The Polish exchange and over-the-counter markets have three separate bourses. The Warsaw Stock Exchange (WSE) and the Polish Financial Market (PGF) act on the exchange market and Centrala Tabel Ofert (CeTO) acts on the over-the-counter market. Unfortunately for developing companies in many e-markets, all three operate under strict by-laws which require companies that wish to enter to provide solid financial documentation, including evidence of a certain level of income for a specified number of years.

New and developing internet companies often cannot fulfil these conditions. Since many have not been in existence for very long they have not yet made the required level of turnover. The restrictions therefore prevent these companies from entering the market. In the face of the rapid growth of many internet businesses, all three exchanges are considering amending their by-laws in order to benefit from the dynamic growth of e-commerce and to enable its financing via transactions on the exchange and over-the-counter markets.

At the beginning of March, the president of the WSE declared that a decision on the creation of a fourth market (along with the main, parallel and free markets) will be made in the next two or three months. This platform will be dedicated to developing companies with low income and will thus open the door for internet companies.

PGF and CeTO are planning to merge and to restructure the over-the-counter market. They intend to create a platform dedicated to internet and other 'young technology' companies which need capital to develop. The new exchange will act along similar lines to NASDAQ with respect to online transactions, which will reduce share emission, operation and investment costs.

These changes should provide the capital necessary to stimulate the rapid growth and development of both internet companies and of the market in general.

For further information on this topic please contact Marek Rosinski or Paulina Kieszkowska at CMS Cameron McKenna by telephone (+48 22 520 5555) or by fax (+48 22 520 5556) or by e-mail ([email protected] or [email protected]).

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