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Brussels, 17 July 2001

Commission launches consultation on transparency obligations of publicly traded companies

The European Commission has launched an open Internet consultation on the transparency obligations of issuers whose securities are traded on regulated markets. This is the first consultation set up by the Commission in accordance with the recommendations of the February 2001 report of the Lamfalussy Committee (see finances/general/lamfalussy.htm). The Committee recommended that all new legislation in the securities field should be preceded by an early, broad and systematic consultation of all interested parties in the securities area, and this was endorsed by the Stockholm European Council. The consultation document provides first indications of the views of the Commission services as to the possible structure and content of a new regime on disclosure requirements and asks for contributions from interested parties by 30 September 2001. The preliminary orientations contained in the consultation document are without prejudice to any future decisions by the Commission in finalising its proposals. This consultation will be followed soon by another on the revision of the Investment Services Directive.

Internal Market Commissioner Frits Bolkestein said: "I attach great importance to this open Internet consultation and encourage all interested parties markets, investors, consumers, regulators to respond to our consultation document. The Lamfalussy report expressed concerns that rules on disclosure of corporate information differ greatly between Member States and urged steps to be taken to enhance the quality and the comparability of financial statements by publicly traded companies. It is therefore necessary to set harmonised standards on disclosure requirements throughout the EU that will provide adequate safeguards for all European investors, irrespective of the Member State in which they are resident. Unless reform is undertaken, inconsistencies will continue and the European financial market will remain fragmented."

Disclosure obligations

The consultation document provides first indications as to the possible future EU regime concerning disclosure obligations of issuers whose securities are admitted to trading on a regulated market. Disclosure obligations cover the following transparency obligations:

  • Periodic obligations such as the obligation to provide financial information (annual and interim reports)

  • Ongoing obligations such as the obligation to disclose changes in the structure of the major holdings in the capital of a company or other material information that needs to be published on an ad-hoc basis to prevent market distortions (e.g. dismissal of the chief executive of a listed company)

Main subjects of consultation

The main issues on which the Commission is seeking contributions are:

    Consolidation: In order to offer more legal certainty as to the law applicable, the Commission is considering the consolidation in a single text all existing periodic and ongoing disclosure obligations for issuers whose securities are admitted to trading on a regulated market. Consolidation would also eliminate inconsistencies and propose a unified scope of application for all disclosure obligations.

    Upgrading of periodical disclosure obligations: The Commission is considering whether to upgrade the requirements of the existing Directive on regular reporting to meet international best practice; e.g. financial statements would follow international accounting standards (IAS) and interim reports would have to be published at the end of each quarter instead of half-yearly.

    Upgrading of ad-hoc disclosure obligations: To prevent market distortions, the Commission is considering whether to upgrade the provisions concerning material information which is not public knowledge and which may lead to substantial movements in the prices of securities.

    Publication in electronic form: Current requirements to publish in one or more newspapers or equivalent means are out of date in the Internet world. Ongoing and regular information should be freely available via the internet. Electronic publication would be less costly for companies than current requirements and investors would have effective and free world-wide access to information on a real-time basis.

    Control by the home administrative competent authority: For the purposes of simplification and efficient management, in line with the recommendations of the Committee of the Wise Men, the Commission is considering whether for each Member State one competent authority should be established. The competent authority would be the independent securities regulator of the home Member State, which is the authority in charge of ensuring investor protection and market transparency.

    Possibility of future implementing measures following the recommendations of the "Lamfalussy" report: To ensure the necessary flexibility of the system, in accordance with the orientations of the Committee of Wise Men, endorsed by the Stockholm European Council, the Commission's services consider that it should be possible, if necessary in future, to make technical adaptations and clarifications in order to keep pace with market developments and to avoid rapid obsolescence of the legal regime.


Responses to this consultative paper should be provided no later than 30th September 2001 and sent to:

European Commission

Internal Market Directorate General

Securities and Organised Markets Unit F/2

Av. de Cortenbergh, 107

B-1000 Brussels

Responses may also be sent by e-mail to:

The consultative document is available on the Commission's Europa web-site at:

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