secretariat-general · x- financial stability, financial services and capital market union...

EUROPEAN COMMISSION Secretariat-General

REFIT Platform

STAKEHOLDER SUGGESTIONS

X- FINANCIAL STABILITY, FINANCIAL SERVICES AND CAPITAL MARKET

UNION

DISCLAIMER

This document contains suggestions from stakeholders (for example citizens, NGOs,

companies) or Member State authorities communicated to the Commission and submitted

to the REFIT Platform in a particular policy area.

It is provided by the secretariat to the REFIT Platform members to support their

deliberations on the relevant submissions by stakeholders and/or Member States

authorities.

The Commission services have complemented relevant quotes from each suggestion with

a short factual explanation of the state of play of any recent, relevant ongoing or planned

work of relevance by the EU institutions.

The document does not contain any official positions of the European Commission

unless expressly cited.

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Table of Contents

FINANCIAL CONGLOMERATES DIRECTIVE (FICOD) - SUPERVISION OF

FINANCIAL CONGLOMERATES ........................................................................... 5

Submission X.1.a by the German Insurance Association (GDV)

(ADOPTED) ...................................................................................................... 5

Policy Context ............................................................................................................. 5

Platform Opinion ......................................................................................................... 5

EUROPEAN RULES ON STORING COMPANY RECORDS ABROAD ....................... 6

Submission X.2.a by the Danish Business Forum (DBF) ........................................... 6

Policy Context ............................................................................................................. 6

EUROPEAN MARKET INFRASTRUCTURE REGULATION (EMIR) ......................... 7

Conflicts with Undertakings for the collective investment in transferable

securities Directive (UCITS Directive) ............................................................. 7

Submission X.3.a by the Federation of Finnish Financial Services

(FFI) ..................................................................................................... 7

Policy Context ................................................................................................... 7

CONFLICTS WITH SOLVENCY II .................................................................................. 9

Submission X.4.a by the German Insurance Association (GDV) ..................... 9

Policy Context ................................................................................................... 9

REPORTS FOR OTC DERIVATIVE TRADING ........................................................... 10

Submission X.5.a by the German Chambers of Commerce and

Industry (DIHK) ................................................................................ 10

Policy Context ................................................................................................. 10

SOLVENCY II .................................................................................................................. 12

Submission X.6.a by the German Insurance Association (GDV) ............................. 12

Policy Context ........................................................................................................... 12

ISSUES RELATED TO LEVEL 2 LEGISLATION AND EUROPEAN

SUPERVISORY AUTHORITIES ............................................................................ 13


Policy Context ........................................................................................................... 14

REGULATION ON KEY INFORMATION DOCUMENTS FOR PACKAGED

RETAIL AND INSURANCE-BASED INVESTMENT PRODUCTS

(PRIIPS) .................................................................................................................... 16

Coherence of information and investor protection rules in the PRIIPs

regulation, the IDD (former IMD2) and Solvency II ...................................... 16

Submission X.8.a by the Federation of Finnish Financial Services

(FFI) ................................................................................................... 16

Policy Context ................................................................................................. 16

Overlapping information requirements ..................................................................... 18

Submission X.8.b by the German Insurance Association (GDV) ................... 18

Policy Context ................................................................................................. 18

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DISCLOSURE OBLIGATION FOR INSURANCE COMPANIES ................................ 19


Policy Context ........................................................................................................... 19

REGULATION ON REPORTING AND TRANSPARENCY OF SECURITIES

FINANCING TRANSACTIONS (SFT REGULATION) ........................................ 20

Submission X.10.a by the German Insurance Association (GDV) ........................... 20

Policy Context ........................................................................................................... 20

DIRECTIVE 2014/95/EU ON DISCLOSURE OF NON-FINANCIAL AND

DIVERSITY INFORMATION BY CERTAIN LARGE COMPANIES AND

GROUPS ................................................................................................................... 21

Disclosure requirements ............................................................................................ 21

Submission X.11.a by the German Chambers of Commerce and

Industry (DIHK) ................................................................................ 21

Policy Context ................................................................................................. 21

Guidelines under development .................................................................................. 23

Submission X.11.b by the German Insurance Association (GDV) ................. 23

Policy Context ................................................................................................. 23

REGULATION OF LISTED COMPANIES .................................................................... 24

Submission X.12.a by the Finnish Chamber of Commerce ...................................... 24

Policy Context ........................................................................................................... 24

Submission X.12.b by the Finnish Chamber of Commerce "Harmonized

thresholds for different Directives" ................................................................. 29

Policy Context ........................................................................................................... 29

FINANCIAL REPORTING .............................................................................................. 32

Submission X.13.a –Member of the REFIT Platform Stakeholder (Mr

Naslin) Group (ADOPTED) ............................................................................ 32

Policy Context ........................................................................................................... 32

Platform Opinion ....................................................................................................... 32

CREDIT AGREEMENTS FOR CONSUMERS RELATING TO RESIDENTIAL

IMMOVABLE PROPERTY (2014/17/EU) .............................................................. 33

Submission X.14.a Submission by a citizen (LTL 663) ............................................ 33

Submission X.14.b by the Finnish Government Stakeholder Survey on EU

legislation ........................................................................................................ 33

Policy Context ........................................................................................................... 33

FINANCIAL BENCHMARKS ......................................................................................... 35

Submission X.15.a by the Finnish Government Stakeholder Survey on EU

legislation ........................................................................................................ 35

Policy Context ........................................................................................................... 35

TRANSNATIONAL PENSIONS ..................................................................................... 36

Submission X.16.a by the House of Dutch provinces for Better Regulation ............ 36

Policy Context ........................................................................................................... 37

MARKET ABUSE (596/2014) ......................................................................................... 39

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Submission X.17.a by the Finnish Government Stakeholder survey on EU

legislation ........................................................................................................ 39

Policy Context ........................................................................................................... 39

ANNUAL FINANCIAL STATEMENTS, CONSOLIDATED FINANCIAL

STATEMENTS AND RELATED REPORTS OF CERTAIN TYPES OF

UNDERTAKINGS .................................................................................................... 40

Submission X.18.a by business on (LtL 726) ........................................................... 40

Policy context ............................................................................................................ 40

'PRIVATE LIMITED COMPANY SIMPLIFICATION AND

FLEXIBILISATION ACT'........................................................................................ 42

Submission X.19.a by company (LTL 739) .............................................................. 42

Policy context ............................................................................................................ 43

FINANCIAL CONGLOMERATES DIRECTIVE (FICOD) - SUPERVISION OF FINANCIAL

CONGLOMERATES

Submission X.1.a by the German Insurance Association (GDV) (ADOPTED)

With Solvency II and CRD IV/CRR, the supervisory regimes for insurers and banks have

been fundamentally revised. The far-reaching requirements raise the question of the

necessity of any additional supervision for financial conglomerates in Europe. Through

the new sectoral supervisory system, cross-sector risks are already comprehensively

covered. The additional regulation of the Financial Conglomerates Directive (FICOD)

therefore leads to unnecessary and burdensome overlap in supervisory procedures. No

added value for supervision and undertakings can be recognized here.

Notwithstanding the revision of FICOD in 2011, the European Commission should

promptly review the Directive. Thereby the subordinate regulation must be examined. It

is decisive that the altered framework conditions be considered.

Policy Context

The Financial Conglomerates Directive (FICOD) was adopted in 2002 to address cross-

sectoral group risks arising in groups active in both the insurance and banking sector. The

first revision of FICOD was adopted in 2011 as a quick fix Directive (FICOD1) to

address immediate problems discovered during the crisis. FICOD1 also contained a

provision for the Commission to deliver a report on the effectiveness of FICOD by

December 2012, followed by a legislative proposal if necessary. The Report was

published in 2012 and recommended a number of areas for review. However a legislative

proposal was put on hold pending the conclusion of the sectoral legislation on which

FICOD builds. Given that the sectoral legislation (CRDIV/CRR and Solvency II) has

now stabilised, it is appropriate to consider the impact of these changes on the relevancy

of FICOD and to assess whether concerns from the 2012 Report remain in spite of the

sectoral legislation amendments.

Platform Opinion

Adopted on 27 June 2016

EUROPEAN RULES ON STORING COMPANY RECORDS ABROAD

Submission X.2.a by the Danish Business Forum (DBF)

Challenge

Rules on storing company records abroad vary across the EU, and there is no European-

wide regulation in this area (apart from the VAT System Directive). This implies that a

company from country A that wishes to set up a business in country В cannot

automatically handle all accounting from country A and use their preferred accounting

system.

Suggestion

Common EU-rules regarding storage of accounting records in another EU country

should be introduced. This will allow businesses to make full use of internet-based

accounting. The final report from "EU Multi Stakeholder Forum on е-Invoicing" could

serve as inspiration. It concludes that the lack of access to storing accounting records in

other countries is a hindrance for the use of electronic accounting.

Policy Context

The EU determines to a great extent the rules on information prepared and disclosed by

EU companies, including the reporting framework for financial statements and non-

financial information. The main legislative sources are the Accounting Directive

(2013/34/EU) for all limited liability companies, and the International Financial

Reporting Standards adopted by the EU by means of regulations directly applicable to

listed companies. These EU companies are required to publish their financial statements

as laid down by the laws of each Member State in accordance with Chapter 2 of Directive

2009/101/EC (i.e. file them with the relevant national business register). The EU does not

however provide for any rules regarding e.g. the accounting software to be used by

companies.

Regarding the storage, for each company, a file shall be opened in a national register in

which those documents and particulars are kept. Member States shall ensure that the

filing of those documents and particulars which must be disclosed is possible by

electronic means. A copy of the whole or any part of those documents or particulars must

be obtainable on application. On this basis, the "BRIS" Directive (2012/17/EU) provides

for a system of interconnection of registers which consists of the aforementioned registers

of the Member States. A central European platform as well as the European e-Justice

portal serving as European access point is planned to be operational by mid-2017. This

interconnection will ensure that all EU business registers will be able to communicate to

each other in a secure and safe way, and will also facilitate the access to information in

the register for the public. Via the e-Justice portal citizens and businesses will be able to

search for information on the limited liability companies registered in Member States,

including information in accounting documents. The website of the e-Justice portal

provides further information: https://e-justice.europa.eu/content_business_registers-104-

en.do

As regards listed companies, the Transparency Directive (2004/109/EC) states that the

European Securities and Markets Authority (ESMA) should set technical requirements

regarding the access to regulated information at Union level and that, with effect from 1

January 2020, all annual financial reports of issuers shall be prepared in a single

electronic reporting format.

https://e-justice.europa.eu/content_business_registers-104-en.do

https://e-justice.europa.eu/content_business_registers-104-en.do

EUROPEAN MARKET INFRASTRUCTURE REGULATION (EMIR)

Conflicts with Undertakings for the collective investment in transferable securities

Directive (UCITS Directive)

Submission X.3.a by the Federation of Finnish Financial Services (FFI)

The European Markets Infrastructure Regulation EMIR was introduced after the

financial crisis with the intention of increasing stability in derivatives markets. The

regulation strongly recommends that derivatives are cleared through central

counterparties and that the finalised trades are registered in trade repositories. This will

mitigate the risk that other market participants present to the trade participants. At the

same time, however, each trade participant's risks will focus on the central

counterparties they use. This will cause problems to UCITS investment funds, because

diversification of risks is an essential starting point in their regulation. The restrictions

do not take into account the obligation to use CCP clearing set in EMIR. This obligation

makes the use of CCPs compulsory for many typically used derivatives contracts. The

restrictions set in UCITS practically prevent UCITS funds from using central

counterparty clearing in the way it is set in EMIR. They will have to continue using

bilateral clearing, which is not in line with the EMIR objectives. It is also not in the best

interests of shareholders, as bilateral clearing is more expensive and carries more risks

than CCP clearing. After EMIR’s central counterparty obligation enters into force,

UCITS funds will no longer be able to use the derivatives contracts that are in the scope

of the obligation.

CCP risk is not similar to other counterparty risks, and UCITS regulation should

therefore be amended so that otherwise justified diversification requirements do not

apply to counterparty risks that target CCPs.

Policy Context

The European Markets infrastructure Regulation (EMIR) requires the use of central

clearing parties (CCPs) for most over-the-counter (OTC) derivative contracts.

The UCITS Directive contains qualitative and quantitative limits for UCITS engaging in

OTC derivative transactions. More specifically, the risk exposure to a counterparty in an

OTC financial derivative transaction shall not exceed 5% of the assets of a UCITS, or

10% if the counterparty is a credit institution.

Furthermore, UCITS may only invest in OTC derivatives that are subject to a reliable and

verifiable valuation on a daily basis and can be sold, liquidated or closed by an offsetting

transaction at any time at their fair value at the initiative of the UCITS (i.e. the unilateral

termination clause). In practice, management companies included such unilateral

termination clause within the standard ISDA documentation, which governs the fund's

use of OTC derivative transactions.

Pursuant to Article 5(4) of EMIR, the new clearing obligation will be subject (amongst

other things) to a certain level of standardisation of the OTC contract.

Both provisions in the UCITS Directive go back to 2002, when risks in OTC derivatives

were mostly managed bilaterally. At the time, OTC derivatives were far less liquid and

were often not centrally cleared.

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Indeed, regarding the unilateral termination clause as currently included in the ISDA

agreements, it seems likely that most CCPs will not agree to include it within the standard

documentation foreseen by EMIR. In the past this clause acted as a safety net for UCITS

obliging counterparties to provide liquidity to the UCITS when necessary.

CONFLICTS WITH SOLVENCY II


Irrespective of whether insurance derivatives can be considered financial instruments in

the true sense, no contradictions should result through the simultaneous regulation in the

Solvency II Directive and the European Market Infrastructure Regulation (EMIR). In

contrast to the specific insurance provisions from Solvency II, some provisions in EMIR

simply cannot be applied to insurance derivatives (e.g. weather derivatives). For

example, Article 11 (3) EMIR mandatorily prescribes the exchange of collateral.

According to Article 105 (6) Solvency II, however, there is no collateral requirement for

the mentioned derivatives. Collateral to be held by or for the primary insurance company

or reinsurance company and the related risks are to be taken into account in the

calculation of the solvency capital, if collateral is provided. Because the two pieces of

legislation, Solvency II and EMIR, address the risk of the loss of the counterparty, a

contradiction exists here.

Policy Context

The provisions on the exchange of collateral under EMIR aim at mitigating counterparty

risk of the derivative transaction, whereas in the context of Solvency II collateral is

important in relation to capital requirements that are meant to ensure the liquidity of the

insurance undertakings.

Under EMIR, a reporting obligation on derivative transactions is laid down aiming at

increasing transparency so that relevant authorities, according to their mandates, can

access the information they need to assess risk and adopt the necessary measures to

reduce systemic risk. The reporting obligation requires counterparties to derivative

transactions to report to trade repositories the information to be sent to the relevant

authorities.

Moreover, EMIR sets out an obligation to clear certain OTC derivative transactions

through central counterparties (CCPs) (the clearing obligation) in order to increase safety

and mitigate systemic risk. Over-the-counter (OTC) contracts that are not suitable to be

cleared by a CCP also entail risk. In order to mitigate that risk, market participants that

are not subject to the clearing obligation should have risk-management procedures in

place that require (the timely, accurate and appropriately segregated) exchange of

collateral. This obligation to exchange collateral includes all OTC derivatives not subject

to the clearing obligation.

Currently, the Commission is conducting a review of EMIR. Particular consideration is

given to the impact of EMIR on smaller firms. The results of the review are expected

around March 2016.

REPORTS FOR OTC DERIVATIVE TRADING

Submission X.5.a by the German Chambers of Commerce and Industry (DIHK)

The DIHK has repeatedly received complaints from traditional industrial companies (not

only financial companies) implementing EMIR obligations. When SMEs use financial

intermediates to fulfil their reporting obligations, they have to contractually arrange this

delegation and to register and administer their Legal Entity Identifier (LEI).

Even if by now, most companies have implemented their reporting duties, so this

considerable one-time effort is largely behind them, an examination should be carried

out as to whether simplifications can be made to the clearing and reporting obligations.

Possible starting points for this are, for example:

- Raising the limits beyond which companies are subject to a clearing obligation

(currently > 100 derivatives or a nominal value of more than €100 million) or at least an

increase in the limits for the requirement for confirmation by the auditor,

- Possibility of reporting aggregated data.

Finally, it should be noted that an important part of the burden in Germany comes from

the need to have compliance with EMIR duties certified by the auditor, which is an

additional obligation created by the German legislator and not within the responsibility

of the European Commission.

Policy Context

The reporting obligation under EMIR was designed to improve transparency in

derivatives markets and to enable authorities to have a comprehensive view of derivatives

market activity and to monitor risks to the stability of the derivatives markets. It is also

aimed at protecting against market abuse. To achieve these objectives, it was decided that

all derivatives contracts should be reported to trade repositories (and not just the

aggregated positions of market participants). Public authorities can access subsets of this

data depending on their legal mandate, so the data reported must be sufficiently far-

reaching and granular to satisfy all users.

The clearing obligation under EMIR applies only to financial counterparties and to non-

financial counterparties that enter into derivatives contracts above a threshold. Its

objective is to reduce systemic risk in financial markets.

The threshold above which non-financial counterparties are subject to the clearing

obligation has been designed to capture only companies that "make an extensive use of

OTC derivatives". Moreover, derivatives used for hedging purposes do not count for the

clearing threshold, which only captures derivatives concluded for speculative activities.

SMEs are therefore subject to the clearing obligation under EMIR only if their

speculative activity is of a size that could pose a threat to the stability of the financial

system.

DIHK highlights that the EMIR reporting obligation is a "burden for SMEs". However,

EMIR also allows counterparties to delegate the reporting of derivatives contracts into

trade repositories to another entity (which can be the other counterparty to their contract).

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SMEs can take advantage of this possibility, though they cannot delegate their legal

obligation to report. Financial counterparties, service providers and trade repositories are

developing new services in this area.

The requirement to have compliance with EMIR duties certified by an auditor is one

which is imposed by national law; it is not an EMIR requirement.

SOLVENCY II


Attestation of solvency requirements pursuant to the German Insurance Supervision

Act

§ 35(2) of the German Act on the Supervision of Insurance Undertakings provides for an

obligatory affirmation of the solvency requirements by the independent auditor. This

strictly national provision goes beyond the Solvency II requirements. Article 129(4) of the

Solvency II Directive only requires a quarterly calculation and communication of the

minimum capital requirement (MCR) to the supervisory authorities.

Requirements for the qualifications of key functions pursuant to the German

Insurance Supervision Act

§ 24(1), Sentences 3 and 4 of the Insurance Supervision Act require theoretical and

practical knowledge in "insurance transactions" and three years of experience in an

insurance undertaking of comparable size and of a comparable business type as

necessary qualifications. In accordance with Article 273(2) of the draft delegated

legislative acts, in contrast, knowledge in "insurance sector, other financial sectors or

other businesses" is expressly to be taken into account. The foreseen tightening in

national law narrows the group of qualified persons unnecessarily. Even a move from the

banking or securities industry would thus only be possible in rare cases after much effort.

Prohibition on borrowing pursuant to the German Insurance Supervision Act

In § 15(1), Sentence 3 of the Insurance Supervision Act, there is still a prohibition on

borrowing for which there is no basis in the European regulations and which does not

exist in other Member States of the EU. The prohibition on borrowing places the German

insurance industry at a disadvantage.

Policy Context

The comments relate to the German Act on the Supervision of Insurance Undertakings

(Versicherungsaufsichtsgesetz, VAG) which is the main national legislation on the

operation and supervision of insurance undertakings implementing the EU Directives on

the subject (Solvency I and, as from 1 January 2016 Solvency II). It is not clear whether

the issues raised are linked to the German act currently in force (Solvency I), or to the

amended act implementing Solvency II which will enter into force on 1 January 2016. As

part of its regular monitoring of the application of EU law, the Commission is currently

examining the measures national authorities have taken to incorporate the Solvency II

Directive into national law. If the Commission detects a possible infringement, it may

start a formal infringement procedure.

ISSUES RELATED TO LEVEL 2 LEGISLATION AND EUROPEAN SUPERVISORY

AUTHORITIES


General suggestions:

Article 16 of the EIOPA regulation is not enough as an unspecified basis for

issuance of guidelines

In the possible revision of the ESA regulation binding requirements should be

defined for impact assessments by ESAs

Explicit secrecy requirements for stakeholder groups raise questions concerning

accountability and the ability to involve other experts

Specific issues raised:

Divergent definitions at different regulatory levels

In the Technical Advice for delegated acts for the implementation of "IMD 1.5" (Article

91 MiFID2) on the handling of conflicts of interest in the sale of insurance-based

investment products, EIOPA proposes a new definition of "inducements" as opposed to

"remuneration" which conflicts with the definition in the Directive.

POG within the context of IMD 2 In accordance with Article 25 of the future Insurance

Distribution Directive (IDD), in a provision borrowed from Article 16(3) of MiFID 2,

Product Over-sight and Governance arrangements by insurance undertakings (POG) are

to be introduced not just for insurance-based investment products, but for all insurance

products. The entire approach was first raised in the current legislative process by

EIOPA, which made preparations for this process without any authorization. In

substantive terms, the POG rule leads to an unnecessary expansion of bureaucratic

requirements which does not by any means benefit such review processes for the

overwhelming majority of simple (non-life) products.

EIOPA guidelines for complex debt instruments

Article 25(10) of MiFID 2 provides for a clear authorization for ESMA to issue

guidelines for complex debt instruments and structured deposits. By contrast, EIOPA has

acted largely without specific authorization in issuing guidelines for Solvency II. The

result has been that this already complex supervisory system has grown to more than

6,700 pages because of these guidelines and the associated explanatory text. It is evident

even from the sheer quantity of pages that such copious rules can hardly be mastered.

Expediting Omnibus II

Also worrisome was the initiative to "expedite" the flagging negotiations for the Omnibus

II Directive by implementing certain components of the proposal immediately as

"guidelines" (cf. EIOPA "Preparatory Guidelines on Solvency II – System of

Governance").

Solvency II guidelines overextend rules

A large number of Solvency II guidelines go beyond the rules of the Directive and the

delegated Regulation. As a result, rules in areas where the lawmakers have created

flexible solutions and eased requirements are hollowed or counteracted.

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Fit & proper requirements: While the Solvency II Directive, in Article 42, imposes

fit and proper requirements only for persons who have a "key function" and

effectively run the undertaking, the System of Governance guidelines (Explanatory

Text 1.22) speak of persons who "implement key functions", thus extending the

scope of the rules to all employees in key functions. Scopes of application which are

deliberately limited must not be extended through guidelines.

"System of Governance" guidelines: Although Article 41(3) of the Solvency II

Directive requires an annual review of documentation requirements only for

certain internal company guidelines, the "System of Governance" guidelines

(Guideline 9) includes all written guidelines in the mandatory annual review.

ESA guidelines on cross-selling

The MiFID 2 Directive authorizes ESMA to issue guidelines on cross-selling, in

conjunction with EBA and EIOPA. However, cross-selling is defined in Article 4 of the

MiFID 2 Directive as "investment service together with another service or product as

part of a package or as a condition for the same agreement or package." Nevertheless,

the ESAs are currently conducting consultations in preparation for such guidelines

which have a far broader scope (namely, packages of all financial products).

Level 2 acts under the Solvency II Framework Directive

The EIOPA's proposed implementing acts for capital add-ons (CP-14/053)41 call for

comprehensive cooperation and disclosure requirements which have no basis in Article

37 of the Solvency II Framework Directive. Furthermore, Article 35 of the Framework

Directive authorizes the member states to adopt such requirements. The technical

standards should do no more than regulate the processes for communicating

information.

Policy Context

The suggestion is focused on EIOPA guidelines on insurance distribution and system of

governance for insurance undertakings. It also relates to draft implementing technical

standards (ITS) developed by EIOPA on capital add-ons.

The European Insurance and Occupational Pensions Authority (EIOPA), the European

Banking Authority (EBA), and the European Securities and Markets Authority (ESMA)

are responsible for the coordination of micro-prudential supervision at European level.

EIOPA, EBA and ESMA have been established as of January 2011 and are Union bodies

with their own legal personality.

The powers assigned to the Authorities include developing draft technical standards as

well as guidelines and recommendations, while respecting better regulation principles.

The Authorities may, in areas specified in the relevant sectorial legislation, develop draft

technical standards in accordance with the procedures set out in Articles 10-15 of the

founding Regulations. In order to give the draft technical standards legal effect, the

Commission needs to subsequently adopt them by means of delegated acts pursuant to

Article 290 TFEU (regulatory technical standards) or by means of implementing acts

pursuant to Article 291 TFEU (implementing technical standards). Technical standards

are of technical nature and must not imply strategic decisions or policy choices; their

content should be delimited by the legislative act on which they are based. Technical

standards are ultimately adopted by the Commission.

15

Guidelines and recommendations adopted by the ESAs pursuant to Article 16 of the

ESAs Regulations are of non-binding nature, but have specific characteristics ('comply or

explain' effect).

In 2014, the Commission conducted the Review of ESAs (http://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:52014SC0261&from=EN). The review of ESAs

concluded that: "Overall, the new instrument of technical standards and the central role of

the ESAs in their development are considered by stakeholders as a success. It allows the

EU to equip itself with a significant amount of high quality rules within a very short

timeframe. Guidelines and recommendations developed under Art. 16 of the ESAs

Regulation proved to be a flexible instrument for convergence, although uncertainties

remain with regard to their nature and scope.

Finally, for stakeholder groups, the ESAs are to publish on their websites the names of

members of the Group, the opinions and advice of the Stakeholder Group, the summaries

of conclusions of its meetings and short biographies of its Members.

REGULATION ON KEY INFORMATION DOCUMENTS FOR PACKAGED RETAIL AND

INSURANCE-BASED INVESTMENT PRODUCTS (PRIIPS)

Coherence of information and investor protection rules in the PRIIPs regulation,

the IDD (former IMD2) and Solvency II

Submission X.8.a by the Federation of Finnish Financial Services (FFI)

Proposals for investor protection in the financial sector contain conflicting and partially

overlapping regulations that apply to the same investment products and customer service.

In revising the regulation of investor protection, the Commission’s original goal was to

harmonise the regulation of different types of investment products and service providers.

This would mean that the same set of rules would govern securities, funds etc. and life

insurance policies, or banks and insurance companies, for example. FFI supports this

idea, but the Commission hasn’t reached this goal. The differences between different

proposals have only grown during Parliament discussions and negotiations with member

states.

For example, at the moment there are overlapping and inconsistent rules and proposals

on disclosure requirements regarding costs and risks of investment products in the

PRIIPs Regulation, IMD2 proposal and MiFID2 rules. Requirements in the PRIIPs

Regulation overlap in certain parts with the disclosure requirements in the Solvency II

directive.

Certain rules in the PRIIPs Regulation go beyond the disclosure requirements and, in

fact, deal with conduct of business rules, which are tackled with in MiFID2 and IMD2 for

different investment products, as they should.

The Commission is now drafting delegated acts on the so-called IMD 1.5 which is

included in MiFID2. IMD 1.5 contains similar but not identical conduct of business rules

for insurance-based investment products. Same products will be regulated by the IMD2

as well. IMD2 will enter into force only later, after MiFID2 and IMD1.5. We are

concerned that two different set of rules need to be applied in a short period of time when

these two regimes enter into force.

The cross selling rules, which are included in MiFID2, IMD2 and the Mortgage Credit

directive, are another example of inconsistent rules, applied to the same financial

services products.

The ESAs have and will produce level 2 and 3 measures on all these fields. Part of level 3

measures are such that the ESAs either do not have a mandate or they are pre-empting

the level 1 still under negotiation. All these different measures create a complex network

of rules for investor protection. We think it is of central importance to create a clear,

comparable and easily applicable set of rules in the area of investor protection. This is in

the interest of both customers and the service providers.

Policy Context

The legislative acts referred to in the suggestion differ from each other in essential points.

The PRIIPs Regulation introduces a Key Information Document for the distribution of

packaged retail and insurance-based investment products (PRIIPs) to retail investor. Its

standardised, very brief format and plain language is to aid investors to understand and

17

compare the main features of investment products offered to them.

The Solvency II Directive lays down the rules for the pursuit of the business and

reinsurance in the European Union. It contains requirements on information to be

provided to policy holders before the conclusion of an insurance contract.

The Insurance Distribution Directive (IDD, formerly known as IMD2) was adopted by

the European Parliament on 24 November and the Council on 14 December 2015. It is

expected to enter into force in February/March 2016, i.e. 20 days after the publication in

the Official Journal. The new Directive sets the legislative framework for the distribution

of insurance in the EU. It will replace the current Insurance Mediation Directive (IMD)

which regulates the distribution of insurance products by intermediaries such as agents

and brokers.

The rules on information and investor protection set by these instruments vary in

accordance with the different objectives, scope and addressees of the legislative acts in

question. IDD, for instance, imposes specific information requirements that are adapted to

the distribution stage and concern all operators involved in the distribution of insurance

products. Solvency II provides obligations for insurance companies to make specific

elements of information available to policy holders.

The system of investor protection and information requirements under the different

legislative instruments is intended as a consistent set of rules with only very limited areas

of intentional overlap. For example, the PRIIPs Regulation states explicitly that it does

not replace Solvency II. This is due to the different objectives of the two instruments:

While the PRIIPs regulation provides for a standardised document with generic

information about the product, Solvency II requires the transmission of customised data

on the insurance contract offered to the individual consumer.

IMD 1.5

IMD has been modified in 2014 by the new Directive on markets in financial instruments

(MiFID II) which introduced a new chapter with specific customer protection

requirements for the sale of insurance-based investment products. This was done as an

interim measure to ensure that the investor protection rules introduced in MiFID II are

also applied to investment products packaged as insurance contracts. The IDD contains

more sophisticated rules and repeals IMD 1.5.

Overlapping information requirements

Submission X.8.b by the German Insurance Association (GDV)

The PRIIPs Regulation provides for the information requirements pursuant to Solvency II

and those in the Regulation to be taken into equal consideration (Recital 9, Article 3(2)).

This regulatory approach has the consequence that identical information will have to be

presented in different documents.

The PRIIPs Regulation moreover supplements the measures contained in the Insurance

Mediation Directive (IMD1) with respect to the distribution of insurance products

(Recital 5). Here, too, information requirements might be doubled. This should be

avoided during the further design.

Policy Context

The PRIIPS Regulation introduces a Key Information Document (KID), the purpose of

which is to provide retail investors with easy to understand descriptions of the main

features of various investment products. Its standardized, very brief format and plain

language is to aid comparison of investment products not just within an investment

product category but also across a wide range of different product categories on a cross-

sectorial basis.

Certain overlaps between KID and disclosure under Solvency II and IMD1 or in the

Insurance Distribution Directive (IDD) were intended as the latter have a broader scope

and are designed for a different public (information to professional investors and

supervisors). The scope of these disclosures will be larger and the information will be

more detailed.

Furthermore, according to IMD1/IDD, the distributor will provide the retail investor with

additional information on its services which are not in the PRIIPs scope whose focus is

on characteristics and comparison of products.

DISCLOSURE OBLIGATION FOR INSURANCE COMPANIES


It is questionable whether the growing number of disclosure regulations for insurers and

insurance intermediaries still serve consumer protection or, insofar as this goal is not

achieved, represent the build-up of unnecessary bureaucracy. For example, for broker

distribution via the Internet there are currently 75 categories of disclosure requirements

(based on IMD1, the Life Assurance Directive, Distance Selling Directive, E-Commerce

Directive). In the future, there will be 147 (based on the Insurance Distribution Directive

(IDD), PRIIPS Regulation, Solvency II Directive, Distance Selling Di-reactive, E-

Commerce Directive). Moreover, it is becoming apparent that many of these provisions

are and will lead to redundancies that will make application even more difficult.

Policy Context

The suggestion refers to a number of legislative acts with substantially different

objectives, scopes and addressees as summarised below.

The PRIIPs Regulation introduces a Key Information Document for the distribution of

packaged retail and insurance-based investment products (PRIIPs) to retail investor.

The Solvency II Directive lays down the rules for the pursuit of the business and

reinsurance in the European Union. It contains requirements on information to be

provided to policy holders before the conclusion of an insurance contract.

The Directives on distance marketing and on e-commerce provide targeted rules for very

specific and well-defined distribution channels, namely distance marketing of consumer

financial services and information society services, including all forms of e-commerce.

The IDD sets the legislative framework for the distribution of insurances in the EU. It

replaces the current Insurance Mediation Directive (IMD) which regulates the distribution

of insurance products by intermediaries such as agents and brokers.

These instruments contain information and disclosure rules which vary in accordance

with the different objectives and scopes of the legislative acts in question. IDD, for

instance, imposes specific information requirements that are adapted to the distribution

stage and concern only the operators involved in the distribution of insurance products.

Solvency II provides obligations for insurance companies to make specific elements of

information available to policy holders. The directives on distance marketing and e-

commerce contain additional information and disclosure requirements that are tailored to

the particular needs of the distribution techniques covered by them.

The system of information and disclosure requirements under the different legislative

instruments is intended as a consistent set of rules with only very limited areas of

intentional overlap. For example, the PRIIPs Regulation states explicitly that it does not

replace Solvency II. This is due to the different objectives of the two instruments. While

the PRIIPs regulation provides for a standardised document with generic information

about the product, Solvency II requires the transmission of customised data on the

insurance contract offered to the individual consumer.

REGULATION ON REPORTING AND TRANSPARENCY OF SECURITIES FINANCING

TRANSACTIONS (SFT REGULATION)


The core of the SFT Regulation involves reporting and information requirements. In

order to avoid additional bureaucratic obstacles, an effort should be made to use the

existing systems. For example, in the case of securities financing transactions, it would

be expedient to use the reporting system in accordance with the EMIR Regulation.

Moreover, the SFT Regulation contains additional information requirements for fund

managers (Article 13). For the design of the UCITS V Directive, the ESMA already

presented guidelines for such re-porting requirements. As a result, a problematic

situation arises with respect to the relation between the ESMA guidelines and the legal

text inter alia

Policy Context

The proposal sets an EU framework on securities financing transactions (SFTs). It

contains three measures to improve the transparency of SFTs. First, all SFTs, except

those concluded with central banks, will be reported to central databases known as trade

repositories. Second, information on the use of SFTs by investment funds will be

disclosed to investors in the regular reports and pre-investment documents of funds.

Finally, minimum transparency conditions will need to be met on reuse of collateral, such

as disclosure of the risks and the need to grant prior consent.

On 17 June 2015, the co-legislators reached a political agreement on the proposed

Regulation. The agreed text has been subject to legal revision and translation prior to its

publication in the EU Official Journal.

- alignment with reporting under EMIR

The SFT Regulation was based on the reporting mechanism for derivative contract

established under EMIR, namely the reporting obligation, registration, supervision and

access to data. As under EMIR, the European Securities and Markets Authority (ESMA)

will develop specific technical standards on reporting procedures and formats, access to

data procedures and registration procedures for TRs. In developing the technical

standards, ESMA shall ensure consistency, to the extent possible, with the existing

standards in EMIR, in order to minimise the reporting burden and IT changes. In

addition, the co-legislators introduced the possibility for trade repositories already

registered under EMIR to follow simplified registration for extension of their services to

SFTs.

- relationship between the ESMA guidelines and the legal text

The annex to the SFT Regulation lists information on the use of SFTs and TRSs to be

disclosed to investors in AIFs and UCITS in the pre-contractual and periodical disclosure

documents. This information is not contradictory, however it is more detailed and

targeted, in comparison to the ESMA guidelines. ESMA guidelines are not applicable to

AIFMs. Thus the SFT Regulation will provide for uniform and legally binding

transparency requirements applicable to all fund managers.

DIRECTIVE 2014/95/EU ON DISCLOSURE OF NON-FINANCIAL AND DIVERSITY

INFORMATION BY CERTAIN LARGE COMPANIES AND GROUPS

Disclosure requirements

Submission X.11.a by the German Chambers of Commerce and Industry (DIHK)

Almost all companies with more than 20 employees assume social responsibility in

Germany. Their commitment goes beyond the legal regulations on a voluntary basis;

accordingly, such information on these matters should also be voluntary. Every fifth

company can well imagine that if the reporting requirements become mandatory, they

will cut back on their levels of commitment (IHK-Unternehmensbarometer 2012).

The directive does not require a fully-fledged and detailed sustainability report. But the

directive requires an additional report which will be a burden for the companies.

Furthermore different studies (Eurochambres, CSES) state much higher direct and

indirect cost than the EU Commission mentioned (less than € 5.000 per year/ company,

i.e. less than €30 million euro on an EU basis).

The proposed directive should therefore be withdrawn or at least implemented with as

few burdens as possible.

Policy Context

The Directive 2014/95/EU on disclosure of non-financial and diversity information by

certain large companies and groups was adopted by the Council on 29 September 2014.

The text entered into force on 6 December 2014. Member States will have a two-year

period to transpose it into national legislation ending in December 2016.

The disclosure requirement applies to large public-interest entities with more than 500

employees. This includes companies listed in EU markets, as well as some unlisted

companies, such as credit institutions, insurance companies, and other companies that are

so designated by Member States because of their activities, size or number of employees.

It is estimated that the number of companies included in the scope of the Directive is

approximately 6000.

The new rules will only apply to some large companies with more than 500 employees, as

the costs for requiring small and medium-sized enterprises to apply them could outweigh

the benefits. For larger companies, costs associated with the required disclosures are

commensurate with the value and usefulness of the information, and with the size and

complexity of the business.

Companies concerned are required to disclose material information including

environmental, social and employee matters, respect of human rights, corruption and

bribery matters, and diversity in the boards of directors.

Companies with fewer than 500 employees will not be subject to any new obligations.

For larger companies, the required disclosures may be provided at group level, rather than

by each individual subsidiary within a group. Auditing will be kept to a minimum.

This measure is expected to improve the transparency of certain large EU companies as

regards non-financial information. This legislation aims at relevant, useful information.

Companies, investors and society at large will benefit from increased transparency. This

22

is important for Europe’s long-term competitiveness and the creation of jobs.

Companies benefit too. Those that already publish information on their non-financial

performance are more competitive and successful in the long term. Investors are more

and more interested in non-financial information in order to have a comprehensive

understanding of a company’s position and development, and to analyse and factor this

information in their investment-decision process.

The Directive leaves significant flexibility for companies to disclose relevant information

in the way that they consider most useful. Companies may use EU-based, international or

national guidelines that they consider appropriate (for instance, the UN Global Com-pact,

ISO 26000, or the German Sustainability Code).

The cost of the proposed disclosure was estimated in the impact assessment to be between

€600 and €4300 per year per company, thus generating a total cost between 10.5 and

75.25 million euros. The cost of disclosure of the diversity policy is estimated to be

between €600 and 1000 generating a total cost between 3.6 and 6 million euros.

Guidelines under development

Submission X.11.b by the German Insurance Association (GDV)

Article 2 of the Directive on disclosure of non-financial information provides for the

European Commission to prepare non-binding guidelines to facilitate reporting of non-

financial information by companies. These guide-lines are currently being developed for

publication prior to 6 December 2016. The purpose and benefit of these guidelines are

very questionable, however. Though uniform reporting would be expedient, this goal does

not justify the additional expense and time pressure. There are proven best practices for

reporting non-financial information, which are already applied today. Based on these

best practices, undertakings are thus preparing for the start of application of the

Directive on 1 January 2017. The non-binding guidelines of the European Commission,

to be published four weeks before the start of application and more than two years after

the Directive came in-to force, consequently do not add any value

Policy Context

The Directive 2014/95/EU on disclosure of non-financial and diversity information by

certain large companies and groups was adopted by the Council on 29 September 2014.

The Directive entered into force on 6 December 2014. Member States will have a two-

year period to transpose it into national legislation ending in December 2016.

This measure will improve the transparency of certain large EU companies as regards

non-financial information. The disclosure requirement applies to large public-interest

entities with more than 500 employees. This includes companies listed in EU markets, as

well as some unlisted companies, such as credit institutions, insurance companies, and

other companies that are so designated by Member States because of their activities, size

or number of employees. It is estimated that the number of companies included in the

scope of the Directive is approximately 6000.

Article 2 of Directive 2014/95/EU requires that the Commission publish non-binding

guidelines by 6 December 2016. Concretely, Article 2 sets out: "The Commission shall

prepare non-binding guidelines on methodology for reporting non-financial information,

including non-financial key performance indicators, general and sectoral, with a view to

facilitating relevant, useful and comparable disclosure of non-financial information by

undertakings. In doing so, the Commission shall consult relevant stakeholders. The

Commission shall publish the guidelines by 6 December 2016."

REGULATION OF LISTED COMPANIES

Submission X.12.a by the Finnish Chamber of Commerce

Problem:

During the past decade, the European Commission has increased the regulation of listed

companies considerably. Recently, numerous directives governing listed companies and

requiring increasing reporting have been given or proposed. The list is long and the

following are just some examples.

Shareholders rights directive (2007/36/EC), directive 2006/46/EC as regards corporate

governance statements, directive (2014/56/EU) on statutory audits of annual accounts

and consolidated accounts (containing rules for audit committees), directive on

disclosure on non-financial and diversity information by certain large companies and

groups 2013/0110 (COD), directive proposal on encouragement of long-term

shareholder engagement COM(2014) 213 final and directive proposal on improving the

gender balance among non-executive directors of companies listed on stock exchanges

and related measures COM(2012) 614 final.

An unfortunate consequence of the new legislative measures has been the excessive

administrative burden it causes on listed companies. The problem is so evident that

actually some time ago a member of the Finnish Parliament asked in a parliamentary

committee hearing who reads all of these reports. It is clear that the increasing

regulatory burden is a major reason for the small number of IPOs in Europe.

Furthermore, the different corporate structures used in the Member States have not

always been taken into account in the legislative process. Now is the time to take a pause

and assess the situation.

One of the factors behind the current situation may be that in the public discussion all

listed companies are believed to be multinationals with unlimited resources when in fact

e.g. in Finland 50 per cent of our listed companies are small caps and actually 20 per

cent of the listed companies have a market value below 20 MEUR, many of them less

than 10 MEUR.

The misunderstanding is highlighted by the EC press release issued on 9 April 2014 with

the headline “European Commission proposes to strengthen shareholder engagement

and introduce a "say on pay" for Europe’s largest companies” while in fact the proposal

covers o listed companies, including the very smallest ones, even below 10 MEUR market

value.

Suggestion:

Finland Chamber of Commerce urges the European Commission to make a decision to

freeze all new regulatory work governing listed companies. If any new rules are to be

considered, the assignment should be given on the highest decision-making level of the

European Commission after robust impact and proportionality assessment.

Policy Context

Corporate governance is traditionally defined as the system by which companies are

directed and controlled and as a set of relationships between a company’s management,

its board, its shareholders and its other stakeholders. The corporate governance

framework for listed companies in the European Union is a combination of legislation

25

and ‘soft law’, including recommendations and corporate governance codes.

The focus of the EU corporate governance framework is on listed companies. This is

because they raise money on capital markets and there is particular need to ensure

protection of external investors. EU action in this area is linked to the growing

European/international character of the EU equity market, with over 40% of total EU

market capitalisation in the hands of foreign (EU and non-EU) investors.

Shareholder Rights Directive 2007/36/EC

Directive 2007/36/EC introduced minimum standards to ensure that shareholders

of listed companies have timely access to information ahead of the general

meeting, can exercise their right such as those to put items on the agenda and

table resolutions and have simple means to vote at a distance. The directive has

set up a basic framework to remove administrative burdens for companies and

investors and abolished the major constraints (such as share blocking). It is a

minimum harmonisation directive that leaves flexibility to Member States.

To the knowledge of the Commission Services the Directive has been correctly

implemented by Member States and its application did not give rise to any

significant litigation or criticism, also on behalf of listed companies. However,

many stakeholders and in particular investors, consider that despite the

improvement brought by the shareholder rights directive, the cross-border

exercise of shareholder rights remains very difficult.

Directive 2006/46/EC as regards corporate governance statements

Directive 2006/46/EC of 14 June 2006 introduced at EU level the 'comply or

explain' approach, a key feature of the EU corporate governance framework.

Listed companies are required to provide a corporate governance statement with

essential information on their corporate governance arrangements and on how

they apply the corporate governance code adopted at national level. The 'comply

or explain' approach allows companies not to follow the corporate governance

code recommendation, provided that they explain the reasons for doing so.

This approach gives companies an important degree of flexibility. There is broad

support for this system, in particular from listed companies, as evidenced by the

responses to the Green Paper on the EU corporate governance framework of 2011

or to the recent Green Paper on the Capital Markets Union.

However, stakeholders also pointed to the shortcomings in the application of the

'comply or explain' approach and in particular to insufficient quality of

explanations provided by companies. Therefore the Commission has adopted a

Recommendation on the quality of corporate governance reporting (‘comply or

explain’). It provided practical EU guidance, based on national best practices

across the EU, for listed companies, investors and national monitoring bodies in

order to improve the quality of disclosures and ensure better transparency.

Directive 2014/56/EU of the European Parliament and of the Council of 16

April 2014 amending Directive 2006/43/EC on statutory audits of annual

accounts and consolidated accounts

The legal framework for the EU Statutory Audit Market is based on two

legislative instruments: a Directive amending the existing Statutory Audit

Directive and a new Regulation on specific requirements regarding statutory audit

of public-interest entities.

26

The role of statutory auditors is to certify companies’ financial statements, i.e. to

provide stakeholders such as investors and shareholders with an opinion on the

accuracy of companies’ accounts. A broad community of people and institutions

rely on the quality of a statutory audit. For this reason, statutory audit contributes

to the orderly functioning of markets by improving the integrity and efficiency of

financial statements.

The primary objective of the recent reform was to increase the quality of statutory

audit. This means both enhancing statutory auditors’ independence and providing

investors and shareholders of audited entities with better and more detailed

information via the audit report.

Directive 2014/95/EU on disclosure of non-financial and diversity

information by certain large companies

The Directive on disclosure of non-financial and diversity information entered

into force on 6 December 2014. Member States will have a two-year period to

transpose it into national legislation, until December 2016. The disclosure

requirement applies to large public-interest entities with more than 500

employees. This includes companies listed in EU markets, as well as some

unlisted companies, such as credit institutions, insurance companies, and other

companies that are so designated by Member States because of their activities,

size or number of employees. It is estimated that the number of companies

included in the scope of the Directive is approximately 6000. Companies are

required to disclose material information including environmental, social and

employee matters, respect of human rights, corruption and bribery matters, and

diversity in the boards of directors.

Commission Proposal COM (2014) 213 for a Directive amending Directive

2007/36/EC as regards the encouragement of long-term shareholder

engagement and Directive 2013/34/EU as regards certain elements of the

corporate governance statement

The proposal for the revision of the shareholder rights directive aims at

remedying key corporate governance shortcomings in European listed companies

listed, such as insufficient long-term oriented engagement of shareholders,

insufficient oversight on directors pay and on transactions between the company

and its related parties as well as remaining difficulties in the cross-border exercise

of shareholder rights. The directive is currently under negotiation by the co-

legislator.

Based on the analysis presented in the impact assessment accompanying the

proposal (SWD(2014)127), the legislation will not create a significant burden for

listed companies, as the only requirements for companies concern remuneration

and related party transactions.

As regards remuneration, current EU rules already require companies to report on

remuneration (accounting rules). Also in most MS national corporate governance

codes or listing rules require the publication of a remuneration report. The

changes in the directive only aim at making such reports more informative and to

harmonise the requirements applied in different MS. As regards related party

transactions, the requirements of the directive only apply to most significant

transactions, which are relatively rare.

27

Other provisions of the proposed directive create additional rights for companies,

such as for example the right for companies to identify their shareholders.

Finally, certain of the requirements have been softened by the Council and the

European Parliament so that the right balance will be found in the trilogue

negotiations.

As regards the wording in the European Commission press release the Finnish

Chamber refers to, it appears useful to clarify that, although many EU's largest

companies are listed, the Commission Services are perfectly aware that many

listed companies are small or medium companies. In this respect, the impact

assessment accompanying the proposal for the directive on encouragement of

long-term shareholder engagement has thoroughly analysed the impact of

proposed measures on listed SMEs.

Commission Proposal for a Directive of the European Parliament and of the

Council on improving the gender balance among non-executive directors of

companies listed on stock exchanges and related measures COM(2012) 614

The measures introduced by several Member States to improve gender balance on

corporate boards vary broadly and a considerable number of Member States have

not taken any action in this area. Voluntary initiatives have generally not

triggered marked progress and the rate of change in most Member States has been

slow, showing that self-regulation cannot bring the desired change. The figures

collected over the past years consistently show that most of the significant

progress in gender balance on company boards is concentrated in a few Member

States that have taken or considered legislative action on the issue. By contrast, in

many Member States where no such measures have been taken the situation is

stagnating or even deteriorating. Thus only an EU-level legislative initiative

would trigger the progress across the EU.

The Commission's proposal sets a quantitative objective of at least 40%

representation for each gender among non-executive directors (supervisory board

members in a dual board system) or 33 % for both types of directors by 2020.

This objective is not linked to a quantitative quota obligation that would lead to

sanctions if not reached, but to a simple procedural obligation: listed companies

who do not meet the target of 40% for non-executive directors (or 33 % for all

types of directors) have to introduce fair and transparent selection procedures for

the selection of candidates for board positions. The proposed approach guarantees

that qualification and merit remain the key criteria for a job on the board while

the definition of the qualification necessary for a specific position is fully in the

hands of the listed companies.

The selection process itself and criteria for selection are not defined in the draft

Directive. It is for each Member State to decide how to best implement the

requirements concerning the selection without creating an undue burden for listed

companies. In particular, the proposed Directive does not impose any specific

criteria or any detailed process that could lead to such a burden. These specific

criteria for board positions are to be established by the companies themselves.

The Directive does not prescribe a “one size fits all solution” but allows Member

States that have chosen another promising option to maintain their national

legislation instead of the procedural requirements of the Directive.

28

The proposal does not apply to SMEs (companies with less than 250 employees)

or non-listed companies.

Finally, it is a temporary measure aimed at achieving a step-change in progress

and it is set to expire in 2028.

Submission X.12.b by the Finnish Chamber of Commerce "Harmonized thresholds

for different Directives"

Problem:

The principles of better regulation have not always been followed in the preparation of

the different rules governing listed companies. This is evident as the new directives and

proposals are so fragmented that they all have different thresholds for application. The

complexity of the current situation can be elaborated with the fact that the

representatives of the European Commission as well as those of the Member States have

been confused of the different thresholds. This proves that the regulatory framework has

become much too difficult for companies. Furthermore, some of the rules are applicable

to relatively small companies whereas much larger unlisted companies remain

unaffected.

The following examples elaborate the complicated regulatory situation regarding

thresholds:

directive proposal on encouragement of long-term shareholder engagement

COM(2014) 213 final:

o all listed companies (despite that EC states in the above-mentioned

press release that Europe’s largest companies are targeted)

directive on disclosure on non-financial and diversity information by certain

large companies and groups 2013/0110 (COD) has different thresholds for the

two new reports:

o as for non-financial information the directive is applicable for public

interest entities with more than 500 employees and exceed either a

balance sheet total of 20 MEUR or a turnover of EUR 40 MEUR

o as for diversity information the directive is applicable for listed

companies fulfilling two out of the following three: more than 250

employees, balance sheet exceeding 17.5 MEUR or turnover exceeding

35 MEUR

directive proposal on improving the gender balance among non-executive

directors of companies listed on stock exchanges and related measures

COM(2012) 614 final

o listed company which employs than 250 persons and has an annual

turnover of 50 MEUR or an annual balance sheet of 43 MEUR

country by country reporting by extractive and forestry industries (Directive

2013/34/E U on the annual financial statements, consolidated financial

statements and related reports of certain types of undertakings)

o Public interest entities exceeding two out of the three following criteria:

250 employees, 20 MEUR balance sheet or 40 MEUR turnovers.

Suggestion:

Finland Chamber of Commerce urges the European Commission to harmonize the

differing thresholds of the directives governing listed companies’ reporting. We suggest a

suitable threshold for exempting small listed companies to be set so that the different

reporting requirements apply to listed companies with more than 500 employees and a

balance sheet exceeding 100 million Euros or a net turnover exceeding 100 million

Euros.

Policy Context

The scope of application of EU legislation is a very important aspect of the legislative

process. Careful analysis and political attention is paid so that the aimed policy

30

objectives are achieved, while proportionality is duly taken into account and undue

administrative burden avoided. In this respect:

The proposed directive on encouragement of long-term shareholder engagement

COM(2014) 213 final, currently under negotiations, applies indeed to all listed

companies. The proposed directive modifies the existing Directive 2007/36/EC on the

exercise of certain rights of shareholders in listed companies. Similarly as the existing

directive, the amended directive applies to all listed companies. The objective of this

directive is to remedy key corporate governance shortcomings in European

companies listed on stock-exchanges, such as insufficient long-term oriented

engagement of shareholders, especially of institutional investors and asset managers.

The proposed directive introduces measures to encourage long-term shareholder

engagement, which include transparency requirements for institutional investors,

asset managers and proxy advisors, rules on shareholder identification and cross-

border exercise of shareholder rights. Only rules on remuneration and on related party

transactions introduce additional requirements for companies. According to the

impact assessment accompanying this proposal (SWD(2014)127), these new rules

will not create significant burden for listed companies.

As regards the directive on disclosure on non-financial and diversity information

by certain large companies and groups, it contains indeed two different sets of

rules which have indeed different scope of application :

as for non-financial information the directive is applicable for public interest

entities with more than 500 employees and exceed either a balance sheet total

of 20 MEUR or a turnover of EUR 40 MEUR

As for diversity information the directive is applicable to large listed

companies, i.e. companies exceeding two out of the three following criteria:

250 employees, 20 MEUR balance sheet or 40 MEUR turnover. The new

provisions will require listed companies to provide information about their

board diversity policy or to explain why they do not have a diversity policy

('comply or explain' approach). The objective of these rules is to encourage

companies to reflect about board diversity, as more diverse boards are less

likely to suffer from the 'group think' and more likely to exercise a thorough

oversight of management decisions.

In addition, the directive does not require a preparation of a new report but

only requires companies concerned to include in their corporate governance

statement (which all listed companies are required to prepare) a description of

their board diversity policy. Given that an average company board consists of

12 individuals, the preparation of such description does not entail substantial

costs nor generate large administrative burden. In order to limit reporting

requirements for listed SMEs, the legislator has decided to exempt them from

this requirement.

Directive proposal on improving the gender balance among non-

executive directors of companies listed on stock exchanges and related

measures COM(2012) 614 final

The Commission's proposal does not apply to SMEs (a listed company which

employs less than 250 persons and has an annual turnover not exceeding EUR 50

million or an annual balance sheet total not exceeding EUR 43 million) or non-

listed companies ( for background information for this proposal see the

assessment sheet on harmonised thresholds that has also been submitted by the

31

Finland Chamber of Commerce)

Country by country reporting by extractive and forestry industries (Directive

2013/34/EU on the annual financial statements, consolidated financial statements

and related reports of certain types of undertakings)

In the context of the Accounting Directive (2013/34/EU) some measures apply

only to targeted groups of companies. This relates to the specific policy objective

of each concrete measure and the proportionality principle, with the aim to avoid

a one-size-fits-all approach. For instance, the disclosure of non-financial

information applies to large public-interest companies across all sectors with

more than 500 employees, because it may not be proportionate for smaller

companies. On the other hand, country-by-country reporting applies only to large

public-interest companies within the extractive and forestry industries

In January 2016, as part of the Anti-Tax Avoidance Package, the Commission

adopted a legislative proposal on automatic exchange of information between tax

administrations on country-by-country reports (CBCR) provided by multinational

groups. The proposal was a direct implementation of OECD BEPS Action 13

which has been agreed by most EU Member States and adopted by G20/OECD at

the end of 2015. Member States reached political agreement at the ECOFIN 8

March. The directive will enter into force in spring 2017.

FINANCIAL REPORTING

Submission X.13.a –Member of the REFIT Platform Stakeholder (Mr Naslin)

Group (ADOPTED)

In the past number of years the volume of reporting required from banking institutions

has increased greatly with each Authority often focusing only on their specific

information needs, without examining to what extent other public authorities have

imposed identical or similar requirements. Banks should be asked to report every piece

of information only once, the understanding being that authorities would share the

relevant data with each other subsequently to ensure that duplicating reporting

requirements be eliminated.

Statistical requirements have become a significant obstacle for the European Union to

completing a Single Market in financial services. Such measures create new

administrative burdens which result in nullifying progress which the many initiatives

taken by the European Commission in this regard over the last decades had achieved.

There is a call for an “integrated” reporting system which would align the various

reporting streams to which banks are subject. Banks should be asked to report every

piece of information only once, the understanding being that authorities would share the

relevant data with each other subsequently to ensure that duplicating reporting

requirements be eliminated (“single point of entry” principle).

Policy Context

On 30 September 2015, the European Commission launched a public consultation

entitled the 'Call for Evidence: EU regulatory framework for financial services'. The

consultation closed on 31 January 2016. The purpose of the Call for Evidence was to

consult all interested stakeholders on the benefits, unintended effects, consistency, gaps

in and coherence of the EU regulatory framework for financial services. The Commission

received 288 responses to the consultation. The summary of contributions can be found

at: http://ec.europa.eu/finance/consultations/2015/financial-regulatory-framework-

review/docs/summary-of-responses_en.pdf

As part of the Call for Evidence, a wide range of respondents from industry and some

public authorities raised concerns in relation to reporting and disclosure requirements,

arguing that some requirements are duplicative or inconsistent across pieces of

legislation; disproportionate or excessive given the activities of the reporting party or the

utility of the reported data; and/or difficult or impossible to meet. However, some

stakeholders, whilst seeing problems in specific reporting requirements, argued against

potential changes as this would require new reporting systems thereby imposing

additional costs on companies.

The Commission is currently reviewing the feedback received and will complete the

analysis by September.

Platform Opinion

Adopted on 27 June 2016

http://ec.europa.eu/finance/consultations/2015/financial-regulatory-framework-review/docs/summary-of-responses_en.pdf

http://ec.europa.eu/finance/consultations/2015/financial-regulatory-framework-review/docs/summary-of-responses_en.pdf

CREDIT AGREEMENTS FOR CONSUMERS RELATING TO RESIDENTIAL

IMMOVABLE PROPERTY (2014/17/EU)

Submission X.14.a Submission by a citizen (LTL 663)

The EU mortgage credit directive (2014/17/EU) should be widened to cover commercial

property and enable commercial debt advisory firms to operate on a cross-border basis.

This will (i) widen access to credit for SMEs (ii) ensure they can obtain sophisticated

advice when negotiating with lenders and (iii) allow SMEs to obtain credit on the best

possible terms.

Submission X.14.b by the Finnish Government Stakeholder Survey on EU

legislation

The residential credit directive (2014/17/EU) increases the cost of the lenders because of

the advance information form and the necessary modifications to the IT systems without

offering any benefits for the customers not already provided under the national

legislation.

Policy Context

The Mortgage Credit Directive 2014/17/EU on credit agreements for consumers relating

to residential immovable property was adopted on 4 February 2014. This Directive aims

to create a Union-wide mortgage credit market with a high level of consumer protection.

It applies to both secured credit and home loans. Member States had to transpose its

provisions into their national law by March 2016.

The main provisions include consumer information requirements, principle based rules

and standards for the performance of services (e.g. conduct of business obligations,

competence and knowledge requirements for staff), a consumer creditworthiness

assessment obligation, provisions on early repayment, provisions on foreign currency

loans, provisions on tying practices, some high-level principles (e.g. those covering

financial education, property valuation and arrears and foreclosures) and a passport for

credit intermediaries who meet the admission requirements in their home Member State.

In other words, the Directive increases inter alia, the level of consumer protection by

requiring creditors to inform consumers prior to the contract conclusion via the European

Standardised Information Sheet (ESIS) of the mortgage's main product characteristics.

The ESIS will therefore help consumers selecting the most suitable mortgage product for

their needs. Due to its standardisation, the ESIS will also help consumers to cross-

compare different mortgage offers in the market, including even in other Member States.

To ensure cross-comparability, the ESIS falls under the maximum harmonisation

approach.

The directive does not cover commercial property. This was a result of a political

decision which reflected, on the one hand, the general economic climate that led to the

financial crisis with severe social and economic consequences such as defaults and

forced sales of residential property, and, on the other hand, the low levels of financial

literacy on the part of consumers. As set out in recital 11 of the Directive, consumers and

enterprises are not in the same position and do not need the same level of protection. It

may be of interest to the citizen that in the case of dual purpose contracts where the

34

contract is concluded for purposes partly within and partly outside the person's trade,

business or profession and the trade, business or professional purposes is so limited as

not to be predominant in the overall context of the contract, that person should also be

considered as a consumer.

Commercial debt advisory firms based within the Union are in the position to operate on

a cross-border basis using their right of establishment or to provide services throughout

the EU. In line with the principle of equal treatment laid down in Articles 49 and 57

TFEU, such entrepreneurs are entitled to do so under the conditions that apply to

nationals of the host Member State.

Capital Markets Union

As part of the Capital Markets Union, the Commission is looking at ways how to support

SMEs in obtaining access to finance. This includes a series of actions to overcome

information barriers that stand between SMEs seeking finance and prospective lenders

and investors:

1. The Commission is set to improve feedback that SME loan applicants receive from banks

in order to enhance the functioning of the credit mechanism in general. For SMEs whose

financing needs cannot be serviced by banks, in some cases, this feedback is likely to be

the starting point to find other sources of information about potential funding options.

2. The Commission is mapping the existing support and advisory capacities assessing

SMEs seeking finance in order to identify best practices and promote the replication of

successful approaches across the EU. The rational for this action is to support the

development of information architectures that help SMEs to identify, understand and

access a wide range of funding source which might be suitable for their financing needs:

non-bank credit including micro-credit or P2P lending, seed capital or private equity

provided by (equity-based) crowdfunding, business angels, venture capital or private

equity, factoring and trade finance.

FINANCIAL BENCHMARKS

Submission X.15.a by the Finnish Government Stakeholder Survey on EU

legislation

The proposed reference rate regulation (9/2013) seeks to address the abuse of

international reference interest rates. Efforts should focus on the reference rates that

have the greatest impact on the European financial market. In their current form, the

requirements imposed by the regulations are in some respects unreasonable for small

operators.

Policy Context

The integrity of benchmarks is critical to the pricing of many financial instruments, such

as interest rate swaps, and commercial and non-commercial contracts, such as loans and

mortgages, and risk management. Any risk of manipulation of benchmarks may

undermine market confidence, cause significant losses to investors and distort the real

economy.

The Commission proposed new standards for benchmarks in September 2013

(Regulation on indices used as benchmarks in financial instruments and financial

contracts) in the wake of the alleged manipulation of various benchmarks including inter-

bank offered rates (EURIBOR, LIBOR, etc.), benchmarks for foreign exchange (FX) and

commodities including gold, silver, oil and biofuels.

On 28 April 2016 the European Parliament approved by a large majority in the plenary

session the adoption of the proposed Regulation on financial benchmarks, following a

political agreement by the Parliament and the Council in November 2015.

Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June

2016 on indices used as benchmarks in financial instruments and financial contracts or to

measure the performance of investment funds and amending Directives 2008/48/EC and

2014/17/EU and Regulation (EU) No 596/2014 has been published in the Official Journal

of the European Union and enters into force on 30 June 2016.

TRANSNATIONAL PENSIONS

Submission X.16.a by the House of Dutch provinces for Better Regulation

Legislation: Transnational pensions

IORP Directive, COM(2001) 214 final, Proposal for a Directive of the European

Parliament and of the Council amending Directive 2003/41/EC on the activities and

supervision of institutions for occupational retirement provision (IORP II), SWD(2014)

102 final (article 12 cross border activities), Mobility Directive 2014/50/EU, article 6

Directive 98/49/EC, Secondment Directive 96/71/EC, Directive from het European

Parliament and Council relating to the enforcement of Directive 96/71/EC on the posting

of workers in the framework of the provision of services, COM(2012) 131 final, Bilateral

treaties for preventing double taxation.

Problem descirption/burden on citizens and business:

In the framework of the free movement of workers, workers employed transnationally

(both seconded workers and border workers) should not be hindered in establishing

adequate pension provisions. One of the possibilities could be an international value

transfer. In practice, however, insufficient international value transfers actually take

place. This is partly due to the imposition of certain restrictive conditions, but also the

absence of any connection between pension systems, as a result of which accepting a

position of employment abroad becomes a difficult choice.

Qualification problems between first (state pensions such as the AOW) and second pillar

(for example on the basis of the contract of employment or collective labour agreement)

can mean that shortfalls arise in pension establishment. Subsequently, it should be noted

that the fiscal processing of (the establishment) of pensions does not work in the same

way in every country. Pension schemes are not comparable, as a result of which there is

no mutual recognition of pension schemes. As a consequence, the same fiscal facilities

are not awarded to foreign schemes. The Mobility Directive and the revised Secondment

Directive are on the one hand aimed at improving pension retention for mobile workers

and on the other hand protecting the position of the seconded worker, whereby specific

supplementary company pension schemes are excluded. Neither in the one directive nor

in the other is the relation with the problem in terms of fiscal issues established. The

absence of fiscal control and supervision acts as an obstacle, and results in shortfalls in

pension establishment for cross-border workers. Because of the fragmented pension

entitlements that can be established here and there in different countries, the cross-

border worker also has little insight into his total pension establishment and the possible

financial and fiscal consequences.

Simplification measure/suggestion:

Solutions should be sought in a system of common pension characteristics as a result of

which pension schemes from different countries can be compared with one another.

Following a determination of comparability, mutual recognition of fiscal rules relating to

pension schemes should contribute to the unhindered continuation of pension

establishment in a cross-border situation. Wherever continuation of a foreign pension

scheme is not eligible, but pension has been established in a fragmented manner in

different countries, a pension track and trace system could provide clarity on the

37

established pension. If workers know that they will be able to obtain a clear overview

(both financial and fiscal) of their established pension on the basis of such a system, they

will be quicker to choose to work over national boundaries. Lack of information will then

no longer be an obstacle.

Policy Context

Under Directive 2003/41/EC, Occupational pension funds in the EU benefit from the

principles of free movement of capital and free provision of services and have the

possibility of providing their services in other Member States. However, applicable fiscal

rules are not harmonised, as this area remains in the remit of Member States.

State of Play

The 2003 Directive on the activities and supervision of institutions for occupational

retirement provision (IORPs) has recently been revised. Agreement between Parliament,

Council and Commission was reached on 30 June 2016, paving the way to the adoption

of a new Directive called IORP2. The revised Directive aims first and foremost at

protecting pension scheme members and beneficiaries.

• The Directive will improve the way pension funds are governed. Workplace

pension funds and their members and beneficiaries will benefit from pension

fund governance by experienced persons who carry out their duties in an

objective, fair and independent way.

• The Directive will make it easier for pension funds to conduct cross-border

business, creating new opportunities for companies and their workforce.

• The Directive will ensure that clear information is provided to pension

scheme members and beneficiaries. The Pension Benefit Statement or "PBS"

is designed to allow pension scheme members to take more informed

decisions about their pensions while leaving Member States the flexibility to

tailor its exact content and design to their market.

• The new rules will make it easier for pension funds to invest in long-term

assets, strengthening the role they can play in the Capital Markets Union.

• The new Directive also encourages responsible investment: as a result of the

agreement, pension funds will have to consider the risk of environmental,

social and governance risks in their investment decisions and document this in

their three-yearly statement of investment policy principles.

• The revision does not cover the areas of national social and labour, fiscal or

contract legislation.

• The new Directive will contain a non-binding endorsement to establish

pension tracking services across the EU.

The Directive has not yet entered into force but it should do so at the end of this year.

Once it enters into force, Member States will have 24 months to transpose the text into

their national legislation, meaning that the Directive could become applicable as from the

38

end of 2018.

Additional Information on the the proposed pension track and trace system. In its

initial proposal on which is based Directive 98/49/EC relating on the safeguarding of

supplementary pension rights for employed and self-employed persons moving within

the European Union, the Commission proposed a provision for the fiscal treatment of

contributions for persons moving within the European Union in order to avoid possible

double taxation However, this provision was not retained by the legislator.

Although Directive 98/49/EC in its Article 5 provides for the payment of in other

Member States, net of any taxes and transaction charges which may be applicable, of all

benefits due under such schemes, it does not concern the tax treatment of these benefits

paid in another Member State.

In fact, in relation to taxation issues, in the absence of measures at EU level, direct

taxation remains essentially a national competence. However, the Member States may

not introduce legislation discriminating directly or indirectly on the basis of nationality.

There is a growing body of CJEU case-law on the application of the Treaty freedoms to

direct taxes, including in relation to Article 45 TFEU on freedom of movement of

workers.

In situations where more than one Member State has taxing rights over income, the CJEU

has confirmed that Member States are free to allocate taxing rights between themselves

(Case C-336/96). They usually do so, on the basis of bilateral double taxation

conventions. These bilateral conventions may not resolve all double taxation problems

caused by the interaction of the Member States’ direct tax systems. In collaboration with

Member States, the Commission services are working to eliminate direct and indirect tax

problems that EU citizens face when crossing borders to work, do business or live.

In its initial proposal on which is based the current Directive 2014/50/EU on minimum

requirements for enhancing worker mobility between Member States by improving the

acquisition and preservation of supplementary pension rights, the Commission included

also some measures in order to facilitate the transferability of pension rights. However,

due to the complexity and diversity of supplementary occupational pension schemes

(even within the same country the transferability of pension rights is not always

possible), the legislator decided not to pursue this particular part of the proposal.

In the 2012 White Paper "An Agenda for Adequate, Safe and Sustainable Pensions", the

Commission outlined plans to support the preparation of a European Tracking Service for

pensions (ETS), an online platform offering mobile workers one-stop access to pension

rights earned in different countries and schemes. In 2013, the Commission awarded a

grant to an international consortium of pension stakeholders (TTYPE) to explore the

feasibility and suggest a high-level design for ETS. The final report, presented in 2016

(ttype.eu), argues that the implementation of ETS is complex but feasible and that ETS

should be owned and run by pension stakeholders, with set-up support from the EU.

Given the decentralised nature of supplementary pension provision, pension stakeholders

are best placed to establish and manage the European Tracking Service for pensions

(ETS), as confirmed by the conclusions of the TTYPE report. The Commission plans to

support this initiative financially by awarding a grant of up to € 2.5 million to support 2-

year pilot phase of ETS implementation. The call for proposals will be published late in

2016.

39

MARKET ABUSE (596/2014)

Submission X.17.a by the Finnish Government Stakeholder survey on EU legislation

Under the regulation on market abuse (596/2014), the entity concerned is required to

report deals on shares of a company owned by an insider within three days instead of

seven as previously. Listed companies are required to issue a stock market release on the

transaction within three days. At worst, such releases may have to be issued on a daily

basis, which undermines the efficiency of the market and may eclipse other more

essential information. This is hardly what the legislator intended.

Policy Context

The question as it stands relates to the Market Abuse Directive 2003/6/EC which has

been repealed by the Market Abuse Regulation 596/2014 (MAR) in application since

July 3rd 2016. MAR was implemented to keep pace with market and technology

developments and to further strengthen market integrity.

The Market Abuse Regulation (MAR) ensures that rules keep pace with market

developments, such as new trading platforms, as well as new technologies, such as high

frequency trading (HFT).

MAR sets 3 types of disclosure obligations :

- art 17 requires issuers to publicly disclose inside information as soon as possible, no

delay shall apply unless very specific circumstances prevail.

- art 18 requires issuers to maintain a list of managers, staff members and persons

working on behalf of the issuer who have access to inside information. This insider list

should be kept up to date at all time.

- art 19 requires managers (and person closely associated to them) to notify the public

and the competent authority of transactions in excess of a predetermined threshold (most

likely 5.000 €) that would occur in relation to the issuer within a calendar year. Such

notification should be made within 3 business days of the date when the threshold has

been reached using the most appropriate media to ensure efficient dissemination of the

information.

The essential delegated and implementing acts based on the Market Abuse Regulation

have been adopted in time to ensure that market participants and supervisory authorities

can implement the new rule book and apply it as of 3 July 2016.

40

ANNUAL FINANCIAL STATEMENTS, CONSOLIDATED FINANCIAL STATEMENTS

AND RELATED REPORTS OF CERTAIN TYPES OF UNDERTAKINGS

Submission X.18.a by business on (LtL 726)

Absence de plan comptable européen. Cela engendre beaucoup de complications et

d'efforts inutiles, génère des risques de confusion (exemple: 400 = compte client en

Belgique et compte fournisseur en France!). L'économie potentielle est 'in-chiffrable'!

Proposer (rapidement!) un plan comptable européen (défini avec l'aide d'un spécialiste en

codification et en informatique SVP de manière à assurer une structure arborescente

facile à exploiter par des logiciels!) 2. Proposer un calendrier de convergence, qui une

fois adopté par un groupe d'états signataires devient contraignant pour les entreprises de

ces états. 3. Proposer en même temps, pour chaque état des outils gratuits de trans-

codification des plans comptables actuels, de manière à permettre, pour les entreprises

qui ne pourraient ou ne souhaiteraient pas implémenter les changements nécessaires, la

coexistence des plans actuels et du plan comptable européen.

Translation

Lack of a European chart of accounts. This creates many complications and wasted

effort, leads to risks of confusion (example: 400 = account receivable in Belgium and

account payable in France!). The potential saving is unquantifiable!

Propose (rapidly!) a European chart of accounts (defined with the help of an IT and

coding specialist in order to ensure a tree structure that can be easily exploited by

software!). 2. Propose a convergence timetable which, once adopted by a group of

signatory States, becomes binding for companies in those States. 3. At the same time,

propose free tools for re-coding current charts of accounts in each State, to enable current

charts of accounts to co-exist alongside the European chart of accounts for companies

that could not or do not wish to implement the necessary changes.

Policy context

La Directive comptable 2013/34/EU vise à harmoniser les principes comptables de base

au niveau européen, ainsi que, dans une certaine mesure, la présentation des états

financiers des entreprises (bilan, compte de résultat, annexe).

Cependant, la directive ne propose pas de plan comptable européen. La directive repose

en effet sur la liberté d'établissement prévue par l'article 50 du traité sur le

fonctionnement de l'Union européenne. A ce titre, l'objet de la directive est, suivant le

paragraphe 2, point g de l'Article 50 de coordonner les garanties exigées dans les États

membres de la part des sociétés à responsabilité limitée, en vue de protéger les intérêts

tant des associés que des tiers. Ces garanties concernent essentiellement les principes

comptables présidant à la préparation des états financiers, le contrôle des états financiers

par un auditeur, et leur publication. Les plans comptables ne font pas partie de ces

garanties, car ils ne représentent qu'un élément technique de classification de

l'information en vue de la préparation des états financiers. De fait, l'absence de plan

comptable national ne nuit pas directement à la mise en œuvre de ces garanties.

41

Cependant, du fait de leur apport technique, ces plans peuvent contribuer indirectement à

la mise en œuvre effective des directives comptables. Par exemple, sur un plan pratique

pour les entreprises, ils contribuent à l'harmonisation du traitement de l'information

financière au sein d'un Etat membre et facilitent le développement de logiciels

comptables standards. De nombreux Etats membres ont développé un ou plusieurs plans

comptables au niveau national en fonction de leur environnement juridique et de leurs

besoins. Non réglementés par les directives comptables, ces plans relèvent de procédures

et pratiques administratives découlant de la législation interne.

Translation

Directive 2013/34/EU (the Accounting Directive) seeks to harmonise the basic

accounting principles at European level and, to a certain extent, the presentation of

company financial statements (balance sheet, profit and loss account, notes to the

accounts).

However, the Directive does not propose a European chart of accounts. The Directive is

based on the freedom of establishment laid down by Article 50 of the Treaty on the

Functioning of the European Union. Under Article 50(2)(g), therefore, the purpose of the

Directive is to coordinate the safeguards which, for the protection of the interests of

members and others, are required by Member States of limited companies. Those

safeguards concern essentially the accounting principles governing the preparation of the

financial statements, the audit of the financial statements by an auditor, and their

publication. Charts of accounts do not form part of those safeguards because they are

merely a technical method of classifying information with a view to preparing the

financial statements. The absence of a national chart of accounts does not directly affect

the implementation of those safeguards.

However, given their technical contribution, such charts of accounts may contribute

indirectly to the effective implementation of the Accounting Directives. For example, on

a practical level for companies, they contribute to the harmonisation of the treatment of

financial information in a Member State and make it easier to develop standard

accounting software. Many Member States have developed one or more charts of

accounts at national level, depending on their legal framework and needs. These charts of

accounts are not regulated by the Accounting Directives but are covered by

administrative practices and procedures under national legislation.

Current state of play

The Accounting Directive 2013/34/EU was to be transposed by the Member States up

until 20 July 2015.

'PRIVATE LIMITED COMPANY SIMPLIFICATION AND FLEXIBILISATION ACT'

Submission X.19.a by company (LTL 739)

De deponeringstermijn voor besloten vennootschappen is onbedoeld verkort als gevolg

van de flexwet.

Door de flexibilisering van het BV-recht is het voor BV’s waarin alle aandeelhouders

tevens bestuurder zijn eenvoudiger om de jaarrekening vast te stellen. Het bestuur van de

vennootschap is verplicht binnen 5 maanden na afloop van het boekjaar een

jaarrekening op te stellen. Deze termijn kan eenmalig worden verlengd met 6 maanden.

Na het opstellen van de jaarrekening heeft de algemene vergadering twee maanden de

tijd de jaarrekening vast te stellen, waarna de jaarrekening binnen 8 dagen (maar

uiterlijk 13 maanden na het einde van het boekjaar) moet worden gedeponeerd bij de

Kamer van Koophandel. Met de invoering van de flex-BV is bepaald dat in het geval dat

alle aandeelhouders tevens bestuurder zijn, de ondertekening van de jaarrekening door

het bestuur ook geldt als vaststelling van de jaarrekening door de algemene vergadering.

Het is dus niet meer nodig om met dezelfde personen als die de jaarrekening hebben

ondertekend, nog een algemene vergadering te houden om de jaarrekening vast te

stellen. Dit is slechts anders indien de statuten expliciet uitsluiten dat de ondertekening

niet tevens de vaststelling inhoudt, maar de meeste statuten zijn op dit punt niet

aangepast aan de nieuwe wetgeving. Onbedoeld heeft dit echter tot gevolg dat de termijn

van 8 dagen om de jaarrekening te deponeren bij de Kamer van Koophandel aanvangt

met het ondertekenen van de jaarrekening.

Translation

The submission deadline for private limited liability companies (besloten

vennootschappen – BVs) was unintentionally shortened as a result of the 'Private Limited

Company simplification and flexibilisation Act' (Wet vereenvoudiging en flexibilisering

BV-recht). By making the legislation governing BVs more flexible, it is easier for BVs in

which all shareholders are also directors to adopt the annual accounts. Company

directors are obliged to adopt annual accounts within five months of the end of the

financial year. This deadline can be extended once by six months. After the annual

accounts have been drawn up, the general assembly has two months in which to adopt

them, after which time they must be filed within eight days (but no later than 13 months

after the end of the financial year) with the Chamber of Commerce. Under the new Act, if

all shareholders are also directors, annual accounts signed by the board also rank as

annual accounts adopted by the general assembly. It is therefore no longer necessary to

hold a general meeting with the same persons as signed the annual accounts in order to

adopt those accounts. The only exception is if the articles of association explicitly state

that signing of the annual accounts does not also constitute adoption of those accounts.

However, most articles of association do not contain this provision, as they have not

been adjusted to take account of the new legislation. The unintentional result is that the

8-day deadline for filing the annual accounts with the Chamber of Commerce begins

with the signing of the annual accounts.

Policy context

Article 30 of the Accounting Directive addresses the publication deadlines of the

financial statements. In particular, this Article states that "Member States shall ensure

that undertakings publish [their] duly approved financial statements [etc.] within a

reasonable period of time, which shall not exceed 12 months after the balance sheet date.

Publication shall be made "as laid down by the laws of each Member State in accordance

with Chapter 2 of Directive 2009/101/EC".

Against this backdrop, the Member States benefit from a large latitude to decide on the

national deadlines and modalities of that publication. The 12 months deadline is to be

construed as a time limit within which a Member State can set its own deadlines – for

instance, say 6 months after the balance sheet date. The Directive does not regulate the

deadline for publication after certain event, such as a Board meeting or a general

assembly. The Directive requires in addition that those financial statements be "duly

approved", however does not elaborate on the processes for that approval, thus leaving

here again full flexibility to the Member States to organise this.

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