Private placement rules and law in Poland

1. Summary of private placement provisions for fund interests (if applicable)

There is no specific definition of private placement under Polish law. The concept of “private placement” is by referring to the exemption from the requirement to publish a prospectus under the provisions of the prospectus law implementing Regulation 2017/1129, as amended (“Prospectus Law”) and refers to securities. According to the Prospectus Law, a placement by any entity (including an AIF which are in the form of securities) will be deemed a private placement provided it is not addressed to more than 149 investors (within the last 12 months) or an unspecified investor.

A public placement will be exempt from the prospectus requirement if, among others, (i) it is addressed to professional entities only; (ii) it is addressed to investors acquiring securities worth no less than EUR 100,000 or securities with a face value of no less than EUR 100,000; (iii) the value of the whole placement does not exceed EUR 1,000,000.

As mentioned, a public placement (a placement with over 149 investors) will be exempt from the prospectus requirement if, among others, it is addressed to professional entities only. A professional entity is one which has the experience and knowledge enabling it to make the right investment decisions and to correctly evaluate the risk associated with such decisions. A detailed list includes, among others: banks, investment firms, insurance companies, dealers / brokerage, investment funds, pension funds, entrepreneurs meeting certain capitalisation thresholds based on MiFID.

AIFMD was implemented into Polish law in March 2016 and came into force at the beginning of June 2016 as an amendment to the Polish law on investment funds.

Pursuant to the Polish law on investment funds alternative investment funds may be offered under the private placement exemption only to professional investors.

The category of professional clients includes also (in addition to specific categories of entities listed above) other entities which are recognised by an alternative fund manager as professional clients based on its evaluation of the clients’ necessary knowledge and experience to take relevant investment decisions and carry out an appropriate risk assessment relevant to such decisions.

2. Other forms of possible placement options for fund interests outside fund regulations

Reverse solicitation may be considered as a non-marketing activity. Assessments of reverse solicitation are made on a case-by-case basis.

3. Consequences of non-compliance with placement regimes for fund interests

Mandatory contractual consequences:

  • Possible application of contract law resulting in an invalidation of the placement and payment of damages. However, market practice is very limited.

Regulatory sanctions:

  • An administrative penalty of up to PLN 5m.

Penal sanctions:

  • A criminal penalty of up to PLN 10m and/ or a two-year prison sentence may be adjudicated if public placement securities are offered in a private placement.

4. Private placement rules for non-fund investments available

Generally, the private / public placement distinction is applicable to securities issued by any entity (such as an “ordinary company”). Accordingly, securities such as bonds, notes, warrants may constitute a good private placement opportunity outside fund regulation, as long as these are issued in a private placement (i.e. a placement to less than 149 investors).

Generally, the private / public placement distinction is applicable to all issuers of securities, including in particular ordinary companies, municipalities and other separately regulated issues.