23 January 2004

FMLC report on Transparency Directive

The London based Financial Market Law Committee (FMLC) published a report on the forthcoming Transparency Directive. According to the FMLC, the proposed Directive creates and increases existing uncertainties.

The Directive establishes a statutory requirement for a company whose securities are publicly traded to ensure appropriate transparency towards investors by regularly publishing and/or making available to the public its Reports and Financial Information in each Member State. This will mean that an issuer (and possibly its auditors) could be exposed to liability in many jurisdictions at the same time and on the basis of different tests of liability and to a variety of sanctions.

It appears to us that these consequences may not have been intended by policy makers, and are contrary to the intention of other European legislation. The proposed Transparency Obligations Directive provides an opportunity to remove various cross-border uncertainties which are both created and increased by the Directive. In the interests of pan-European business and a single common market, this opportunity should be taken.

Report

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