03 November 2003

FBE Response to the CESR Consultation on Prospective Directive

The central concerns of the European Banking Federation (FBE) relate to the issues of IAS restatement and advertisement of the prospectus. On the IAS restatement, FBE has strong reservations regarding CESR's decision to impose a 2-year restatement for all non-IAS accounts.

FBE is particularly are concerned about two distinct problems. First, an issuer in 2005 (the year of the effectiveness of the Prospectus Directive) would have to restate its accounts not only for 2004 (as would be required by the IAS Regulation) but also for 2003.

FBE argues that any requirement at Level 2 of the Prospectus Directive concerning the restatement or reconciliation of previous financial statements to IAS should not overrule the existing IAS-Regulation. In this regard, FBE rejects the requirement that audited financial information must be presented and prepared in a form consistent with that which will be adopted in the issuer’s next annual financial statement

Second, for all newcomers to the market after 2005, they would always have a burden of restatement that is one year longer than that required by the IAS. The implementing measure of the Prospectus Directive should not extend beyond what is required by the IFRS.

With regard to the advertisement of the prospectus it is, according to the FBE, unclear whether the host Member State should be able to exercise any right with respect to other (horizontal, i.e. non-financial sector specific) advertisement rules that may exist for advertisers in its jurisdiction.

However, in most cases FBE would expect the principles underlying these laws to be very consistent across Europe so as to make it possible for the host regulators to control compliance with such obligations, if any, without the resort to an “a priori” approval.

Full resonse

© FBE