The Capital Market Commission, the securities regulator, yesterday announced the abolition of the current 18 percent daily volatility limit on the 20 stocks comprising the FTSE/ASE-20 index, beginning on January 1, 2005. It also decided to extend the 18 percent limit to 20 percent for the other listed stocks, also effective on January 1. «We are ending the limit up/limit down for FTSE/ASE-20 constituents, in agreement with the Athens Stock Exchange management,» Capital Market Commission head Alexis Pilavios told reporters. «We believe the Greek market is mature enough to handle transactions without (price) limits,» he said. Pilavios also presented a series of measures designed to improve accountability and transparency in financial markets and to boost investor interest, which has never recovered since the bubble market of 1999 burst, leaving hundreds of thousands with shares they bought at the top of the curve and which they could not now sell without incurring substantial loss. Pilavios also said that, concerning the application of International Accounting Standards, the Commission’s proposal is that Greek listed companies begin reporting under IAS with first-half results next year and not with the annual results, as suggested by government officials. However, that is up to the Economy and Finance Ministry to decide. The adoption of IAS is expected to affect the bottom line of many listed firms, especially state-controlled banks, since they will be required to report on the estimated cost of pensions and severance payments and to deduct it from the firm’s equity capital. It also imposes additional disclosure requirements for the benefit of investors and shareholders. As part of these, the Commission said listed companies will be required to distribute annual reports to shareholders before the annual assembly takes place. «We want shareholders’ meetings to have real value with substantive discussion. Every listed company must have a website,» Pilavios said. Annual reports must be posted on companies’ websites no later than 10 days before the annual assembly of shareholders. He emphasized that annual reports must include a company’s after-tax earnings per share (EPS) and equity capital. «As is the practice abroad, investors must know the after-tax profit figures, which means there will be one price-to-earnings (P/E) ratio and not several, creating confusion,» Pilavios said. As for mutual funds, the commission will require quarterly statements to shareholders to clearly include what funds charge as management and custody fees – a move that will boost competition in the sector. «Mutual fund investors must know exactly what they are paying funds to manage their money,» the commissioner said. Pilavios said that money market mutual funds will also not be allowed to invest in shares or equity derivatives at all, ending current practice. Funds will be required to also inform investors of their cumulative returns in the last three years in addition to detailed portfolio holdings on a quarterly basis instead of biannually as is the case now. «Information on portfolio holdings must be available no later than 10 days after the end of each quarter,» Pilavios said. In the tax bill it has submitted to Parliament, the government provides a tax break on 15 percent of expenditure for the acquisition of shares worth up to 3,000 euros in balanced or equity funds in the period 2005-2009, on condition is that buyers hold on to their shares for at least three years.