FCA consults on early implementation of the Transparency Directive's requirements for reports on payments to governments
27 Aug, 2014
The Financial Conduct Authority (FCA) has issued a consultation on the early implementation of the Transparency Directive Amending Directive 2013/50/EU requirement for issuers that are active in the extractive or logging of primary forest industries to prepare a report annually on payments made to governments in the countries in which they operate. Comments are due by 7 October 2014.
Earlier this month, the Department for Business, Innovation and Skills (BIS) published its feedback on implementation of the country-by-country reporting provisions of the EU Accounting Directive (Directive 2013/34/EU (link to European Commission website)) for extractives companies - those in the mining, oil and gas sectors, as well as those who log primary forests.
In its response, BIS indicated that the FCA would consult on the equivalent requirements of the revised Transparency Directive (Directive 2004/109/EC) (TD) as amended by the Transparency Directive Amending Directive (Directive 2013/50/EU (link to the European Commission website)).
The FCA has published CP 14/17 which proposes new rules and guidance in Chapter 4 of the Disclosure and Transparency Rules (DTRs). The proposed requirements are contained in a new DTR 4.3A:
- Extractives companies with transferrable securities admitted to trading on an EEA regulated market should prepare a report on payments to governments for financial years commencing on or after 1 January 2015. This is consistent with the timing of the forthcoming company law requirement under the EU Accounting Directive, but a year earlier than required by EU law. In the case of a parent undertaking, the report must be on a consolidated basis.
- Reports under DTR 4.3A must be disseminated via a Regulated Information Service ('sent down the wire'). That announcement must set out which the website on which the report is available. The report must remain available on that website for ten years.
- A UK company reporting under the forthcoming BIS regulations will be treated as having prepared a report as required by DTR 4.3A, although it will be necessary to both disseminate it as required by DTR 6.3 and file it at Companies House.
The new requirements will also apply to companies who are required by the Listing Rules to comply with DTR 4 as if they were an issuer for the purposes of the DTRs.
The sanctions regime that will apply in cases of failure to comply with DTR 4.3A will be that applicable to failures to comply with other parts of DTR 4. The new sanctions regime required by the revised TD will be introduced later with the other changes required by the revised TD.
Please click for:
- The consultation document published by the FCA
- Our previous UK Accounting Plus news item on the response from BIS on the implementation of the country-by-country reporting provisions of the EU Accounting Directive