INVESTING in EU stocks is a tricky business. Financial Services Commissioner Frits Bolkestein wants to make it easier for investors by harmonising the mish-mash of national and Union rules governing the information firms listed on the stock markets of Europe must disclose. His plan - the latest step in the creation of an EU-wide securities market regime by 2003 - goes beyond just standardising the way companies publish their glossy annual reports. It also addresses the need for firms to disclose changes in their major holdings or management structure. Here's a look at what's on the table:
- Consolidation - All companies listed on any regulated stock markets would face the same rules, and all existing EU rules would be brought together in a single text designed to provide legal certainty.
- Upgrading of 'periodical disclosure obligations' - Firms would have to publish interim results quarterly instead of half-yearly. Financial statements would have to follow 'international best practice'.
- Upgrading of 'ad-hoc' disclosure obligations - To prevent market distortions, the Commission is considering whether to upgrade rules forcing markets to disclose information that is not public knowledge and which may lead to substantial movements in the securities.
- Publication on the Web - Current requirements to publish financial reports in selected newspapers are out of date. Ongoing and regular information should be made freely available on the Internet. This would improve access for investors and cost firms less.
- Control by home 'administrative competent authority' - Securities market regulators in the member states would be in charge of ensuring investor protection and market transparency.
- Technical changes to the new rules, if adopted, should be possible through the new 'Lamfalussy procedure'. This means two committees of national regulators and experts, including the Commission could fine tune the rules if circumstances dictate.
Details of European Commission proposals for the harmonisation of rules governing financial disclosure.