Quarterly reports anger European investors

Aleadinginvestment management association and a high profile life insurance association in Europe have joined together to voice opposition to the proposed introduction of mandatory quarterly reporting which would affect financial services groups.

The French Asset Management Association and the Association of British Insurers joined a chorus of protest among corporations opposed to the change which is being pushed by the European Commission (EC).

The EC’s move comes as part of its new transparency directive, aiming to align its reporting standards with the US where the practice is currently a standard requirement among listed companies.

The protest by the associations follow indications by the UK Financial Services Authority that it would take its lead from the EC on mandatory quarterly reporting.

The associations questioned the wisdom of implementing the change towards quarterly reports, saying the practice had not helped prevent corporate scandals in the US.

They called for investors to show their opposition to the proposals, an action followed by a response from two-thirds of the world’s leading bankers who also expressed their concern.

According to the French association, quarterly reporting is not a high priority, as it would encourage short-term outlooks by managers who would always be focusing on the next reporting deadline.

The associations said it was vital that price sensitive news was transmitted to the market accurately and promptly, but that quarterly reporting should not be a substitute for reliable ad hoc announcements.