The Authority’s financial statement review remit derives from Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (the EU Transparency Directive), as transposed into Irish Law.
What is the EU Transparency Directive?
The EU Transparency Directive was introduced to harmonise information requirements applying to entities whose securities have been admitted to trading on a regulated market situated, or operating, within the EU (‘issuers’). Accordingly, the EU Transparency Directive applies to issuers of shares, debt securities, derivative securities and closed-ended investment funds admitted to listing and trading on the regulated market of the Irish Stock Exchange. The EU Transparency Directive sets out a number of transparency requirements regardingthe disclosure of periodic and ongoing information, including issuers’ obligations relating to publication, content and timing of issuers’ financial reports.
The EU Transparency Directive has been implemented in Ireland through a combination of:
- primary legislation (sections 1379 to 1384 of the Companies Act 2014); and
- secondary legislation (Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. 277 /2007) as amended by:
What is IAASA’s role under the EU Transparency Directive?
Recital No. 28 of the EU Transparency Directive states that:
‘A single competent authority should be designated in each Member State to assume final responsibility for supervising compliance with the provisions adopted pursuant to this Directive…Member States may, however, designate another competent authority for examining that information referred to in this Directive is drawn up in accordance with the relevant reporting framework and taking appropriate measures in case of discovered infringements;’.
While the Central Bank of Ireland is the central administrative authority for the purposes of the EU Transparency Directive, IAASA has been designated a separate competent authority for the purposes of the financial reporting monitoring and enforcement role described above (i.e. Article 24(4)(h) of the EU Transparency Directive). IAASA, through its Financial Reporting Supervision Unit, is responsible for examining affected issuers’ compliance with the financial reporting framework requirements set out in the EU Transparency Directive as transposed into Irish law and for taking appropriate action where non-compliance is identified.
What is the ‘relevant reporting framework’?
The ‘relevant reporting framework’ has been defined by ESMA as:
‘IFRS and financial reporting frameworks deemed equivalent with IFRS based on the EC Regulation 1569/2007 as well as national generally accepted accounting principles (national GAAPs) used in the EEA. This also includes requirements for management reports resulting from the Directive on the annual financial statements’.