PL Capital 25: A Capital Pipeline for Polish Companies?
Forget the "Polish Index on the NYSE." It’s a mistake. We need new architecture, not symbols.
If the state's objective is to genuinely open American capital sources to Polish companies, the starting point should not be a symbolic "Polish index on Wall Street," nor an attempt to turn the Warsaw Stock Exchange (WSE) into a formal subsidiary of the NYSE. Such ideas sound good politically but fail to solve the fundamental problem: how American investor capital can move beyond the secondary market and directly into the balance sheets of Polish companies. The answer lies in a far less flashy but much more effective structure: a capital issuance program for selected Polish companies using the Sponsored Level III ADR/ADS formula on the US market. The SEC clearly distinguishes between a foreign issuer’s mere trading presence and an ADR program designed for capital raising; for foreign private issuers, specific offering and reporting forms are provided, including F-1, F-3, and 20-F.
The essence of the "PL Capital 25" project would not be the creation of a single fund representing Poland, but rather a shared issuance infrastructure for a cohort of approximately twenty-five companies that meet liquidity, transparency, and corporate governance requirements. Each of these companies would remain a Polish issuer of common shares listed on the WSE, while simultaneously gaining a channel for capital issuance and distribution in the US via sponsored ADRs/ADSs. In this architecture, the underlying shares originate in Poland, while the instrument sold to the American investor takes the form of an ADR—a security issued by a US depositary bank representing a specific number of deposited shares of the foreign company. The SEC explicitly describes this framework, and the NYSE requires completed depositary documentation for ADR listings, specifically the Depositary Listing Agreement and a draft Depositary Agreement.
In this model, two distinct acts of issuance must be precisely differentiated. The first act belongs to the company: the issuance of new common shares, which increases its equity. The second act belongs to the US depositary bank: the issuance of ADRs corresponding to the underlying shares deposited on the Polish side. From the New York investor's perspective, an ADR is purchased; from the Polish company's perspective, new equity is sold. Only this structure achieves what a standard ETF cannot. An ETF may improve liquidity and valuation, but it does not, in itself, inject new funds into a company. A Level III ADR program, however, is specifically designed so that the US offering is linked to actual capital procurement by the foreign issuer.
The depositary layer is as critical as the issuance itself. Underlying shares cannot hang in a vacuum between Warsaw and New York; they must be maintained in an orderly post-trade arrangement. The natural core of this system is the KDPW (Central Securities Depository of Poland), which handles custodian participation and the maintenance of securities and omnibus accounts. In practice, "PL Capital 25" would rely on one or several global or specialized custodians with access to KDPW as participants. Such a custodian would hold the block of underlying shares for the US depositary bank, while KDPW remains the Polish pillar for registration and settlement. Consequently, the entire structure would not require dismantling domestic market infrastructure, but rather its orderly integration with the American depositary layer.
The cash flow in this model should be simple and transparent. The company prepares the share issuance in Poland while simultaneously filing the appropriate SEC documents for an ADR offering. The bookrunners then sell the instrument to US investors. Upon closing, the American investor pays for the ADR/ADS, the company issues new shares, those shares enter the Polish depositary, and the depositary bank issues the corresponding ADRs. After deducting underwriting commissions and legal, audit, and depositary costs, the net proceeds flow to the company. From an economic standpoint, this is US capital distribution based on a Polish underlying instrument. The NYSE provides for such listings in conjunction with securities offerings, and the SEC explicitly links Level III ADRs to the ability of a foreign issuer to raise capital.
From the state's perspective, the priority is not to participate in price discovery, but to create a credible environment for private capital. The state should act primarily as an infrastructure organizer: standardizing English-language disclosure, building a shared panel of legal advisors and auditors for issuers, assisting in the standardization of relations with KDPW, custodians, and depositary banks, and creating an institutional pathway to prepare companies for 20-F obligations. Only at a secondary level should a state "anchor investor" be considered. In the Polish context, the PFR (Polish Development Fund) is a natural candidate for this role, as it operates as a strategic capital investment entity. However, its participation should not involve "picking winners" politically, but rather entering primary offerings on market terms as a minority investor.
This leads to the most delicate issue: state aid. When a state seeks to support the capital market, the line between building infrastructure and selectively subsidizing risk is easily crossed. Therefore, "PL Capital 25" should not be a program for guaranteed valuations, post-debut buybacks, or administrative insurance of offerings. If public capital enters the project, it must do so in the spirit of the Market Economy Operator Test (MEOT): at arm's length, preferably pari passu with private investors, through a transparently selected manager, and without any privileged transfer of risk from the private to the public sector. The European Commission’s latest guidelines identify this as the central point in assessing whether a measure is market-based or constitutes state aid.
The true purpose of the program would not be to "showcase Poland in New York," but to create a serial, repeatable financing channel for the WSE’s best companies. In the first phase, such a program should not even include the full twenty-five offerings. It would be wiser to start with a few issuers of the highest reporting quality, sufficient free float, and the capacity to maintain investor relations to American standards, and only then expand the cohort. The SEC allows foreign private issuers to use F-1, F-3, and 20-F forms, providing a sensible roadmap: an initial public offering or follow-on under the entry regime, followed by faster and cheaper subsequent issuances once a reporting history is established. This seriality effect would be the greatest advantage of "PL Capital 25": not a one-off media success, but a durable pipeline for capital acquisition.
Ultimately, "PL Capital 25" should be understood not as an investment product, but as market architecture. The Polish company remains the issuer of capital. The ADR issued by the depositary bank becomes the vehicle for that capital for the US investor. The underlying share remains embedded in the Polish settlement system with the involvement of KDPW and custodians. The state does not replace the market; it builds the shared entry infrastructure and may, cautiously, provide an anchor investor on market terms. If properly designed, this program would be a far more realistic tool for developing the Polish capital market than the dream of administratively "transferring" the WSE to New York. It would offer no illusions of a shortcut, but something far more valuable: a functioning mechanism through which capital from the world’s largest financial market can systematically fund selected Polish enterprises.