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To transparency

VIEWS: 6 PAGES: 6

									To:       All Listing Agents

From: Daryl Byrne/Gerard Scully

Date: 18 June 2007

Re:   Transparency Directive Implementation
____________________________________________________________________

Introduction

Please be advised that the Transparency Directive (2004/109/EC) was implemented into
Irish law on 13 June 2007 and has effect from this date. The purpose of this memo is to
provide information on:

    1. the new transparency regime, including administrative changes;

    2. the effective date for financial information requirements; and

    3. the impact on the current listing rules for debt and derivative securities.

For the avoidance of doubt, the new transparency regime does not apply to issuers of
securities listed on the Alternative Securities Market of the Exchange (for whom the
Listing Rules of the Exchange continue to apply).

The new transparency regime

Under the new transparency regime, the following legislation and rules apply to listed
issuers:

    1. Part 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006;

    2. Transparency (Directive 2004/109/EC) Regulations 2007 (the ‘Regulations’); and

    3. Interim Transparency Rules of the Financial Regulator (the ‘Transparency Rules’)1.


1
    It should be noted that, in relation to several Regulations, the Transparency Rules contain more stringent
    requirements than those in the Regulations and apply to issuers where Ireland is the ‘home Member
    State’ (as defined in Regulation 2).
Please find enclosed copies of the Regulations and Transparency Rules.

An overview of the implications of the new transparency regime on current continuing
obligation requirements is set out in Appendix 1.

Administrative changes

The Financial Regulator is the competent authority in Ireland responsible for carrying out
the obligations provided for in the Regulations, other than the enforcement of accounting
standards (please see paragraph below), and for ensuring that the provisions adopted
pursuant to the Regulations are applied. The Financial Regulator has chosen to delegate
certain tasks to the Irish Stock Exchange, including the monitoring of listed companies
for compliance with their obligations under the Regulations and the Transparency Rules.

The Irish Auditing and Accounting Supervisory Authority (‘IAASA’) is the competent
authority in Ireland for the enforcement of accounting standards and has the power to
examine that periodic financial information referred to in the Regulations is drawn up in
accordance with the relevant reporting framework and take appropriate measures in cases
of discovered infringements. The Exchange has successfully lobbied the Department of
Enterprise, Trade and Employment to ensure that, for the time being, IAASA will not
levy listed companies to fund its review function.

Breaches of the Regulations will be subject to the sanctioning regime of the Financial
Regulator or IAASA, as appropriate. Breaches of the Transparency Rules will be subject
to the sanctioning regime of the Financial Regulator.

It should be noted that failure to submit annual financial reports and half-yearly
financial reports within the timeframes permitted under the Regulations 4(2) and
6(2)(b), respectively, will result in a suspension of listing of securities pending
publication of the relevant report. There is no flexibility in the Regulations or
Transparency Rules for granting extensions to the publication deadlines.

Effective date for financial information requirements2

Under the transitional provisions in Regulation 79, listed companies are required to
comply with the financial reporting requirements in Regulations 4 to 9 as follows:

1. a company whose financial year starts before 20 January 2007 must comply with
   Regulations 4 to 9 on and from the beginning of its next financial year; and

2. a company whose financial year starts on or after 20 January 2007 must comply
   with Regulations 4 to 9 on and from 13 June 2007.
2
    The financial information requirements in the Regulations do not apply to an issuer exclusively of debt securities
    with a minimum denomination of at least €50,000, admitted to trading on the regulated market of the Exchange.
    Such issuers must comply with the financial information requirements set out in Chapter 7 of the various Guideline
    booklets.
The table in Appendix 2 illustrates the application of the periodic reporting requirements
of the Regulations to issuers whose financial year begins before and after 20 January
2007.

Issuers must continue to comply with the current financial information requirements in
the relevant Guideline booklets until such time as they are required to comply with the
requirements of the Regulations.

Issuers should be aware that Regulation 10 sets out exemptions for certain types of
issuers, including issuers of debt securities, and Regulation 79 includes a number of
transitional provisions which apply to issuers of debt securities.

Impact on the current Guidelines

Many of the requirements in the Regulations cover areas where the Exchange already has
listing rules, as set out in the various Guideline booklets. The Exchange intends to
shortly publish revised Guidelines, updated principally to reflect:

1. the relevant requirements under the Regulations and Transparency Rules; and

2. the final Prospectus Rules of the Financial Regulator.

Conclusion

Listed issuers are strongly encouraged to examine the requirements of the Regulations
and Transparency Rules in detail in order to ensure compliance with the new regime. We
would also encourage listing agents to consult their clients at an early stage in relation to
the new requirements.

For further information, please contact Gerard Scully or Daryl Byrne on 617 4229.
                                                    Appendix 1

      Impact of the new Transparency Regime on Current Continuing Obligations

Please note that Appendix 1 identifies some of the implications of the Regulations and,
where applicable, the related Transparency Rules and does not purport in any way to
be a comprehensive explanation of all material implications of the Regulations and/or
Transparency Rules.

1. Disclosure of Periodic Financial Information (Regulations 4 to 8) – Retail debt3
   only

      The following key changes for listed issuers of retail debt arise under Regulations 4 to
      8 which relate to the publication of periodic financial information:

      (a) Shorter reporting deadlines (Regulations 4(2) and 6(2)(b))

           Issuers are required to publish annual financial reports at the latest four months
           after the year end (deadlines under the Listing Rules currently aligned with the
           requirements in an issuer’s national legislation).

           Issuers are required to publish half-yearly financial reports at the latest two
           months after the period end.

      (b) Availability of annual and half-yearly reports (Regulations 4(2) and 6(2)(c))

           There is a new requirement for issuers to ensure that annual financial reports and
           half-yearly financial reports remain publicly available for at least five years.

      (c) Responsibility statements (Regulations 4(3)(c) and 6(3)(c))

           There is a new requirement for issuers to include a responsibility statement in
           their annual and half-yearly reports. Regulation 8(5)(d) clarifies that the ‘true and
           fair’ view to be expressed in the responsibility statements for half-yearly reports is
           satisfied by including a statement that the condensed set out financial statements
           have been prepared in accordance with:

           (i)    the international accounting standard applicable to interim financial
                  reporting adopted pursuant to the IAS Regulation; or

           (ii)   for Irish companies not using IFRS, pronouncements on half-yearly reports
                  issued by the Accounting Standards Board; or



3
    ‘retail debt’ – debt with a minimum denomination of less than €50,000.
      (iii) for all other companies not using IFRS, a national accounting standard
            relating to interim reporting.

   (d) Civil liability regime (Regulation 12)

      Regulation 12 introduces a civil liability regime in relation to false or misleading
      statements in, or omissions of information from, financial information reports and
      statements required under Regulations 4 to 8 and 26.

2. Dissemination of Regulated Information

   Under Section 5 of the Transparency Rules, there is no change to the current practice
   by which a listed company discloses information to the market, i.e. direct disclosure
   to a Regulatory Information Service or disclosure via the Company Announcements
   Office of the Exchange. Disclosing regulation information in this manner also
   satisfies the obligation in Regulation 31 to file information with the Financial
   Regulator.
                                                            Appendix 2

                                                    Impact of the Regulations


TD compliant periodic   Accounting period         Accounting period      Accounting period       Accounting period      Accounting period
report / publication    starting 1 January 2007   starting 1 March       starting 1 April 2007   starting 1 July 2007   starting 1 October
deadlines                                         2007                                                                  2007

Half-yearly report      31 August 2008            31 October 2007        30 November 2007        28 February 2008       31 May 2008

Annual report           30 April 2009             30 June 2008           31 July 2008            31 October 2008        31 January 2009

								
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