The Transparency Directive (Directive 2004/109/EC or the 'TD') establishes the periodic financial information to be published by issuers whose securities are admitted to trading on a regulated market.

The TD provides that 'information requirements also require adequate control by the competent authority of the Member State' of the issuer. Regulation 1606/2002/EC paved the way for convergence of the financial reporting standards throughout the Community for issuers whose securities are admitted to trading on a regulated market and who are required to prepare consolidated accounts.

The periodic financial information covered by the TD basically relates to the annual report, the half-yearly report and the interim management statements. According to Article 24 of the TD, a single competent authority should be designated in each Member State to assume final responsibility for supervising compliance with the provisions adopted pursuant to the Directive, as well as for international cooperation.

In this regard, ESMA has issued Guidelines on enforcement of financial information under Article 16 of the Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 ('ESMA regulation') in relation to the acts referred to in Article 1(2) of the ESMA Regulation, which includes the Transparency Directive, with a view to establish consistent, efficient and effective supervisory practices in relation to, and ensuring the common, uniform and consistent application of, such acts.

These guidelines are principles-based and i) define enforcement of financial information and its scope under the Transparency Directive; ii) set out what characteristics enforcers should possess; iii) describe selection techniques that should be followed and other aspects of enforcement methodology; iv) describe the types of enforcement actions that should be made use of by enforcers and explain how enforcement activities are coordinated within ESMA.

The Malta Financial Services Authority is the local independent authority responsible for ensuring compliance by listed companies with the International Financial Reporting Standards. The Authority's function aims to ensure investor protection and promote market confidence by contributing to improved transparency of accurate and reliable financial information, which is fundamental for investors as well as potential investors, to arrive at an informed investment decision.

In this context, the Authority has issued a Circular to assist local Listed Entities who have still not been selected by the Authority for examination of the published accounts to ensure that applicable disclosures are included in their annual financial statements.

For further information, enquirers may contact Dr. Christopher P. Buttigieg, Director Securities and Markets Supervision Unit (cbuttigieg@mfsa.com.mt), Ms Lorraine Vella, Senior Manager, Securities and Markets Supervision Unit (lvella@mfsa.com.mt), or Ms Stephanie Buhagiar Camilleri, Analyst , Securities and Markets Supervision Unit (scamilleri@mfsa.com.mt).

MFSA Newsletter February 2016

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