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January 2004: FEE calls for coordinated enforcement of IFRSs in Europe
The European Federation of Accountants (FEE) has called for a pan-European body to enforce International Financial Reporting Standards consistently throughout Europe:
"The impending adoption of IFRS in Europe should be a key driver towards a fully integrated European capital market by facilitating comparability of financial information across the EU. However, FEE... is concerned that the benefits of increased market efficiency will be undermined unless there is consistent enforcement of IFRS throughout Europe, a role that the proposed enforcement body would undertake.... The European coordination body's role is to ensure consistency in the processes used and decisions reached by national enforcement bodies in order to create a level playing field for enforcement of International Financial Reporting Standards."
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February 2004: EC Will Propose New European Rules on Auditing and SPE Disclosures
In a Speech (PDF 64k) before a plenary session of the European Parliament, Frits Bolkestein, European Commissioner for Internal Market, Taxation and Customs, announced that, in March, he will be proposing to the Commission a revised Company Law Directive on the Statutory Audit function. "It will strengthen controls over the audit profession in the EU. With independent oversight; strengthened inspection; stronger ethical and educational principles; high quality audit standards." It is likely also to include:
- Full group auditor responsibility for consolidated accounts of a group of companies.
- Obligatory independent audit committees for listed companies.
- Stricter auditor rotation requirements.
- Strengthened sanctions.
Mr. Bolkestein also said the Commission is developing proposals to require "full disclosure in the company accounts of offshore Special Purpose Vehicles, including why the company uses these offshore structures and much stricter verification by the group auditor of their content".
Impact of IFRSs on European banks – ECB views
The February 2004 edition of the Monthly Bulletin of the European Central Bank (ECB) includes a 13-page article on The Impact of Fair Value Accounting on the European Banking Sector. The article presents "an overview of the current debate" and expresses ECB's views about "how exogenous shocks to the banking sector are likely to manifest themselves in banks' financial statements under the new rules." Click to Download (PDF 1,475k – see pages 70-83). Also, in an address to a plenary session of the European Parliament on 16 February 2004, Jean-Claude Trichet, president of the ECB, spoke about what he views as significant negative consequences of recognising financial instruments at fair values.
Accounting Regulatory Committee Meeting February 2004
Click to download the Summary Record (Minutes) (PDF 33k) of the 3 February 2004 meeting of the European Commission's Accounting Regulatory Committee. The ARC recommended endorsement of IFRS 1 and also discussed strengthening of EFRAG, IASB governance, and IAS 32 and IAS 39.
March 2004: European Commission Proposes New Audit and Governance Rules
In March 2004, the EC proposed major revisions to the EU rules in the areas of auditing standards, auditor oversight, and related corporate governance. The proposals, which are somewhat along the lines of the Sarbanes-Oxley Act in the US, are set out in a proposed Directive on Statutory Audit of Annual Accounts and Consolidated Accounts. The new Directive would replace the current 8th Directive and amend the 4th and 7th Directives. Among other things, the new EC proposals would:
- Require registration of all statutory auditors and audit firms. Non-EU auditors of companies listed in Europe will have to register in the EU.
- Create an EU-wide, publicly accessible, electronic database of registered statutory auditors and audit firms.
- Require that statutory auditors and audit firms be subject to a code of professional ethics at least as rigorous as the code adopted by the Ethics Committee of IFAC.
- Adopt International Standards on Auditing throughout the EU. The proposed Directive notes that the Commission may adopt a common standard audit report for use throughout the EU.
- Require that the group auditor assume full responsibility for financial statements.
- Define "public interest entities" to include all listed companies plus other entities that are publicly accountable because of the nature of their business (such as banks and insurance companies) or because of their size (number of people employed).
- Require that boards be established in each EU member state (something like the PCAOB in the US) to oversee the auditing profession:
— The board overseeing audit firms that do not audit public interest entities should comprise a "clear majority" of non-practitioners.
— The board overseeing audit firms that audit public interest entities must be 100% non-practitioners.
— In overseeing audit firms from outside the EU, an EU-wide system will be established to decide whether and to what extent the quality assurance systems in other countries should be recognised.
- Form an EU-wide audit regulatory committee to co-ordinate oversight (details have not yet been agreed).
- Require each "public interest entity" to form an audit committee of non-executive directors to oversee the audit.
- Establish principles of auditor independence, with more stringent independence requirements for auditors of public interest entities.
- Require annual transparency reports of statutory auditors and firms that audit public interest entities. These would be publicly available.
- Require companies and audit firms to explain to national authorities the reasons for all auditor changes.
- Require disclosure of audit and non-audit fees paid by listed companies.
- Give member states the following options regarding auditor rotation: (a) require rotation of the lead audit partner on an engagement every five years or (b) require rotation of the entire audit firm every seven years.
- Mandate mutual recognition in a number of areas, including auditor licensing, oversight, quality assurance, and registration. An EU member state would be allowed to impose an "aptitude test" for statutory auditors registered in other member states or other countries.
- Update education requirements for auditors, adding a requirement for continuous education.
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The Commission has asked the European Parliament and the Council to consider the proposal in detail in the second half of 2004 with the aim of "fast-track" adoption by mid-2005. There would then be a period of 18 months for member
states to implement it in national law. Click to download:
March 2004: European Parliament Adopts a Transparency Directive
On 30 March 2004, the European Parliament approved a new Transparency Directive that will improve the information that investors receive, though not quite as far as had been proposed. The Directive now goes to the Council of Ministers for final approval. Among the provisions:
- All securities issuers will have to provide annual financial reports within four months after the end of their
financial year.
- More detailed half-yearly financial reports by share issuers will be required, based on IAS 34.
- The Parliament did not adopt the Commission's proposal for quarterly financial reports. Instead, the compromise Directive requires that share issuers publish interim management statements in between the annual financial report and the half-yearly financial report. These statements should include a narrative description of the financial position and of the impact of material events on that financial position. This would not apply to those share issuers who publish full quarterly financial reports.
- The Parliament considered but did not adopt management remuneration disclosure requirements.
- More information is required on related party transactions.
- More information will be provided by bond issuers.
- A mechanism will be established for assessing at EU level the equivalence between international accounting standards and non-EU country accounting standards for the purpose of allowing companies from non-EU countries to submit their national GAAP financial statements rather than IFRS statements.
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Click for Press Release (PDF 79k).
May 2004: Surveys on Extended Use of IFRSs in European Union
The European Union Accounting Regulation requires that European companies listed in a European securities market must use IFRSs to prepare their consolidated financial statements starting in 2005. EU countries have the option to:
- Require or permit IFRSs for unlisted companies
- Require or permit IFRSs in parent company (unconsolidated) financial statements
- Permit companies whose only listed securities are debt securities to delay IFRS adoption until 2007
- Permit companies that are listed on exchanges outside of the EU and that currently prepare their primary financial statements using a non-EU GAAP (in most cases this would be US GAAP) to delay IFRS adoption until 2007.
The European Commission has surveyed the 15 current EU member states, the 3 EEA member states, and the 10 additional countries that joined the EU as of on their plans regarding the four options above. Here is an overview of the findings:
EC Survey on Member States' Use of Options in Accounting Regulation
18 Pre-May 2004 EU and EEA Members:
Virtually all of the 18 current EU and EEA members are going to permit, though not require, IFRSs for the consolidated statements of unlisted companies. Only 4 will permit IFRS for the parent company separate statements, 11 will not permit, and 3 are undecided. Regarding the 2007 deferral for debt-only listed companies, 6 have decided to delay, 5 probably will delay, and 7 will not delay. Two countries will permit companies to delay IFRSs to 2007 if their current primary GAAP is a non-EU GAAP, and several other countries probably will do so.
10 EU Members that Joined May 2004:
Two of the 10 new EU members, Cyprus and Malta, already require IFRSs for all companies. Of the 8 other new members, 6 will either require or permit at least some unlisted companies to use IFRSs, and 5 will require or permit IFRSs in the parent company separate statements.
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Note: The EC had originally issued separate tables in March 2004 and again in July 2004 for (a) the 18 EU/EEA members and (b) the 10 countries that joined the EU in May 2004. In January 2005 the EC issued a combined updated table as follows:
Note: This table was further updated by the Commission as of 25 February 2008:
May 2004: Council of Economics and Finance Ministers Approves Transparency Directive
At its meeting on 10-11 May 2004, the Council of Economics and Finance Ministers of the European Union voted to support the draft Directive on transparency that was approved by the European Parliament on 30 March 2004. The Directive establishes minimum requirements with regard to information to be reported by issuers whose securities are admitted to trading on a regulated market. Details of the Directive as approved by Parliament can be found Here. Among other things, the Directive would establish a mechanism for assessing at EU level the equivalence between international accounting standards and non-EU country accounting standards for the purpose of allowing companies from non-EU countries to submit their national GAAP financial statements rather than IFRS statements.
June 2004: EC Report on Implementation of IFRSs in Europe
The 10th Progress Report (PDF 148k) on the European Commission's Action Plan for Financial Services, which was presented to the 2 June 2004 meeting of the Council of Economics and Finance Ministers, provides an update on the implementation of IFRSs in Europe, including the following commentary on IAS 39:
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On IAS 39, discussions continue between the IASB and interested parties.
On 21 April, the IASB re-exposed the fair value option in IAS 39. Further discussions relate to the presentation of cash flow hedges and the possible application of a third type of hedge. On IAS 32, the Interpretation Committee of the IASB, IFRIC, is working on a draft interpretation regarding the treatment of cooperative shares that will be exposed for further comments in the near future. It is the Commission's intention to take stock of the ongoing discussions between the IASB and the European banking industry on IAS 39 at a next meeting of the Accounting Regulatory Committee, planned on 14 June.
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June 2004: FEE Warns that EU Standards "Second Best" Without IAS 39
A report published by FEE, the Federation of European Accountants, warns that Europe's accounting standards would be regarded globally as inferior if some IFRSs (particularly IAS 39) are not endorsed for use in Europe. "We emphasise the need for 'endorsed IFRS' to be the same as 'IFRS'", said FEE President David Devlin. "The endorsement process should not be used as a means to create European standards. Only global standards will meet the wider objectives of financial stability, efficiency and transparency and provide the benefits of increasing confidence in financial markets, reducing the cost of capital and facilitating global investments." The report identifies the following "serious implications" of not endorsing all IFRSs:
- Extra disclosures to explain differences from IFRS, for reasons of transparency.
- Companies would no longer be able to claim that their financial statements were prepared under IFRS, with related consequences for the audit report.
- Related audit implications.
- The risk of setting a precedent.
- System changes implications of any unique European standards in any area, such as IAS 39.
- The risk that some financial institutions, banks or insurance undertakings that apply or want to apply IAS 39 will be seriously disadvantaged.
- Access to capital markets could be restricted or made more expensive.
- Loss of opportunity to converge IFRS and US GAAP and possible impact on other elements of transatlantic dialogue.
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Click for FEE Report (PDF 256k) and FEE Press Release (PDF 93k).
June 2004: News Reports about the ARC Meeting on IAS 39
The Accounting Regulatory Committee (ARC) of the European Commission met on Monday 14 June 2004 to consider whether to recommend that the Commission adopt IAS 39 for use in Europe. The ARC includes one representative from each of the 25 EU member states. Although there is no report yet on the ARC Website or other announcement from the Commission, the New York Times and the Financial Times have both reported that the governments of four European countries – Belgium, France, Italy, and Spain – objected to the rule and six others, including Germany, abstained. Fifteen voted in favour. The Commission has asked the countries to put their views in writing by 30 June. After then, the Commission will make a decision.
June 2004: CESR Recommendations on Financial Information in Prospectuses
The Committee of European Securities Regulators (CESR) has invited comments on its draft recommendations on the content of prospectuses, including both financial and non-financial information. CESR's proposed recommendations on historical financial information cover selected financial information, operating and financial review, capital resources, profit forecasts or estimates, restatements of historical financial information, pro forma financial information, financial data not extracted from issuer's audited financial statements, interim financial information, working capital statements, and capitalisation and indebtedness. CESR notes that "the purpose of the recommendations is not to provide interpretations of IAS/IFRS or Member States' local GAAP but to clarify certain disclosure requirements included in [EU Prospectus Regulation No. 809/2004] where necessary." Comments are due 18 October 2004. Click for:
June 2004: EC Begins Study of Equivalence of National GAAPs to IFRSs
The Accounting Regulation adopted by the European Union requires that European companies listed in a regulated European securities market must prepare their financial statements in conformity with International Financial Reporting Standards starting in 2005. Subsequent legislation provides that non-European companies whose securities are listed in a regulated European securities market must also follow IFRSs starting in 2007 unless the Commission has agreed, prior to 1 January 2007, to recognise financial statements prepared in accordance with "third country GAAP" (a non-European national GAAP) as being equivalent to those prepared in accordance with IFRSs. The European Commission has asked the Committee of European Securities Regulators (CESR) to assess the IFRS-equivalence of the following GAAPs by June 2005: US-GAAP, Japanese GAAP, and Canadian GAAP. Click to download the full EC Formal Mandate to CESR regarding CESR's assessment (PDF 32k). The mandate states that:
In giving its advice, CESR should take full account of the following key objectives:
- When assessing as to whether financial statements prepared under third country GAAP provide a true and fair view of the issuer's financial position and performance, the priority should lie on assuring the protection of investors;
- A global and holistic assessment of the quality of the financial information provided by the accounting system in question should be carried out from a technical point of view and independently from any international convergence project aiming at a single set of accounting standards, such as the project currently conducted by the International Accounting Standard Board and the US Financial Accounting Standard Board.
- The global and holistic assessment should be based on the entirety of the third country GAAP in force as of 1 January 2005. The assessment should focus only on the significant differences between IAS/IFRS as endorsed at EU level and the
third country GAAP in question.
- The assessment should not relate as to whether the third country GAAP in question might be conducive to the European public good. This is a criterion for endorsing IAS/IFRS at European level pursuant to Article 3(2) of the IAS Regulation, but not for assessing equivalence.
- The assessment should also be carried out independently of whether the third country concerned already recognises IAS/IFRS as equivalent to their domestic GAAP.
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July 2004: CESR Seeks Comments on Enforcement Standards
The Committee of European Securities Regulators (CESR) has invited comments on a proposed approach to implementing its Standard No. 2, Coordination of Enforcement Activities. Standard 2 is establishes principles for coordinating enforcement at a pan-European level. CESR's Current Proposal (PDF 99k) involves guidance for implementing those principles. Written comments are due by 6 September 2004 and can be posted directly on the CESR Website.
July 2004: Deloitte Urges Endorsement of IAS 32 and IAS 39 in Europe
Deloitte has urged the European Financial Reporting Advisory Group (EFRAG) to recommend that the European Commission adopt IAS 32 and IAS 39 for use in Europe starting in 2005. Our Letter to EFRAG (PDF 51k) cites a number of "far reaching and damaging" consequences for the transition to IFRSs in Europe in 2005 if there is not a "fully endorsed and wholly supported standard on the recognition and measurement of financial instruments".
July 2004: EFRAG Endorses IAS 32 but Not IAS 39
At its meeting on 8 July 2004 in Brussels, the Technical Expert Group of the European Financial Reporting Advisory Group (EFRAG) agreed to recommend that the European Commission endorse IAS 32 Financial Instruments: Presentation and Disclosure for use in Europe. However, EFRAG concluded not to make any recommendation on endorsement of IAS 39 Financial Instruments: Recognition and Measurement because only 5 members were in favour of endorsement while 6 were against. Click to download EFRAG's Letter on IAS 32 (PDF 38k).
July 2004: ARC Considers "Carving Out" Parts of IAS 39 Before Endorsement
The Accounting Regulatory Committee (ARC) of the European Commission met on 9 July 2004 to discuss the possible endorsement of IAS 32 and IAS 39 for use in Europe. At the meeting, the ARC considered the possibility of "carving out" some paragraphs of IAS 39 dealing with hedge accounting and the fair value option. The official Summary Record (PDF 197k) of the meeting includes the following notes relating to the "carve-out":
The Chairman asked the Member States for their initial reactions in particular on a possible Commission proposal on a partial endorsement of IAS 39:
- Many Member States adopted a very positive stance vis-a-vis a possible Commission proposal to adopt IAS 39 with the exception of the fair value option and of certain provisions relating to hedge accounting. Whilst a significant number of Member States were in favour of the Commission proposal, they needed more time and information to evaluate the suggestion properly....
- Many Member States in favour of full endorsement indicated nevertheless their willingness to find constructive solutions and hence their readiness to examine a possible intermediate solution as sketched out by the Commission.
- A few Member States maintained their strong preference for full endorsement of IAS 39 and rallied to an alternative proposal put forward by one of them that would consist of endorsing IAS 39 while granting Member States the possibility to disapply collectively or individually some of the provisions of IAS 39. This alternative did not attract much support and was opposed by some other Member States on the ground that it would lead to discrepancy in financial reporting throughout the EU and be contradictory to the objective of harmonisation sought after through the IAS Regulation....
- Five Member States were not in a position to offer a view, as they had not yet completed their domestic consultations on the Commission proposal. Three Member States were not represented at the meeting.
- A significant number of Member States insisted on the importance of allowing the full application of IAS 39 by companies that would wish to do so.
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The ARC will meet next on 8 September 2004 to consider endorsement of IAS 39.
August 2004: Charlie McCreevy Will Be New EC Commissioner for Internal Market
Mr Barroso | Jose Manuel Barroso, President-designate of the European Commission, has announced the policy portfolios he has allocated to each of the 25 new EC Commissioners. Charlie McCreevy, who is an Irish Chartered Accountant, will be Commissioner for Internal Market and Services, replacing Frits Bolkestein. Among Mr. McCreevy's responsibilities will be accounting and financial reporting, including the implementation of IFRSs in Europe. The new Commission will take office on 1 November, subject to approval by the European Parliament. The Parliament can vote only on the whole body and not on individual Commissioners. The EC decision on endorsing IAS 39 is expected to be made by the current Commissioners before 1 November. Click for:
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Mr McCreevy |
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September 2004: EC Proposes to Adopt IAS 39 Minus Two Sections
The European Commission has posted to its website a "working document" setting out its proposals regarding adoption of IAS 39 for use in Europe. The proposals would carve out of IAS 39 two sections – the prohibition on hedge accounting for core deposits and the fair value option. The remainder of IAS 39 would be adopted. The Commission explains the carve-outs as follows:
- "IAS 39 does not sufficiently take into account the way in which
many European banks operate their asset/liability management particularly in a fixed interest
rate environment. The limitation of hedges to either cash flow hedges or fair value hedges
and the strict requirements concerning the effectiveness of those hedges make it impossible
for those banks to hedge their core deposits on a portfolio basis and would force them to carry
out important and costly changes both to their asset/liability management and to their
accounting system.... Those provisions of IAS 39, which prevent portfolio hedging of core deposits on a fair
value measurement basis, and which can be clearly identified, should not be adopted because
they do not meet the conditions set out in Article 3(2) of Regulation (EC) No 1606/2002 and
in particular the criteria of understandability, relevance, reliability and comparability required
of the financial information needed for making economic decisions."
- "IAS 39 introduces an option to fair value all financial assets and liabilities. However, the
IASB has recently published an Exposure Draft (a consultation paper) which proposes an
amendment to IAS 39 in order to restrict the fair value option contained in the standard. The
proposed amendment is a direct response to concerns expressed by the European Central
Bank, by prudential supervisors as well as by securities regulators which fear that the fair
value option might be used inappropriately. This proposed amendment is currently debated in
public and a final version will most likely not be available before the end of 2004. The provisions in IAS 39 relating to that fair value option, which are also distinct and separable from other parts of the standard, should not be considered applicable, because of the uncertainty surrounding the final version of those provisions. As soon as the IASB has
completed its work on this issue, and normally no later than by the end of 2005, the Commission will examine the resulting amendments to IAS 39 with a view to their endorsement, in the light of the conditions set out in Article 3(2).
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Click to download:
September 2004: EFRAG Technical Evaluation of IAS 39 "Carve-Out"
The European Financial Reporting Advisory Group (EFRAG) has responded to the request of the European Commission for technical input on the "carve-outs" proposed by the EC in relation to IAS 39 Financial Instruments: Recognition and Measurement. The "carve-outs" would:
- remove the IAS 39 fair value option as it applies to liabilities, and
- facilitate the use of fair value hedge accounting for the interest rate hedges for core deposits on a portfolio basis.
EFRAG's Letter (PDF 71k) notes, among other things:
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Many of the comments received referred to significant side effects of the carve-out, which were also noted by members of EFRAG.
In relation to the carve-out of the fair value option for liabilities the concerns are that the carve-out will create artificial volatility for many entities in Europe and the effect may be serious for those entities and countries affected. We have in the appendix explained these issues more fully, but we can mention the cases of economically or contractually linked or matched financial assets and liabilities where artificial volatility is introduced if assets and related liabilities are not accounted for on the same basis. Examples are unit linked instruments and the Danish mortgage institutions.
In relation to hedge accounting the effect of the carve-outs is not just to allow fair value hedging of core deposits on a portfolio basis but to extend the range of items that can be designated as hedged items and to relax the effectiveness test requirements for all hedges. The effects of their relaxation are significant.
In practice the tightening of the provisions in relation to the fair value option prevents entities from using certain sensible accounting practices that they would be able to use under the full IAS 39. On the other hand the relaxation of the effectiveness test for hedging transactions will allow entities to apply accounting that the full IAS 39 would not.
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October 2004: ARC endorses IAS 39 with two parts modified
At its meeting in Brussels on 1 October 2004, the Accounting Regulatory Committee of the European Commission voted to recommend endorsement of IAS 39 for use in Europe, with two modifications. The modifications (1) prohibit use of the IAS 39 fair value option as it applies to liabilities, and (2) allow using fair value hedge accounting for interest rate hedges of core deposits on a portfolio basis. With respect to hedging of core deposits, EU member states can elect to require the unmodified version of IAS 39. Further, if a Member State permits the modified version, companies can elect to apply the unmodified IAS 39. Click to download the published ARC Opinion (PDF 13k). The fair value option as it applies to liabilities is regarded as inconsistent with the IV Accounting Directive and therefore the modification is required for all companies. Even though IFRSs become mandatory in Europe in 2005, the ARC has yet to vote on endorsement of the revised versions of 14 IASs that were adopted by the IASB in December 2003 as part of its Improvements Project (to date, the EC has endorsed only the pre-2003 versions). Nor has the ARC endorsed IAS 32, IFRSs 2 through 5, or IFRIC 1. These are expected to be considered at ARC's 30 November 2004 meeting.
October 2004: Proposed Amendments to 4th and 7th Directives
On 28 October 2004 the European Commission published a proposal for a Directive of the European Parliament and of the Council amending Council Directives 78/660/EEC and 83/349/EEC (the Fourth and Seventh Directives) concerning the annual accounts of certain types of companies and consolidated accounts. Objectives of the revisions are to establish the collective responsibility of board members for a company's financial statements and annual reports; enhance transparency about related party transactions (companies' transaction with their managers, managers' family members, and others); expand disclosures about off-balance arrangements (including commitments and special purpose entities); and introduce a corporate governance statement. Click to download:
Other language versions can be found on the EC Website.
October 2004: CESR Concept Paper on Equivalence of National GAAPs and IFRSs
The Committee of European Securities Regulators (CESR) has published a Concept Paper on Equivalence of Certain Third Country GAAP and on Description of Certain Third Countries' Mechanisms for Enforcement of Financial Information. CESR developed the paper in response to a request from the European Commission for advice on equivalence of Canadian, Japanese, and United States GAAPs with IFRSs. The EC also asked CESR to describe the mechanisms existing in those countries and others for the enforcement of standards for financial information. The concept paper sets out the basis on which CESR will approach its analysis. Click to Download the CESR Concept Paper (PDF 289k). CESR has requested comments on its concept paper by 22 December 2004.
November 2004: European Commission Endorses IAS 39
The European Commission has adopted a Regulation endorsing IAS 39 Financial Instruments: Recognition and Measurement, with the exception of certain provisions on the use of the full fair value option for liabilities and on hedge accounting. The Commission's announcement states that:
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This text was supported both by a qualified majority of Member States at the Accounting Regulatory Committee (ARC) on 1 October and by the European Parliament. The Commission has also adopted a political declaration stating that it expects the International Accounting Standards Board (IASB) to bring forward the necessary amendments to the current full fair value option by December 2004 and to the provisions on hedge accounting by September 2005. Use of IAS 39, apart from the 'carved-out' sections, will be legally binding for all listed companies in the EU from 1st January 2005.
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December 2004: Europe Adopts Final Transparency Directive
The European Council and Parliament have approved a new Directive on minimum transparency requirements for listed companies. The Directive must be implemented by EU Member States within two years of its publication in the EU's Official Journal, which should take place in the next few weeks. The Directive completes a package of Financial Services Action Plan measures adopted over the last two years – including the IAS Regulation, the Market Abuse Directive, and the Prospectus Directive – to establish a common financial disclosure regime across the EU for issuers of listed securities. Under the Directive, all securities issuers will have to provide annual financial reports within four months after the end of the financial year. Investors in shares will receive more complete half-yearly financial reports. Those issuers who do not publish quarterly reports will need to provide quarterly management statements. Bond issuers will also be required to publish half-yearly reports. Click for:
December 2004: CESR Consults on Financial Information Transparency
The Committee of European Securities Regulators (CESR) has published Part II of the draft CESR advice on possible implementing measures for the new EU Transparency Directive. This paper complements Part I of the consultation paper issued in October, which covered dissemination and storage of regulated information. Part II covers three specific issues raised in relation to half yearly reporting, namely, the minimum content of half-yearly financial statements not prepared under IAS/IFRS; the meaning and scope of 'major' related party transactions that must be reported on in half-yearly reports; and, the auditor's review of the half-yearly report (where such a review has been conducted). It also addresses the equivalence of transparency requirements for 'third country' issuers. The CESR deadline for comment on Part II is 4 March 2005. A hearing is scheduled for 17 February 2005. Consultation on Part I closes 28 January 2005. Click to download:
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