CELEX: 51986PC0396
Language: en
Date: 1986-07-16
Title: PROPOSAL FOR A COUNCIL DIRECTIVE ON THE OBLIGATIONS OF BRANCHES ESTABLISHED IN A MEMBER STATE BY CREDIT INSTITUTIONS AND FINANCIAL INSTITUTIONS HAVING THEIR HEAD OFFICES OUTSIDE THAT MEMBER STATE REGARDING THE PUBLICATION OF ANNUAL ACCOUNTING DOCUMENTS

No C 230/4                               Official Journal of the European Communities                                      11.9.86
                                                                II
                                                        (Preparatory Acts)
                                                   COMMISSION
               Proposal for a Council Directive on the obligations of branches established in a Member State
              by credit institutions and financial institutions having their head offices outside that Member
                               State regarding the publication of annual accounting documents
                                                       COM(86) 396 final
                                (submitted to the Council by the Commission on 7 August 1986)
                                                         (86/C 230/05)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                            any case provide the public, and in particular creditors,
                                                                    with an adequate view of the financial situation of the
Having regard to the Treaty establishing the European               undertaking, since part of a coherent whole cannot be
Economic Community, and in particular Article 54 (3)                viewed in isolation;
(g) thereof,
                                                                    Whereas, on the other hand, in view of the present level
Having regard to the proposal from the Commission,                  of integration, the need for certain information on the
                                                                    activities of branches of credit institutions and financial
Having regard to the opinion of the European Par-                   institutions having their head offices outside the relevant
liament,                                                            Member State cannot be disregarded; whereas, however,
                                                                    the extent of such information must be limited so as to
                                                                    prevent distortions of competition;
Having regard to the opinion of the Economic and
Social Committee,
                                                                    Whereas equality of competition means, with regard to
Whereas the establishment of a European internal                    the branches of credit institutions and financial
market presupposes that the branches of credit                      institutions having their head offices in non-member
institutions and financial institutions having their head           countries, that such branches must, on the one hand, in
offices in other Member States should be treated in the             publishing their annual accounting documents, adhere to
same way as branches of credit institutions and financial           a standard which is the same as or equivalent to that of
institutions having their head offices in the same Member           the Community, but, on the other hand, that such
State; whereas this means that, with regard to the pub-             branches should not have to publish their own annual
lication of annual accounting documents, it is sufficient            accounts if they fulfil the abovementioned condition;
for the branches of such institutions having their head
offices in other Member States to publish the annual
accounting documents of their institution as a whole;
                                                                    Whereas the equivalence of annual                  accounting
                                                                     documents of credit institutions and financial institutions
Whereas the proposal for an Eleventh Council Directive               having their head offices in non-member countries
concerning disclosure requirements in respect of                     required under this Directive may lead to problems of
branches provides for rules of disclosure concerning                 assessment; whereas it is therefore necessary for this and
documents and particulars relating to branches opened in             other problems in the area covered by the Directive, and
a Member State by certain types of companies governed                in particular in its implementation, to be dealt with by
by the law of another State; whereas as regards                      representatives of the Member States and the
disclosure of annual accounting documents, Article 11 of             Commission jointly in a Contact Committee; whereas, in
that proposed Directive refers to specific provisions to be          order to keep the number of such committees within
 laid down for banks and other financial institutions;               limits, such cooperation should be carried out within the
                                                                     framework of the Committee set up under Article 52 of
Whereas the present practice of some Member States of                Council Directive 78/660/EEC ('), with the Committee
requiring the branches of credit institutions and financial          meeting in an appropriate composition where problems
 institutions having their head offices outside the Member           relating to credit institutions are to be dealt with,
 State to publish annual accounts relating to the branch is
 no longer justified following the adoption of the Council
 Directive on the annual accounts of banks and other
 financial institutions; whereas branch accounts cannot in           0) OJ No L 222, 14. 8. 1978, p. 11.
 ---pagebreak--- 11.9. 86                                         Official Journal of the European Communities                                        No C 230/5
HAS ADOPTED THIS DIRECTIVE:                                                         — the income of the branch deriving from items 1
                                                                                          to 3 and 6 of Article 29 or from items B 1 to B 3
                                                                                          and B 6 of Article 30 of Directive . . . / . . ./EEC,
                                  Article 1
                                                                                    — the total claims and liabilities attributable to the
                                   Scope                                                  branch, broken down by those in respect of
                                                                                          credit institutions and those in respect of
1.     The coordination measures prescribed by this                                       customers,
Directive shall apply to branches of credit institutions                            — the net sums of the total assets or liabilities of the
and financial institutions within the meaning of Article 2                                balances of the branch in relation to the head
of Council Directive . . . / . . ./EEC (l) established in a                               office, the other branches and the undertakings
Member State which have their head offices outside that                                   included in the consolidated accounts of the
Member State. Where a credit institution or financial                                     credit institution or financial institution;
institution has its head office in a non-member country,
this Directive shall apply in so far as the credit institution
or financial institution has a legal form which is                          (b) a description of the activities of the branch, showing
comparable to the legal forms specified in Article 2 of                              the main categories of business during the financial
Directive . . . / . . ./EEC.                                                        year.
2.     The third indent of Article 1 of Council Directive
77/780/EEC (2) shall apply mutatis mutandis to branches                     Where such information is required, it must be audited
of credit institutions and financial institutions within the                by one or more persons authorized to audit accounts
meaning of this Directive.                                                  under the law of the Member State in which the branch
                                                                            is established.
                                  Article 2
                                                                                                             Article 3
Provisions relating to branches of credit institutions and
financial institutions having their head offices in other                   Provisions relating to branches of credit institutions and
                              Member States                                 financial institutions having their head offices in non-
                                                                                                        member countries
1.     Member States shall require branches of credit
institutions and financial institutions having their head                    1.         Member States shall require branches of credit
offices in other Member States to publish the documents,                    institutions and financial institutions having their head
specified in Article 42 of Directive . . . / . . ./EEC (annual              offices in non-member countries to publish the
accounts, consolidated                 accounts,    annual     report,      documents specified in Article 2 (1), drawn up and
consolidated annual report, opinions of the person                          audited in the manner required by the law of the non-
responsible for auditing the annual accounts and                            member country, in accordance with the provisions set
consolidated accounts), of the credit institution or                        out therein.
financial institution in accordance with the provisions set
out therein.
                                                                            2.          Where such documents are in conformity with or
2.     Such documents must be drawn up and audited in                       equivalent to documents drawn up in accordance with
the manner required by the law of the Member State in                       the provisions of Directive . . . / . . ./EEC, Article 2 (3)
which the credit institution or financial institution has its               shall apply.
head office, in accordance with Directive . . . / . . ./EEC.
 3.    Branches may not be required to publish annual                       3.          Where the documents specified in paragraph 1 are
 accounts relating to their own activities.                                  not in conformity with or equivalent to documents
                                                                             drawn up in accordance with the provisions of Directive
                                                                             . . . / . . ./EEC, Member States may require the branches
 4.    Member States may, pending further coordination,                      to publish annual accounts relating to their own
require branches to provide the following additional                         activities.
 information:
 (a) details of:                                                             4.         In the cases specified in paragraphs 2 and 3,
      — the endowment capital of the branch,                                Article 2 (4) shall apply.
      — the profit or loss of the branch,
                                                                             5.         Member States shall not apply to branches of credit
                                                                             institutions and financial institutions having their head
 (1) Proposal for a Council Directive on the annual accounts of              offices in non-member countries provisions which would
     banks and other financial institutions, OJ No C 130, 1. 6.
     1981 and amended proposals, OJ No C 83, 24. 3. 1984 and                 place such branches in a more favourable position than
     O J N o C 3 5 1 , 3 1 . 12. 1985.                                       the branches of credit institutions or financial institutions
 (2) OJ N o L 322, 17. 12. 1977, p. 30.                                      having their head offices in other Member States.
 ---pagebreak--- No C 230/6                              Official Journal of the European Communities                                 11.9.86
                          Article 4                                (b) advise the Commission, if necessary, on additions or
                                                                        amendments to this Directive.
                  Language of publication
                                                                                            Article 6
Member States may require that the documents provided
for in this Directive be published in their official                                     Final provisions
language and that the translation of such documents be
certified.                                                         1.    Member States shall bring into force the laws, regu-
                                                                   lations and administrative provisions necessary to comply
                                                                   with this Directive not later than 1 January 1990. They
                          Article 5                                shall forthwith inform the Commission thereof.
                    Contact Committee                              2.    A Member State may provide that the provisions
                                                                   referred to in paragraph 1 above shall first apply to
The Contact Committee set up pursuant to Article 52 of             annual accounts for the financial year beginning on
Directive 78/660/EEC shall, when constituted appro-                1 January 1992 or during the calendar year 1992.
priately, also:                                                    3.    Member States shall communicate to the
                                                                   Commission the texts of the main provisions of national
(a) facilitate, without prejudice to Articles 169 and 170          law which they adopt in the field covered by this
     of the Treaty, harmonized application of this                 Directive.
     Directive through regular meetings dealing, in
     particular, with practical problems arising in                                          Article 7
     connection with its application, such as assessment of
     equivalence;                                                  This Directive is addressed to the Member States.