FCA Delays Implementation of European Single Electronic Format in UK
FCA published the policy statement PS20/14 setting out the proposal to push back, by one year, the mandatory requirements for European Single Electronic Format (ESEF). The concerned ESEF requirements relate to filing and publication of machine-readable financial statements and mandatory tagging of basic financial information. These were originally scheduled for financial years starting on or after January 01, 2020, but will now apply to financial years starting on or after January 01, 2021. Issuers will still be able to publish and file their financial reports in ESEF voluntarily for financial years starting on or after January 01, 2020, from January 2021, if they choose to do so. The new rules will come into force on December 31, 2020, which is the implementation period completion day, as defined in the European Union (Withdrawal Agreement) Act 2020.
PS20/14 summarizes the feedback received and sets out the FCA response to it. It also offers an update on measures to extend deadline for the publication, by listed companies, of financial statements. FCA decided to continue with its proposal to push back by one year the mandatory requirements to publish and file machine-readable financial statements and tagging of basic financial information. However, requirements for tagging of notes to the annual financial statements will now run on their original timetable. This means that the requirement for all issuers to publish and file their annual financial reports in XHTML web browser format, replacing the current PDF format, will be pushed back to financial years starting on or after January 01, 2021, for publication from January 01, 2022. To tag basic financial information, the requirement for issuers that prepare consolidated annual financial statements in accordance with IFRS will be pushed back to financial years starting on or after January 01, 2021, for publication from January 01, 2022. However, the requirement for issuers that prepare IFRS consolidated annual financial statements to tag notes to the financial statements will be unchanged, applying to financial years starting on or after January 01, 2022, for publication from January 01, 2023.
PS20/14 affects issuers with transferable securities admitted to trading on UK regulated markets, or issuers that are considering admission to trading on a UK regulated market. It is also of interest to:
- Issuers with securities admitted to the FCA Official List or considering a listing
- Firms advising issuers or advising persons investing in them
- Firms or persons investing or dealing in UK-listed securities or securities admitted to trading on a UK regulated market
- Firms providing research and analysis on issuers, accountants, and other advisors, along with the service providers helping issuers with the preparation and publication of their annual financial statements
The new rules will come into force at the end of the implementation period as defined in EU (Withdrawal Agreement) Act 2020 (that is, December 31, 2020). To allow issuers to submit annual reports based on the ESEF standard, FCA is also upgrading its National Storage Mechanism facility and its online archive of filings by companies that are subject to the Transparency Directive and Listing Rules. FCA anticipates releasing the upgrade in January 2021, ready for issuers that wish to file reports in ESEF on a voluntary basis. To meet ESEF requirements issuers will need to devote potentially significant management and operational time for the rest of this year and continuing into 2021. In this context, and in line with other recent actions to relieve burdens on issuers, changes to the ESEF implementation timetable will allow issuers to focus on their more immediate and significant priorities. The EU regulatory technical standards setting out the detailed requirements and implementation timetable are already in force and will be a part of the UK law under the EU Withdrawal Act. FCA can only change the regulatory standards when it has the power to do so at the end of the Implementation Period. FCA is, therefore, making these changes with effect from January 01, 2021, following the end of the implementation period.
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Keywords: Europe, UK, Banking, Securities, ESEF, Reporting, IFRS, COVID-19, PS20/14, FCA
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