The London Stock Exchange has responded to CESR’s second consultation on proposed implementing measures of the Transparency Directive. We believe these implementing measures are an important aspect of the creation of a single market.
Our response highlights a key concern regarding equivalence of third countries information requirements. We agree with CESR’s outlined methodology (i.e. equivalence should be assessed in the same manner in the context of both GAAP and other requirements; "equivalence" does not mean "identical to"; and the important factor is the ability of informed investors to make a similar decision or reach a similar conclusion in terms of investment and disinvestment).
However, we are extremely concerned that this methodology is not followed through in the resulting discussion and advice on the pages that follow. The Commission has asked CESR to produce advice on the principles to consider; however the advice sets out requirements. We believe that, overall, CESR needs to take a much more flexible approach to determining third country issuers’ equivalence – it should be enough that third countries have broadly similar requirements.
The original consultation paper can be found at: www.cesr-eu.org