Letter to the IFRS Foundation Constitution on ESMA's response to the Exposure Draft Proposed Targeted Amendments
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ESMA responds to the IFRS Foundation consultation on amending its Constitution. It accepts reducing the size of the IASB and ISSB for financial sustainability reasons, but considers ten members should generally be the minimum and calls for a strong EU presence on both Boards.
Key points
- Rejects the idea that an eight-member Board is sufficient; proposes ten as the normal lower bound.
- Asks for at least two EU members on the IASB and one or two on the ISSB; the EU provides about 26% of the Foundation's funding.
- Proposes raising to six the affirmative votes needed to approve exposure drafts and standards.
- Calls for more clarity on at-large seats, part-time members and term lengths.
Who is affected
IFRS Foundation, IASB and ISSB; indirectly, issuers applying IFRS (around 3,800 in the EEA) and users of financial information.
Plain-language version
ESMA, the EU watchdog for stock markets and investment products, has responded to reforms at the foundation behind IFRS, the accounting rules listed companies use for their financial statements. It accepts smaller boards but wants at least ten members and a strong EU presence, since the EU provides about 26% of the foundation's funding. Those rules shape the accounts you read before investing.
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Summary produced with artificial intelligence from the official publication. It may contain errors: always check the original document.
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