WARSAW -- The fast-growing Warsaw Stock Exchange is trying to tighten criteria for listing companies as part of changes that some analysts say may turn off foreign investors.


The changes include creating a separate floor for companies that do not meet the new criteria of the main exchange, created in 1991 after a 50-year hiatus under communist rule.


The changes are needed partly as a result of the enormous success of the exchange, which now lists 28 companies, officials say.


According to the International Finance Corporation, an arm of the World Bank, the Warsaw exchange is the fastest-growing securities market in the world, with an increase of 717 percent in 1993. In April, prices plunged for five weeks, but have since improved.


"At the time when the Warsaw Stock Exchange was 'very young,' the criteria were very vague and general," said Piotr Szeliga, chief of the quotations department at the exchange.


"Now we are flooded with new companies (applying to be listed). Thus, we have to carefully select" those to be listed, said Szeliga.


But at least one analyst is cautious about the changes.


"This is a rather serious thing they have done," said Suzanne Patrick, who analyzes central European capital markets for U.S. brokerage Arnold and S. Bleichroeder Inc. in New York.


Foreign institutional investors may lose interest in the Warsaw exchange because of the time needed to track stocks of varying quality on the various levels of the exchange, she said.


She also said that had the tighter criteria been in place since the exchange's beginning, the market would have been deprived of a number of its best performers.


Under the proposed changes approved this week by the exchange's council, companies applying for listing would have to have minimum net assets of 90 billion zlotys ($3.9 million) and share capital of at least 45 billion zlotys.


Previously, there was no minimum requirement on net assets, while the requirement for share capital on the main board was only 20 billion zlotys.


At least 25 percent of a company's shares will have to be held by small shareholders, who are defined as holding less than 5 percent of a company's equity individually. The total minimum value of their shares will have to be 40 billion zlotys.


The new requirements will not apply to the companies already quoted on the exchange, while the limits would be lower on the parallel market.


The council also decided to open another trading section for companies that do not meet the criteria and cannot be quoted on the main or parallel market.


The third section would pose a greater degree of risk for investors because a 10 percent limit on the daily fall or rise of share prices will not apply.


Companies seeking to enter the third floor will have to obtain permission from the Securities Commission and provide references from a broker who is already a member of the Stock Exchange. The approval of the exchange council and its board will not be necessary.


The changes must next be approved by the Polish Securities Commission and by the Extraordinary Assembly of Warsaw Stock Exchange on Sept. 16.


Jacek Jonak, a spokesman for the Securities Commission, said the exchange's proposal "goes in the right direction, although at the moment I cannot say what will be the commission's decision."