The Ministry of Finance has a strategy for the capital market [SRRK]

The project of the Capital Market Development Strategy (abbreviated as SRRK) assumes, among other things, the reduction of bureaucracy in some procedures, as well as ideas for increasing the turnover volume. It may be necessary to introduce new financial instruments, but we cannot expect a tax revolution. According to the ministry, such incentives only work in the short term.

There is no need to convince anyone that the Polish capital market is lame. The largest global investors, who care about high liquidity, usually bypass it with a wide arc or invest with us a small part of capital, on the principle of diversifying the portfolio intended for markets that are still developing.

Many entities, with the Ministry of Finance at the forefront, are interested in changing this situation. The debates have been going on for months, and last week the so-called a consensus conference during which the assumptions of the Capital Market Development Strategy (SRRK) project were presented, compared to the remarks reported for weeks.

Be sure to read: SII asks the Ministry of Finance to reduce the Belka tax to 9%

Where did the idea for changes come from? The world is escaping Poland. And not only highly developed countries that rely on the market economy that has been built for many years, also the smaller ones from our region. The reason is, among others The offer is still too small - for example, there are no development bonds popular in other countries, no short sale of shares, and market intermediaries are underinvested and often do not even know the full range of opportunities that they could offer their clients.

400 comments and 60 activities

On February 28, 2019, the project was published on the website of the Ministry of Finance. He was also immediately attracted by comments - from institutions, brokers, associations, market participants. In a word: from all those who have to deal with the shortcomings of our system on a daily basis.

The strategy design is available HERE

SRRK is very extensive. It contains 60 in detail of the regulations described, which in the opinion of its creators are barriers to the development of the capital market in Poland. Of course, each of them can be changed. The ideas of changes concern many areas: from financial education at the lowest levels, through protection of individual investors, to better service of the largest companies, changes in taxes and investments in new technologies that can increase the level of both services provided and the security of transactions and funds.

What will we find in the SRRK project?

There are, among others, tax incentives, but it is already known that there will be no revolution. According to the Ministry of Finance, such activities bring about results, but only short-term ones. Meanwhile, the strategy is to direct the Polish market to a completely new, faster development path. This does not mean, however, that changes in taxes will not be at all. However, only some entities can be counted on. The MF proposes, among others:

• recognition of 125 proc. the costs of preparing a debut offer on the WSE for tax costs, which would encourage companies to make their debuts on the stock exchange,
• lower dividend taxes on investments lasting over 3 years, which would encourage long-term investment in stable, dividend companies,
• partial elimination of taxes on profits from the sale of employee shares,
• unification of the tax system in the primary and secondary market of bonds,
• the possibility of partial tax optimization by settling together profits and losses from various financial instruments, including investment fund units.

It is also planned to standardize the banking license so that banks - also new ones - can stimulate turnover on the capital market.

MF: Poland is the heart of Central and Eastern Europe

The plans of the Ministry of Finance are ambitious. The authors of the development strategy do not hide that Poland can and should become a regional hub for the development and financing of small but innovative enterprises. There was also an idea for a different approach to tax from some financial institutions.

- This means that if, for example, the bank decides to enter into transactions that do not meet the requirements, the funds received as a result of these transactions will not be exempt [from tax - ed.]. The tax on certain financial institutions should be structured in such a way as to promote behavior that minimizes the above systemic risk related to OTC trading - we read in the project.

Who will be the face of change?

During the consultation of the project, comments appeared to appoint a leader who would oversee the implementation of the strategy.

- The strategy should be implemented under the supervision of a specially appointed plenipotentiary, preferably a government representative, acting as a secretary or undersecretary of state within the Ministry of Finance. The government's authorization of the plenipotentiary would help to maintain his high status as a partner for talks towards the social, market and political side. The representative should also be equipped with effective tools thanks to which he will be able to carry out the tasks assigned to him. Significant help for the person supervising the implementation of the SRRK should also be the expert base, providing substantive and organizational support - emphasizes Marek Dietl, president of the Warsaw Stock Exchange.

For now, however, such a person has not been chosen. And time is running out, because at the end of June there will be another consultative meeting, while before the holidays the ready draft strategy is to be considered by the Council of Ministers. The implementation of the SRRK is to take place in the years 2019-2023.