The new European Transparency Directive, which was published at the end of 2013 in the Official Journal, is now in force.
In a major effort to simplify the burden of financial reporting, the EU has killed off quarterly reporting for publicly listed companies. Local (country specific) legislation is required to follow suit although in special circumstances some companies may be compelled to report quarterly, provided that such a requirement does not “constitute a significant financial burden, and if the additional information required is proportionate to the factors that contribute to investment decisions.”
No doubt quoted companies will be delighted with the news that they are no longer tied to the grindstone of the quarterly financial reporting cycle. The EU hopes that these new measure will not only reduce the reporting burden but also reduce short-termism in investment decisions tied to quarterly results.
For public companies the time saving could be considerable and hopefully the finance function will be able to focus on the analysis of performance or perhaps process improvement initiatives instead of worrying about statutory filings.
What happens next? It will be fascinating to see if non-EU countries, especially the United States follows the EU’s lead.
You can view the full text of the Directive in the Official Journal here.