Treasurers must sort out their arguments over IAS 39 Treasurers remain deeply concerned about the impact of IAS 39 Financial Instruments: Recognition and Measurement.
The requirement for listed companies to prepare an Operating and Financial Review (OFR) as been going through an uncertain period. With effect from years starting 1 April 2005 the OFR became mandatory for listed companies by virtue of statutory instrument SI 2005/1011 which amended the Companies Act 1985. Then in November 2005 the Chancellor announced the intention to remove this obligation, which was made effective in January 2006 by statutory instrument SI 2005/3442.
Credit rating agencies (CRAs) play an important role in the efficient operation of the global capital markets. Investors and lenders rely on CRAs to provide a clear measure of the creditworthiness of debt issuers and borrowers, while debt issuers rely on CRAs to issue ratings that accurately reflect the company’s relative creditworthiness. Companies also use credit ratings to evaluate trading partners, financial counterparties, and potential business partners; and in many jurisdictions, regulators also rely on CRAs for determining regulatory capital requirements and permitted investments.
The context for the Review is the Government’s drive to reduce unnecessary regulatory burdens on business and other stakeholders, as set out in Chapter 3 of the 2005 Pre-Budget Report. Around half of new regulations that impact on business derive from the EU and there are now systems in place to ensure that such laws are not ‘over-implemented’, unless there is a strong and proven case for doing so.
However the stock of existing UK laws may include areas that were not implemented in the least burdensome way possible, thereby placing the UK at a competitive disadvantage.
A fair, modern, and effective framework of company law is crucial to our performance as an economy, and as a society. Britain was among the first nations to establish rules for the operation of companies, and our law remains a model for many nations overseas.
But over time the law can become outdated, and risks presenting obstacles to the ways companies want and need to do business in today’s world. We are determined to avoid this. That is why we established the Company Law Review, to consider in detail how our law can best be modernised.
This consultative document seeks your views on three legislative measures which form part of the European Commission’s Action Plan on Company Law and Corporate Governance (CLAP)1. Each of the three proposals is dealt with in self-contained sections.
A new qualification for the evolving treasury profession The ACT has launched a radical development of its professional qualifications, the result of three years’ work by a team of people from bot
Borrowers and lenders will already be very well aware that the application of International Accounting Standards by all EU listed companies may have a significant effect on the numbers reported in a group’s or an entity’s financial statements. If not already planned or completed companies will need to communicate sufficiently with their lenders and the credit rating agencies so that the implications of IFRS are properly understood. If need be this can form the basis of any negotiation over waivers or variations in financial covenants.
The Association of Corporate Treasurers (“ACT”) and of the Association Française des Trésoriers d’Entreprises (“AFTE”) have submitted a joint response to the Committee of European Securities Regulators’ consultation paper over its technical advice to the European Commission on possible measures concerning credit rating agencies (“CRAs”) issued in November 2004.
