AMF

R É P U B L I Q U E F R A N Ç A I S E Autorité des marchés financiers 17, place de la Bourse - 75082 Paris Cedex 2 - Tél : 01 53 45 60 00 - Télécopie : 01 53 45 61 00 ­ www. amf-france. org 23 January 2004 Corporate governance and internal control - Disclosure and publication requirements for securities issuers (Loi de sécurité financière, Art. 122) Introduction Under the loi de sécurité financière (LSF)1, issuers of securities are subject to new disclosure requirements for corporate governance and internal control. As of 2003, the chairmen of the board of directors or the supervisory board of limited-liability companies (sociétés anonymes) are required report to shareholders annually, in a document appended to the Management Report issued by the board of directors, regarding the way in which the board prepares and organises its work ("corporate governance"), as well as on the internal control procedures implemented by the company. For limited companies with a board of directors,2 the report must also specify whether the powers of the chief executive have been restricted in any way. 3 Statutory auditors are required to submit their observations concerning the section of the chairman's report dealing with the internal control procedures for preparing and handling financial and accounting information. 4 These observations are contained in a special report appended to the auditors' report. The disclosure and publication requirements for companies making public offerings of securities will be incorporated into the General Book of Rules of the Autorité des marchés financiers (AMF), the French securities regulator, which will also publish an annual report based on the information published in this respect. 5 Pursuant to Article L. 621-1 of the French Monetary and Financial Code, the AMF hereby clarifies its expectations concerning the information to be disclosed by the issuers referred to in Article 122 of the LSF. 6 1 Loi de sécurité financière dated 1 August 2003, published in the Official Journal of the French Republic, issue 177 dated 2 August 2003 at p. 13220. 2 As opposed to a dual structure, i. e. , a management board and a supervisory board. 3 LSF, Art. 117. 4 LSF, Art. 120. 5 LSF, Art. 122 6 Art. 122 applies to any public legal entity, i. e. , any entity which has conducted a public offering of securities, regardless of its legal form (limited partnership, groupement d'intérêt économique, etc. ), its country of origin, or the type of product issued (debt or equity securities).