LSE Submission To European Commission Consultation

The European Commission is consulting on proposed changes to the disclosure obligations of companies. The consultation is seeking to consolidate all disclosure requirements into one text and ensure that EU requirements are applied to all securities of issuers traded on "regulated markets". The consultation proposes to upgrade regular financial reporting and ongoing ad hoc disclosure requirements and require that this information is available on company websites. It also looks to concentrate responsibility for disclosure requirements with companies' "home" competent authority.

We recognise this is an important consultation and believe that improved disclosure standards across the EU, appropriately enforced, will enhance investor protection and confidence, and aid the creation of a pan-European financial services market. The main points in our submission are as follows:

• we agree with the Commission's aim to have a consolidated regime integrating all current ongoing and regular EU disclosure requirements into a single text;
• we are concerned that the "one size fits all" approach in the consultation is unlikely to be appropriate for SMEs and certain specialist issuers, particularly given the unnecessary associated costs; and
• given the general obligation to disclose all price sensitive information on a timely basis, the Exchange does not believe that mandatory quarterly reporting is necessary. It may indeed be detrimental and actually reduce the level of ongoing disclosure.