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Despite a turbulent history, the Warsaw Stock Exchange is now the largest exchange in Eastern Europe, with a completely electronic system and several companies on its record. It was founded in the 1700s and has faced closures due to occupation and war, but reopened in 1989 with three guiding principles. The exchange is now a publicly owned company, with the State Treasury owning nearly all of its shares.
Despite having one of the most turbulent histories in the entire financial world, the Warsaw Stock Exchange in Poland has persevered to become the largest exchange in Eastern Europe. Its history dates back to the 1700s and it has many closures due to occupation and war. It is based on three legal principles that describe the mission of the exchange. It is a publicly owned company and has a completely electronic system with several companies on its record.
The Warsaw Stock Exchange began in the 1700s, when the country was known as the Kingdom of Poland and the exchange mostly traded notes and coins. Over the centuries, the exchange experienced an unpredictable life cycle, especially during the 20th century. During World War I, the Warsaw Interchange was closed during the German occupation, only to reopen after the war and close once more under the German occupation of World War II. This time, the trading floor would remain closed for almost 50 years.
During the communist rule of Poland after World War II, the Warsaw Stock Exchange remained inactive. When the communist government collapsed in 1989, it took two more years and financial assistance from France to reopen. The exchange started with just five shares, but over the next two decades it began to rise with expansion. At the time of writing this article, the Warsaw exchange is considered the largest stock trading center in all of Eastern Europe.
When the Warsaw Stock Exchange reopened its doors, he founded three guiding principles that would help guide his decisions. One focused on the dependence of the exchange on the public offering, the conditions governing the introduction of financial instruments in organized trade and public companies. The second included the trading of financial instruments, such as stocks, bonds, subscription rights, futures and other items of financial trading. Third, the exchange would operate under the supervision of the capital market, that is, the legal rules that dictate a capitalist economy.
The incarnation of the Warsaw Stock Exchange in 1989 was founded by the State Treasury, but its structure has changed from being a government-owned organization to being a publicly traded company. Interestingly, the treasury still owns nearly all of the exchange’s 60,000 shares, leaving the rest to be owned by banks and brokerage firms. Due to its relative newness in the trading market, the exchange has always boasted an electronic communication network that enables fully digital and modern trading.
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