Brussels, 19/04/2002 (Agence Europe) - On Thursday, the services of Commissioner Fritz Bolkestein made public an initial analysis of the lessons the EU should draw from the Enron affair. This document, entitled "A first response to Enron related policy issues", was presented to European Economy and Finance Ministers in Oviedo (for details, see EUROPE of 13 April, p.7 and 15/16 April, p.12), who backed the Commission's proposal calling of the high-level group of company law experts to undertake an in-depth examination of corporate governance and auditing issues in the light of this affair.
This document stresses that the EU is already working on most Enron-related regulatory issues through the Financial Services Action Plan and also recalls political initiatives taken in five priority areas: - financial reporting: it is suggested that the EU should make a concerted political effort to convince the American authorities to accept international accounting standards (IAS) financial statements prepared by EU companies seeking to be quoted on the American securities market; - statutory auditing: the Commission will shortly issue a Recommendation on auditor independence, obliging auditors to demonstrate (with documents), with certain guarantees, that none of their actions or relationships with their clients have compromised their independence. The Commission will also present a Communication on future priorities for auditing strategy; - Corporate governance: the mandate of the high level group of company law experts will be expanded to review further corporate governance and auditing issues (like the role of non-executive directors and supervisory boards, management remuneration, and the responsibility of management for the preparation of financial information). The preliminary conclusions and proposals for reform will first be discussed at the June EcoFin Council, then at the European Summit of Seville. The final conclusions will be presented to the informal EcoFin Council in September; - Transparency: the Commission invites the Committee of European Securities Regulators (CESR) to report on supervisory issues related to derivatives and derivative trading, as complex derivative instruments can escape proper supervision, in particular when trading takes place on non-regulated markets, Mr. Bolkestein's note stipulates; - Financial analysts and rating agencies: within the consultation process on the Investment Services Directive, the Commission will assess possible measures that may be taken to ensure that the market does not receive false or misleading signals from financial analysts' general recommendations on stock valuations by credit rating agencies. The Commission calls on Member States to decide on the proposed directive on market abuse, aimed at obliging Member States to ensure that financial analysts take reasonable care that general recommendations are fairly presented.
(The full version of the document can be found on the Commission's Internet site at the following address: http: //http://www.europa.eu.int/comm/internal_market/en/company/company/index.htm )