EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 21 May 2008 
at the request of the Polish Minister for Finance on a draft law amending the  
Law on trading in financial instruments and other legislation 
(CON/2008/20) 
 Introduction and legal basis
 
On 28 February 2008 the European Central Bank (ECB) received a request from the Polish Minister for 
Finance for an opinion on draft legislative provisions  amending Polish laws in the area of capital market 
regulation1.  
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the third, fifth and sixth in dents of Article 2(1) of Council Decision 98/415/EC 
of 29 June 1998 on the consultation of the European Central Bank by national authorities regarding draft 
legislative provisions2, as the draft law relates to Narodowy Bank Polski (NBP), to payment and 
settlement systems and to rules applicable to financial institutions insofar as they  materially influence the 
stability of financial institutions and markets. In accor dance with the first sentence of Article 17.5 of the 
Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 1.  The purpose of the draft law and the scope of the consultation 
1.1  The legislative package subject to the curre nt ECB consultation will transpose a number of 
Community directives into the Polish legal system
3 and make other amendments that do not 
directly relate to implementation requirements. The ECB was already consulted on draft provisions 
contained in the legislative package in 20064. Currently, the consulting authority has requested an 
ECB opinion on certain new amendments and provisi ons which have been proposed since the time 
                                                 
1  The proposed amendments are divided into three separate  draft laws: (i) draft law amending the Law of 29 July 2005 on 
trading in financial instruments (Dz.U.  2005, No 183, item 1538, as amended) a nd other legislation; (ii) draft law 
amending the Law of 29 July 2005 on public offerings and th e conditions for admitting financial instruments into the 
organised system of trading and on public companies (Dz.U.  2005, No 184, item 1539, as amended); and (iii) draft law 
amending the Law of 24 May 2004 on investment funds  (Dz.U. 2004, No 146, item 1546, as amended). 
2  OJ L 189, 3.7.1998, p. 42. 
3  The implemented Direct ives include: (i) Directive 2004/39/EC of the Eu ropean Parliament and of the Council of 
21 April 2004 on markets in financial instruments amendi ng Council Directives 85/611/EC and 93/6/EEC and Directive 
2000/12/EC of the European Parliament and of the Coun cil and repealing Council Directive 93/22/EEC (OJ L 145, 
30.4.2004, p. 1); (ii) Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital 
adequacy of investment firms and credit institutions (reca st) (OJ L 177, 30.6.2006, p. 201); and (iii) other Community 
directives (2004/25/EC, 2004/109/EC , 2006/73/EC, 2007/14/EC and 2004/16/EC). 
4  See ECB Opinion CON/2006/53 of 16 November 2006 at the requ est of the Polish Minister for Finance on a draft law 
amending the Law on trading in financial instruments.  
2 of the original ECB consultation5. The present ECB opinion is limited to one of the draft laws 
submitted with the current consultation request (herei nafter, the ‘draft law’), which is amending the 
Law of 29 July 2005 on trading in financial instrume nts (hereinafter, the ‘current Law on trading in 
financial instruments’)6 and other legislation, including th e Law of 24 August 2001 on settlement 
finality in payment and settlement systems and on th e supervision of such systems (hereinafter, the 
‘Law on settlement finality’)7.  
1.2 The draft law introduces new elements inter alia  as regards the following issues related to 
securities clearing and settlement: (i) Krajowy Depozyt Papierów Warto ściowych (KDPW, the 
Polish central securities depository an d settlement system) is to change its shareholder structure in 
that NBP will be obliged to dispose of its shares current ly possessed in KDPW8; (ii) in view of the 
forced sale of KDPW shares, NBP’s oversight powers over KDPW will be reduced, while NBP 
will obtain certain limited consultation and info rmation powers in relation to KDPW and other 
clearing and settlement operators, as a r esult of the proposed public law provisions9; and 
(iii) outsourcing of KDPW’s activities to third parties is to be restricted10. Additionally, the 
statutory definition and procedure for rec ognition of payment and settlement systems11 and 
licensing requirements for banks conducting brokerage activities12 are amended. 
 2. General remarks The ECB would like to reiterate its comments in Opin ion CON/2006/53 to the extent they have not been 
incorporated in the current version of the draft law, pa rticularly on the following: (i) the need to adapt the 
statutory definitions of ‘clearing’ and ‘settlement ’ to standards developed by the Committee on Payment 
                                                 
5  Such amendments were either added in the text of the le gislative draft submitted to the Parliament (Sejm) following ECB 
Opinion CON/2006/53 (see Sejm document No 64) or are pr oposed in the separate Governmental submission of 
15 February 2008, complementing the original draft.  
6  See publication references  in the footnote 1 above.  
7  Dz.U. 2001, No 123, item 1351, as amended.  One of the other laws subject to th e amendmnets proposed by the draft law 
is the Law on banking of 29 August 1997 (consolidated  text: Dz.U. 2002, No 72,  item 665, as amended). 
8  See Article 46 of the Law on trading in financial instru ments following the amendments introduced in this Law by 
Article  1(37) of the draft law, as amended by point 1(15) of the Governmental submission of 15 February 2008, and by 
Article 18a of the draft law, as added by point 8 of the abovementioned G overnmental submission.  
9  See Articles 48(16), 50(2), 64a, 68a(5) and 68b(1) of th e Law on trading in financia l instruments following the 
amendments introduced in this Law by Article 1(38), (50a), (51a) (added by point 1(22) of the Governmental submission 
of 15 February 2008) and Article 56 of the draft law.  
10  The draft law will allow KDPW only to outsource to its own s ubsidiaries. See Article 48(7) to (15) of the Law on trading 
in financial instruments following the amendments introduced in this Law by Article 1(38) of the draft law, as partially 
amended by point 1(17) of the Governme ntal submission of 15 February 2008.  
11  In certain cases, in view of the systemic risk considerat ions, the following competence will be given to NBP’s President 
in relation to payment systems and to the Financial Supervisi on Commission in relation to securities settlement systems: 
(i) recognition of arrangements involving only two participants as  a ‘system’; and (ii) recognition of indirect participants 
as participants in the system; see Articles 2 and Articles 2a and 17a and Article 19 of the Law on settlement finality 
following the amendments introduced in th is Law by Article 13(1)-(2a), (7a) and (9) of the draft law, as partially 
amended by point 4 of the Government al submission of 15 February 2008. 
12  In particular, certain amendments will be introduced to  the applicant bank’s initial capital and the organisational 
separation of banking and brokerage activi ties; see Article 111 of the Law on trad ing in financial in struments following 
the amendments introduced in this Law by Article 1(96) of the draft law, as ame nded by point 1(44) of the Governmental 
submission of 15 February 2008. 
3 and Settlement Systems (CPSS) of the Bank for In ternational Settlements (BIS) and by the ECB13; (ii) the 
need to prevent spillover of risks from the entity providing central counterparty services to the entity 
providing security settlement services14; (iii) the need to assign tasks related to ensuring proper operation 
of the clearing and settlement process not only to KDPW  but also to other clearing or settlement system 
operators which may be established in Poland15; (iv) the need for clearing and settlement system operators 
to submit rules on business continuity measures and on secondary sites as a prerequisite for obtaining a 
licence16; and (v) the need to ensure express coverage of clearing houses under the provisions of the Law 
on settlement finality17. The ECB recommends taking into account past ECB comments at the current 
stage of the legislative work, in addition to  the more detailed remarks presented below.  
 3. Central bank ownership and oversight of securities clearing and settlement systems 
3.1 At present, the sole securities clearing and se ttlement operators in Poland are: (i) KDPW; and 
(ii) NBP, for certain types of securities
18. KDPW, which performs a whole range of depository and 
settlement functions, is owned in equal parts by the State Treasury, the Warsaw Stock Exchange 
and NBP19. KDPW is supervised by the Fina ncial Supervision Commission (FSC)20 and is also 
subject to oversight exercised by NBP through: (i) participation of one NBP representative in the 
FSC21; and (ii) wide corporate-law control measure s available to NBP due to its holding of KDPW 
shares, such as being represented in KDPW Supervisory Board22 and exercising rights available to 
the Supervisory Board members23. 
                                                 
13  See paragraph 2.3 of ECB Opinion CON/2006/53, as currently  relating to Article 45b of th e Law on trading in financial 
instruments, as amended by Ar ticle 1(36) of the draft law. 
14  See paragraph 2.4 of ECB Opinion CON/2006/53, as curren tly relating to Article 68a(11) of the Law on trading in 
financial instruments, as amended by  Article 1(56) of the draft law. 
15  See paragraph 2.5 of ECB Opinion CON/ 2006/53, as currently relating to Article 48 and Article 68a(1) to (2) of the Law 
on trading in financial instruments, as amended by Article 1(33) and (56) of the draft law. 
16  See paragraph 2.6 of ECB Opinion CON/2006/53, as currently relating to Article 68c(2) to (3) of the Law on trading in 
financial instruments, as amended by  Article 1(56) of the draft law. 
17  See paragraph 2.10 of ECB Opinion CON/2006/53, as currently  relating to Article 15(1) to (2) of the Law on settlement 
finality, as amended by Arti cle 13(5) of the draft law. 
18  NBP may register and settle transactions in securities: (i) i ssued by itself or by the State Treasury; or (ii) incorporating 
derivative rights based on such securitie s (Article 49 of the current Law on trading in financial instruments; cf. 
Article 45c of the Law on trading in financial instruments following the amendments introduced by Article 1(36) of the 
draft law).  
19  See the KDPW Annual Report 2006, p. 6 and its English tr anslation available on KDPW’s website at www.kdpw.com.pl. 
20  See Article 5(6) of the Law of 29 July 2005 on supervis ion of the capital market (D z.U. 2005 No 183, item 1537, as 
amended, hereinafter the ‘Law on supervision of the capital market’). 
21  Article 5(2) of the Law of 21 July 2006 on supervision of  the financial market (Dz. U. 2006, No 157, item 1119, as 
amended).  
22  KDPW Supervisory Board comprises six to nine members appointed for a three-year term by KDPW Shareholders’ 
General Meeting (see paragraph 15 of the KDPW Statute, as last amended by Resolution No 5/2007 of the KDPW 
Extraordinary General Shareholders’ Meet ing of 22 August 2007, hereinafter, the ‘KDPW Statute’ (available with its 
English translation on KDPW’s we bsite at www.kdpw.com.pl)).  
23  The KDPW Supervisory Board continuously monitors KDPW’s ac tivities. The responsibilities of the Supervisory Board 
include, inter alia : (i) review of KDPW financial st atements and KDPW Management Boar d accounts; (ii) suspension of 
Management Board members from their duties; (iii) adop ting the KDPW Rules, the Rules of the KDPW Settlement 
Guarantee Fund and the Rules of the Investor Compensation Scheme; (iv) appointing a certified auditor; (v) approving 
the KDPW business plans and financial plans; and (vi) approving the estab lishment of KDPW subsidiaries (see 
paragraph 20 of the KDPW Statute). 
4 3.2 Article 18a of the draft law requires NBP to dispo se of its shares held in KDPW’s capital within 12 
months of the draft law’s entry into force. If NBP does not dispose of its shares in KDPW, the 
sanction of not being able to exercise shareholder rights would apply to NBP. This would result in 
NBP losing its current oversight powers ove r KDPW stemming from its rights as a KDPW 
shareholder. The explanatory memorandum to the draft law suggests that such discontinuation of 
NBP’s oversight powers exercised on the basis of its  shareholder status may be compensated by the 
assignment of certain public law competences to the NBP, as proposed by the draft law24. It 
proposes that the NBP President will have a right to issue a non-binding opinion on: (i) the KDPW rules and amendments to such rules, presented to the FSC for approval, to the extent such rules 
concern clearing and settlement of transactions in fi nancial instruments; and (ii) within the same 
scope – rules of KDPW’s subsidiaries conductin g securities clearing and settlement functions 
delegated by KDPW and rules of other cleari ng houses or settlement houses, established on the 
basis of the Law on trading in financial instruments, once it is amended
25. Further, at the NBP 
President’s request, members of the KDPW manageme nt and staff will be obliged to disclose in 
writing information regarding KDPW’s activities related to the clearing and settlement of 
transactions in financial instruments26.  
3.3 Central bank financial independence 
The ECB wishes to point out that the concept of central bank financial i ndependence in Article 108 
of the Treaty should be seen from the perspective of  whether any third party is able to exercise 
either direct or indirect influence over the ability of the national central bank (NCB) to fulfill its mandate
27. The draft law does not comply with the principle of central bank independence as it forces 
NBP to dispose of its assets, namely all its shares  held in KDPW. The ECB is of the view that the 
NBP’s shareholder status may be modified, if and when needed, in ag reement with the NBP’s 
decision-making bodies, at the market price.  
3.4 Recognition of NBP’s oversight functions  
The ECB understands that the draft law does not subs tantially affect NBPs’ supervision of payment 
systems under the Law on settlement finality28. However, the draft law foresees express 
specification of certain NBP’s oversight powers ove r securities clearing and settlement systems. As 
recalled in previous ECB opinions, an oversight f unction is inherent in the central bank task of 
promoting a sound market infrastructure, in order to  safeguard the effectiveness of monetary policy 
                                                 
24  See page 53 of the explanatory memorandum to the G overnmental submission of 15 February 2008. The ECB 
understands that the assignment to NBP of certain public law oversight competences was already proposed in the version 
of the draft law consulted in 2006, whereby it was not li nked with the proposal to force NBP’s sale of KDPW shares. 
25  The NBP President may also issue a non-binding opinion on the op erating licence to be given by the FSC to such clearing 
houses and settlement houses (see provisions referre d to in footnote 9 above). 
26  See new Article 64a of the Law on trading in financial instruments, introduced by Article 1(51a) of the draft law, added 
by point 1(22) of the Governmental  submission of 15 February 2008.  
27  See paragraph 9 of ECB Opinion CON/2004/16 of 11 May 2004 at the request of the Italian Ministry of Economic 
Affairs and Finance on a draft law on the protection of savings. 
28  See Article 16(1) and (3) and Articles 17 to 19 of the Law on settlement finality. As a resu lt of provisions introduced by 
the draft law, the NBP President will obtain certain new competences relating to the recognition of arrangements 
involving only two participants as a ‘system’ (see provisions listed in footnote 11 above).  
5 and the overall stability of the financial system29. It should be recognised in this context that 
payment systems and security settlement system s (SSSs) are interlinked given the use of the 
mechanism of ‘delivery versus payment’ under which settlements of securities and transfers of 
funds take place simultaneously. There is therefore a strong argument for integrating the oversight of payment and securities settlement systems, and fo r the NCB to perform this function. Settlement 
of both legs of such transactions should be subject  to similar safeguards to avoid asymmetries with 
systemic implications. The role of NCBs in SSS ove rsight is evident given SSSs’ crucial role in the 
functioning of the financial markets and, therefor e, the need for them to  be safe and efficient. 
Oversight of payment and clearing systems is one of the core competencies attributed to the Eurosystem, with its legal basis specified in Article 105(2) of the Treaty and Article 3.1 and 
Article 22 of the Statute of the European System of Central Banks and of the European Central Bank
30. In particular, the Eurosystem central banks perform oversight of payment systems in line 
with the common oversight policy defined by the Go verning Council, which will also apply to NBP 
once Poland adopts the euro31. As noted in previous ECB opinions32, the central bank oversight role 
is also reflected: (i) at international level, in the joint work on SSSs concluded by the CPSS and the 
International Organization of Securities Commissions (IOSCO)33; and (ii) at Community level, in 
the joint work of the ESCB and the Committee of European Securities Regulators (CESR) in 
establishing common standards for EU SSSs34, the mandate for which has recently been reaffirmed 
by the Council35.  
3.5 The ECB further notes that in the particular case of NBP’s oversight of KDPW the need to ensure 
the effectiveness of the oversight functions is supported by the systemic importance of KDPW in 
maintaining financial market stability in Poland, by the key role of KDPW settlement services in 
the operations implementing NBP’s monetary po licy and by the close operational link between 
KDPW and the NBP-operated payment syst ems, including the SORBNET-EURO system 
connected with the Eurosystem’s TARGET system36. In view of the above, the ECB recommends 
                                                 
29  Paragraph 2.8 of ECB Opinion CON/2006/53; cf. paragra ph 3.2 of ECB Opinion CON/2006/20 of 25 April 2006 on the 
Dutch draft law concerning financial sector supervisi on and paragraphs 4 to 14 of ECB Opinion CON/1999/19 of 
20 January 2000 at the request of the Luxembourg Ministry  for the Treasury and the Budget on a draft legislative 
proposal implementing Directive 98/26/E C [title shortened]; cf . CPSS, ‘Central Bank Oversight of Payment and 
Settlement Systems’, May 2005, point  1.1; publication available on the BIS website at www.bis.org. 
30  See paragraph 5 of ECB opinion CON/2003/14 of 7 August 2003 at the request of the Banca d’Italia on a draft regulation 
on payment systems, payment infrastructures and payment instruments. 
31  Cf. paragraph 14 of ECB Opinion CON/2005/24 of 15 July 2005 at  the request of the Ministry of Finance of the Czech 
Republic on a draft law on the integration of financial mark et supervisors; see also paragraph 4.2 of ECB Opinion 
CON/2006/15 of 9 March 2006 at the request of the Polish Mini ster of Finance on a draft law on the supervision of 
financial institutions. 
32  Cf. paragraph 15 of ECB Opinion CON/2005/24. 
33  See e.g. joint CPSS-IOSCO publications ‘Recommendations  for securities settlement systems’, November 2001 and 
‘Recommendations for Central Counterpar ties’, November 2004; publications available on the BIS website at 
www.bis.org. 
34  See e.g. joint ESCB-CESR publication ‘Standards for s ecurities clearing and settlement in the European Union’, 
September 2004; publication av ailable on the ECB webs ite at www.ecb.europa.eu. 
35  See the informal ECOFIN Co uncil meeting of 4 to 5 April 2008, ‘EU fi nancial markets infrastructures’, point 3; 
publication available on the website of the Slov enian Presidency of the EU at www.eu2008.si. 
36  The SORBNET-EURO is soon to be replaced by TARG ET2-NBP system. 
6 that the Polish authorities adopt solutions ensuring NBP’s capacity to perform  its oversight tasks, 
including in particular meaningful and direct access by NBP to information relevant for the 
performance of its financial stability role and NBP’s long-term capacity to ensure the smooth 
functioning of the payment and settlement infrast ructure relevant to its monetary policy and 
intraday credit operations. In particular , the ECB makes the following comments: 
(i) The ECB reiterates its earlier recommendation37 for NBP to be expressly made responsible, 
as one of its tasks, for the oversight of all securities clearing and settlement systems that 
operate or will operate in Poland, including the systems’ rules, and given access to all 
information and data relevant to the performance of such oversight  tasks. In this context, the 
ECB also draws the Polish legislator’s attention to the following provisions proposed by the draft law: (i) Article 64a of the Law on trading in financial instruments
38, which requires 
only KDPW and not any other ope rators to provide NBP with information in writing as 
regards their clearing and settlement activities; a nd (ii) Article 2(2) of the Law on settlement 
finality39, which does not provide for any NBP involvement in the exercise of the 
competence to recognise the legal arrangeme nts between two participants as securities 
settlement systems.  
(ii) It needs to be further considered how th e NBP’s oversight competences should be adequately 
exercised in cooperation with the FSC exercisi ng its supervisory competences on the basis of 
the provisions amended by the draft law40. If other authorities have legal or other 
responsibilities for aspects of payment and settlement systems, central banks are open to cooperation with these authorities.  
 4. Delegation of securities clearing a nd settlement services to third parties 
The ECB draws the Polish legislator’s attention to th e proposed provision of Article 48(7) of the Law on 
trading in financial instruments
41, which specifies that the listed KDPW tasks may be delegated solely to 
KDPW’s own subsidiaries. The ECB notes that while national laws may provide for authorisation or 
review requirements in respect of de legating or outsourcing to third parties of the activities of the central 
securities depositories (CSDs) conducting settlement func tions, such laws normally do not require legal 
dependence by the CSD on third parties to whic h CSD activities are delegated or outsourced. Any 
provisions proposed in this regard should not prejudi ce further evolution of the securities infrastructure in 
Poland, its integration with the European securities in frastructure and further market harmonisation, as it 
could negatively affect Polish investors and issuers.  
                                                 
37  See paragraph 4.3 of ECB Opinion CON/2006/15, as also re peated in the paragraph 2.8 of ECB Opinion CON/2006/53. 
38  As introduced by Article 51a of the draft law, ame nded by point 1(22) of the Governmental submission of 
15 February 2008.  
39  As introduced by Article 13(2) of the draft law, am ended by point 4 of the G overnmental submission of 
15 February 2008.  
40  See Article 16 of the draft law in the wording proposed by  point 5 of the Governmental submission of 15 February 2008, 
amending relevant provisions of the La w on supervision of the capital market. 
41  As amended by Article 1(38) of the draft law.  
7  
This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 21 May 2008. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET