1. Financial reporting obligations in SMP market Cost accounting and accounting separation Chris Rowsell

2. Powers to impose financial reporting obligations Wholesale cost accounting –cost-orientation, price control or cost recovery –clauses 84(9) - 84(11) of Comms Bill Retail cost accounting –retail tariff regulation, where wholesale not sufficient –Clause 88(6) of Comms Bill Accounting separation –no undue discrimination, unfair cross subsidy –Clauses 84(7) and 84(8) of Comms Bill

3. Link to market reviews Driven by the market reviews That is: –market reviews decided whether financial reporting obligations were necessary –this document proposes how those obligations are to be implemented

4. Markets with A/S and/or C/A

5. Main proposals Proposals On-demand reporting Delivery of statements Publication of subset of statements Transparent accounting documentation Increased amendment powers Auditor - duty of care to regulator Choice of audit level

6. Example of matrix

7. Summary Condoc and annexes will be large... but reflects level of detail, not impact Publish Monday 19 May 10 week consultation