 5, Section 2 shall read as follows:

“Section 2

Enforcement against Rights Attached to Financial Instruments Registered in SecuritiesAccounts or Other Accounts and against Receivables Credited to Cash Accounts

Art. 93.1. The enforcement authority shall seize the rights attached to financialinstruments, as defined in the regulations on trading in financialinstruments, registered in a securities account or another account,and receivables credited to the cash account of the obligated party byway of delivering to the entity keeping such accounts, hereinafterreferred to as “the account keeper”, a notification of the seizure ofrights attached to financial instruments and receivables credited tothe cash account of the obligated party up to the amount of theenforced claims referred to in Art. 93.2.

2. The enforcement authority shall call upon the account keeper todeliver to the enforcement authority funds from the obligated party’scash account in an amount of up to the value of the enforced claimincreased by default interest and cost of enforcement, and, if thefunds in such cash account are not sufficient to cover the enforcedclaim, to sell, at the demand of the enforcement authority, the seizedfinancial instruments and pay the sale proceeds to the enforcementauthority or notify the enforcement authority within seven (7) daysfrom the receipt of the notification of any obstacle to the realisationof the seized assets, including the fact that such an entity does notkeep a cash account, securities account or another account for theobligated party.

3. The seizure of rights attached to financial instruments and ofreceivables credited to a cash account shall be deemed effected uponthe account keeper receiving the notification of the seizure and shallalso cover rights and receivables which have not been registered inor credited to the obligated party’s accounts at the time of theseizure.

4. The seizure of rights attached to financial instruments andreceivables credited to a cash account shall also be effective if thenotification referred to in Art. 93.1 includes only the obligatedparty’s first name and surname, or name, and address.

117

5. While sending the notification referred to in Art. 93.1, theenforcement authority shall:

1) notify the obligated party of the seizure of such party’s rightsattached to financial instruments and receivables credited toa cash account, delivering to such party an official copy of thewrit of execution, if not yet delivered, and an official copy of thenotification (addressed to the account keeper) of the seizure ofrights attached to financial instruments and receivables creditedto a cash account, and shall notify the obligated party that suchparty may not dispose of the seized rights,

2) call upon the obligated party to inform the enforcementauthority, within seven (7) days from the receipt of thenotification referred to in Art. 93.5.1, of the order in which andprices at which the financial instruments are to be sold.

6. In the case referred to in Art. 93.5.2, in line with the obligatedparty’s instructions, the enforcement authority shall issue a sell orderfor financial instruments which traded in organised trading asdefined in the regulations on trading in financial instruments.

7. If the obligated party has failed to specify a selling price or order inwhich financial instruments are to be sold by the time prescribed orif the sale of financial instruments in line with the obligated party’sinstruction has not been effected within five (5) consecutive tradingdays, the enforcement authority shall issue a sell order for financialinstruments at a price enabling the order to be executed in organisedtrading.

8. The enforcement authority shall determine the scope of sale and theorder in which financial instruments are to be sold on the basis of thequotations in organised trading on the day preceding the date of thesell order.

9. The financial instruments whose prices on the day preceding thedate of the sell order guarantee the highest income or lowest loss inrelation to their respective nominal values shall be sold first.

10. If the sale of financial instruments has not been effected on the firsttrading day after the lapse of the period referred to in Art. 93.7 or thesale proceeds are insufficient to cover the enforced claims, theenforcement authority shall order supplementary sell transactions, towhich the provisions of Art. 93.8-9 shall apply accordingly.

Art. 94.1. The provisions of Art. 93.1, 93.3, 93.4 and 93.5.1 shall applyaccordingly also to the seizure of financial instruments which areregistered in a securities account or another account, but are nottraded in organised trading.

2. Upon the receipt of the notification of the seizure of financialinstruments referred to in Art.94.1, the account keeper shallpromptly send the account statement relating to the obligated party’saccounts to the enforcement authority.

118

3. The financial instruments referred to in Art. 94.1 shall be sold tonatural persons in accordance with the provisions of Part 2,Chapter 6, Section 2.

Art. 94a. The account keeper shall register the buyer’s financial instruments inthe buyer’s account based on the order referred to in Art. 68b.

Art. 94b. The provisions of Art. 71b shall apply accordingly if the accountkeeper makes a payment to the obligated party from the seizedamounts or proceeds from the sale of the seized rights attached tofinancial instruments or if the account keeper executes the obligatedparty’s instructions which render the enforcement ineffective.

Art. 94c. If the seized rights attached to financial instruments and receivablescredited to a cash account of the obligated party have earlier beenseized by another enforcement authority, the account keeper shallpromptly notify the relevant enforcement authorities of the same.”.

Art. 188.

The following amendments are hereby made to the Personal Income Tax Act of July26th 1991 (Dz.U. of 2000, No. 14, item 176, as amended14)):

1) In Art. 5a:

a) Art. 5a.11 shall read as follows:

“11) securities shall mean the securities referred to in Art. 3.1 of the Act onTrading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No.183, item 1538).”,

b) Art. 5a.13 shall read as follows:

“13) derivative financial instruments shall mean the financial instrumentsspecified in Art. 2.1.2 of the Act on Trading in Financial Instruments ofJuly 29th 2005,”,

c) Art. 5a.14 shall read as follows:

“14) capital funds shall mean investment funds and foreign funds referred toin the regulations concerning investment funds and insurance capital fundsoperating under the provisions of the Insurance Activities Act, with theexception of pension funds referred to in the regulations on theorganisation and operation of pension funds,”;

14) Amendments to the consolidated text of the Act have been promulgated in Dz.U. of 2000, No. 22,

item 270, No. 60, item 703, No. 70, item 816, No. 104, item 1104, No. 117, item 1228 and No. 122,item 1324; Dz.U. of 2001, No. 4, item 27, No. 8, item 64, No. 52, item 539, No. 73, item 764, No. 74,item 784, No. 88, item 961, No. 89, item 968, No. 102, item 1117, No. 106, item 1150, No. 110,item 1190, No. 125, items 1363 and 1370 and No. 134, item 1509; 2002, No. 25, item 253, No. 74,item 676, No. 89, item 804, No. 135, item 1146, No. 141, item 1182, No. 169, item 1384, No. 181,item 1515, No. 200, item 1679 i No. 240, item 2058; 2003, No. 7, item 79, No. 45, item 391, No. 65,item 595, No. 84, item 774, No. 90, item 844, No. 96, item 874, No. 122, item 1143, No. 135,item 1268, No. 137, item 1302, No. 166, item 1608, No. 202, item 1956, No. 223, item 2217 andNo. 228, item 2255; 2004, No. 29, item 257, No. 54, item 535, No. 93, item 894, No. 99, item 1001,No. 109, item 1163, No. 116, items 1203, 1205 and 1207, No. 120, item 1252, No. 123, item 1291,No. 151, item 1596, No. 162, item 1691, No. 210, item 2135, No. 263, item 2619 and No. 281,items 2779 and 2781; and Dz.U. of 2005, No. 25, item 202, No. 30, item 262, No. 85, item 725,No. 86, item 732, No. 90, item 757 and No. 102, item 852.

119

2) In Art. 17:

a) in Art. 17.1:

- Art. 17.1.5 shall read as follows:

“5) revenue from the participation in capital funds, subject toArt. 17.1c,”,

- Art. 17.1.6b shall read as follows:

“b) exercise of rights attached to securities referred to in Art. 3.1b of theAct on Trading in Financial Instruments of July 29th 2005,”,

b) after Art. 17.1b, Art. 17.1c shall be added, which shall read as follows:

“1c. Revenue from the redemption of units in a sub-fund of an umbrella fundshall not be recognised if units in such sub-fund are converted into unitsin another sub-fund of the same investment fund in accordance with theprovisions of the Act on Investment Funds of May 27th 2004 (Dz.U.No. 146, item 1546).”;

3) In Art. 23:

a) Art. 23.1.38 shall read as follows:

“38) expenditure on the subscription for or acquisition of shares in orcontributions to a cooperative, shares in an incorporated company andother securities, as well as expenditure on the acquisition of shares orunits in capital funds; however, such expenditure shall be the tax-deductible cost of disposal against consideration of such shares,contributions and other securities, including the repurchase of securitiesby the issuer thereof, as well as the repurchase of shares or units incapital funds or redemption of units in, shares in or investmentcertificates of capital funds, subject to Art. 23.3e,”,

b) after Art. 23.3d, Art. 23.3e shall be added, to read as follows:

“3e. The provisions of Art. 23.1.38 (the sentence following the semicolon)shall not apply to the conversion of units in a sub-fund into units inanother sub-fund of the same umbrella fund, effected in accordance withthe provisions of the Act on Investment Funds of May 27th 2004.”;

4) In Art. 30a:

a) Art. 30a.1.5 shall read as follows:

“5)on revenue from participation in capital funds,”,

b) Art. 30a.5 shall read as follows:

“5. Income referred to in Art. 30a.1.5 shall not be reduced by the losses onparticipation in capital funds or other losses on cash capital and propertyrights incurred in a given tax year and previous years.”;

5) In Art. 30b, Art. 30b.2.2 shall read as follows:

“2) the difference between the sum of revenue from the exercise of rights attachedto securities referred to in Art. 3.1b of the Act on Trading in FinancialInstruments of July 29th 2005, and tax-deductible cost determined based onArt. 23.1.38a,”.

120

Art. 189.

The Corporate Income Tax Act of February 15th 1992 (Dz.U. of 2000, No. 54, item654, as amended15)) shall be amended as follows:

1) Art. 12.4.18 shall read as follows:

“18) revenue from the redemption of units in a sub-fund of an umbrella fund ifunits in such sub-fund are converted into units in another sub-fund of thesame investment fund in accordance with the provisions of the Act onInvestment Funds of May 27th 2004 (Dz.U. No. 146, item 1546).”;

2) In Art. 16:

a) Art. 16.1.8 shall read as follows:

“8)expenditure on the subscription for or acquisition of shares in orcontributions to a cooperative, shares in a company or partnership andother securities, as well as expenditure on the acquisition of shares or unitsin capital funds; however, such expenditure shall be recognised as tax-deductible cost of disposal against consideration of such contributions,shares and other securities, including the repurchase of securities by theissuer thereof, as well as the repurchase of shares or units in capital fundsor redemption of units in, shares in or investment certificates of capitalfunds, subject to Art. 16.7e,”,

b) After Art. 16.7d, Art. 16.7e and 16.7f shall be added, to read as follows:

“7e.The provisions of Art. 16.1.8 (the sentence following the semicolon) shallnot apply to the conversion of units in a sub-fund into units in another sub-fund of the same umbrella fund, effected in accordance with the provisionsof the Act on Investment Funds of May 27th 2004.

7f. Capital funds referred to in Art. 16.1.8 shall be investment funds andforeign funds referred to in the Act on Investment Funds of May 27th2004.”;

3) Art. 17.1e.2 shall read as follows:

“2) securities or financial instruments other than securities, referred to inArt. 2.1.2c and 2.1.2d of the Act on Trading in Financial Instruments ofJuly 29th 2005 (Dz.U. of 2005, No. 183, item 1538), provided that suchacquisition has occurred as part of managing the portfolio referred to inArt. 75 of the Act on Trading in Financial Instruments, on condition thatsuch securities or financial instruments are deposited in a separate accountkept by the authorised entity within the meaning of the said Act,”;

4) Item 25 shall be assed in Appendix 3 to read as follows: 15) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2000, No. 60, items 700

and 703, No. 86, item 958, No. 103, item 1100, No. 117, item 1228 and No. 122, items 1315 and 1324;2001, No. 106, item 1150, No. 110, item 1190 and No. 125, item 1363; Dz.U. of 2002, No. 25, item253, No. 74, item 676, No. 93, item 820, No. 141, item 1179, No. 169, item 1384, No. 199, item 1672,No. 200, item 1684 and No. 230, item 1922; Dz.U. of 2003, No. 45, item 391, No. 96, item 874, No.137, item 1302, No, 180, item 1759, No. 202, item 1957, No. 217, item 2124 and No. 223, item 2218;Dz.U. of 2004, No. 6, item 39, No. 29, item 257, No. 54, item 535, No. 93, item 894, No. 121, item1262, No. 123, item 1291, No. 146, item 1546, No. 171, item 1800 and No. 210, item 2135, No. 254,item 2533; Dz.U. of 2005, No. 25, item 202, No. 57, item 491 and No. 78, item 684.

121

“25 cooperatives established pursuant to Council Regulation 1435/2003/ECof July 22nd 2003 on the Statute for a European Cooperative Society(SCE) (OJ L 207, 18.08.2003).”.

Art. 190

The Act on the Banking Guarantee Fund of 14th 1994 (Dz.U. of 2000, No. 9, item 131,as amended16)) shall be amended as follows:

1) Art. 2.1.c shall read as follows:

“c) entities operating pursuant to the Act on Trading in Financial Instrumentsof July 29th 2005 (Dz.U. of 2005, No. 183, item 1538),”;

2) Art. 16.4a shall read as follows:

“4a.The fund may participate in trading in treasury securities also through aninvestment firm, and may hold a bank account for the settlement of suchtransactions.”.

Art. 191.

In the Bond Act of June 29th 1995 (Dz.U. of 2001, No. 120, item 1300, as amended17))item 2a shall be added after Art. 31.2.2 to read as follows:

“2a) with whom the issuer has entered into an agreement on the offering ofsecurities referred to in Art. 72.1 of the Act on Trading in FinancialInstruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538);”.

Art. 192.

In the Act on Tax Offices and Chambers of June 21st 1996 (Dz.U. of 2004, No. 121,item 1267 and No. 273, item 2703), Art. 5.9b.4 shall read as follows:

“4)entities operating pursuant to the provisions of the Act on Trading inFinancial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item1538), and pursuant to the regulations on investment funds;”.

Art. 193.

In the Act on the Rules Governing the Exercise by State Treasury of its Rights ofAugust 8th 1996 (Dz.U. No. 106, item 493, as amended18)), Art. 5a.3.3 shall read asfollows:

16) Amendments to the consolidated text of the Act were promulgated in Dz.U. of: 2000, No. 86, item

958, No. 119, item 1252 and No. 122, item 1316; Dz.U. of 2001, No. 154, item 1802; Dz.U. of 2003,No. 60, item 535, No. 217, item 2124 and No. 223, item 2218; Dz.U. of 2004, No. 91, item 870,No. 121, item 1262 and No. 146, item 1546.

17) Amendments to the consolidated text of the Act were promulgated in Dz.U. of: 2002, No. 216, item1824; 2003, No. 217, item 2124.

18) Amendments to the Act were promulgated in Dz.U. of 1996, No. 156, item 775; Dz.U. of 1997, No.115, item 741 and No. 141, item 943; Dz.U. of 1998, No. 155, item 1014; Dz.U. of 2000, No. 48, item550; Dz.U. of 2001, No. 4, item 26; Dz.U. of 2002, No. 25, item 253, No. 240, item 2055; Dz.U. of2004, No. 99, item 1001, No. 123, item 1291 and No. 273, item 2703.

122

“3)as regards disposal of shares and bonds admitted to trading on theregulated market as defined in the Act on Trading in Financial Instrumentsof July 29th 2005 (Dz.U. of 2005, No. 183, item 1538).”.

Art. 194.

The Act on the Registered Pledge and the Pledge Register of December 6th 1996 (Dz.U.No. 149, item 703, as amended19)) shall be amended as follows:

1) Art. 7.2.7 shall be added, to read as follows:

“7) rights attached to financial instruments other than securities as defined in theAct on Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No.183, item 1538).”;

2) In Art. 22:

a) Art. 22.1.1 shall read as follows:

“1) registered pledge has been created on financial instruments registered in asecurities account or in another account within the meaning of the Act onTrading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No.183, item 1538),”,

b) Art. 22.2 shall read as follows:

“2. Foreclosure of the assets encumbered with a registered pledge shall beeffected after the lapse of the period for the performance of the obligationwhich has been secured with such pledge, as of the date when:

1) the financial instruments are registered in a securities account or inanother account, as the case may be – in the case referred to inArt. 22.1.1,

2) the pledgee represents that it has foreclosed the assets – in the casereferred to in Art. 22.1.2 and 22.1.3.”;

3) Art. 23.1 shall read as follows:

“1. If the pledge agreement stipulates that the pledgee’s claims are to besatisfied through foreclosure of the assets encumbered with the registeredpledge and the pledge has been created on financial instruments referred toin Art. 22.1.1 admitted to trading on a regulated market as defined in theAct on Trading in Financial Instruments of July 29th 2005, the value of theforeclosed financial instruments shall be determined based on the pricequoted as at close of trading on the foreclosure date. If such financialinstruments were not traded on such a date, their value shall be determinedbased on the price quoted as at close of trading on the last day on whichthey were traded.”.

19) Amendments to the Act were promulgated in Dz.U. of 1997, No. 121, item 769; Dz.U. of 1998, No.

106, item 668; Dz.U. of 2000, No. 48, item 554 and No. 60, item 702; Dz.U. of 2003, No. 228, item2256; Dz.U. of 2004, No.146, item 1546 and No. 273, item 2703.

123

Art. 195.

The Act on Sureties and Guarantees Issued by the State Treasury and Certain LegalPersons of May 8th 1997 (Dz.U. of 2003, No. 174, item 1689, as amended20)) shall beamended as follows:

1) Art. 26.3 shall read as follows:

“3. For the purpose of separation referred to in Art. 26.1, the value of sharesshall be determined based on their market value; the value of shares whichare not traded in organised trading as defined in the Act on Trading inFinancial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item1538) shall be determined based on the book value of the company.”;

2) Art. 28.1a shall read as follows:

“1a. Shares which are a part of the resources, admitted to trading on theregulated market, shall be disposed of by a minister competent for theState Treasury at the request of a minister competent for public finances.”.

Art. 196.

The Act on the Organisation and Operation of Pension Funds of August 28th 1997(Dz.U. of 2004, No. 159, item 1667) shall be amended as follows:

1) Art. 41.2 shall read as follows:

“2. At least one-third of the members of the management board should holda university degree in law or economics or be entered in the register ofinvestment advisors as defined in the Act on Trading in FinancialInstruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538).”;

2) Art. 42.1.6 shall read as follows:

“6)of an entity conducting brokerage activities as defined in the Act onTrading in Financial Instruments of July 29th 2005, or other activitiesrelated to trading in broker-traded financial instruments as defined in thesaid Act;”;

3) Art. 49.2 shall read as follows:

“2. Professional secrecy, as defined in Art. 49.1, shall cover the informationrelating to investments made by the fund, register of the fund members,fund members’ instructions to be followed in the event of their death aswell as the representations referred to in Art. 83, the disclosure of whichcould compromise the interests of the fund members or of investorsoperating on the regulated market as defined in the Act on Trading inFinancial Instruments of July 29th 2005.”;

4) Art. 50.2.2b shall read as follows:

“b) a number of in the company clearing transactions executed on the capitalmarket, whose number does not result in the emergence of the parent-subsidiary relationship as defined in the Act on Public Offering and theTerms for Introduction of Financial Instruments to Organised Trading and

20) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2004, No. 123, item

1291, No. 145, item 1537 and No. 281, item 2785; Dz.U. of 2005, No. 78, item 684.

124

on Public Companies of July 29th 2005 (Dz.U. of 2005, No 184, item1539),”;

5) Art. 54.1.3 shall read as follows:

“3) the organisational rules of a pension fund company, which specify inparticular the manner of preventing a disclosure of information which, ifused, could compromise the interests of the fund members, or which,following such disclosure, could materially affect the price of financialinstruments or derivative financial instruments related thereto as defined inthe Act on Trading in Financial Instruments of July 29th 2005;”;

6) Art. 64.2 shall read as follows:

“2. The depositary may, upon approval by the competent authority, entrust themanagement of the fund assets to an authorised external entity, in thescope referred to in Art. 69.2.4 of the Act on Trading in FinancialInstruments of July 29th 2005, provided this is in line with the interests ofthe fund members.”;

7) Art. 93.1.3 shall read as follows:

“3) investment firms as defined the Act on Trading in Financial Instruments ofJuly 29th 2005;”;

8) Art. 102.8 shall read as follows:

“8. The provisions of Art. 38.3 and 38.4 of the Commercialisation andPrivatisation Act of August 30th 1996 (Dz.U. of 2002, No. 171, item 1397and No. 240, item 2055; Dz.U. of 2003, No. 60, item 535 and No. 90, item844; Dz.U. of 2004, No. 6, item 39, No. 116, item 1207, No. 123, item1291 and No. 273, item 2703) shall not apply to the transfer of shares inpublic companies which are registered in collective accounts to the assetsof the employee pension fund.”;

9) In Art. 141.1:

a) Art. 141.1.4 and 141.1.5 shall read as follows:

“4) shares in companies listed on the regulated stock exchange market, as wellas pre-emptive rights, rights to shares, and bonds convertible into shares insuch companies, listed on the regulated stock exchange markets;

5) shares in companies listed on the regulated over-the-counter market ordematerialised, in accordance with the Act on Trading in FinancialInstruments of July 29th 2005, shares in companies which are not listed onthe regulated market, and pre-emptive rights, rights to shares and bondsconvertible into shares in companies which are listed on the regulatedover-the-counter market or which are dematerialised but not listed on theregulated market;”,

b) Art. 141.1.9 and Art. 141.1.10 shall read as follows:

“9) bonds and other debt securities issued by local government institutions,their associations or the capital city of Warsaw, dematerialised inaccordance with the Act referred to in Art. 141.1.5;

125

10) bonds and other debt securities, other than dematerialised securities, issuedby local government institutions, their associations or the capital city ofWarsaw;”,

c) Art. 141.1.11 and Art. 141.1.12 shall read as follows:

“11)bonds, dematerialised in accordance with the Act referred to inArt. 141.1.5, issued by entities other than local government institutions,their associations, or the capital city of Warsaw, which have been securedin the amount equal to their full par value plus interest, if any;

12) bonds and other securities, other than dematerialised securities, issued byentities other than local government institutions, their associations, or thecapital city of Warsaw, which have been secured in the amount equal totheir full par value plus interest, if any;”,

d) Art. 141.1.13a shall read as follows:

“13a) bonds and other debt securities, dematerialised in accordance with theprovisions of the Act referred to in Art. 141.1.5, other than thosereferred to in Art. 141.1.9 and Art. 141.1.11;”,

e) Art. 141.1.13c shall read as follows:

“13c) depositary receipts, as defined in the Act on Trading in FinancialInstruments of July 29th 2005, admitted to trading on the regulatedmarket in the territory of the Republic of Poland.”;

10) Art. 151.2 shall read as follows:

“2. A fund may lend securities traded on the regulated market in accordancewith the provisions of the Act on Trading in Financial Instruments of July29th 2005 and regulations issued thereunder.”;

11) Art. 152.1 shall read as follows:

“1. An employee fund may entrust, within the scope and on the termsprovided for in the Act on Trading in Financial Instruments of July 29th2005, the management of the fund’s assets to an entity which, pursuant tothe above regulations, is authorised to conduct activities related to themanagement of portfolios comprising one or more broker-traded financialinstruments, and which holds the Polish Securities and ExchangeCommission’s authorisation to conduct such activities.”.

Art. 197.

In the Act on Court Enforcement Officers and Enforcement Proceedings of August 29th1997 (Dz.U. No. 133, item 882, as amended21)) Art. 2.5 shall read as follows:

“5. Public administration bodies, tax offices, pension authorities referred to inArt. 476.4 of the Code of Civil Procedure, banks, savings-and-loancooperatives and entities conducting brokerage activities pursuant to the Acton Trading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No.

21) Amendments to the Act were promulgated in Dz.U. of 1999, No. 110, item 1255; Dz.U. of 2000, No.

48, item 554; Dz.U. of 2001, No. 98, items 1069 and 1070 and No. 130, item 1452; Dz.U. of 2003, No.41, item 361 and No. 124, item 1152; 2004, No. 173, item 1808, No. 202, item 2067 and No. 236, item2356.

126

183, item 1538) shall be obliged, at the written request of a court enforcementofficer, to provide such officer with any information necessary to properlyconduct enforcement proceedings. The provisions of Art. 762 of the Code ofCivil Procedure shall apply accordingly. In the cases concerning enforcementof alimony benefits or benefits of a similar nature, the information referred toherein shall be provided free of charge.”.

Art. 198.

The Banking Law of August 29th 1997 (Dz.U. of 2002, No. 72, item 665, asamended22)) shall be amended as follows:

1) Art. 4.1.8a shall read as follows:

„a) parent entity within the meaning of Art. 4.14 of the Act on Public Offeringand the Terms for Introduction of Financial Instruments to OrganisedTrading and on Public Companies of July 29th 2005 (Dz.U. of 2005, No184, item 1539), or”;

2) Art. 28 shall read as follows:

“Art. 28.1. Shares in banks, excluding shares dematerialised in accordance withthe Act on Trading in Financial Instruments of July 29th 2005(Dz.U. of 2005, No. 183, item 1538), shall be registered shares.Disposal of registered shares by shareholders shall require approvalof the Banking Supervision Commission for a year from the bank’sentry in the register of entrepreneurs.

2. Should the bank shares be excluded from trading on the regulatedmarket or rematerialised in accordance with the regulations referredto in Art. 28.1, the bearer shares shall be converted into registeredshares.”;

3) Art. 79b.2 shall read as follows:

“2. The provisions of Art. 79b.1 shall not apply with respect to a shareholderholding only shares which are admitted to trading on the regulated marketand which confer the right to exercise up to 5% of the total vote at thegeneral shareholders meeting.”;

4) Art. 90.4-7 shall read as follows:

„4. Banks may issue uncertificated bank securities, such securities to beregistered in a depository kept by the issuer thereof, National Depositoryfor Securities or an investment firm.

5. If bank securities are uncertificated, all the information referred to inArt. 90.1 should be contained in a deposit certificate or another documentissued by the bank to an entitled person.

22) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2002, No. 126, item

1070, No. 141, item 1178, No. 144, item 1208, No. 153, item 1271, No. 169, items 1385 and 1387 andNo. 241, item 2074; Dz.U. of 2003, No. 50, item 424, No. 60, item 535, No. 65, item 594, No. 228,item 2260 and No. 229, item 2276; Dz.U. of 2004, No. 64, item 594, No. 68, item 623, No. 91, item870, No. 96, item 959, No. 121, item 1264, No. 146, item 1546 and No. 173, item 1808; Dz.U. of 2005,No. 83, item 719 and No. 85, item 727.

127

6. Rights attached to uncertificated bank securities shall accrue as of themoment such securities are first registered in a securities account and shallinure to the benefit of the account holder.

7. Transfer of rights attached to uncertificated bank securities shall beeffected when a relevant entry is made in the account where such banksecurities are registered, following the execution of an agreement. Thebenefits obtained from the bank securities before such entry is made shallinure to the buyer, unless the agreement provides otherwise.”;

5) Art. 184 shall be deleted.

Art. 199.

In the Act on the Social Security System of October 13th 1998 (Dz.U. No. 137, item887, as amended23)) Art. 65.2.4 shall read as follows:

“4) shares and bonds dematerialised in accordance with the Act on Trading inFinancial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item1538),”.

Art. 200.

The Commercial Companies Code of September 15th 2000 (Dz.U. No. 94, item 1037,as amended24)) shall be amended as follows:

1) Art. 88 shall read as follows:

“Art. 88. The persons who may become partners in a partnership shall bepersons qualified to practise the following professions: solicitor,pharmacist, architect, construction engineer, auditor, insurance broker,tax adviser, securities broker, investment adviser, accountant,physician, dentist, veterinary doctor, notary public, nurse, midwife,legal counsels, patent attorney, property appraiser, and sworntranslator.”;

2) Art. 315.1 shall read as follows:

“1. Payments for shares shall be made directly or through the intermediation of aninvestment firm into the account of the company in the process of organisationmaintained by a bank in the European Union or in a country which is a party tothe European Economic Area Agreement.”;

23) Amendments to the Act were promulgated in Dz.U. of 1998, No. 162, items 1118 and 1126; 1999, No.

26, item 228, No. 60, item 636, No. 72, item 802, No. 78, item 875 and No. 110, item 1256; Dz.U. of2000, No. 9, item 118, No. 95, item 1041, No. 104, item 1104 and No. 119, item 1249; Dz.U. of 2001,No. 8, item 64, No. 27, item 298, No. 39, item 459, No. 72, item 748, No. 100, item 1080 and 1189,No. 111, item 1194, No. 130, item 1452 and No.154, item 1792; Dz.U. of 2002, No. 25, item 253, No.41, item 365, No. 74, item 676, No. 155, item 1287, No. 169, item 1387, No. 199, item 1673, No. 200,item 1679 and No. 241, item 2074; 2003, No. 56, item 498, No. 65, item 595, No. 135, item 1268, No.149, item 1450, No. 166, item 1609, No. 170, item 1651, No. 190, item 1864, No. 210, item 2037, No.223, item 2217 and No. 228, item 2255; Dz.U. of 2004, No. 19, item 177, No. 64, item 593, No. 99,item 1001, No. 121, item 1264, No. 146, item 1546, No. 173, item 1808, No. 187, item 1925 and No.210, item 2135; 2005, No. 64, item 565, No. 86, item 732 and No. 132, item 1110.

24) Amendments to the Act were promulgated in Dz.U. of 2001, No. 102, item 1117, Dz.U. of 2003, No.49, item 408 and No. 229, item 2276, and Dz.U. of 2005, No. 132, item 1108.

128

3) Art. 320.1.4 shall read as follows:

“4. a confirmation issued by a bank or an investment firm to the effect that thepayment for shares has been made into the account of a company in the processof organisation; in the event that the articles of association provide forcoverage of the share capital with non-cash contributions following theregistration, a representation by all members of the management board shall beenclosed, to the effect that steps have been taken to ensure that suchcontributions will be made as provided for in the articles of association prior tothe lapse of the date specified in Art. 309.3”;

4) Art. 328.6 shall read as follows:

“6. A shareholder in a public company holding dematerialised shares shall beentitled to receive a deposit certificate issued in its name by the entity keepingthe securities account in accordance with the provisions of regulations on tradingin financial instruments.”;

5) Art. 329.3 shall read as follows:

“3. Payments for shares shall be made directly or through the intermediation of aninvestment firm into an account of the company, maintained by the bank in theEuropean Union or in a country which is a party to the European EconomicArea Agreement.”;

6) Art. 331.3 shall read as follows:

“3. After announcement of the numbers of invalidated documents evidencing sharesor of temporary certificates the company shall issue new documents orcertificates bearing the former numbers and shall sell them through theintermediation of a notary public, an investment firm, or a bank.”;

7) Art. 336.3 shall read as follows:

“3. The provisions of Art. 336.1 and Art. 336.2 shall not apply to shares which areacquired in the case of a share capital increase and which are subject todematerialisation in accordance with the regulations on trading in financialinstruments in connection with their intended admission to trading on aregulated market, and to shares issued in connection with a merger, demerger ortransformation of a company.”

8) Art. 340.3 shall read as follows:

“3. In the period when shares in a public company encumbered with a pledge or aright of usufruct, are registered in securities accounts at a brokerage house orat a bank keeping securities accounts, the voting rights attached to suchshares shall inure to benefit of the shareholder.”;

9) Art. 343.1 shall read as follows:

“1. A shareholder in relation to a company shall a person whose name is entered inthe share register or who holds bearer shares, subject to regulations on tradingin financial instruments.”;

10) in Art. 362.1, after 362.1.2 item 2a shall be added, to read as follows:

“2a. a public company which acquires shares in order to fulfil its obligationsunder debt instruments convertible into shares,”;

11) Art. 403 shall read as follows:

129

“Art. 403.The general shareholders meeting shall be held at the company’sregistered office. The general shareholders meeting may also be heldin the city where the registered office of a company operating a stockexchange on which the shares in this company are traded is situated.The articles of association may provide for other venue for conveningthe general shareholders meeting, with a proviso that the meetingsmay be held only in the territory of the Republic of Poland.”;

12) In Art. 406:

a) Art. 406.2 shall read as follows:

“2. Certificates issued to confirm that the shares have been deposited ata notary public, bank or an investment firm with a registered office ora branch in the European Union or in a country which is a party to theEuropean Economic Area Agreement, as specified in the noticeconvening the general shareholders meeting, may be submitted insteadof shares.”,

b) Art. 406.3 shall read as follows:

“3. Shareholders in public companies holding dematerialised shares shallsubmit to the company deposit certificates issued in their name by theentity keeping their securities account in accordance with the regulationson trading in financial instruments.”;

13) the second sentence of Art. 451.2 shall read as follows:

“In the case of dematerialised shares in a public company, such shares shall bedeemed delivered upon their registration in a securities account in accordancewith the regulations on trading in financial instruments.”.

Art. 201.

The Commodity Exchange Act of October 26th 2000 (Dz.U. of 2005, No. 121, item1019) shall be amended as follows:

1) in Art. 2:

a) Art. 2.9c shall read as follows:

“c. foreign investment firms or foreign legal persons referred to in the Act onTrading in Financial Instruments of July 29th 2005 (Dz.U. of 2005, No.183, item 1538), conducting brokerage activities in the territory of theRepublic of Poland,”;

b) Art. 2.11 shall read as follows:

“11. “parent entity” shall mean a parent entity as defined in Art. 4.14 of theAct on Public Offering, Conditions Governing the Introduction ofFinancial Instruments to Organised Trading, and Public Companies of July29th 2005 (Dz.U. of 2005, No 184, item 1539),”;

2) Art. 3.4 shall be added, to read as follows:

“4. An offer or acquisition of property rights whose price directly or indirectlydepends on foreign exchange rates or interest rates shall be effected inaccordance with the provisions of the Acton Public Offering, ConditionsGoverning the Introduction of Financial Instruments to Organised Trading, and

130

Public Companies of July 29th 2005 and the secondary legislation issuedthereunder.”;

3) in Art. 5:

a) Art. 5.2 shall read as follows:

“2. Subject to Art. 5.3 and the provisions of the Act on Trading in FinancialInstruments of July 29th 2005, the business of the company referred to inArt. 5.1 shall comprise exclusively operation of a stock exchange.”,

b) Art. 5.4 shall read as follows:

“4. The authorisation referred to in Art. 5.3 shall not apply to a companyoperating a stock exchange on which the property rights referred to in Art.2.2.e are traded; such a company shall be obliged to comply with therequirement referred to in Art. 14.1.”;

4) Art. 6.6 shall read as follows:

“6. The provisions of Art. 6.1 shall not apply if a company operating a stockexchange is a public company as defined in the Act on Public Offering,Conditions Governing the Introduction of Financial Instruments toOrganised Trading, and Public Companies of July 29th 2005.”;

5) Art. 9.2 shall read as follows:

“2. Subject to Art. 5.3a, only the entities referred to in Art. 2.3, as well as anexchange clearing house and the National Depository for Securities may beparties to commodity exchange transactions, to the extent that the same isnecessary to perform the responsibilities related to the use of the fundsaccumulated in the system referred to in Art. 15.5.2 in line with their intendedpurpose.”;

6) Art. 11.2.16 shall read as follows:

“16. specifying the manner of clearing of transactions, including indication of anexchange clearing house competent for the clearing of transactions executed ona given commodity exchange and related to the commodities referred to inArt. 2.2.e;”;

7) in Art. 14:

a) Art. 14.1 and 14.2 shall read as follows:

“1. An authorisation to operate a stock exchange on which property rightsreferred to in Art. 2.2.e are traded, or an authorisation to admit propertyrights referred to in Art. 2.2.e to trading on an existing exchange, shall beissued subject to a condition that an exchange clearing house isestablished, with the applicant acting as its founder and a shareholder, andthat the exchange clearing house commences operations in the specifiedtime.

2. Subject to Art. 14.2a, an exchange clearing house may be established onlyin the legal form of a joint-stock company, for the purpose of providingfinancial services related to commodity exchange transactions in the rightsreferred to in Art. 2.2.e, executed on a given exchange, and for the purposeof performing the responsibilities set forth in Art. 15.5 and 15.6.”,

b) Art. 14.2a shall read as follows:

131

“2a. An exchange clearing house may also provide financial services relatedto commodity exchange transactions in commodities referred to in Art.2.2b, 2.2.c, and 2.2.d.”;

8) Art. 15.5.2 shall read as follows:

“2) organisation and management of a system guaranteeing proper performance ofobligations under transactions -,”;

9) Art. 17.1 shall read as follows:

“1. An application for an authorisation to operate an exchange on which rightsreferred to in Art. 2.2.e are traded should include, besides the informationrequired to be included in an authorisation to operate the exchange, theinformation referred to in Art. 7.2.1-6 concerning the company operating anexchange clearing house.”;

10) in Art. 18:

a) Art. 18.2 shall read as follows:

“2. In the event that the rights referred to in Art.2.2.e are to be traded ona given exchange, with the National Depository for Securities acting as anexchange clearing house, the authorisation to operate the exchangereferred to in Art. 14.1 may be issued if the applicant encloses anagreement concluded with the National Depository for Securities on theclearing of commodity exchange transactions along with the rules referredto in Art. 18.4”,

b) Art. 18.3 shall read as follows:

“3. The provisions of Art. 15 and Art. 17 shall apply accordingly to theclearing of commodity exchange transactions by the National Depositoryfor Securities as part of its acting as an exchange clearing house; otherwisethe clearing of such transactions shall be governed by the Act on Tradingin Financial Instrument of July 29th 2005.”;

11) Art. 27.1.3 shall read as follows:

“3. has not been found by a final court judgment guilty of a tax offence, an offenceagainst reliability of documents or property, business transactions or forgery ofmoney, securities, official stamps or trademarks, offences specified in the Acton Trading in Financial Instruments of July 29th 2005, in the Act on PublicOffering, Conditions Governing the Introduction of Financial Instruments toOrganised Trading, and Public Companies of July 29th 2005, in the Act onCapital Market Supervision of July 29th 2005, offences specified herein, or inthe Act on Storage Warehouses,”;

12) Art. 37.2 and 37.3 shall read as follows:

“2. Shares in a commodity brokerage house, with the exception of sharesdematerialised in accordance with the provisions of the Act on Trading inFinancial Instruments of July 29th 2005, shall be registered shares.

Art. 37.3. The funds used to finance the acquisition of or subscription for shares ina commodity brokerage house which are not dematerialised, shall not comefrom loans or undocumented sources.”;

13) Art. 38.3 shall read as follows:

132

“3. A commodity brokerage house shall be entitled to conduct activities withrespect to commodities referred to in Art. 2.2.e, subject to obtaining a licenceand meeting the financial conditions, and in line with the terms and conditionsset forth in the Act on Trading in Financial Instruments of July 29th 2005.Provisions of Art. 82, Art. 85, Art. 89 and Art.167 of the Act on Trading inFinancial Instruments shall apply to proceedings concerning granting,revocation or expiry of the licence.”;

14) Art. 47 shall be deleted.

Art. 202.

In the Act on Storage Warehouses and on Amending the Civil Code, Code of CivilProcedure, and Other Statutes of November 16th 2000 (Dz.U. No. 114, item 1191 andDz.U. of 2004, No. 173, item 1808), Art. 3.3 shall read as follows:

“3. Entrepreneur’s business may be managed by persons who have not been foundby a final court judgment guilty of an offence against reliability of documents,property, business transactions and cash and securities transactions, a taxoffence, offences referred to in the Act on Public Offering, ConditionsGoverning the Introduction of Financial Instruments to Organised Trading,and Public Companies, of July 29th 2005 (Dz.U. of 2005, No 184, item 1539),in the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of2005, No. 183, item 1538), in the Act on Capital Market Supervision of July29th 2005, or for the criminal offences defined herein.”

Art. 203.

The Act on Prevention of Money Laundering Practices and Financing of Terrorism ofNovember 16th 2000 (Dz.U. of 2003, No. 153, item 1505, as amended25)) shall beamended as follows:

1) in Art. 2:

a) Art. 2.1 shall read as follows:

“1) obliged institutions shall mean banks, the National Bank of Poland (to theextent it keeps bank accounts for legal persons, sells numismatic objects,buys gold and replaces damaged coins and banknotes, pursuant to the Acton the National Bank of Poland of August 29th 1997 (Dz.U. of 2005No. 1, item 2)), branches of foreign banks, electronic money institutions,branches of foreign electronic money institutions and clearing agentsoperating under the provisions of the Electronic Payment Instruments Actof September 12th 2002 (Dz.U. No. 169, item 1385 and Dz.U. of 2004No. 91, item 870 and No. 96, item 959), investment firms and custodianbanks as defined in the Act on Trading in Financial Instruments of July29th 2005 (Dz.U. of 2005, No. 183, item 1538) referred to in Art. 71.1 ofthe Act on Trading in Financial Instruments of July 29th 2005, foreignlegal persons conducting commodity brokerage activities in the territory ofthe Republic of Poland, commodity brokerage houses as defined in the

25) Amendments to the consolidated text of the Act were promulgated in Dz.U. of 2004, No. 62, item

577, Dz.U. No. 96, item 959 and No. 116, item 1203.

133

Commodity Exchange Act of October 26th 2000 (Dz.U. of 2005 No. 121,item 1019), commercial companies referred to in Art. 50a of theCommodity Exchange Act of October 26th 2000, the National Depositoryfor Securities (to the extent it keeps securities accounts), entities whosebusiness involves games of chance, bets, gaming on gaming machines andon low-value gaming machines, insurance undertakings, main branches offoreign insurance undertakings, investment funds, investment fundcompanies, saving-and-loan cooperatives, Poczta Polska (state-ownedpublic utility providing postal services), notaries public (with respect tonotary activities concerning trade in instruments of value), solicitors, legalcounsels practising their profession on a basis other than an employmentcontract, foreign lawyers providing legal assistance on a basis other thanan employment contract, practising auditors, practising tax advisers,entities engaged in foreign-exchange office activities, entrepreneursrunning auction houses or antique shops, or involved in leasing orfactoring activities, or activities related to trading in metals or precious andsemi-precious stones, consignment sale, pawnbroking or real estate agencyservices, and foundations;”,

b) Art. 2.3 shall read as follows:

“3) “instruments of value” shall mean coins and banknotes, financialinstruments as defined in Art. 2.1. of the Act on Trading in FinancialInstruments of July 29th 2005, other securities and foreign currencyinstruments, property rights, movables and real property;”;

2) Art. 12.3 shall read as follows:

“3. The provisions of Art. 12.1.6 shall not apply to transactions executed onthe regulated market as defined in the Act on Trading in FinancialInstruments of July 29th 2005.”;

3) Art. 21.3.3 shall read as follows:

“3)Polish Securities and Exchange Commission – with respect to investmentfirms and custodian banks as defined in the Act on Trading in FinancialInstrument of July 29th 2005, entities referred to in Art. 71.1 thereof,foreign legal persons conducting commodity brokerage activities in theterritory of Republic of Poland, commodity brokerage houses as defined inthe Commodity Exchange Act of October 26th 2000, investment funds,investment fund companies, and the National Depository for Securities;”;

4) Art. 33.2.8 shall read as follows:

“8)Chairman of the Polish Securities and Exchange Commission or personsauthorised by the Chairman – with respect to investment firms andcustodian banks as defined in the Act on Trading in Financial Instrumentsof July 29th 2005, entities referred to in Art. 71.1 thereof, foreign legalpersons conducting commodity brokerage activities in the territory of theRepublic of Poland, commodity brokerage houses as defined in theCommodity Exchange Act of October 26th 2000, investment funds,investment fund companies, and the National Depository for Securities;”.

134

Art. 204.

The Act on the Final Nature of Settlements in Payment Systems and SecuritiesSettlement Systems, and Rules of Supervision over These Systems, of August 24th2001 (Dz.U. No. 123, item 1351, as amended26)) shall be amended as follows:

1) in Art. 1:

a) Art. 1.5d-f shall read as follows:

“d) brokerage house as defined in the Act on Trading in Financial Instrumentsof July 29th 2005 (Dz.U. of 2005, No. 183, item 1538),

e) foreign legal person, as referred to in Art. 115 of the Act specified inArt. 1.5d, conducting brokerage activities in the territory of the Republicof Poland,

f) foreign investment firm, as defined in the Act specified in Art. 1.5d,conducting brokerage activities in the territory of the Republic of Poland,”,

b) Art. 1.11 shall read as follows:

“11) “securities” shall mean broker-traded financial instrument as defined inArt. 2 of the Act specified in Art. 1.5d,”;

2) Art. 15.1 shall read as follows:

“1. The provisions of Art. 4-7 and 11-14 of this Act, as well as Art. 22.1.4,Art. 66, Art. 67, Art. 80 and Arts 135-137 of the Bankruptcy and RecoveryLaw of February 28th 2003 (Dz.U. No. 60, item 535, as amended27)) shallapply to the securities clearing systems operated by the NationalDepository for Securities (“National Depository”), exchange clearinghouse referred to in the Commodity Exchange Act of October 26th 2000,as well as to systems maintained by the National Bank of Poland.”;

3) Art. 16.2 shall read as follows:

“2. With the exception of systems maintained by the National Bank of Poland, theNational Depository for Securities and the exchange clearing house referred toin the Commodity Exchange Act of October 26th 2000, the operation ofsecurities settlement systems shall require an authorisation of the PolishSecurities and Exchange Commission, to be granted upon consultation withGovernor of the National Bank of Poland.”

Art. 205.

In Art. 16.1.2 of the Act on Responsibility of Group Entities for Prohibited Acts Subjectto Penalty of October 28th 2002 (Dz.U. No. 197, item 1661, Dz.U. of 2004, No. 93,item 889, No. 191, item 1956 and No. 243, item 2442),

a) Art. 16.1.2b shall read as follows:

26) Amendments to the Act were promulgated in Dz.U. of 2003 No. 60, item 535, No. 223, item 2216,

Dz.U. of 2004 No. 64, item 594, No. 96, item 959, and Dz.U. of 2005 No. 83, item 719.27 Amendments to the Act were promulgated in Dz.U. of 2003, No. 217, item 2125, Dz.U. of 2004, No.

91, items 870 and 871, No. 96, item 959, No. 121, item 1264, No. 146, item 1546, No. 173, item 1808,No. 210, item 2135, and Dz.U. of 2005 No. 94, item 785.

135

“b)Arts 178-180 of the Act on Trading in Financial Instruments of July 29th2005 (Dz.U. of 2005, No. 183, item 1538),”,

b) Art. 16.1.2d shall be added, to read as follows:

“d)Arts 99-101 of the Act on Public Offering, Conditions Governing theIntroduction of Financial Instruments to Organised Trading, and PublicCompanies of July 29th 2005 (Dz.U. of 2005, No 184, item 1539);”.

Art. 206.

The Bankruptcy and Recovery Law of February 28th 2003 (Dz.U. No. 60, item 535, asamended28)) shall be amended as follows:

1) Art. 326.2 shall read as follows:

“2. If the sale transaction concerns financial instruments admitted to tradingon a regulated market as defined in the Act on Trading in FinancialInstruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538), thejudge-commissioner may agree for the sale to be executed by aninvestment firm. In such a case, the judge-commissioner may specify thestock exchange (or order the receiver to do so) and the minimum sellingprice.”;

2) Art. 466 shall read as follows:

“Art. 466. Subject to Art. 464, the provisions of the law governing contractualobligations and applicable to transactions executed on a regulatedmarket, as defined in the Act on Trading in Financial Instruments ofJuly 29th 2005, shall apply to agreements concluded as part oftransactions on such a market.”.

Art. 207.

The Insurance Activities Act of May 22nd 2003 (Dz.U. No. 124, item 1151, Dz.U. of2004, No. 91, item 870, No. 96, item 959, Dz.U. of 2005, No. 48, item 447 and No. 83,item 719) shall be amended as follows:

1) Art.29.3 shall read as follows:

“3) entity conducting brokerage activities as defined in the Act on Trading inFinancial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item1538) or other activities related to trading in broker-traded financialinstruments as defined in the said Act;”;

2) in Art. 34:

a) Art. 34.1 shall read as follows:

“1. Shares in insurance undertakings, other than shares dematerialised inaccordance with the Act on Trading in Financial Instruments of July 29th2005, shall only be registered shares.”,

b) Art. 34.4-6 shall read as follows: 28) Amendments to the Act were promulgated in Dz.U. of 2003 No. 217, item 2125, Dz.U. of 2004,

No. 91, items 870 and 871, No. 96, item 959, No. 121, item 1264, Dz.U. No. 146, item 1546, No. 173,item 1808, No. 210, item 2135, and Dz.U. of 2005 No. 94, item 785.

136

“4. To determine the shareholder structure of an insurance undertaking, theNational Depository for Securities along with investment firms andcustodian banks as defined in the Act on Trading in Financial Instrumentsof July 29th 2005 shall provide, at the request and cost of the insuranceundertaking being a public company, such insurance undertaking withinformation on particular shareholders holding a number of its sharesconferring the right to 5% or more of the total vote at the generalshareholders meeting, within 30 days from the request submission.

5. Provision of the information referred to in Art. 34.4 shall not be deemed abreach of the professional secrecy obligation defined in the Act on Tradingin Financial Instruments of July 29th 2005.

6. If shares of an insurance undertaking are excluded from trading on aregulated market or are rematerialised in accordance with the provisionsreferred to in Art. 34.5, the insurance undertaking shall, within threemonths from the receipt of the relevant decision, convert its bearer sharesinto registered shares. The bearer shares shall not be traded in the periodfrom the date of the decision delivery to date of the conversion.”;

3) Art. 35. 9 shall read as follows:

“9. The provisions of Art. 35.1-7 shall not prejudice the provisions of the Actreferred to in Art. 35.2 or the provisions of the Anti-Trust and ConsumerProtection Act.”;

4) Art. 36.4 shall read as follows:

“4. The provisions of Art. 36.1-3 shall not prejudice the provisions of thePublic Offering Act of July 29th 2005 (Dz.U. of 2005, No 184, item 1539)or the provisions of the Anti-Trust and Consumer Protection Act.”;

5) in Art. 155.1:

a) Art. 155.1.1 shall read as follows:

“1)40% of the technical reserves held in the form of securities admitted totrading on a regulated market or investment fund units;”,

b) Art. 155.1.3 shall read as follows:

“3)10% of the technical reserves held in the form of mortgage bonds, shares,shares not admitted to trading on a regulated market and other fixed-income or variable-yield securities, provided that the insuranceundertaking’s share in the issuer thereof does not exceed 10% of suchissuer’s share capital;”;

6) Art. 239.11 shall read as follows:

“11. The provisions of Art. 239.1-10 shall not prejudice the provisions of thePublic Offering Act of July 29th 2005 (Dz.U. of 2005, No 184, item 1539)or the provisions of the Anti-Trust and Consumer Protection Act.”.

Art. 208.

Art. 24.1.4 of the Insurance Brokerage Act of May 22nd 2003 (Dz.U. No. 124,item 1154, Dz.U. of 2004 No. 96, item 959, and Dz.U. of 2005, No. 48, item 447) shallread as follows:

137

“4) hold shares in insurance undertakings other than shares admitted to trading ona regulated market.”.

Art. 209.

The Act on Certain Types of Financial Collateral of April 2nd 2004 (Dz.U. No. 91, item871, and Dz.U. of 2005, No. 83, item 719) shall be amended as follows:

1) Art. 2.1.5 shall read as follows:

“5)an investment firm as defined in the Act on Trading in FinancialInstruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538);”;

2) In Art. 3:

a) Art. 3.2 shall read as follows:

“2) “financial instruments” shall mean securities, money market instruments,units in collective investment undertakings and other financial instrumentsother than securities as defined in the Act on Trading in FinancialInstruments of July 29th 2005, as well as bank securities and equityinterests in companies or partnerships;”,

b) Art. 3.7 shall read as follows:

“7) “security interest in uncertificated securities” shall be security interest inuncertificated instruments, recorded in a securities account or anotheraccount in which financial instruments other than securities are registered,in a deposit account, or in other securities records maintained by therelevant entities.”;

3) Art. 5.1.3 shall read as follows:

“3) establishing a block on the securities account or on another account inwhich financial instruments other than securities are registered, or on thesecurities deposit account, in accordance with other regulations;”;

4) Art. 6 shall read as follows:

“Art. 6. Regulations concerning pledge on rights to cash or on financialinstruments shall apply accordingly to any collateral securingfinancial claims created by establishing the block referred to in Art.5.1.3.”;

5) Art. 7.2 shall read as follows:

“2. Security interest in cash shall be recorded in the account to which the cashserving as collateral is credited, while security interest in financialinstruments shall be recorded in the securities account or another accountin which financial instruments other than securities are registered, ina deposit account, or in other securities records maintained by the relevantentities.”;

6) Art. 11.1 shall read as follows:

“1. If the pledge agreement stipulates that the pledgee’s claims are to be satisfiedthrough foreclosure of the assets encumbered with the pledge and the pledgehas been created on financial instruments admitted to trading on a regulatedmarket, the value of the foreclosed financial instruments shall be determined

138

based on the price quoted as at close of trading on the foreclosure date. If suchfinancial instruments were not traded on such a date, their value shall bedetermined based on the price quoted as at close of trading on the last day onwhich they were traded.”;

7) Art. 13 shall read as follows:

“Art. 13. Agreement on the creation of financial collateral on uncertificatedfinancial instruments, rights arising under such collateral, priority ofrights, and satisfaction of claims under such collateral shall begoverned exclusively by the law of the country in which the securitiesaccount, another account in which financial instruments other thansecurities are registered, deposit account or other securities records inwhich such collateral is registered, are kept. The acquisition in goodfaith of uncertificated financial instruments shall also be governed bysuch law.”.

Art. 210.

The Act on Personal Pension Accounts of April 20th 2004 (Dz.U. No. 116, item 1205)shall be amended as follows:

1) In Art. 2:

a) Art. 2.1 shall read as follows:

“1) “IKE account (Personal Pension Account)” shall mean a separate entry inthe register of an investment fund unit holders, a separate securitiesaccount or any other account in which financial instruments other thansecurities are registered, or of a cash account auxiliary to any suchaccount, held with an entity conducting brokerage activities, or a separateaccount held with an insurance capital fund, a separate bank account heldwith a bank, kept in accordance with this Act, and to the extent notprovided for in this Act, in accordance with the regulations applicable tosuch accounts and registers;”,

b) Art. 2.5 shall read as follows:

“5) “funds” shall mean cash, units in an insurance capital fund, units ininvestment funds, securities and financial instruments other than securitiesreferred to in Art. 2.1.2c and 2.1.2d of the Act on Trading in FinancialInstruments of July 29th 2005 (Dz.U. of 2005, No. 183, item 1538),registered in the IKE account;”,

c) Art. 2.7 shall read as follows:

“7) “entity conducting brokerage activities” shall mean a brokerage house ora bank conducting brokerage activities as defined in the Act on Trading inFinancial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item1538);”;

2) Art. 27.1 and 27.2 shall read as follows:

“1. The agreements referred to in Art. 8.1.2 shall provide for investing fundsin securities dematerialised in accordance with the Act on Trading inFinancial Instruments of July 29th 2005, subject to Art. 27.2.

139

2. The agreements referred to in Art. 8.1.2 may permit placing orders, solelyfor the purpose of limiting investment risk, for financial instruments otherthan securities referred to in Art. 2.1.2c and 2.1.2d of the Act referred to inArt. 27.1, if their price depends on the price of the securities registered ina given holder’s IKE account, and on condition that they are traded on aregulated market.”;

3) Art. 28 shall read as follows:

“Art. 28. 1. If the competent authority orders to transfer securities, financialinstruments other than securities, cash and documents relating to themaintenance of securities accounts, other accounts in which suchfinancial instruments are registered and cash accounts to anotherentity conducting brokerage activities, following the expiry orrevocation of a brokerage licence, the entity conducting brokerageactivities to which such securities, financial instruments or cash areto be transferred shall preserve the designation of the fundsaccumulated in the IKE account.

2. When transferring the funds accumulated in the IKE account referredto in Art. 28.1 the entity conducting brokerage activities shallprovide the entity conducting brokerage activities indicated by thecompetent authority with the information referred to in Art. 21.2.

3. The entity conducting brokerage activities to which the fundsaccumulated in the IKE account referred to in Art. 28.1 have beentransferred, shall be obliged to request, within 14 days following thetransfer, the holder of the IKE account to enter into an IKE accountagreement or make an outbound transfer.

4. In the case referred to in Art. 28.1 the holder of the IKE accountshall be obliged, within 45 days as of the receipt of the request, toenter into an IKE account agreement with the entity to which theholder’s securities, financial instruments other than securities andcash have been transferred, or to effect the outbound transfer toanother financial institution or a pension scheme which such holderhas jointed.

5. If the entity conducting brokerage activities to which securities,financial instruments other than securities, cash and documentsrelating to the maintenance of securities accounts, other accounts inwhich such financial instruments are registered as well as cashaccounts have been transferred does not operate IKE accounts, thenthe transfer of those funds to another financial institution shall bedeemed the outbound transfer.

6. Should a holder of the IKE fail to meet the deadline referred to inArt. 28.4, the funds accumulated on the IKE account shall bereturned.”;

4) Art. 39.3 shall read as follows:

“3. After the lapse of the period referred to in Art. 39.1, an entity conductingbrokerage activities, when effecting the outbound transfer of the fundsaccumulated on the IKE account, may charge a fee for transfer ofsecurities, financial instruments other than securities, and cash; however,

140

such a fee may not exceed the fee charged on such entity by the NationalDepository for Securities, as defined in the rules referred to in Art. 50 ofthe Act on Trading in Financial Instruments of July 29th 2005.”.

Art. 211.

The Act on Investment Funds of May 27th 2004 (Dz.U. No. 146, item 1546 and Dz.U.of 2005, No. 83, item 719) shall be amended as follows:

1) in Art. 2:

a) item 1 shall be deleted,

b) after Art. 2.1, item 1a shall be added, to read as follows:

“1a) “Act on Trading in Financial Instruments” shall mean the Act on Tradingin Financial Instruments of July 29th 2005 (Dz.U. of 2005, No. 183, item1538);”,

c) Art. 2.14 shall read as follows:

“14) “investment firm” shall mean an investment firm as defined in the Act onTrading in Financial Instruments;”,

d) Art. 2.18 shall read as follows:

“18) “derivatives” shall mean property rights whose market price dependsdirectly or indirectly on the price or value of the securities referred to inArt. 3.1.a of the Act on Trading in Financial Instruments, and otherproperty rights whose market price depends directly or indirectly on themarket price of foreign currencies or the level of interest rates”,

e) Art. 2.22 shall read as follows:

“22) “organised market” shall mean a separate, organisationally andfinancially, trading system, which operates on a regular basis and ensuresuniform conditions for execution of transactions and universal and equalaccess to information on transactions, in accordance with the rules set outin the applicable laws of the country in which the trading takes place and,in particular, the organised trading referred to in the Act on Trading inFinancial Instruments”,

f) after Art. 2.22, item 22a shall be added which shall read as follows:

“22a) “regulated market” shall mean the market referred to in Art. 14 of theAct on Trading in Financial Instruments”,

g) Art. 2.27 and 2.28 shall read as follows:

„27) “discretionary management of a securities portfolio” shall mean themanagement of portfolios as defined in Art. 75.1 of the Act on Trading inFinancial Instruments;

28) “advisory services in the area of securities trading” shall meaninvestment advisory relating to financial instruments as defined inArt. 76 of the Act on Trading in Financial Instruments”,

h) Art. 2.34 shall read as follows:

141

“34) “securities” shall mean the securities as defined in Art. 3.1 of the Act onTrading in Financial Instruments, excluding derivatives;”,

i) Art. 2.35 shall be added, to read as follows:

“35) dematerialised securities” shall mean the securities defined in the firstsentence of Art. 5.1 of the Act on Trading in Financial Instruments;”;

2) Art. 6.1 shall read as follows:

“1. Unit-holders of an investment fund shall be natural persons, legal personsand organisational units without legal personality:

1) in whose name units or fractional parts thereof are entered in theregister of unit-holders, or

2) who hold securities accounts in which public investment certificatesare registered, or

3) in the case of non-public investment certificates of a closed-endinvestment fund:

a) persons holdings rights under certificated investmentcertificates,

b) persons specified in the register of unit-holders as holders ofuncertificated investment certificates.”;

3) In Art. 7:

a) Art. 7.2 shall read as follows:

“2. The following may be contributed to a fund:

1) dematerialised securities – if provided for in the articles ofassociation of the fund, or

2) securities other than dematerialised securities or shares in limited-liability companies – if provided for in this Act and the articles ofassociation of the fund.”,

b) Art. 7.3 shall be deleted;

4) Art. 15.4 shall read as follows:

“4. In the case of a closed-end investment fund issuing non-public investmentcertificates, the total minimum amount of payments to the fund and themanner of collecting the payments shall be defined in the articles ofassociation of the fund.”;

5) Art. 18.2.8 and Art. 18.2.9 shall read as follows:

“8) the types of dematerialised securities and their classes that may becontributed as payment, and if such contributions can only be made in theform of securities issued by a specific issuer, the name of such issuer, theperiod in which payments in the form of securities will be accepted, andthe principles for the valuation of securities used as payment;

9) in the case of closed-end investment funds – the types of securities otherthan dematerialised securities and their classes, as well as shares in limitedliability companies that can be contributed in consideration for investmentcertificates;”;

142

6) Art. 27 shall read as follows:

“Art. 27. 1. The management company shall carry out a subscription for unitsand non-public investment certificates directly or through an entityconducting brokerage activities.

2. During the subscription for units, the management company shallmake the prospectus and simplified prospectus of the investmentfund available free of charge.

3. The management company may, with the Commission’s consent,carry out a subscription for units and non-public investmentcertificates through an entity other than that specified in Art. 27.1. Insuch a case, the management company shall attach to the applicationreferred to in Art. 22 the agreement concluded with such entity andthe documents specified in Art. 32.4 regarding such entity.

4. The Commission shall refuse the consent referred to in Art. 27.3 ifan analysis of the agreement and the documents referred to inArt. 27.3 shows that the entity acting as an intermediary in thesubscription may perform those activities in breach of the principlesof fair trading or in a manner that does not duly protect the interestsof the persons subscribing for units and non-public investmentcertificates.”;

7) Art. 28.2 shall read as follows:

“2. If the payment to the investment fund is made by contribution of securitiesother than dematerialised securities or in the form of shares in limited-liability companies, the person subscribing for investment certificates shalltransfer, by way of an agreement, in accordance with other regulations, therights attached to such securities or shares to the management company,and shall submit to the depositary a copy of the agreement and – in thecase of a contribution in the form of securities – the securities or, if thesecurities are uncertificated, a document confirming ownership of suchsecurities, issued pursuant to the applicable regulations.”;

8) In Art. 33:

a) Art. 33.1 shall read as follows:

“1. Declarations of will made in connection with the acquisition and requests forredemption of units in investment funds or foreign investment funds, open-endinvestment funds registered in EEA states and open-end investment funds registeredin OECD states other than Member States or EEA states, including orders to buy orredeem units, may be submitted through natural persons who are bound with themanagement company, entity conducting brokerage activities or the entity referredto in Art. 32.2, under a mandate contract or another legal relation of a similar nature.Such natural person may not accept payments for the purchase of units, or acceptand transfer redemption proceeds.”,

b) Art. 33.2.2 shall read as follows:

“2) the entity conducting brokerage activities – as provided for in Art. 170 ofthe Act on Trading in Financial Instruments;”,

c) Art. 33.3 shall read as follows:

143

“3. Where a person buys or redeems units in an investment fund through anentity conducting brokerage activities or an entity referred to in Art. 32.2,such entity and the management company shall be jointly and severallyliable for any damage incurred by such person, unless the damage resultsfrom circumstances for which such entity is not responsible.”,

d) Art. 33.5 shall be added, to read as follows:

“5. The liability of the entity conducting brokerage activities or the entityreferred to in Art. 32.2, as well as the liability of the domestic bank or thecredit institution may not be disclaimed, limited or otherwise changed byway of an agreement. Any agreements disclaiming liability shall be nulland void.”;

9) Art. 35.1 shall read as follows:

“1. Declarations of will made in connection with the acquisition of units orredemption requests may be submitted on electronic carriers, provided thatthe requirements aimed at ensuring authenticity and reliability of suchdeclarations of will are met.”;

10) In Art. 37, Art. 37.3 shall be added, to read as follows:

“3. Semi-annual financial statements of investment funds, including combinedsemi-annual financial statements of umbrella funds, as well as semi-annualfinancial statements of the individual sub-funds, shall be subject toa review.”;

11) In Art. 46:

a) Art. 46.1 shall read as follows:

“1. A management company may commission, on the basis of an agreement,management of an investment fund’s portfolio or its part only to:

1) an entity conducting brokerage activities, in the scope provided for in theAct on Trading in Financial Instruments;

2) an entity conducting brokerage activities with a registered office in anotherMember State;

3) an entity conducting brokerage activities with a registered office in anOECD state other than a Member State,

– if:

a) securities or money market instruments listed on a regulated market inan OECD state are acquired for the fund’s investment portfolio or for apart of such portfolio in accordance with the fund’s articles ofassociation;

b) the entity conducting brokerage activities is subject to supervision bythe competent capital market supervisory authority in such state;

c) the Commission’s cooperation with such supervisory authority isensured on a reciprocity basis.

b) Art. 46.4 and 46.5 shall read as follows:

“4. An investment portfolio or its part whose management has beencommissioned to the entities referred to in Art. 46.3 may not include

144

dematerialised securities referred to in the first sentence of Art. 5.1 of theAct on Trading in Financial Instruments.

5. The provisions of Art. 46.4 shall not exclude the possibility of an entityreferred to in Art. 46.3 being commissioned, on the basis of an agreement,to make decisions as to the way of voting at a general shareholdersmeeting, as well as to buy and sell shares in a company whose shares werein the investment fund’s portfolio or a part of such portfolio that wastransferred for management, prior to the opening day of the public offeringof such securities or their admission to trading on a regulated market.”;

12) Art. 47.4 shall read as follows:

“4. A management company which conducts the activities specified inArt. 47.1 shall participate in the compensation scheme referred to in theAct on Trading in Financial Instruments to the same extent as a brokeragehouse whose sole business consists in discretionary management ofsecurities portfolios or providing advisory services related to trading insecurities. The provisions of the Act on Trading in Financial Instrumentsregarding the mandatory compensation scheme shall apply accordingly.”;

13) Art. 50.9 shall read as follows:

“9. The provisions of Art. 50.3 shall not apply to a management companymanaging solely securitisation funds or private equity funds, on conditionthat investment certificates issued by such funds are not public investmentcertificates.”;

14) Art. 53 shall read as follows:

“Art. 53. The shares of a management company shall be registered shares,unless they are dematerialised.”;

15) Art. 58.1.2 shall read as follows:

“2) the management company’s organisational chart and the rules for theprevention of the disclosure of information whose use could be detrimentalto the interests of unit-holders or investors acquiring securities offered in apublic offering or securities traded on a regulated market;”;

16) Art. 65.2.7 shall read as follows:

“7) shares in companies operating stock exchanges or over-the-countermarkets as defined in the Act on Trading in Financial Instruments;”;

17) In Art. 101:

a) Art. 101.2 shall read as follows:

“2. An open end investment fund shall not invest more than 20% of the valueof its assets in units of a single open-end investment fund, foreign fund orcollective investment undertaking referred to in Art. 101.1, and – if suchan open-end investment fund, foreign fund or collective investmentundertaking is an umbrella fund or a fund or institution comprising sub-funds, and each sub-fund has an individual investment policy – more than20% of the value of its assets in units of a single sub-fund. In the case ofinvestments, referred to in the preceding sentence, in units of a single sub-fund, the fund’s prospectus should specify additional risk related to suchinvestments”,

145

b) Art. 101.4 shall read as follows:

“4. If an open-end investment fund invests its assets in units or investmentcertificates of another fund or in units of a foreign fund or a collectiveinvestment undertaking referred to in Art. 101.1.3, managed by the samemanagement company or an entity from the management company’sgroup, such management company or entity may not charge fees for saleor redemption of such units or investment certificates.”,

c) Art. 101.5 shall be added, to read as follows:

“5. An open-end investment fund that invests more than 50% of its assets inunits or investment certificates referred to in Art. 101.4, shall be obliged todisclose the maximum level of fees charged for the management of theopen-end investment fund, foreign fund or collective investmentundertaking referred to in Art. 101.4, in the prospectus and in the annualand semi-annual financial statements, combined financial statements of anumbrella fund and the financial statements of the sub-funds.”;

18) Art. 102.1 shall read as follows:

“1. An open-end investment fund may lend dematerialised securities onlypursuant to Art. 94.1.3 of the Act on Trading in Financial Instruments, oncondition that:

1) the fund obtains collateral in the form of cash or securities in which thefund may invest in accordance with the investment policy defined in itsarticles of association;

2) the value of the collateral is at least equivalent to the value of the securitieslent on each asset valuation day of such fund up until the day on which thelent securities are returned;

3) securities shall be lent for a period not longer than six months.

19) Art. 116 shall read as follows:

“Art. 116. The articles of association of a specialised open-end investment fundmay permit payments to be made into a fund in the form ofdematerialised securities which the unit-holders acquired onpreferential terms or free of charge, in accordance with otherregulations. In such a case, the provisions of Art. 38.3 of theCommercialisation and Privatisation Act of August 30th 1996 (Dz.U.of 2002, No. 171, item 1397, No. 240, item 2055, Dz.U. of 2003No. 60, item 535, No. 90, item 844, and Dz.U. of 2004, No. 6, item39, No. 116, item 1207, No. 123, item 1291 and No. 273, item 2703)shall not apply.”;

20) In Art. 120:

a) Art. 120.1 shall read as follows:

“1. A closed-end investment fund issuing public investment certificates shallbe obliged to submit an application for admission of investment certificates totrading on a regulated market within seven days of the fund being entered inthe register of investment funds and of the day of the closing of each issue ofcertificates”

b) Art. 120.3 shall read as follows:

146

“3. In the event that the admission of investment certificates to trading on aregulated market is refused, they may be traded in an alternative tradingsystem referred to in the Act on Trading in Financial Instruments.”

21) Art. 121.1 shall read as follows:

“1. Investment certificates of a closed-end investment fund may be in the formof either registered or bearer securities, save that public investmentcertificates may only be in bearer form..”

22) Art. 122.1 shall read as follows:

“1. A certificated non-public investment certificate shall specify:

1) the name of the closed-end fund and the registered office of the fund;

2) the number under which the fund is entered in the register ofinvestment funds;

3) the date of the fund’s registration and the date of issue of the investmentcertificate;

4) the duration of the investment fund, if limited;

5) the series and number of the investment certificate;

6) whether the investment certificate is issued in bearer or registeredform;

7) whether the registered investment certificate carries any votingpreference, with details of the scope of such preference;

8) any restrictions on the transferability of the investment certificate.”;

23) Art.123.1 shall read as follows:

“1. Should the closed-end investment fund’s articles of association sostipulate, non-public investment certificates may be issued in anuncertificated form. In such case, all the fund’s investment certificatesshall be issued in such form.”;

24) Art. 124 and Art. 125 shall be repealed;

25) in Art. 126:

a) the first sentence of Art. 126.1 shall read as follows:

“The following shall be provided along with an offer of non-public investmentcertificates:”,

b) Art.126.3 shall read as follows:

“3. The Polish Council of Ministers shall define, by way of a regulation, thedetailed wording of the terms and conditions of the issue of non-publicinvestment certificates in order to provide the buyers of the certificateswith the information necessary for an assessment of the risk associatedwith investing in such certificates.”;

26) Art. 127 shall read as follows:

“Art. 127. The articles of association of a closed-end investment fund may permita simultaneous offering of more than one issue of non-publicinvestment certificates.”;

147

27) Art.130.2 shall read as follows:

“2. If the payment to the fund is made by contribution of securities other thandematerialised securities or of shares in limited-liability companies, theperson subscribing for investment certificates shall transfer, by way of anagreement, in accordance with other regulations, the rights attached tosuch securities or shares to the fund, and shall submit to the depositary acopy of the agreement and – in the case of a contribution in the form ofsecurities – the securities or, if the securities are uncertificated,a document confirming ownership of such securities, issued pursuant tothe relevant regulations.”;

28) Art.136.2 shall read as follows:

“2. The delivery referred to in Art. 136.1 shall be effected::

1) upon registration of the certificate in the unit-holder’s securitiesaccount – in the case of public investment certificates;

2) in the case of non-public investment certificates:

a) by handing over the certificate – in the case of a certificatedinvestment certificate, or

b) upon the certificate being entered in the register of unit-holders– in the case of an uncertificated investment certificate.”;

29) Art.137.1 shall read as follows:

“1. Should the closed-end investment fund’s articles of association sostipulate, registered non-public investment certificates of a closed-endinvestment fund may be delivered to an investor who has not paid the fullissue price of the certificates”;

30) Art.140.7 shall read as follows:

“7. The articles of association of the fund referred to in Art. 196, which issuesnon-public or public investment certificates with an issue price percertificate not lower than the złoty equivalent of EUR 40,000 maystipulate that under the circumstances specified in Art. 140.6, the companymanaging such fund shall be entitled to charge an additional fee in order tocover the organisational costs of the fund and lost profits.”;

31) Art.141.1 shall read as follows:

“1. A member of the board of investors may be only a participant of a closed-end investment fund who holds investment certificates representing over5% of the total number of a given fund’s certificates and who has agreedin writing to serve on the board, and:

1) has blocked a number of investment certificates representing over5% of the total number of such certificates:

a) in a securities account – in the case of public investmentcertificates,

b) in the register of fund participants – in the case of uncertificatednon-public investment certificates, or

148

2) has deposited with the depositary a number of certificated non-public investment certificates representing over 5% of the totalnumber of such certificates.”;

32) Art. 143.1.1 shall read as follows:

“1)The unit-holders referred to in Art. 6.1.2 who have submitted at themanagement company, not later than seven days prior to the investors’meeting, deposit certificates issued in accordance with the Act on Tradingin Financial Instruments;”;

33) in Art. 162, Art. 162.3 shall be added, to read as follows:

“3. The conversion referred to in Art. 162.1.5 shall involve a concurrentredemption of units in an umbrella fund and acquisition of units in anothersub-fund of the same investment fund with the redemption proceeds.”;

34) Art. 181.7 shall read as follows:

“7. Deposit certificates shall be governed by the provisions of the Act onTrading in Financial Instruments.”;

35) Art. 196 shall read as follows:

“Art. 196.A closed-end investment fund or a specialised open-end investmentfund which applies the principles and investment limits of a closed-end fund may be created as a private equity fund that invests 80% ormore of its assets in assets other than:

1) securities offered in a public offering or admitted to trading ona regulated market, unless such offering or admission takesplace after acquisition of the securities by the fund;

2) money market instruments, unless they have been issued bya private company the shares of which are held in the fund’sinvestment portfolio.”;

36) Art. 280.2 and 280.3 shall read as follows:

“2. The professional secrecy obligation referred to in Art. 280.1 shall apply toany information obtained by the persons specified in Art. 280.1 inconnection with their professional activities performed under anemployment contract, a mandate contract or as part of another legalrelation of a similar nature, relating to the legally protected interests of theentities performing activities connected with the operations of aninvestment fund or of a collective securities portfolio and, in particular,information relating to the investments and the register of unit-holders ofsuch fund or portfolio, or other activities performed as part of a statutorilyregulated business falling within the scope of supervision by theCommission or a foreign competent authority, or information concerningthe activities taken as part of such supervision.

3. The professional secrecy obligation, as defined in Art. 149 of the Act onTrading in Financial Instruments, shall apply to the provision ofmanagement company’s services of discretionary management ofsecurities portfolios or advisory services in the area of securities trading.”.

149

Art. 212.

The Act on Freedom of Business of July 2nd 2004 (Dz.U. No. 173, item 1807 and No.281, item 2777, and Dz.U. of 2005, No. 33, item 289 and No. 94, item 788) shall beamended as follows:

1) in Art. 75.1:

a) Art. 75.1.7 shall read as follows:

“7) the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of2005, No. 183, item 1538);”,

b) Art. 75.1.7 item 7a shall be added, to read as follows:

“7a) the Act on Public Offering, Conditions Governing the Introduction ofFinancial Instruments to Organised Trading, and Public Companies ofJuly 29th 2005 (Dz.U. of 2005, No 184, item 1539);”;

2) Art. 84.2 shall read as follows:

“2) supervision over the capital market, pursuant to the Act on Capital MarketSupervision of July 29th 2005 (Dz.U. of 2005, No. 183, item 1537), theAct on Trading in Financial Instruments of July 29th 2005, the Act onPublic Offering, Conditions Governing the Introduction of FinancialInstruments to Organised Trading, and Public Companies of July 29th2005, the Act on Investment Funds of May 27th 2004 (Dz.U. No 146, item1546, and Dz.U. of 2005, No. 83, item 719), and the Commodity ExchangeAct of October 26th 2000;”.

Art. 213.

The Act on European Grouping of Economic Interests and the European Company ofMarch 4th 2005 (Dz.U. No. 62, item 551) shall be amended as follows:

1) Art. 2.7 shall read as follows:

“7) “public company” shall mean a company as defined in Art. 4.20 of the Act onPublic Offering, Conditions Governing the Introduction of FinancialInstruments to Organised Trading, and Public Companies of July 29th 2005(Dz.U. of 2005, No 184, item 1539);”;

2) Art. 17.3 shall read as follows:

“3. Shareholders in a public company shall submit, together with the requestreferred to in Art. 17.2, a deposit certificate issued in their name in accordancewith the Act on Trading in Financial Instruments of July 29th 2005 (Dz.U. of2005, No. 183, item 1538).”;

3) Art. 18.7 shall read as follows:

“7. If the buy-out concerns shares admitted to public trading in securities, transferof such shares shall be effected pursuant to an agreement concluded betweenthe shareholder demanding that his shares be bought out and the buyer, uponan appropriate entry being made in the securities account of the buyer pursuantthe provisions of the Act on Trading in Financial Instruments of July 29th2005.”.

150

Part XII

Transitional and Final Provisions

Art. 214.

1. As of the effective date hereof, the activities of the Warsaw Stock Exchange shallbe governed by the provisions of this Act, with the exclusion of Art. 25 and Art.165.3.

2. The Commission shall move to the minister competent for financial institutions toprohibit the company referred to in Art. 214.1 to operate a stock exchange market,if such company conducts such activities in gross violation of the law.

3. As of the effective date hereof, the securities within the meaning of Art. 3.3 andArt. 4 of the Act referred to in Art. 224, which are traded on a regulated market onthat date shall become financial instruments other than securities, referred to inArt. 2.1.2.c and 2.1.2.d.

4. The securities within the meaning of Art. 3 and Art. 4 of the Act referred to inArt. 224 which are traded on a regulated market on the effective date hereof and arenot registered in the depository for securities as at that date, shall become financialinstruments other than securities, referred to in Art. 2.1.2.c and 2.1.2.d, as of thedate of their registration in the depository for securities, provided that theregistration takes place within 30 days as of the effective date hereof.

5. As of the effective date hereof, the official stock exchange market organised by thecompany referred to in Art. 214.1, which meets the requirements set out in theregulations issued under Art. 90.2 of the Act referred to in Art. 224, shall becomethe official listing market referred to in Art. 16.2.

Art. 215.

1. As of the effective date hereof, the provisions of this Act, with the exclusion ofArt. 36, Art. 37.2 and Art. 166.1.2 and 166.13, shall apply to the activities ofa company operating an OTC market.

2. The Commission shall prohibit operation of an OTC market by the companyreferred to in Art. 215.1, if it conducts such activities in gross violation of the law.

Art. 216.

1. Brokerage licences or authorisations to keep securities accounts granted by theCommission prior to the effective date hereof shall authorise their holders toperform activities specified in Art. 69.2-4 or Art. 119.1, respectively. If a brokeragehouse or a bank conducting brokerage activities intends to perform activitiesspecified in Art. 69.2-4, which before the effective date hereof were not brokerageactivities, the provisions of Art. 87 and Art. 78.4 shall apply accordingly.

2. Entities conducting brokerage activities on the basis of licences granted by theCommission prior to the effective date hereof shall, within six month as of theeffective date hereof, adjust their operations to the requirements of this Act.

151

3. The companies operating regulated markets on the effective date hereof shall adaptthe terms of the rules referred to in Art. 105.1 or Art. 115.1 of the Act referred to inArt. 224, to the changes resulting from the provisions of this Act, within threemonths from its effective date.

4. Issuers of securities admitted to public trading pursuant to the provisions of the Actreferred to in Art. 224, who did not conclude the agreement referred to in Art. 70 ofthe said Act prior to the effective date hereof, shall conclude the agreement referredto in Art. 5.3-5 within 14 days from the effective date hereof.

Art. 217.

1. The entries in the register of securities brokers and the register of investmentadvisers made prior to the effective date hereof shall continue to be valid.

2. The licences, authorisations and approvals granted by the Commission prior to theeffective date hereof shall continue to be valid.

Art. 218.

1. Brokers entered in the register of securities brokers prior to the effective datehereof shall be required to pass a supplementary examination to obtainqualifications to perform activities related to investment advisory services. Thisrequirement shall also apply to investment advisory services provided whileperforming the activities of an investment firm agent by such a broker.

2. The supplementary examination shall be conducted by the examination boardqualifying brokers. The provisions of Art. 128.1, 128.3 and 128.9 and theregulations issued pursuant to Art. 128.11.1 and 128.11.2 shall apply accordingly tothe matters related to the examination before the examination board qualifyingbrokers, subject to a proviso that the thematic scope of the supplementaryexamination shall only comprise the fields related to the performance of investmentadvisory services.

3. In the case of a broker entered in the register of securities brokers prior to theeffective date hereof, the requirement to employ a prescribed number of investmentadvisers and securities brokers, referred to in Art. 83.1.3, shall be deemed to be metif the broker passes the supplementary examination.

4. The fact of passing the supplementary examination, referred to in Art. 218.1, shallbe published in the Official Journal of the Polish Securities and ExchangeCommission, referred to in Art. 7.4 of the Act on Capital Market Supervision.

Art. 219.

1. In the cases related to offences specified in Art. 167-173 of the act referred to inArt. 224, with respect to which criminal proceedings were cancelled or theinstigation of such proceedings was refused due to the fact that the offence ceasedto be prosecutable as a result of the provisions hereof coming into effect, theChairman of the Commission may apply to the Court or the prosecutor forinformation or copies of documents related to the case, to the extent necessary forthe Commission to instigate administrative proceedings in cases related to the acts,specified in Art. 171.1, and Art. 172-174, corresponding to such offences.

152

2. The provisions of the Act referred to in Art. 224 which relate to the acts specifiedin Art. 171.1 and Art. 172-174 hereof shall apply to the acts representing offencesspecified in Art. 167-173 of the Act referred to in Art. 224, committed prior to theeffective date hereof and disclosed following that date.

Art. 220.

1. Subject to Art. 220.2, the provisions of this Act shall apply to cases instigated butnot concluded prior to the effective date hereof.

2. The persons who on the effective date hereof fulfil, according to the existingregulations, the criteria to be met to be entered in the register of brokers or theregister of advisers, shall be entered in the register upon submitting a relevantapplication, subject to the three-month period referred to in Art. 129.1.

Art. 221.

Until December 31st 2005, the compensation scheme referred to in the provisions ofPart V hereof secures the payment of investors’ funds referred to in Art. 133.2; thepayment shall comprise 100% of the funds covered by the compensation scheme in thecase of funds of up to the złoty equivalent of EUR 3,000, and 90% in the case of fundsin excess of that amount, provided that the upper limit for the funds covered by thecompensation scheme shall equal the złoty equivalent of EUR 11,000, computed at themid-exchange rate quoted by the National Bank of Poland in the exchange-rate table forthe date on which the circumstances giving grounds to the payment of compensationhave occurred.

Art. 222.

The secondary legislation issued under Art. 23.5 and 23.6, Art. 31.2, Art. 59c.2,Art. 60.1, Art. 60.3.2, Art. 60.5, Art. 90.2 and 90.4, Art. 97a.2 and Art. 161g of the Actreferred to in Art. 224 shall continue to be valid until the secondary legislation issuedprovided for in this Act are issued, but in no event for a period longer than six monthsas from the effective date hereof.

Art. 223.

The provisions of this Act shall apply to the determination by the National Depositoryfor Securities of the rates to be applied in 2006 in the calculation of contributions to thecompensation scheme, in accordance with Art. 121.6 of the Act referred to in Art. 224.

Art. 224.

The Act on Public Trading in Securities of August 21st 1997 (Dz.U. of 2005, No. 111,item 937) shall hereby become null and void, with the exception of Art. 118-123 andArt. 123a and 123b and Art. 146a, subject to Art. 223, which shall become null and voidas of December 31st 2005.

Art. 225.

This Act shall take effect after the lapse of 30 days from its promulgation.

153