Activites

• 2006/08/16 Final act published in Official Journal
  • Directive 2006/46
  • OJ L 224 16.08.2006, p. 0001-0007
  • Corrigendum to final act 32006L0046R(01)
  • OJ L 217 18.08.2010, p. 0014
• 2006/06/14 Final act signed
• 2006/06/14 End of procedure in Parliament
• #2730
• 2006/05/22 Council Meeting
• 2006/05/22 Act adopted by Council after Parliament's 1st reading
• 2005/12/15 Results of vote in Parliament
  • Results of vote in Parliament
  • T6-0518/2005 summary

    The European Parliament adopted a resolution drafted by and made some amendments to the Commission’s text, which were the results of a compromise reached by Parliament, Council and Commission:-Parliament felt that costly and inefficient over-regulation should be avoided, in particular for SMEs. Measures to enhance business transparency and liability for inappropriate behaviour should be proportionate to their actual benefit to shareholders and other interested parties. Excessive demands regarding disclosure should be avoided: the duty of disclosure should only be extended where this is relevant and necessary;-the inclusion of off-balance sheet transactions in the notes is not necessary, since the rules of IAS 1, Presentation of Financial Statements, already give a sufficient guarantee that information relevant to decision-making is disclosed by the companies. The Commission’s proposal to this effect, which amounts to treating listed and unlisted companies in the same way, is also, in the Parliament’s opinion, unnecessary, since unlisted companies by definition do not make any claims on the capital market and there is thus no “public interest” in the inclusion of off-balance sheet transactions in the notes. The duty of disclosure of transactions with related parties, which the Commission also calls for in its proposal, was regarded as disproportionate. Parliament deleted the Commission proposals to this effect.-Parliament clarified the proposed principle of collective responsibility for the proper drawing up and publication of the annual report and financial statement. Responsibility and liability are separate, the one does not automatically entail the other. Responsibility and liability derive solely from national law. The directive does not create any new law on liability. Members of the board are only collectively responsible for the activities of the board to which they belong, and are only liable on the basis of their own responsibility. Collective responsibility exists only within a board and not between boards.-On the corporate governance statement, Parliament felt that this should not form part of the financial statement, since this would require a management assessment. In addition, a number of the items of information required in the corporate governance statement were felt to be superfluous and disproportionate, since the benefit of inclusion in the corporate governance statement would be far exceeded by the effort and costs involved.-There was a new article inserted in Directive 78/660/EC, which provides a 20 % increase of the thresholds for small and medium-sized companies, and which is reflected in the amendments.

• 2005/12/01 Committee report tabled for plenary, 1st reading/single reading
  • A6-0384/2005
• 2005/11/28 Vote in committee, 1st reading/single reading
• #2666
• 2005/06/07 Council Meeting
  • 2666 summary

    The Council approved a general approach, pending the European Parliament's first-reading opinion, on a proposal for a Directive aimed at strengthening investors' and shareholders' confidence in the annual and consolidated accounts of companies. The text provides for greater obligations to disclose information and for the collective responsibility of board members. It aims to supplement other Community measures, in particular the Commission's action plans for financial services and corporate governance. While promoting the reliability of company accounts, the draft Directive has to find a balance to avoid overburdening companies with new administrative obligations, in particular small andmedium-sized undertakings. The future Directive will amend the existing "Accounting Directives" (76/660/EEC and 83/349/EEC).

• 2005/01/27 Committee referral announced in Parliament, 1st reading/single reading
• 2004/10/27 Legislative proposal published
  • COM(2004)0725 summary

    PURPOSE : to further enhance confidence in the financial statements and annual reports published by European companies.PROPOSED ACT : Directive of the European Parliament and of the Council.CONTENT : recent corporate scandals have highlighted issues related to board members'misconduct and thereby underlined the need for the Commission to pursue its Action Plan and establish an EU-framework of collective responsibility for board members, including appropriate sanctions and liability. Hence the Commission proposes to ensure that Member States must guarantee that board members are collectively responsible at least towards the company. In this respect, shareholders and other stakeholders need reliable, complete and easily accessible information. This concern is shared by the European Parliamentand the Council and should be addressed by amending the Accounting Directives 78/660/EEC and 83/349/EEC as follows:- Establish collective responsibility of board members: Confidence in the financial statements is linked to who has responsibility for drawing up and publishing them. In line with what is currently prevailing in Member States the responsibility should rest collectively with all board members.- Enhance transparency about related parties' transactions: Companies' transaction with their managers, the latter's family members or other so-called related parties are often not carried out under normal commercial conditions. While satisfactory transparency is required for all listed European companies, under International Accounting Standards (IAS) more transparency is necessary for unlisted companies.- Enhance transparency about off-balance arrangements: The disclosure requirements in the Accounting Directives for off-balance sheet commitments are not precise enough. Special Purpose Entities (SPE) is a prominent example: They are captured in the balance sheet if they qualify as a subsidiary but in many cases SPE's may be organised in a different way. Instead of developing complex definitions of an SPE (bearing the immediate risk of circumvention), disclosure should instead be improved by imposing a specific requirement in the notes to the accounts for material off-balance sheet arrangements, including SPE's.- Introduce a corporate governance statement: Investors on European capital markets have a major interest in listed EU-companies' corporate governance practices. Accordingly, each listed company should – in a specific section of its annual report - disclose information about its practices in a "corporate governance statement".

  • DG [{'url': 'http://ec.europa.eu/dgs/internal_market/', 'title': 'Internal Market and Services'}],

Documents

• Legislative proposal published: COM(2004)0725
• Debate in Council: 2666
• Committee report tabled for plenary, 1st reading/single reading: A6-0384/2005
• Results of vote in Parliament: Results of vote in Parliament
• Decision by Parliament, 1st reading/single reading: T6-0518/2005
• : Directive 2006/46
• : OJ L 224 16.08.2006, p. 0001-0007
• : Corrigendum to final act 32006L0046R(01)
• : OJ L 217 18.08.2010, p. 0014

History

(these mark the time of scraping, not the official date of the change)