In this newsletter, we provide a snapshot of the principal European, US and selected international governance and securities law developments of interest to European corporates.

EU DEVELOPMENTS

Transparency Directive: Updated ESMA Q&As

On 23 October 2015, the European Securities and Markets Authority ("ESMA") published an update to its Q&As on the Transparency Directive.

The update includes the insertion of new questions on, amongst others, the reporting of payments to governments at consolidated level, horizontal aggregation, changes of home member state during a transitional period, financial reporting and information, publication of sanctions and shareholder notifications.

A copy of the updated Q&As is available here: https://www.esma.europa.eu/sites/default/files/library/2015/11/esma-2015-1595_document_qas_on_td.pdf

Financial Reporting: ESMA Public Statement on Improving the Quality of Disclosures in Financial Statements

On 27 October 2015, ESMA published a public statement on improving the quality of disclosures in IFRS financial statements to address concerns surrounding the lack of relevant information and increasing size of annual reports.

ESMA proposes that the following principles be considered with regards to disclosures made in annual reports:

  • Provide information that is as entity specific as possible and avoid boilerplate language;
  • Provide information that is necessary to understand the issuer's financial performance and position;
  • Use the materiality concept under IFRS more effectively and remove irrelevant information;
  • Financial statements should be as clear and concise as possible; and
  • Issuers and auditors should ensure that financial statements and supporting documents are consistent.

A copy of the report is available here: https://www.esma.europa.eu/search/site/quality%2520of%2520disclosures

MiFID II: ESMA Note on MIFID II Implementation Delay

On 17 November 2015, ESMA published a note on delaying the implementation of the Markets in Financial Instruments Directive ("MiFID") II. It is unlikely that the Level 2 provisions will be published until March 2016, leaving insufficient time to develop the systems for MiFID II implementation.

ESMA identifies four areas where the complexity, interaction and need for a harmonised start date of the systems are especially acute: reference data, transaction reporting, transparency parameters and position reporting.

ESMA also discusses the pros and cons of different options for imposing an implementation delay.

The full text of the note is available here: https://www.esma.europa.eu/search/site/MiFID%2520II%2520Implementation%2520Day?page=1

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