Brussels, 30/10/2003 (Agence Europe) - Next Tuesday, the Ecofin Council will discuss the negotiations underway for the adoption of the 'Transparency' Directive, which details the information to be provided by companies listed on the stock exchange. Member states disagree over the possibility of requiring companies to publish three monthly reports.
Suggested by the Commission, the Directive imposes, among others, the publication of detailed yearly reports and reports noting turnover and results before or after taxes in the first or third quarter of each financial year (see EUROPE of 27 March, p. 9). The Commission underlines that 1,000 of the 6,000 European share issuers already publish three-monthly reports. The draft Directive also details the language requirements and the methods for the releasing of information, points over which there seems to be little disagreement within the Council
On the other hand, several member states, with the British leading, are opposed to the publication of three-monthly reports. On Tuesday, the Italian Presidency should note that a majority of the delegations are able to support the principal of three monthly reports, but that there remains a disagreement over the scope and content of such an obligation.
This comes in addition to the fact that the two parliamentary rapporteurs, the Labour member Peter Skinner (for the Economic and Monetary Affairs Committee) and the German Christian Democrat Klaus-Heiner Lehne (for the Internal Market Committee), are opposed to the introduction of three-monthly reports. According to the draft report by Peter Skinner, which should be submitted to the economic committee at the beginning of February 2004, it is better to privileged the quality of information, rather than publication every three months, which risks leading to focus on short-term gains. According to Mr Skinner, this obligation is too burdensome for small companies.
At the beginning of the month, the Securities Industry Association (SIA) sent a letter to the European Commission protesting against the draft text. According to the American association of share issuers, for non-European issuers, such as American companies that publish their financial reports according to the American accounting standard GAAP, the writing of a second report according to international ISA standards would be costly. The SIA argues an additional cost of $10 million per issue. It also underlines that 330 out of 445 international companies registered on the London exchange are not located in the EU. Let us recall that the obligations proposed by the Commission remain more flexible that those set out in the United States since the adoption of the Sarbanes-Oxley Act in 2002.