Jacek Jastrzębski, Chair of the KNF, took part in a fireside chat with prof. dr hab. Zbigniew Ćwiąkalski, titled ‘Law, courts and supervision facing the growing complexity of the capital market’ during the 20th Funds Forum organised by the Chamber of Fund and Asset Management (IZFiA). The chat was hosted by Tomasz Prusek.

Jacek Jastrzębski expressed his belief that codified law inherently could not keep up with technological development and financial markets’ dynamics. For this reason, a special role is played by institutions such as the financial supervisor, which – thanks to its operational flexibility – may respond to emerging challenges and close the gap between the development of the market and the legislative process. 

The Chair of the KNF also referred to risk in the financial market. He made a distinction between two types of that risk: market risk (related to the possibility of an investment’s failure) and the risk arising from unfair practices, such as fraud or misappropriation of funds. He emphasised that investors should be aware of and ready to accept market risk as a natural part of investing, while the State and supervision authorities are obliged to ensure protection against unlawful activities. In the context of deregulation, he pointed out that any change in legislation should be assessed in terms of its impact on both types of risk.

Yet another topic raised during the debate was the role of the Court of Justice of the European Union’s case-law in the formation of the Polish financial market. Jacek Jastrzębski remarked that frequent interventions by the CJEU may arise from the national system’s insufficient ability to resolve important disputes on its own. Consequently, many problems reach the European level, where the CJEU hears cases within a relatively narrow scope, without taking into consideration their national, market context. The sum of those fragmented outcomes determines, in turn, the functioning of the entire financial market. The response should consist in building capacity to solve legal issues of the national financial market at the national level.

Jacek Jastrzębski also expressed his scepticism about the idea of establishing a specialised court for the capital market, pointing to difficulties in specifying its competence and to the uncertainty whether the establishment of such a court would enhance the efficiency of proceedings. Instead of creating a new institution, he sees more potential in developing specialised units within existing structures, such as prosecutor’s offices, the Police or institutions cooperating with the judiciary.