EN Official Journal of the European Union CE 78/856

(2004/C 78 E/0909)

WRITTEN QUESTION P-3776/03

by Christopher Huhne (ELDR) to the Commission

(5 December 2003)

Subject: US GAAP

Could the Commission clarify whether CESR has been asked to provide an answer on what it believes constitutes ‘equivalent’ accounting standards in its advice on Level 2 implementing measures for the Prospectus Directive (2003/71/EC (1)) Article 20(3) and Section 4.2 of the Commission's mandate of 7 February 2003 (CESR 03-038)?

Given the worrying trend of Asian companies looking to Asian rather than EU markets in the absence of clarification on EU policy, can the Commission make a clear statement of intention to recognise US GAAP as equivalent for non-EU issuers?

Answer given by Mr Bolkestein on behalf of the Commission

(28 January 2004)

The first provisional mandate of 18 March 2002 sent to the Committee of European Securities Regulations (CESR) by the Commission requested advice related to the detailed content of prospectuses. Article 7 and its implementing measures cover the minimum information requirements to be included in a prospectus for both Union and non Union issuers prepared according to Community requirements. This advice might also have a bearing on any possible measures implementing Articles 20(3) of the Prospectus Directive (2003/71/EC) (2). These implementing measures need to address the issue of the financial information to be given by third countries issuers in line with existing Community legislation that already address this issue in Directive 2001/34/EC (3).

CESR proposed in its advice a general principle requiring that the national accounting standards to be used by third country issuers in their prospectuses drafted under Union laws when presenting their financial information should be ‘equivalent’ to Regulation (EC) No 1606/2002 (4) of the Parliament and of the Council of 19 July 2002 on the application of international accounting standards.

As to the second question, regarding recognition of US GAAP (5), the situation is as follows. CESR proposed a solution introducing a transitional period for the application of the general principle of equivalence described above, which would allow internationally accepted accounting standards to be used by third country issuers in their prospectuses when presenting their financial information. In its draft implementing measures with respect to the Prospectus Directive (2003/71/EC), the Commission proposes to follow CESR's advice of a transitional period until 2007. The Commission will reflect in due course on further detailed arrangements for the application of the general principle of equivalence.

(1) OJ L 345, 31.12.2003, p. 64.

(2) Directive 2003/71/EC of the Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC (Text with EEA relevance), OJ L 345, 31.12.2003.

(3) Directive 2001/34/EC of the Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities, OJ L 184, 6.7.2001.

(4) OJ L 243, 11.9.2002.

(5) Generally Accepted Accounting Principles in the United States.