CELEX: 51988PC0118
Language: en
Date: 1988-03-07
Title: AMENDED 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 (presented by the Commission pursuant to the third paragraph of Article 149 of the EEC Treaty)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 118
Vol. 1988/0033
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                           COM ( 88 ) 118 final
                                           Brussels ,    7 March 1988
                       AMENDED    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
         ( presented by the Commission pursuant to the
       third paragraph of Article 149 of the EEC Treaty )
                                     I >      у;. > \
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 ---pagebreak---                                  AMENDED  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
I . Explanatory Memorandum
1 . On 7 August 1986 , the Commission sent the Council a proposal for a
     Directive on " branch accounts "        ( 1 ).
2 . The Economic and Social Committee delivered its opinion ( 2 )                 on 24
     September 1987 and the European Parliament                 delivered its   opinion
     on its sitting of 16 November 1987 ( 3 ).
3 . An    amended    proposal     has   been   drawn   up    in   order  to  take  into
     account ,   as far as possible ,        the opinions delivered by these two
     institutions .
4 . The Commission was able to accept virtually all amendments
     proposed by the European Parliament . Most of them help to clarify
     the text or to make the necessary adaptation arising from recent
     developments in Community legislation .
5 . The following comments are made on the most important changes :
     (a)    the  exact     references     in   several    Articles    to   the  Council
           Directive on     the annual    accounts   and   consolidated accounts     of
           banks and other financial institutions , which was decided only
           recently , have been introduced in the text of the proposal ;
( 1 ) C0MC86 ) 396 final , OJ C 230 of 11 September 1986 , p. 4
( 2 ) CES 805 / 87 ( F ) RJ / js
(3)    PE  113.305 / fin .
                                                                               г
 ---pagebreak---                                               2
(b)    it    is  clarified       that    certain   disclosure     requirements     of  the
      proposed 11th Company Law Directive in respect of branches ,
      which will become applicable generally to all companies ,
      should be then respected by banks mutatis mutandis ;
( c ) the Contact Committee already set up under the 4th Company Law
      Directive       ( 78 / 660 / EEC )  is  the  appropriate      forum   in   order  to
      discuss the        practical questions         related    to   the  comparability
      or     equivalence        of   annual     accounts   in    the   case    of   credit
      institutions having their head office outside of the Community
      and for which the accounting documents are drawn up according
      to the legislation of that State . This Committee is charged to
      facilitate decisions to be taken on that subject matter ;
(d)   in the      final     provisions      the  dates transforming       the Directive
      into national          legislation and       to apply    these provisions       have
      been      adapted      to    those    contained   in   the     Council    Directive
      ( 86 / 635 / EEC )  on   annual    and  consolidated    accounts .
                                                                                     3
 ---pagebreak---                                      AMENDED 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
II . Text of the proposai
           Original proposai                                   Amended proposai
THE COUNCIL OF THE EUROPEAN COMMUNITIES             Unchanged
Having regard to the Treaty establishing
the European Economic Community , and in
particular Article 54(3)(g ) thereof .
Having regard to the proposal from the
Commission ,
Having regard to the opinion of the
European Parliament ,
Having regard to the opinion of the
Economic and Social Committee ,
Whereas the establishment of a European
internal market presupposes that the
branches of credit institutions and
financial institutions having their head
offices in other Member States should be
treated in the same way as branches of
credit institutions and financial insti ¬
tutions having their head offices in the
same Member State ; whereas this means that ,
 ---pagebreak---                                             2
              Original proposai                            Amended proposai
with regard to the publication of annual
accounting documents , it is sufficient
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 ;
Second recital :                              Second recital :
Whereas the proposal for an Eleventh          Whereas the proposal for an Eleventh
Council Directive concerning disclosure       Council Directive concerning disclosure
requirements in respect of branches pro¬      requirements in respect of branches pro¬
vides for rules of disclosure concerning      vides for rules of disclosure concerning
documents and particulars relating to         documents and particulars relating to
branches opened in a Member State by          branches opened in a Member State by
certain types of companies governed by        certain types of companies governed by
the law of another State ; whereas as         the law of another State ; whereas as
regards disclosure of annual accounting       regards disclosure of annual accounting
documents , Article 11 of that proposed       documents , Article 11 of that proposed
Directive refers to specific provisions       Directive refers to specific provisions
to be laid down for banks and other           to be laid down for banks and other
financial institutions ;                      financial institutions , especially in
                                              respect of the matters covered by
                                              Articles 3 and 7 of that proposed
                                              di rective ;
Whereas the present practice of some          Unchanged
Member States of requiring the branches
of credit institutions and financial
institutions having their head offices
outside the Member 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
 ---pagebreak---                                           - 3 -
               Original proposai                              Amended proposai
 financial institutions ; whereas branch
 accounts cannot in any case provide the
 public , and in particular creditors ,
 with an adequate view of the financial
 situation of the undertaking , since
 part of a coherent whole cannot be
viewed in isolation ;
Whereas , on the other hand , in view of
the present level of integration , the
need for certain information on the
activities of branches of credit insti ¬
tutions and financial institutions having
their head offices outside the relevant
Member State cannot be disregarded ;
whereas , however , the extent of such
information must be limited so as to
prevent distortions of competition ;
                                                5 . recital ( inserted )
                                                Whereas , however , the provisions of this
                                                Directive do not in any way affect the
                                                obligations of branches of credit insti ¬
                                                tutions and financial institutions to
                                                provide information pursuant to social
                                                legislation , especially with regard to
                                                employees' rights to information ,
                                                pursuant to host countries' rights of
                                                supervision over credit institutions or
                                                financial institutions , and pursuant to
                                                fiscal legislation ;
Whereas equality of competition means .         Unchanged
with regard to the branches of credit
institutions and financial institutions
                                                                                   C
 ---pagebreak---                                              - 4 -
               Original proposai                   Amended proposai
having their head offices in non-member
countries , that such branches must , on the
other hand , in publishing their annual
accounting documents , adhere to a standard
which is the same as or equivalent to that
of the Community , but , on the other hand ,
that such branches should not have to
publish their own annual accounts if they
fulfil the abovementioned condition ;
Whereas the equivalence of annual accoun¬
ting documents of credit institutions and
financial institutions having their head
offices in non-member countries required
under this Directive may lead to problems
of assessment ; whereas it is therefore
necessary for this and other problems in
the area covered by the Directive , and in
particular in its implementation , to be
dealt with by representatives of the
Member States and the Commission jointly
in a Contact Committee ; whereas , in order
to keep the number of such committees
within limits , such cooperation should be
carried out within the framework of the
Committee set up under Article 52 of
Council Directive 78 / 660 / EEC ( 1 ), with
the Committee meeting in an appropriate
composition where problems relating to
credit institutions are to be dealt with ,
HAS ADOPTED THIS DIRECTIVE :
( 1 ) OJ No L 222 , 14.8.1978 , p. 11
 ---pagebreak---                  Original proposai                            Amended proposai
              Article 1                                     Article 1
                Scope                                           Scope
1 . The coordination measures prescribed     1 . The coordination measures prescribed
by this Directive shall apply to branches    by this Directive shall apply to branches
of credit institutions and financial         of credit institutions and financial
institutions within the meaning of           institutions within the meaning of
Article 2 of Council Directive               Article 2 of Council Directive
.../ _ / EEC ( 1 ) established in a Member   86 / 635 / EEC ( 1 ) established in a Member
State which have their head offices        / State which have their head offices
outside that Member State . Where a          outside that Member State . Where a
credit institution or financial insti-       credit institution or financial insti­
tution has its head office in a non-         tution has its head office in a non-
member country , this Directive shall        member country , this Directive shall
apply insofar as the credit institution      apply insofar as the credit institution
or financial institution has a legal         or financial institution has a legal
form which is comparable to the legal        form which is comparable to the legal
forms specified in Article 2 of              forms specified in Article 2 of
Directive .../.../ EEC .                     Directive 86 / 635 / EEC ( 1 ).
2 . The third indent of Article 1 Council    2 . Unchanged
Directive 77 / 780 / EEC ( 2 ) shall apply
mutatis mutandis to branches of credit
institutions and financial institutions
within the meaning of this Directive .
( 1 ) Proposal for a Council Directive on    ( 1 ) OJ No L 372 , 31.12.1986 , p. 1
the annual accounts of banks and other
financial institutions , OJ No . C 130 ,
1.6.1981 and amended proposals , OJ
No . C 83 , 24.3.1984 and OJ No . C 351 ,
31.12.1985
 ( 2 ) OJ No . L 322 , 17.12.1977 , p. 30
 ---pagebreak---               Original proposai                        Amended proposai
           Article 2                                  Article 2
Provisions relating to branches of credit Unchanged
institutions and financial institutions
having their head offices in other              •
Member States
1 . Member States shall require branches  1 . Member States shall require branches
of credit institutions and financial      of credit institutions and financial
institutions having their head offices    institutions having their head offices
in other Member States to publish the     in other Member States to publish the
documents , specified in Article 42 of    documents , specified in Article 44 , and
Directive _ / _ / EEC ( annual accounts , in particular , in paragraphs 2 and 4 ,
consolidated accounts , annual report ,   thereof , of Directive 86 / 635 / EEC ( annual
consolidated annual report , opinions     accounts , consolidated accounts , annual
of the person responsible for auditing    report , consolidated annual report ,
the annual accounts and consolidated      opinions of the person responsible for
accounts ), of the credit institution     auditing the annual accounts and conso-
or financial institution in accordance    lidated accounts ), of the credit insti-
with the provisions set out therein .     tution or financial institution in
                                          accordance with the provisions set out
                                          therein .
2 . Such documents must be drawn up and   2 . Such documents must be drawn un and
audited in the manner required by the     audited in the manner required by the
law of the Member State in which the      law of the Member State in which the
credit institution or financial insti-    credit institution or financial insti­
tution has its head office in accordance  tution has its head office in accordance
with Directive _ / _ / EEC .              with Directive 86 / 635 / EEC .
 ---pagebreak---                                             7
                 Original proposai                             Amended proposai
                                               2a . Articles 2 and 4 of the proposal for
                                               an eleventh Council Directive concerning
                                               disclosure requirements in respect of
                                              branches opened in a Member State by
                                               certain types of companies governed by
                                              the law of another State shall apply
                                              mutatis mutandis .
3 . Branches may not be required to publish   3 . Unchanged
annual accounts relating to their own
activities .
4 . Member States may , pending further       4 . Unchanged
coordination , require branches to provide
the following additional information :
( a ) detai ls of :                           ( a ) detai ls of :
- the endowment capital of the branch ;       - unchanged
- the profit or loss of the branch ;          - unchanged
- the income of the branch deriving from      - the income of the branch deriving from
    items 1 to 3 and 6 of Article 29 or           items 1 , 3 , 4 , 6 and 7 of Article 27
    from item B.1 to B.3 and B.6 of Article      or from items B.1 to B.4 and B.7 of
    30 of Directive _ /.../ EEC ;                 Article 28 of Directive 86 / 635 / EEC ;
■ the total claims and liabilities            - unchanged
    attributable to the branch , broken
    down by those in respect of credit
    institutions and thoscin respect of
    customers ;
 ---pagebreak---                                                - 8
               Original proposai                                Amended proposai
- the net sums of the total assets or              - unchanged
    liabilities of the balances of the branch
    in relation to the head office , the other
    branches and the undertakings included in
    the consolidated accounts of the credit
    institution or financial institution ;
( b ) the description of the activities of         Unchanged
      the branch , showing the main categories
      of business during the financial year .
Where such information is required , it
must be audited by one or more persons
authorized to audit accounts under the
law of the Member State in which the
branch is established .
            Article 3                                          Article 3
Provisions relating to branches of credit          Unchanged
institutions and financial institutions
having their head offices in non-member
countries
1 . Member States shall require branches           1 . Unchanged
of credit institutions and financial
institutions having their head offices
in no-member countries to publish the
documents specified in Article 2(1 )
drawn up and audited in the manner
required by the law of the non-member
country , in accordance with the provi ¬
sions set out therein .
 ---pagebreak---                                             9
                  Original proposai                         Amended proposai
    Whom such documents are in conformity     2 . Where such documents are in conformity
with or equivalent to documents drawn up      with or equivalent to documents drawn up
in accordance with the provisions of          in accordance with the provisions of
Directive – / _ / EEC , Article 2(3 ) shall   Directive 86 / 635 / EEC , Article 2(3 ) shall
apply .                                       apply
3 . Where the documents specified in          3 . Where the documents specified in
paragraph 1 are not in conformity with        paragraph 1 are not in conformity with
or equivalent to documents drawn up in        or equivalent to documents drawn up in
accordance with the provisions of             accordance with the provisions of
Directive .../.../ EEC , Member States        Directive 86 / 635 / EEC , Member States
may require the branches to publish           may require the branches to publish
annual accounts relating to their own         annual accounts relating to their own
act i vi t i es .                             activities .
4 . In the cases specified in paragraphs      4 . Unchanged
2 and 3 , Article 2(4 ) shall apply .
5 . Member States shall not apply to          5 . Unchanged
branches of credit institutions and
financial institutions having their head
offices in non-member countries provisions
which would place such branches in a more
 favourable position than the branches of
 credit institutions or financial institu ¬
 tions having their head offices in other
 Member States .
 ---pagebreak---                                                10 -
                 Original proposal                                 Amended proposal
             Article 4                                            Article 4
        Language of publication                               Language of publication
Member States may require that the                  Unchanged
documents provided for in this Directive
be published in their official language
and that the translation of such documents
be certified .
             Article 5                                            Article 5
         Contact Committee                                     Contact Committee
The Contact Committee set up pursuant to            The Contact Committee set up pursuant to
Article 52 of Directive 78 / 660 / EEC shall ,      Article 52 of Directive 78 / 660 / EEC shall ,
when constituted appropriately also :               when constituted appropriately , also ;
( a ) facilitate , without prejudice to             ( a ) facilitate , without prejudice to
      Articles 169 and 170 of the Treaty ,                Articles 169 and 170 of the Treaty ,
      harmonized application of this                      harmonized application of this
      Directive through regular meetings                  Directive through regular meetings
      dealing , in particular , with                      dealing , in particular , with
      practical problems arising in                       practical problems arising in
      connection with its application ,                   connection with its application ,
      such as assessment of equivalence ;                 such as assessment of equivalence ;
                                                          facilitate decisions on the compara -
                                                          bi lity and equivalence of the legal
                                                          forms referred to in Article 1(1 ).
( b ) advise the Commission , if necessary ,        ( b ) unchanged
      on additions or amendments to this
      Di rective .
 ---pagebreak---                                            11
                Original proposal                           Amended proposal
            Art iele 6                                    Article 6
        Final provisions                               Final provisions
1 . Member States shall bring into force      1 . Member States shall bring into force
the laws , regulations and administrative     the laws , regulations and administrative
provisions necessary to comply with this      provisions necessary to comply with this
Directive not later than 1 January 1990 .     Directive not later than 31 December
They shall forthwith inform the Commission    1990 . They shall forthwith inform the
thereof .                                     Commission thereof .
2 . A Member State may provide that the       2 . A Member State may provide that the
provisions referred to in paragraph 1         provisions referred to in paragraph 1
above shall first apply to annual             above shall first apply to annual
accounts for the financial year begin-        accounts for the financial year begin-
ning on 1 January 1992 or during the          ning on 1 January 1993 or during the
calendar year 1992 .                          calendar year 1993 .
3 . Member States shall comunicate to         3 . unchanged
the Commission the texts of the main
provisions of national law which they
adopt in the field covered by this
Directive .
            Article 7                                     Article 7
This Directive is addressed to the            Unchanged
Member States
                                                                                 Ί(4