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            COMMISSION DECISION         

of 4 December 2006         

on the use by third country issuers of securities of information prepared under internationally accepted accounting standards

(notified under document number C(2006) 5804)

(2006/891/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (1), and in particular the second subparagraph of Article 23(4) thereof,

Whereas:

HAS ADOPTED THIS DECISION:

Article 1

Prior to financial years starting on or after 1 January 2009, an issuer whose registered office is in a third country may prepare its annual consolidated financial statements and half-yearly consolidated financial statements in accordance with the accounting standards of a third country provided that one of the following conditions is met:

Article 2

1.   By 1 April 2007, the Commission shall present to the European Securities Committee and the European Parliament a first report on the work timetable of the authorities responsible for national accounting standards in the US, Japan and Canada for the convergence between IFRS and the Generally Accepted Accounting Principles of those countries.

2.   The Commission shall closely monitor, and regularly inform the European Securities Committee and the European Parliament about the amount of progress in the convergence between International Financial Reporting Standards and the Generally Accepted Accounting Principles of Canada, Japan and the United States of America and of progress on the elimination of reconciliation requirements that apply to Community issuers in those countries. In particular, it shall inform the European Securities Committee and the European Parliament immediately if the process is not proceeding satisfactorily.

3.   The Commission shall also regularly inform the European Securities Committee and the European Parliament about the development of regulatory discussions and the amount of progress in the convergence between International Financial Reporting Standards and the Generally Accepted Accounting Principles of third countries mentioned in paragraph (c) of Article 1 and progress towards the elimination of any reconciliation requirements. In particular, the Commission shall inform the European Securities Committee and the European Parliament immediately if the process is not proceeding satisfactorily.

4.   In addition to the obligations under paragraphs 2 and 3, the Commission shall engage in and maintain a regular dialogue with third country authorities and, before 1 April 2008 at the latest, the Commission shall present a report to the European Securities Committee and to the European Parliament on the progress in convergence and progress towards the elimination of any reconciliation requirements that apply to Community issuers under the rules of a third country covered by paragraph (b) or (c) of Article 1. The Commission may request or require another person to prepare the report.

5.   At least six months before 1 January 2009, the Commission shall ensure a determination of the equivalence of the Generally Accepted Accounting Principles of third countries, pursuant to a definition of equivalence and an equivalence mechanism that it will have established before 1 January 2008 in accordance with the procedure referred to in Article 27(2) of Directive 2004/109/EC. When complying with this paragraph, the Commission shall first consult the Committee of European Securities Regulators on the appropriateness of the definition of equivalence, equivalence mechanism and the determination of the equivalence that is made.

Article 3

This Decision is addressed to the Member States.

Done at Brussels, 4 December 2006.

For the Commission

Charlie McCREEVY            

Member of the Commission

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(1)OJ L 390, 31.12.2004, p. 38.

(2)OJ L 243, 11.9.2002, p. 1.

(3)OJ L 191, 13.7.2001, p. 43.

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