EU’s Directive on transparency of financial reporting – the same rights to information for domestic and foreign investors

While the managements of big number of stock companies in our country avoid announcement of prospectus in order to make it possible for the present owners and interested investor to sell and buy stocks on the stock exchange, at the end of last year European Parliament and Council adopted the Directive on harmonization of obligations of the issuers of the securities for trade on the organized market, which obliges them to present their financial reports to the public for inspection!

It is all based on the fact that the announcement of accurate, complete and timely information on issuers of securities represents guarantee of trust of the investor and enables making of right and less risky investment decisions.

That means that it is necessary that the potential investor be well informed on business results and property of the issuer, which strengthens both the investor’s security and the market efficiency.

Judging by the translation and processing of the text of the Directive, which was carried out by Jasmina Živković from the Belgrade Stock Exchange – the authors of the document believed that the efficient, transparent and integral securities markets contribute to the unique market of European Union and stimulate economic growth and employment thanks to the optimal distribution of assets and reduction of expenses.

The Directive regulates obligation of the issuer of securities to announce more complete six-month reports if their securities are bought and sold on the regulated market.

Concerning the right to information, foreign investors are equal to the investors whose headquarters are in the countries that are members of EU.