Review of Accounting Directives – XBRL

perspective

Piotr Madziar – European Commission15 September 2009, Brussels - FESE

Topics• XBRL – areas of potential application• Regulate future financial markets• Simplify - Get economy restart by business

friendly environment• Disclose - Restore confidence in markets and

institutions• Automate - Make the knowledge society work• Conclusions• Next steps?

Europe – are we ready?

European InstitutionsL3C

Industry

MS

professionsIT

Financial

Real economy

ITFinancial

EU Internal Market

Int’l

Regulatory

Standard setting

IOSCO

Basel

IASB

IFAC

Third countries

FSFWB

IMF

XBRL driving forces

XBRLSimplification Crisis

Stoiberg De Larosiere

G20EU Council EP

COM

MS

MeasuresRegulate Simplify AutomateDisclose

SME

Citizens, Unions

Young&Smart

Now: L3 legislation

HLG Stoiber Opinions Studies

Accounting Review

Transparency Direcitve

FP7/Cordis Grants

Technical Standards

Interoperability

CESR TG

Commission Communication

In Future: New L3: Authorities, Budgets,Tech standards

IFRS for SME?

?

Request by: Treasuries

Taxpayers

To:

SBR - EU taxonomy?

Christopher Cox and Charlie McCreevy

Statement of 1 February 2008:• Wide-ranging discussion on XBRL developments• Cooperative approach to reducing regulatory friction• Enhancing investor protection• XBRL will let investors take full advantage of IFRS (in the

speech)

European Parliament

Resolution on Lamfalussy follow-up: future structure of supervision (September 2008)

• Calls upon the L3 Committees to design common reporting standards

• Multi-purpose format such as XBRL• Throughout the EU• Calls upon the Commission to submit adequate legislative

proposals

XBRL for IFRS

Commission works with: • IASCF XAC• XBRL EU• FEE XBRL WG

De Larosiere Reform

• Financial crisis driven• Position of national regulators?• Global aspect• Commission absolute priority

De Larosiere proposal• Commission’s proposal in late September 2009• ESRC and ESFS = ECB + ESAs + national regulators+…• Banking: FCD, CRD, DGSD, fund transfer reg,…?• Insurance: FCD, IORP Dir, Insurance and Reinsurance

Directives, Solvency II, Anti Money Laundering Dir (AMLD),…?• Securities & Markets: TD, MiFID, MAD, PD, UCITS, CRA Reg.,

Take-over Bids Dir, Settlement Finality Dir (SFD), Financial Collateral Arrangements Dir….?

• Technical standards,…? XBRL?• Links to international standard setters,…? XBRL?• Financial assistance 50 M€

Commissioner’s agenda

Addressed in 7 September 2009 speech:• [Course out of the current crisis] will also require

effective and responsible reform of financial markets. Speed is of essence: we cannot afford to emerge from the crisis without a financial system that is more ethical, robust and responsible

• …my vision for Europe in 2020 (…) shows real leadership on the global stage, with our partners in the G8 and G20, especially with the US

Simplification and reduction of administrative burden

• Citizen well-being and SME driven • EU initiative• Open formula (all ideas welcomed)• High priority for Barroso 1 Commission (and next

Commission?)

European ParliamentResolutions on simplified business

environment (January 2008, May 2008)• It should be easier to prepare, file and publish statutory

information• Electronically• Strongly promotes the use of new technology such as XBRL• Such information easily accessible for investors, creditors and

employees• Throughout the EU• Invites the Commission to present a roadmap for introducing

XBRL in the EU

Simplification initiatives• Stoiber HLG Opinion on annual accounts (XBRL,

pull model) of 10/07/2008• Study identifying simplification areas• Report on Simplification in Accounting• Study on prudential reporting• Commission at XBRL Int’l Conference –

24/06/2008• Review of Accounting Directives 2009• Business Registers

Accounting Review - XBRL• 3/50 against• 10 (11) MS use it• 17 MS have active projects• €200-€500 costs (€7 for SME) in Germany, less

than €0 in Belgium (savings of €22m)• OK for one-stop-shop• BUT: implementation gradual• Option for companies

Other• XBRL taxonomy for IFRS for SME, by IASCF• X-DIS (XML for Data Interoperability in Statistics)

is the statistical project in the IDABC programme• BRITE

Corporate disclosure

Corporate governance in financial industries• Driven by transatlantic relations• Remuneration, bonus-malus• Position of business organisations, regulators?• Global aspect (G20), but MS strong interest

(GE, FR,…)

Transparency Directive (2004/109/EC):

Recitals (23) and (25):• One filing and storage system in each MS• Access to information more organized• Dissemination throughout the Community• Centralised dissemination in MS allowing a European network to be built upArticle 22:• MS to draw up public access guidelines• Aiming at creation of electronic networks at national level between regulators,

operators, regulated markets and company registers• Aiming at creation of a single electronic network (or platform of networks)

across MS

CESRAdvice on storage and filing of regulated information

(30 June 2006):Questions:• Whether use of input standards (XBRL or similar) is desirable• Type of technology used in the interface with end usersAnswers:• MS to designate Officially Appointed Authorities (OAMs)• Quality standards to be compiled by OAMs • OAMs must be accessible through internet, receive electronic filings, store in

electronic format• Electronic means must be: easily accessible, commonly used, widely available • Interoperability agreements between MS and between OAMs

New CESR advise by 2010

CommissionRecommendation (11 October 2007):MS to mandate the competent authorities to prepare (within CESR) a governance

agreementIt should address:• Creation of a network platform• Conditions to join• Sanctions• Network platform managing body• FundingFunctionalities of the electronic network:• Central list of issuers• Interface language directory• Security, certainty, time recording, accessibility, searchable

Council Conclusions of 22 and 23 November 2007

• Europe must remain in the forefront• IT offers new set of tech instruments and business reporting languages• European Community and MS to improve competitiveness• Need to streamline reporting concerning the same type of data• Optimise the use of electronic means• Take into account the possibilities offered by the available technical

standards

E-government initiatives

• Technology and competitiveness driven

• Completion of (New?) Lisbon Agenda• EU and global dimension

Thank you!

Contacts

• DG Internal Market & Services website:http://ec.europa.eu/dgs/internal_market/index_en.htm

• Piotr Madziar+32-(0)2-2950869piotr.madziar@ec.europa.eu