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QUARTERLY REPORTING REJECTED: TRANSPARENCY DIRECTIVE TO BE AGREED TOMORROW
Tuesday 23rd March 2004
Tomorrow in Brussels, ambassadors from the EU Member States are expected agree on a proposal put forward by the Irish Presidency of the EU on the Transparency Directive. This will bring to an end months of controversy because MEPs have signalled informally that they are likely to accept the Irish Presidency's proposals as well. A vote will then take place in the European Parliament next week on the 30th of March.
Timothy Kirkhope, Conservative MEP for Yorkshire and the Humber said:
"This is a good deal. This proposal should increase the range and quality of information available to investors in the UK and right around Europe. Hugely damaging red tape has been removed from the directive: companies will not be required to file quarterly accounts. This would have been an onerous and expensive burden on business which would not have produced any proportionate benefits to investors. Arguably, quarterly reporting requirements in the US contributed to the Enron crisis, with firms inflating their figures to try to meet quarterly reporting deadlines.
We have also removed the big threat to the bond markets contained in the Commission proposal. Companies were already de-listing their bonds in response to the uncertainty caused by the Commission's threat that third country issuers would have to issue half yearly reports and draw up a second set of accounts in addition to those compiled under their home country rules."
Notes to Editors
- The proposal will be put forward by the Irish Presidency to the Coreper meeting of EU ambassadors.
- Instead of quarterly reporting, companies will be asked to publish a short statement on their current financial position.
