The European Securities and Markets Authority (ESMA) published, on Wednesday 3 March, its recommendations on amendments to the ‘Transparency’ Directive that it sent to the European Commission following the ‘Wirecard’ case.
In November 2020, ESMA published its peer review on the accounting scandal that affected the German ‘Wirecard’ payment service in 2020, in which it concluded that there were a series of failures and inefficiencies in German supervision (see EUROPE 12594/5). It had then announced that it would also propose more general recommendations at a later stage (see EUROPE 12615/21).
“ESMA considers that the Wirecard case has shown, once again, that timely and effective enforcement of financial information is paramount to ensure investor protection and confidence in capital markets”, it wrote in its letter.
ESMA is thus addressing the shortcomings of the Directive on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (‘Transparency’ Directive).
In particular, it considers that the Directive should include provisions to eliminate confidentiality impediments that prevent an efficient and effective exchange of information between the competent authorities in accordance with the Directive, audit oversight bodies, prudential supervisory authorities and anti-money laundering supervisory authorities.
ESMA also advocates for not allowing the outsourcing of the task of regularly reviewing financial information to audit firms and amending the Directive to ensure that the central competent authority, designated authorities or delegated entities and their staff are independent from market participants and that they act independently from governments.
Finally, in its opinion, the powers of national authorities should be strengthened and harmonised. In particular, auditors should be given the binding power to require corrective information, while competent national authorities should be able to require a second independent audit and carry out joint on-site inspections, it says.
See the letter: http://bit.ly/2MMInX0 (Original version in French by Marion Fontana)