News
In a surprise announcement last week, the EU expressed the following:
"In order to reduce the administrative burden and to encourage long term investment, the requirement to publish quarterly financial information would be alleviated. Companies could of course continue to
publish quarterly information on a voluntary basis if they wished to".
This is part of suggested changes to the Transparency Obligations Directive such as incorporating CfD disclosure and improving CDR reporting. Initial soundings from IRO members indicate that they are likely to continue to update the market at least four times per year at appropriate times for their industry sectors.
The Transparency Matters blog takes a look at the proposals:
End of IMS proposed from left field.
"In this era of more transparency, a rather surprising development. The European Commission has published a set of proposals following its earlier consultation on changes to the Transparency Obligations Directive. There are several (sensible) proposals affecting disclosure of major holdings (to incorporate CFD disclosures) and improved CSR reporting.
However the one that catches the eye are the proposals around the IMS. In order to reduce the administrative burden linked to listing on regulated markets and encourage long-term investment, notes the Commission’s press release and FAQ’s, the requirement to publish quarterly financial information [this covers both interim management statements and quarterly reports] would be abolished for all listed companies.
Many questions. Why has this been so sudden? The Commission had floated reduced disclosures for SME’s...but for ALL listed companies? How quickly could this take effect? Probably not before 2013 if you work it back.
But how would companies react? In my view, this could be a bit like the now-voluntary prelims. They are such a crucial IR communications opportunity that NOT to publish an update on progress would be absurd. How else will companies update the complete trading picture between final results and half year?
I suspect – as with prelims – the vast majority will continue to produce a statement. Whether it changes following the FSA research and guidance to include more financial content, is debatable.
Nonetheless, the biggest question is whether this will happen at all. The reaction from the ‘stakeholders’ is likely to be that more reporting is a Good Thing, and that any backward step – connected or not to helping reduce red tape – is unwelcome".
The Commission is also separately looking at potential revisions to MiFID in order to "improve the transparency and oversight of less regulated markets – including derivatives markets - and to address the issue of excessive price volatility in commodity derivatives markets". The proposals include a directive and regulation and the key elements are:
+More robust and efficient market structures
+Taking account of technological innovations
+Increased transparency
+Reinforced supervisory powers and a stricter framework for commodity derivatives markets
+Stronger investor protection
The Society will monitor the proposals and update members as to the likely impact on their activities.
Published: 3 November, 2011