Commission plans to make company finances more transparent

The Commission is readying a plan to increase financial transparency among Member State companies, to boost investor confidence.

The European Commission is preparing a proposal according to which all 7,000 listed EU companies would have to report their financial results publicly every three months. This system would be simliar to the the quarterly earnings reports that are standard in the US, although the information required of European companies would not have to be as detailed.

The Commissions plans are based on the DG Internal Market's Financial Services Action Plan, which was outlined in 2000 as a consequence of decisions taken at the March 2000 Lisbon Summit. In this communication the Commission proposed that all EU listed companies adhere to a common accounting system beginning in 2005. The Commission also forsees the same starting date for the new proposals on quarterly reports. It hopes to achieve greater transparency of EU company accounts and boost investor confidence through this new proposal. The companies will have to quote at least turnover, profit, and losses, though detailing future prospects -as is standard in the US - will not be a necessity. Commission officials hope to have tabled the new proposal in the coming weeks.



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