FCA delays implementation of European Single Electronic Format
The UK Financial Conduct Authority (FCA) today published a Policy Statement setting out its decision on proposals to push back by one year mandatory requirements related to the European Single Electronic Format (ESEF).
The ESEF initiative includes requirements for publication and filing of machine- readable financial statements and the electronic tagging of basic financial statements and notes to these financial statements. It will enhance the accessibility of issuers’ financial data and will make easier the process of evaluating corporate performance by investors across industry sectors and different jurisdictions.
The FCA’s proposals to delay the implementation aimed to reduce the burden on issuers during the exceptional circumstances of the coronavirus pandemic.
Feedback to the relevant consultation paper was supportive overall of a delay to ESEF implementation for financial years starting on or after January 1, 2020, although some of the respondents, particularly a number of companies assisting issuers in implementing ESEF, opposed it.
Feedback about whether the regulator should delay requirements for tagging of notes to the annual financial statements was more balanced between those who supported a delay and those who did not feel that it was necessary.
In light of the feedback, the FCA says it is going to proceed with its proposal to push back by one year ESEF requirements originally scheduled for financial years starting on or after January 1, 2020. These requirements will now apply to financial years starting on or after January 1, 2021.
The FCA notes that issuers will still be able to publish and file their financial reports in ESEF voluntarily for financial years starting on or after 1 January 2020, from January 2021 if they choose to do so.
The regulator has adjusted its proposal in relation to implementation of mandatory tagging of notes to the annual financial statements. Given the mixed feedback to this proposal, and taking into account the views of those respondents who did not support any delay to the overall ESEF timetable, the FCA has decided to keep this requirement to the existing timetable. Hence, it will apply to financial years starting on or after January 1, 2022.