Upload
britney-francis
View
214
Download
2
Embed Size (px)
Citation preview
WORLD BANK conference - 8 November 2005WORLD BANK conference - 8 November 2005Advanced Program in Accounting and Advanced Program in Accounting and
Auditing RegulationAuditing Regulation
CESRCESRAn IntroductionAn Introduction
Michel ColinetMichel ColinetDirector for Financial Information, CESRDirector for Financial Information, CESR
Committee of European Securities Committee of European Securities RegulatorsRegulators
OverviewOverview
What is CESR?What is CESR? Role of CESR and the Lamfalussy Role of CESR and the Lamfalussy
ProcessProcess CESR inter-institutional relationship CESR inter-institutional relationship CESR working methods and organisationCESR working methods and organisation CESR-Fin: organisation, key objectives CESR-Fin: organisation, key objectives
and sub-committeesand sub-committees Concluding remarksConcluding remarks
Committee of European Securities Regulators: 27 members (EU+EEA).
Officially established in June 2001 by European Commission Decision background: Lamfalussy Report presented by a Committee of presented by a Committee of
Wise Men on the Regulation of European Securities MarketsWise Men on the Regulation of European Securities Markets Introduced a 4 level approach to the development of EU Introduced a 4 level approach to the development of EU
securities legislation – now extended to banking and insurancesecurities legislation – now extended to banking and insurance Role for CESR at Level 2 and 3 of Lamfalussy processRole for CESR at Level 2 and 3 of Lamfalussy process
Independent Committee regrouping senior representatives (Chairs and Senior Officer) from national public authorities competent in the field of securities regulation
Operational arrangements of CESR set out in a Charter. Exchange of confidential information among Members under signed MOU.
What is CESR?What is CESR?
Role of CESR and the Lamfalussy Role of CESR and the Lamfalussy Process (1)Process (1)
EU Directives and Regulations
LEV
EL
1
LEV
EL
1
Implementing Measures
LEV
EL
2
LEV
EL
2
EnforcementLEV
EL
4
LEV
EL
4
LEV
EL 3
LEV
EL 3
Increasing Supervisory ConvergenceGuidelines and Standards
THE FOUR LEVEL THE FOUR LEVEL PROCESSPROCESS
Role of CESR and the Lamfalussy Role of CESR and the Lamfalussy Process (2)Process (2)
LEVEL 1 = general measures ; high level objectives ( = Directives)
LEVEL 2 = sets out technical requirements necessary to achieve objectives of Level 1 (Directives or Regulations)
LEVEL 3= measures intended to foster consistent and uniform implementation (developed by CESR for use by its members )
LEVEL 4 = European Commission (EC) checks Member States compliance with EU legislation and may take action against Member States in case of breach of Community Law. CESR may contribute at level 4 by supplying information to the EC
Role of CESR and the Lamfalussy Role of CESR and the Lamfalussy Process (3)Process (3)
LEVEL 2LEVEL 2
Commission Mandate to CESR
CESR‘s Final Advice sent to EU Commission
Proposal for Implementing Measures presented to ESC
Vote by ESC within 3 months
Adoption of Implementing Measures by EU Commission
Preparation of Level 2 advices to the European Commission represented the largest part of CESR's activities until June 2004
Areas covered by CESR at Level 2: Prospectus and Transparency Directives, MiFid, Investment Management
Examples of CESR’s advices for Level 2 implementing measures in the area of financial reporting Prospectus regulation (historical and prospective financial Prospectus regulation (historical and prospective financial
information, pro forma information, auditor’s involvement, information, pro forma information, auditor’s involvement, MD&A…)MD&A…)
Technical measures for ongoing financial reporting by listed Technical measures for ongoing financial reporting by listed companies (Transparency Directive)companies (Transparency Directive)
Assessment of Equivalence between Canadian, Japanese and Assessment of Equivalence between Canadian, Japanese and US GAAP and IFRS.US GAAP and IFRS.
Role of CESR and the Role of CESR and the Lamfalussy Process (4)Lamfalussy Process (4)
Level 2Level 2
Foster consistent and uniform transposition and day to day implementation of Level 1 & 2 legislation
Active role for CESR at Level 3 Convergence in supervision practiceConvergence in supervision practice Administrative guidelines, interpretations, recommendations, Administrative guidelines, interpretations, recommendations,
common standards, peer reviews and comparison of regulatory common standards, peer reviews and comparison of regulatory practicespractices
Examples in the area of financial reporting: CESR Recommendations on Transition to IFRS: enhanced disclosures and explanations on impact Transition to IFRS: enhanced disclosures and explanations on impact
of the transition from old GAAP to IFRSof the transition from old GAAP to IFRS Presentation and audit of historical financial information in Presentation and audit of historical financial information in
prospectus (IPO and SPO)prospectus (IPO and SPO) Alternative Performance Measures : presentation of non GAAP Alternative Performance Measures : presentation of non GAAP
performance indicatorsperformance indicators Standards on Enforcement of Financial InformationStandards on Enforcement of Financial Information
Significant shift towards greater emphasis on Level 3 work which has gained pace over 2004 and will continue to be the focus
Role of CESR and the Role of CESR and the Lamfalussy Process (5)Lamfalussy Process (5)
Level 3Level 3
CESR‘s Inter-Institutional CESR‘s Inter-Institutional RelationshipsRelationships
CESR‘s working methods (1)CESR‘s working methods (1)
CESR Chair and Vice-Chair elected for a period
of two years. The Committee of Chairs (of national authorities) meets at least four times a year.
Each Expert Group is Chaired by the Head of a CESR member (Chair or Commissioner) and experts from all the members participate
CESR works with the support of a Secretariat A representative of the European
Commission participates as observer in all debates (except in discussions related to individual and/or firms).
CESR‘s working methods (2)CESR‘s working methods (2)
CESR issues an Annual and Half-Yearly
Report (submitted to the European Commission and presented to the European Parliament and the Council) which provides extensive information on CESR
CESR reports regularly to the European Parliament and maintains strong links with the European Securities Committee
CESR’s offices located in Paris (Avenue de Friedland 11-13, 75008 Paris.
Website: www.cesr-eu.org.
CESR‘s working methods (3)CESR‘s working methods (3)
CESR Public Statement on Consultation PracticesCESR Public Statement on Consultation Practices High level Market Participants Consultative PanelHigh level Market Participants Consultative Panel Consultation procedure includes (mainly for Level 2 Consultation procedure includes (mainly for Level 2
work):work): Call for evidence at reception of a new mandate from the ECCall for evidence at reception of a new mandate from the EC Consultative Working Groups (market experts) set up to Consultative Working Groups (market experts) set up to
advise the CESR Expert Groupsadvise the CESR Expert Groups Public consultations on draft papers (sometimes re-Public consultations on draft papers (sometimes re-
consulting if necessary). consulting if necessary). Public hearings for interested parties to voice their concerns Public hearings for interested parties to voice their concerns
and to make suggestions (held in Paris)and to make suggestions (held in Paris) Responses to consultations are published on the CESR Responses to consultations are published on the CESR
websitewebsite The final advice is issued with a feedback statementThe final advice is issued with a feedback statement
Transparency is an integral part of CESR‘s working Transparency is an integral part of CESR‘s working practicespractices
CESR organisation (post June CESR organisation (post June 2004)2004)
CESR ChairsPlenary meeting 4 x year
Market Participants Consultative Panel
Expert Groups
Level 3Investment ManagementClearing and SettlementProspectusReview Panel
Permanent Operational Groups
Level 2MiFID•Intermediaries•Cooperation and Enforcement•MarketsTransparencyInvestment Management
Mediation Task Force
CESR-Pol
CESR-FinLevel
3
CESR-Fin -CESR-Fin - OrganisationOrganisation
CESR-Fin
SCE
EECS
ATFSISE
ARC
SAC
EFRAG
IFRS: Monitor pro-actively the development and EU
adoption (endorsement) of international accounting standards (IAS/IFRS)
Level 2 and 3 regulatory work
Enforcement of compliance with IFRS: foster a proper and consistent application of IAS/IFRS by EU listed companies, through coordination of national supervision activities and exchange of information
Audit: Monitor developments in Europe in the field of auditing.
CESR Fin Key objectivesCESR Fin Key objectives
CESR-Fin subcommitteesCESR-Fin subcommittees(1)(1)
SISE (Subcommittee on Endorsement of International Standards)
Monitors development and UE endorsement of IAS/IFRS (comment letters…)
Permanent Observer to Accounting Regulatory Committee (ARC), European Financial Reporting Advisory Group (EFRAG) and IASB Standards Advisory Committee (SAC)
Level 2: advice to the EC on Equivalence of Canadian, Japanese and US GAAP with IFRS (June 2004)
Level 3:– Recommendation on Transition to IFRS (Dec 2003)– Recommendation on Alternative Performance Measures
(May – Oct 2005)
CESR-Fin subcommitteesCESR-Fin subcommittees(2)(2)
ATF (Audit Task Force)
Monitoring of EU regulatory developments – focus on Monitoring of EU regulatory developments – focus on audit of publicly accountable companiesaudit of publicly accountable companies
8th Directive on Company Law + EU endorsement 8th Directive on Company Law + EU endorsement of auditing standardsof auditing standards
Oversight of audit profession & Consideration of Oversight of audit profession & Consideration of independence requirementsindependence requirements
CESR-Fin subcommitteesCESR-Fin subcommittees(3)(3)
Enforcement of IFRS (will be further developed by M. Østergaard and M. Suurväli)
-> SCE (Sub-Committee on Enforcement)
Develops standards and guidance for harmonizing enforcement methodology in the EU
-> EECS (European Enforcers Coordination Sessions)
Forum of EU National Enforcers: discussion of Forum of EU National Enforcers: discussion of enforcement decisions and practical issues in enforcement decisions and practical issues in relation to financial reporting under IFRS relation to financial reporting under IFRS
Database of national enforcement decisionsDatabase of national enforcement decisions
Markets are beginning to integrate at differing speeds, and this looks set to be encouraged further by the FSAP;
CESR has had, and continues to have, a very ambitious workload. The emphasis of CESR work is shifting significantly from providing Level 2 advice, to an increasing emphasis on supervisory convergence i.e. Level 3;
CESR is actively working on developing all the tools available in the new legislative framework to deliver Level 3 convergence;
IFRS: continuation of monitoring work on new or revised standards/interpretations and importance to deepen coordination of enforcement for fostering consistent application of standards thoughout the EU
Concluding remarksConcluding remarks