No C 53/54 Official Journal of the European Communities 3. 3. 80 
The proposed increase in Community quotas is a further step in a direction which may well be 
contrary to a subsequent common transport policy'. 
Voting 
For: 11; against: 44; abstentions: 6. 
Opinion on the proposal for a Council Directive on information to be published on a re­
gular basis by companies whose transferable securities are admitted to official stock ex­
change listing 
The text referred to the Committee has been published in Official Journal of the Euro­
pean Communities No C 29 of 1 February 1979, page 5. 
A. LEGAL BASIS FOR THE OPINION 
On 6 February 1979 the Council referred the abovementioned proposal to the Econ­
omic and Social Committee in accordance with Articles 54 and 198 of the Treaty esta­
blishing the European Economic Community. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 
172nd plenary session held in Brussels on 24 and 25 October 1979. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the Euro­
pean Economic Community, and in particular Arti­
cles 54 and 198 thereof, 
Having regard to the request made by the Council 
of the European Communities on 6 February 1979 
for an opinion, 
Having regard to the Rules of Procedure of the 
Economic and Social Committee, and in particular 
Article 22 thereof, 
Having regard to the decision taken by the Bureau 
of the Economic and Social Committee on 20 Feb­
ruary 1979 instructing the Section for Economic 
and Financial Questions to draw up an opinion on 
the matter, 
Having regard to the opinion of the Section for 
Economic and Financial Questions adopted at its 
53rd meeting on 18 September 1979, Having regard to the oral report made by the rap­
porteur, Mr Miller, 
Having regard to the discussions at its 172nd plen­
ary session held on 24 and 25 October 1979 (meeting 
of 24 October 1979), 
HAS ADOPTED THE FOLLOWING OPINION 
unanimously: 
The Committee welcomes in principle the purpose 
of the draft Directive, the aims of which are to rein­
force the protection given to investors by obliging 
companies to publish half-yearly reports on their ac­
tivities, and to bring about a degree of uniformity in 
company reporting throughout the Community. 
However, the Committee regards this draft Direc­
tive, containing only minimum standards, as merely 
a first step in the process of harmonization. It hopes 
3. 3. 80 Official Journal of the European Communities No C 53/55 
that in the long run it will be adapted, in the light of 
experience, for the better. Even with this reserva­
tion, the Committee could give its approval to the 
present proposal only if the articles are amended to 
take account of the following general and specific 
observations. 
1. General observations on the Directive as proposed 
1.1. The role of the competent authority 
There are major questions concerning the role of the 
competent authority to which the present draft Di­
rective gives no answer, but which the Committee 
thinks must be satisfactorily resolved if the obliga­
tions imposed on such authorities are to be accepta­
ble to them. For instance, it is proposed that the 
Directive should apply to all companies already 
listed on a stock exchange within the territory of a 
Member State at the time the proposal becomes ef­
fective, including those listed companies incorpor­
ated outside the Community. The draft Directive 
does not make it clear what obligations will be im­
posed on a Community exchange should such a 
company fail to comply, or indeed what sanctions 
are available. The possibility must be recognized 
that some companies, and especially small and 
medium-sized companies, may want to de-list rather 
than accept these new obligations. They could, for 
instance, quite properly argue than an interim report 
obligation, particularly in a specific form, was not 
part of their original contract with the Community 
exchange, and that to impose it unilaterally would 
be unfair. 
1.2. The Directive, in this matter, is quite different 
from the Admissions Directive, which obliges the 
competent authority not to do certain things — 
namely admit securities to listing — unless the con­
ditions laid down have been fulfilled. The obliga­
tion to act that this draft Directive imposes on the 
competent authority raises questions not only of the 
position in the event of non-compliance, but also of 
the position where investors and others can show 
that non-compliance or cancellation of listing has 
caused them damage. 
1.3. It is the view of the Committee that the Direc­
tive should indicate how these matters should be 
dealt with for it would be imprudent to enact this 
Directive until practical and reasonable solutions 
have been found to these general objections to the 
present draft. The matters referred to here are again 
touched on in the specific comment on Article 11. 1.4. The position of credit institutions and insurance 
companies 
The Committee thinks that more reflection should 
be given to the position of credit institutions and in­
surance companies under the present draft Direc­
tive. As the Commission recognizes in its explana­
tory memorandum, some of the information re­
quired to be published under certain Articles of the 
draft Directive would not be appropriate in the case 
of such bodies and would therefore have to be 
adapted. 
1.5. The Commission is presently engaged in pre­
paring a proposal for a Directive on the annual ac­
counts of credit institutions. The Committee be­
lieves that there is a strong case to be made for not 
applying the present proposal to credit institutions 
until that Directive has been adopted. In this way 
the adaptation foreseen under Article 11 (3), for 
instance, could take into account the solutions 
adopted for drawing up the banks' annual accounts, 
thus achieving in this field, at least, a reasonable 
basis of comparability. The same applies to insur­
ance companies' accounts. 
1.6. If this suggestion should prove to be imprac­
ticable, the Committee is of the opinion that rather 
than relying on competent authorities to decide 
what is inappropriate in the sphere of company re­
porting and of the periodic reports of banks and fin­
ancial institutions, the Commission should instead 
spell out in detail what information it does require 
these institutions to make until such time as the 
Directive on the annual accounts of credit institu­
tions comes into force. 
1.7. Whichever alternative is adopted, the Com­
mittee is strongly of the opinion that neither should 
be used as a pretext for postponing the application 
of the Directive to all forms of financial institutions 
covered by it. 
2. Specific comments 
2.1. Article 1 
In so far as the Directive when it becomes effective 
will apply to companies listed on a stock exchange 
No C 53/56 Official Journal of the European Communities 3. 3. 80 
within the territory of a Member State, but incorpor­
ated outside the Community, the Committee's 
general remarks made in paragraph 1.1 above 
apply specifically to Article 1. 
2.2. Article 3 
This Article allows a Member State to subject com­
panies within its own territory to stricter require­
ments than those provided for in the Directive. The 
Commission states in its explanatory memorandum 
'it did not appear possible to achievea greater 
degree of harmonization at this stage'. The Commit­
tee would like to point out that in order to ensure 
better investor protection and a consistent standard 
of reporting throughout the Community, it would 
have nothing against the imposition of stricter stan­
dards, provided they were uniform and reasonable. 
2.3. The position which the Commission has once 
more taken is unsatisfactory since it is contrary to 
the principle of harmonization to allow Member 
States to impose on companies subject to the Direc­
tive and listed on their exchanges, more rigorous 
obligations than those contained in the Directive it­
self. As no one is suggesting that Member States 
with higher standards than the proposed minimum 
requirements should diminish the quality of their 
control, a variety of regulations will continue to ex­
ist throughout the Community. This will make it dif­
ficult to compare like with like and could lead to 
distortions in the flow of capital. It could have 
practical difficulties too. Where, for instance, a com­
pany's securities are quoted on two or more ex­
changes in the Community, one of which imposes 
stricter requirements than the other, would the com­
pany be obliged to publish two different reports or 
should the Directive state that in suchcases the rules 
applying to a company listed or more than one 
stock exchange should be those of the exchange of 
the country of incorporation? The Commission 
should amend its proposal and make it incumbent 
upon the competent authorities to consult with one 
another in order to resolve the above difficulty for 
listed companies. 
2.4. Article 4 
The Committee believes that until the period be­
tween the closure of the accounting year and the 
publication of the annual accounts is shortened, a 
slightly longer period should be permitted within which a company must publish its interim reports, 
say within four or even five months after the end of 
the period. Although there are few practical difficul­
ties in publishing within three months, there is much 
merit in companies providing reports at more or less 
regular intervals throughout the year. The three 
months proposal could cause the interim figures to 
follow too soon after the final results for the pre­
vious year, leaving a long interval of up to nine 
months before any further results are forthcoming. 
2.5. Article 5 
It is the opinion of the Committee that Article 5 
asks for information in far too great detail and that, 
in any case, much of it is irrelevant where a com­
pany produces actual profit figures and earnings per 
share. It also points out that the application of the 
dispensations allowed for by Article 11 (4) could 
make much of the effect of this Article nugatory. 
Specifically, the Committee recommends that net 
profit before tax rather than the gross operating re­
sult should be given in half-yearly reports and that 
paragraph 4 should read: 
'The explanatory statement shall enable investors 
to make an informed appraisal of the company's 
business and shall relate to the information re­
ferred to in paragraph 2, giving supporting 
figures where relevant.' 
2.6. As much of the information specifically re­
quired in subparagraph 4 appears to the Committee 
to be either irrelevant (e.g. 'stocks of finished prod­
ucts') or too unclear as a legal requirement (e.g. 'de­
cisions taken as to future investment'), the Commit­
tee would prefer the subject matter of this Article of 
the Directive to be covered by a general requirement 
which would impose the obligation to publish any 
supplementary information which is necessary for a 
reasonable appreciation of the half-yearly results or 
of other material changes in the aggregate of the bal­
ance on profit and loss account and other reserves. 
2.7. The Committee also recommends that in the 
interests of giving essential information to investors, 
there should be an additional requirement to pro­
vide details of changes in capital gearing and in 
liabilities, especially short-term liabilities.