Sanctions as a Mechanism Disciplining Issuers on the NewConnect Market

Sylwia Frydrych
European Research Studies Journal, Volume XXIV, Issue 3B, 456-469, 2021
DOI: 10.35808/ersj/2475


Purpose: This article aims to analyze the types of disciplinary measures imposed by the WSE, as the ATS Organizer, on NewConnect companies in 2008-2020 for violation of applicable law. The analysis covers the types of disciplinary measures depending on the breach of the ATS Regulations by issuers. Design/Methodology/Approach: Due to the complexity of the data analysis, mixed research methods were used as observation, analysis, and inference. The study used reports available at and statistical data from the Annals of the Warsaw Stock Exchange. Findings: In the analyzed period, 57.42% of NewConnect companies were subject to sanctions. The most common disciplinary measures imposed on companies for non-compliance with the ASO Regulations are suspension, warning, and a fine. A financial penalty has a more disciplinary effect on NewConnect companies than other punitive measures. Practical implications: The conclusions of this study can be used in the sanctioning process of the ATS Organizer. The article's content concerns the findings of the analysis of the most common violations of the ATS Regulations by issuers and the answer to whether the penalty imposed by the ATS Organizer disciplines issuers, contributing to better fulfillment of the obligations arising from the ATS Regulations. Originality/Value: The theoretical and empirical literature does not provide guidance on factors that discipline issuers, contribute to compliance with regulations, and avoid excluding a company from the NewConnect market. The analysis results presented in the article supplement the existing research on sanctions imposed on companies listed on NewConnect in 2008-2020 due to the type of violation.

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