The London Stock Exchange has responded to CESR’s draft advice on the equivalence of certain third country GAAP. While we congratulate CESR on completing such a difficult technical analysis, we do have some concerns about the advice. In particular, although CESR rejects the requirement of full reconciliation, we are concerned that the approach it advocates would inadvertently require full reconciliation which would deter issuers from seeking admission to EU regulated markets.
In addition, we suggest that the Commission should consider this matter very carefully, not just in relation to the technical accuracy of the advice, but also within the context of the important wider economic and market concerns. We suggest that the Commission should consider granting equivalent status to the third country GAAP for an interim period of say five years, to be followed by further review once the Financial Services Action Plan legislation is in place and fully operational.
The original consultation paper can be found at: www.cesr-eu.org