EACB comment on Transparency Directive

06 October 2003

The EACB underlines that in practice a great number of the Directive’s requirements could prove to be too burdensome for a small business structure which could result in higher operational costs to the disadvantage of the securities-holder and the customer.

Furthermore, the EACB argues that banks are already extensively regulated and supervised at Member State level and will be faced by additional requirements under the forthcoming new Basel Capital Accord.

Therefore EACB proposes that:

the deadline for annual financial reports should be extended from 3 to 5 months.

for shareholding companies, half-yearly financial reporting should be limited to profit and loss statements as well as explanatory notes, with further information remaining optional to the issuer.

for non-listed bond issuers, the information about the issuer’s repayment capacity to assess the issuer’s insolvency risk should be sufficient.

the decision to introduce an obligation of audit review of halfyearly accounts should be subject to a future review of the Directive.

quarterly reporting does not give an accurate presentation of business activity, leads to short-termism and should therefore be avoided.

the great number of notification threshold intervals would create confusion on the market and should be reduced.

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