15 October 2013

Responses to ESMA Guidelines on Enforcement of Financial Information: EBF, FEE

EBF

The EBF appreciates that the ESMA proposed guidelines are based on the CESR standards’ principles.

The EBF considers the CESR Standards on the enforcement of financial information (CESR/03-073 & CESR/o3-317c) and the principles established in these two standards have efficiently assisted to deliver a sound framework for the work of enforcers in Member States. The EBF therefore welcomes that the ESMA proposed guidelines are based on these CESR standards’ principles. The EBF further welcomes that the long-standing approach of leaving enforcement to the individual Member States is to be retained.

The EBF also welcomes the statement raised in the consultation paper that the issuance of accounting standards and the interpretations of their application are roles exclusively of standard-setters e.g. IASB and IFRS Interpretation Committee, and that enforcers in contrast must exclusively aim at enforcing compliance with standards. In this context, the EBF urges ESMA to ensure that a clear dividing line between standard setters and enforcers is put in force and effectively respected to avoid misinterpretations.

The EBF also emphasises that the risk-based approach in enforcement activities is the only way to focus enforcement efficiently. Efficiency (effective methods and cost-efficiency) is in fact mentioned as one of the objectives in the consultation paper. The EBF considers that if enforcement has no risk-based significance, the additional value of enforcement becomes questionable.

Full comment letter

FEE

FEE welcomes ESMA’s efforts to promote a common European approach to the requirements in the Transparency Directive on the enforcement of financial information and ensure a level playing field across the EU. Hereby ESMA needs to aim at furthering the cooperation of national competent enforcement authorities at the European level, without overstepping the boundaries of the Transparency Directive.

It would be helpful for ESMA to explain why it has used its power under Article 1(3) of the ESMA regulation in this regard. More specifically, stating the reasons why the Guidelines are necessary to ensure the effective and consistent application of the Transparency and Prospectus Directives would be helpful.

Finally, in trying to achieve a common European enforcement approach, it would be very useful for ESMA to measure its effectiveness in promoting a common European enforcement approach when the final Guidelines are being applied by national enforcement authorities.

Full comment letter

Original ESMA-consultation paper

All responses