The Commission presented a report on the exercise of the power to adopt delegated acts conferred on the Commission pursuant to Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market.

Directive 2010/78/EU amended the Directive 2004/109/EC and conferred powers on the Commission to adopt delegated acts as referred to in certain Articles of Directive 2004/109/EC. These powers have been conferred on the Commission for a period of 4 years from 4 January 2011 until 3 January 2015.

This report will cover the period 4 January 2011 to 3 October 2015 . Throughout the reporting period, the Commission exercised only the empowerments under Article 23(4). The following delegated acts have been adopted:

(1) Commission Delegated Regulation (EU) No 310/2012 amending Regulation (EC) No 1569/2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council.

By this delegated regulation, the Commission:

updated the conditions, set out in the Regulation (EC) No 1569/2007 , for the acceptance of third country accounting standards for a limited period; extended the period, for which a mechanism for the recognition of equivalence of third country's Generally Accepted Accounting Principles (GAAP) for a limited period may be applied, until 31 December 2014.

(2) Commission Delegated Regulation (EU) 2015/1605 amending Regulation (EC) No 1569/2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council.

By this delegated regulation, the Commission extended the period, for which a mechanism for the recognition of equivalence of third country's GAAP for a limited period may be applied, until 31 March 2016. Based on the mechanism set out in Regulation 1569/2007, the Commission recognised the GAAP of the Republic of India as equivalent to IFRS in the Union for a limited period of time until 31 March 2016.

It must be noted that the Commission adopted most of the implementing provisions to Directive 2004/109/EC by a Commission Directive 2007/14/EC of 8 March 2007.

In conclusion, the Commission considered that it has exercised its delegated powers correctly to ensure that the necessary provisions were in place.

COM(2015)0655
EUR-Lex

The Commission presents a staff working document on the state of play on convergence between International Financial Reporting Standards (IFRS) and third country national Generally Accepted Accounting Principles (GAAP).

According to the European Securities and Markets Authority (ESMA) report, the four countries that were found equivalent to IFRS on a temporary basis until 31 December 2011 (China, Canada, India, and South Korea) have taken further steps in pursuing their convergence or adoption. The document examines the actions undertaken by each country.

China has already substantially converged its accounting standards with IFRS and is committed to eliminating the remaining, residual, differences.

In India, the latest developments introduce uncertainty about the country’s commitment towards an IFRS-compliant financial reporting system. There is significant uncertainty as to whether India would adopt the IFRS or otherwise come up with a country-specific version with numerous modifications and carve-outs in some important areas, such as agriculture, financial instruments, negative goodwill, and real estate.

Other major economies have also recently announced their intention to adopt IFRS, such as Argentina, Brazil, Mexico, and Taiwan .

In Russia, there have been recent developments as far as the adoption of IFRS is concerned.

Commission services will continue to monitor the situation and assesses the efforts by third countries converging to IFRS or intending to adopt IFRS, with the technical assistance of ESMA.

SEC(2011)0991
EUR-Lex

In accordance with Article 33 of Directive 2004/109/EC, the Commission presents this report reviewing the operation of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (“the Transparency Directive"). The report describes the impact of the Transparency Directive and how it has been complied with; identifies the main issues emerging from the application of the Transparency Directive and draws a number of conclusions. It is completed by a Commission staff working paper which provides further detail on the issues described as well as on how information has been collected (see summary of SEC(2010)0611.).

With regard to impact and compliance, the External Study on the application of the Transparency Directive reflects that a strong majority of participants consider the Transparency Directive to be useful for the proper and efficient functioning of the market. Stakeholders generally consider that regulated information disclosed by issuers reaches investors, except perhaps for the case of information disclosed by smaller listed companies. In terms of economic impacts of the Transparency Directive on financial markets, research conducted so far is not conclusive. It seems rather that the Transparency Directive is neutral: while perceived as a simplifying factor for primary market issuance, there is a lack of empirical evidence to back up this perception. A review of issuers' practices shows that issuers generally comply with financial reporting obligations and that this is also the perception of stakeholders. Financial information disclosed is considered useful and sufficient for investment purposes. Also, the simplification of language requirements for disclosure of financial information introduced in 2004 has been particularly welcome.

The cost of compliance with the obligations of the Transparency Directive does not appear particularly high. This is also the perception of issuers, although small and medium sized listed companies are more concerned about the cost of compliance. The introduction of the "Home Member State rule" as well as the simplification of the language regime for financial disclosures in 2004 should, in principle, have contributed to reducing issuers' costs. However, there are increased costs for cross-border investors resulting from the insufficiently harmonised requirements of the Transparency Directive.

Having examined in detail the emerging issues , the report states that the review of the operation of the Transparency Directive shows that there are areas where the regime created by this Directive could be improved, notably in relation to the simplification of the rules applicable to smaller listed companies with a view to making capital markets more attractive to them. The cross-border visibility of smaller listed companies towards potential investors and analysts also needs to be improved with a view to ultimately achieve higher levels of trading on the securities of these smaller issuers. There are possible measures in the framework of the Transparency Directive which could contribute to this goal: e.g. providing for more flexible deadlines to the disclosure of financial reports by small issuers would enhance their visibility since they would no longer inform about their performance at the same time as large issuers; harmonising the maximum content and presentation of reports would facilitate reading and comparability by investors and analysts. In this context, the review of the operation of the Transparency Directive also shows that it would be desirable, in order to increase the visibility and attractiveness of smaller listed companies, to facilitate access by potential investors and information intermediaries at a pan-European level to financial information disclosed by small issuers and stored in the officially appointed mechanisms for the storage of regulated information.

Additionally, the review of the operation of the Transparency Directive shows the need for greater convergence of the rules on the disclosure of major holdings of voting rights and of financial instruments giving access to voting rights (including cash-settled derivatives) as well as the opportunity to simplify the reporting requirements for issuers in the broader corporate governance context. In this connection, this report also identified the concerns of some stakeholders regarding the disclosure of environmental and social information. Some stakeholders (non-governmental organisations, some investor organisations) regularly request improvements to European legislation regarding ESG disclosure. In their view, the Transparency Directive could be an appropriate vehicle to integrate such disclosures alongside financial reporting obligations of listed companies, and to address some of the perceived short-comings of current ESG disclosure rules and practice.

COM(2010)0243
EUR-Lex

This Commission Staff Working examines emerging issues in the review of the operation of Directive 2004/109/EC. It is the document accompanying the report from the Commission on the operation of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (“the Transparency Directive”.) A number of issues emerge from the review of the operation of the Transparency Directive:

the debate is raised as to whether the transparency rules should be specifically adapted to smaller listed companies with a view to maintaining and also increasing the attractiveness of regulated markets for this category of issuers; the usefulness of quarterly financial disclosures; the need for greater harmonisation of the rules on notification of major holdings; the need for greater sophistication of the Directive rules so as to cover market trends and innovations; the question of the transparency rules in the non-regulated markets.

These issues are equally related to the possibility of reducing costs of compliance with the Directive, notably those associated with notification of major holdings and those incurred by smaller listed companies.

Lastly, while there are no major compliance problems, the review of the operation of the Directive shows that some adjustments to the text of the Directive would be beneficial in the interest of improved clarity.

SEC(2010)0611
EUR-Lex

This report aims to present stricter national measures pursuant to Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (hereinafter the "Transparency Directive"), as well as their main impact. This Directive requires issuers of securities in regulated markets within the EU to ensure appropriate transparency for investors through the disclosure of periodic and on-going regulated information and the dissemination of such information to the public throughout the Community.

Under Article 31(2) of the Transparency Directive, Member States have to inform the Commission of any national measures they adopt which go beyond the requirements of the Directive. Stakeholders regularly report to the Commission services, for example, that, as regards listed companies, Member States often impose (or maintain existing) more stringent national rules on top of the European legislation, and thus do not pass on to companies the potential for simplification which the harmonisation brought by EU law offers. In this context, a resolution of the European Parliament asked the Commission to examine whether the transposition of this Directive has led to 'gold plating' by Member States. Against this background, the Commission services undertook a limited survey on this issue in 2008.

The Commission report highlights the different regulatory approaches of the Member States to the Transparency Directive as regards adopting and/or maintaining more stringent national rules. It also shows that the limits imposed by the Home Member State Rule of the Directive already result in positive effects for issuers. However, evidence collected so far shows that the flexibility offered by the Directive results in more transparency in the market, but also in practical difficulties for investors' compliance with their obligations and may have adverse effects on the market for corporate control. The report also shows that, while national regulatory convergence in this regard could be an option to address possible negative effects caused by the lack of harmonisation, such a process would need to be voluntary at this stage. At the same time, facilitation of cross-border compliance with different existing national obligations has already been undertaken, in particular by the Committee of European Securities Regulators (CESR), with positive results.

The question of whether legislative changes should be made to the Transparency Directive is not addressed in this report. Whether there is scope for legislative changes from a longer time perspective will be reviewed in the context of the report that the Commission has to draw up on the operation of the Directive, pursuant to Article 33.

SEC(2008)3033
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IMPLEMENTING ACT: Commission Directive 2007/14/EC laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market

CONTENT: the Commission adopted implementing measures for Directive 2004/109/EC which deals with obligations regarding transparency of listed companies. The aim of the implementing measures is to improve the quality of information available to investors on companies’ performance and financial position as well as on changes in major shareholdings. The rules established by Directive 2007/14/EC supplement provisions of the Directive 2004/109/EC without expanding the scope of the requirements established by the latter.

The Commission's implementing measures supplement the Transparency Directive with regard to:

- issuers' disclosure of financial information in half-yearly reports;

- investors' disclosure of major holdings;

- minimum standards for the pan-European dissemination of regulated information to the public; and

- minimum requirements for accepting equivalence of third-country regulations in respect of some elements of the Directive.

ENTRY INTO FORCE : 29/03/2007.

TRANSPOSITION : 08/03/2008.

32007L0014
OJ L 069 09.03.2007, p. 0027

PURPOSE : to harmonise the transparency requirements with regard to information about issuers whose securities are admitted to trading on a regulated market.

LEGISLATIVE ACT : Directive 2004/109/EC of the European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC.

CONTENT : Efficient, transparent and integrated securities markets contribute to a genuine single market in the Community and foster growth and job creation by better allocation of capital and by reducing costs. The disclosure of accurate, comprehensive and timely information about security issuers builds sustained investor confidence and allows an informed assessment of their business performance and assets. This enhances both investor protection and market efficiency. To that end, security issuers must ensure appropriate transparency for investors through a regular flow of information. To the same end, shareholders, or natural persons or legal entities holding voting rights or financial instruments that result in an entitlement to acquire existing shares with voting rights, must also inform issuers of the acquisition of or other changes in major holdings in companies so that the latter are in a position to keep the public informed.

This Directive establishes requirements in relation to the disclosure of periodic and ongoing information about issuers whose securities are already admitted to trading on a regulated market situated or operating within a Member State. A high level of investor protection throughout the Community enables barriers to the admission of securities to regulated markets situated or operating within a Member State to be removed. Member States other than the home Member State will no longer be allowed to restrict admission of securities to their regulated markets by imposing more stringent requirements on periodic and ongoing information about issuers whose securities are admitted to trading on a regulated market. The main requirements with regard to disclosure are as follows:

- The issuer shall make public its annual financial report at the latest four months after the end of each financial year and shall ensure that it remains publicly available for at least five years. The directive specifies the documents comprising the annual financial report;

- The issuer of shares or debt securities will make public a half-yearly financial report covering the first six months of the financial year as soon as possible after the end of the relevant period, but at the latest within two months. The half-yearly financial report must remain available to the public for at least five years.

- Interim management statements – an issuer whose shares are admitted to trading on a regulated

market shall make public a statement by its management during the first six-month period of the financial year and another statement by its management during the second six month period of the financial year. Such statement must be made in a period between ten weeks after the beginning and six weeks before the end of the relevant six-month period. It will contain information covering the period between the beginning of the relevant six-month period and the date of publication of the statement. The directive describes the matters which the statement is expected to cover.

The directive lists the exemptions to disclosure requirements and also prescribes the ongoing information to be provided. This includes notification of the acquisition or disposal of major holdings by the shareholder to the issuer as well as the acquisition or disposal of major proportions of voting rights.

Finally, there are specific provisions on disclosure requirements for issuers whose registered office is in a third country.

TRANSPOSITION : 20 January 2007.

ENTRY INTO FORCE :20 January 2005.

Directive 2004/109
OJ L 390 31.12.2004, p. 0038-0057

T5-0220/2004
OJ C 103 29.04.2004, p. 0035-0376 E

T5-0220/2004

Debate in Parliament

A5-0079/2004

A5-0079/2004

2546

2537

OJ C 242 09.10.2003, p. 0006-0010
BCE(2003)0021

COM(2003)0138
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COM(2003)0138
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