the Centre’s activities in investors and treating them With this vision, the GAAP on these aspects, the
Europe is the publication of equally (note these are Centre supports what the Centre advocates a
the ‘de Larosiere Report’. institutional investors as retail Commission has put forward comprehensive rather than
The report produced a investors are not allowed to and appreciates some of the piecemeal approach by the
number of proposals purchase alternatives). This innovations also proposed by IASB in its review of
supporting a new pan- goes beyond existing the de Larosière Group. The fi nancial instrument
European supervisory legislation and is certainly Centre’s letter can be found at accounting and emphasises
system. Of particular interest sympathetic to the views held
www.cfainstitute.org/centre/ the need for independent
is the proposed redefi ning of by the Centre’s Asset topics/comment/2009/ standard setting that
the three level III committees Manager Code. pdg/090409.pdf primarily focuses on investor
into three European transparency requirements.
Authorities in banking, Regulator engagement Meeting with IASB In its comments, the Centre
insurance and securities. The The team at the Centre has The Corporate Disclosure reiterates the merits of the fair
aim is to set harmonised submitted consultations on Policy Council (CDPC), value measurement approach
standards of supervision and the structure of the audit along with Patrick Finnegan, and the need for enhanced
enforcement across the EU, market and on the updating CFA, director, Financial levels and quality of disclosures.
with the new authorities of the Prospectus Directive. Reporting Policy Group The FRPG fi nalised its
having ultimate decision- The Centre has also given a (FRPG), and Vincent Papa, consultative response to the
making powers. The written submission to The CFA, senior policy analyst, IASB on the key convergence
Commission is in the process International Organization of Centre for Financial Market project and fi nancial statement
of drafting accelerated Securities Commissions Integrity, had a consultative presentation.
legislation to approve the ‘de (IOSCO) for their Madrid meeting with the IASB staff This project includes
Larosiere’ recommendations. stakeholder meeting. In and board members at the improvements on cashfl ow
It is estimated that the new addition to the de Larosiere beginning of March. The disclosure and proposes a
regulatory architecture will activity, the Centre was meeting covered a range of cohesive and disaggregated
be up and running in the delighted to hear that the topics including fi nancial classifi cation across the main
course of 2010. Commission had accepted as statement presentation, fi nancial statements. Among
policy many of its ideas on fi nancial instrument the proposals, the Centre
EU regulation rating agencies and retail accounting, consolidations advocates the provision of
The Commission is close to investment products. and revenue recognition. The the direct cash fl ow method
issuing new policy documents FRPG also met the Corporate format and a balance sheet to
on executive compensation, Vision for Europe Reporting Users Forum balance sheet reconciliation
retail investment products The Centre responded to the (CRUF) to engage on our that conveys to fi nancial
and a directive on alternative European Commission’s positions in key areas of statement users the
investment funds. The Centre Communication for the fi nancial reporting. interconnectedness of
has seen drafts on all three spring European Council, disparate fi nancial
documents and is delighted which addresses the Financial reporting statements.
to report that they favour supervisory and regulatory The Financial Reporting Finally, through a press
investors’ interests. reforms that are going to Policy Group (FRPG) issued release, the Centre
There are certainly signs reshape EU fi nancial markets consultative responses and disseminated its IFRS
that they have read the and set an important press releases on fi nancial convergence survey results to
Centre’s executive example for other leading instrument accounting, IAS the media. They show 91%
compensation manual and jurisdictions globally. The 39, and proposed of global membership would
accepted many of the risks Centre values the defi ning amendments. The favour a single set of high
fl agged within it. They have principles of better amendments relate to quality fi nancial reports.
sided with the Centre on the regulation behind the impairment of fi nancial assets All comment letters and
harmonisation of business Financial Services Action and the treatment of fair press releases can be found
conduct in the sales of retail Plan, and would like to see value in illiquid instruments. on the CFA Institute website
products. these principles more Given the complexity of at
www.cfainstitute.org/
On the draft Alternatives’ thoroughly applied in the requirements and the centre and www.cfainstitute.
Directive there is reference to context of the new regulatory signifi cance of the difference org/aboutus/press/release/
acting in the best interest of and supervisory framework. between IFRS and US index.html.
52 SUMMER 2009
50-5350-53 CFAI report.indd 52CFAI report.indd 52 1/6/091/6/09 12:10:4112:10:41Professional Investor Summer 09.54 54 4/6/09 15:41:05
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