FEE - 25/10/2005 Where is the demand for internal control and risk management reporting coming from ? Jean-Paul Servais Vice Chairman CBFA (Financial Regulator, Belgium) Chairman CSPE (High Council for Economic Professions, Belgium) Lecturer ULB (University of Brussels, Belgium)

FEE - 25/10/2005 Risk management and internal control in the EU American approachEuropean Approach - Strong regulation- Best practices (CG Codes) i.e. soft law (potentially implemented at nat. level) - Section 302 & 404 SOX- New 8th directive (art. 39) - Proposal to amend 4th and 7th EU Directives  Regulators point of view  In Belgium  At European level

FEE - 25/10/2005 Risk management and internal control in the EU A priority for the regulators ?  Current practice in framework of bank, insurance companies and pension funds.  Quid about the implementation of new regulatory supervision of financial information of listed companies ?  Regulators point of view  In Belgium  At European level

FEE - 25/10/2005 CBFA External audit Internal audit Internal control Concentric circles of supervision

FEE - 25/10/2005 Risk management and internal control in the EU Answer to some of FEE’s questions  Do you agree with FEE’s proposal that there should be a basic EU requirement for all companies to maintain accounting records that support information for published financial statements ? Why not …. But it depends on the status of listed companies ….

FEE - 25/10/2005 Risk management and internal control in the EU Answer to some of FEE’s questions  What role should regulatory requirements play in promoting improvement in risk management and internal control ? - Exhaustive information has to be published just in time by these companies …. - Does the enforcement need to be performed by the regulators during field inspections ?

FEE - 25/10/2005 Risk management and internal control in the EU A cost/benefits approach  Regulators point of view  In Belgium  At European level

FEE - 25/10/2005 Conclusions