The head of the Polish Financial Supervision Authority for a maximum of 14 years and the “ban on competition”. The government is preparing changes at the market regulator

The introduction of a 14-year limit of time performing his function by the Chairman of the PFSA and his deputies and the prohibition of their employment for a specified period of time in supervised entities-such as The changes were included in the draft amendment to banking law.

On Friday, a draft amendment to banking law and some other acts was published on the pages of the Government Legislation Center. The project prepared by the Ministry of Finance is aimed at implementing the Polish Law of the EU Directive, including supervisory powers and the regulation referring to credit risk requirements.

The project proposes to determine the limit of time performing the function by the chairman of the Polish Financial Supervision Authority and his deputies. It will be 14 years old, with this period will be calculated to everyone performing this function, who will be appointed after January 11, 2026.

KNF management with a ban on competition?

A ban on employing (as a rule 12 months) will also be introduced for a specified time in “supervised entities, entities providing services to supervised entities and entities conducting lobbying activities in the field of financial market (in matters that a person dealt with) by the chairman of the PFSA and his deputies. A similar prohibition will also be to take over employees of the Office of the Polish Financial Supervision Authority after completing the function or termination of employment. In their case, this period will be essentially 6 months.

At the same time, the PFSA is to gain the right to grant consent to the appointment of members of the management board and the chairman of the Bank's supervisory board, if in the light of EU regulations is a “large institution” (currently the Commission issues such permission to appoint the president – PAP). The PFSA will also assess whether internal control cell managers and financial directors in such large institutions meet “correspondence requirements”. Banks will have to inform the KNF about planned significant transactions, such as the purchase or sale of a significant package of shares, transfer of assets or liabilities of significant value, mergers and divisions of credit institutions.

“In the case of the planned purchase or taking of shares or rights from the shares and in the case of the planned sale of a package of shares, the notification is required if the planned transaction leads to the achievement or exceeding of 15 percent of the recognized capital of the potential buyer, while the planned transfer of assets or obligations is submitted when their value is at least 10 % or rights from shares, give a negative opinion as to the merger or division, as well as impose sanctions in the event of transactions in violation of the provisions of the Act, “we read in the justification.

In accordance with the proposed regulations, a foreign bank wanting to start operating in Poland will have to create a branch and obtain the PFSA permission to conduct business. The project also proposes to establish the so -called minimum capital threshold, i.e. a mechanism “allowing to limit the underestimation of capital requirements calculated using the internal rating method (IRB).”

“In accordance with applicable regulations, banks have the option of estimating the capital requirement either by the standard method or the IRB method. If the IRB method is used, the capital requirement is often much lower than in the case of the standard method, which is more conservative. According to the new regulations 72.5 percent

Changes in the standard credit risk method are also proposed to increase the sensitivity of this method to the risk “in several key aspects”. The project also mentions the ordering of market risk requirements by “establishing binding requirements based on an alternative standard method and the introduction of multipliers increasing the value of the requirement calculated by a simplified standard method.”

The draft act is to enter into force on January 11, 2026, with the exception of some of the provisions that will come into force at another time. (PAP)

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