ESMA consults on revised accounting enforcement guidelines

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20 Jul, 2013

The European Securities and Markets Authority (ESMA) has launched a consultation on guidelines on the enforcement of financial information published by listed entities in the European Union. The proposed guidelines are the result of a review of Standards No. 1 and 2 on the enforcement of financial information developed by the Committee of European Securities Regulators (CESR), ESMA's predecessor, in April 2003 and April 2004 respectively.

ESMA has decided to review the CESR standards in order to reflect the experience gained by their use since 2005. The new guidelines are based on the same principles, however, they have been reformulated throughout and have been combined into one document.

Also, the objective of enforcement has been revised in order to reflect the importance of compliance with the relevant financial reporting standards and transparency of financial information. Additionally, the concept of enforcement has been extended in order to include, in addition to the enforcers’ review of the financial information, any other actions which might contribute to enforcement such as for example issuing alerts.

Regarding the scope, ESMA noted that investor protection requires the extension of the scope of enforcement to the whole financial reporting framework applicable to listed issuers on the EU Single Market. This includes national GAAPs from the EU jurisdictions and third countries' accounting standards, which have been declared equivalent to IFRS.

The proposed guidelines would apply to all competent authorities and any other bodies from the EU undertaking enforcement responsibilities under the Transparency Directive and the IFRS Regulation.

Please click for access to the consultation document and a corresponding press release on the ESMA website. The closing date for responses to the consultation is 15 October 2013 and ESMA expects to publish the final guidelines in 2014.

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