Featured Product

    EC Note on Application of EU Law for European Single Electronic Format

    November 06, 2020

    EC adopted an explanatory note on the way the European Single Electronic Format (ESEF) will work for listed companies in EU. Following requests from stakeholders, the note clarifies how to apply certain provisions of the EU law in the context of ESEF, including the audit of ESEF-compliant annual financial statements, the use of an electronic signature, and the responsibilities and liabilities of issuers. EC also published a set of frequently asked questions (FAQ) on ESEF. From 2021 onward, all listed companies in the EU will be able to use the ESEF—a new, single electronic document—when publishing their annual financial reports.

    The aim of ESEF is to make it easier for listed companies to meet transparency requirements and ultimately to enhance transparency on the capital markets in EU. These provisions in the ESEF regulation stem from Directive Transparency Directive, Audit Directive, and Accounting Directive. In particular, the note provides: 

    • Clarifications on existing EU provisions concerning audit. The note clarifies that EU law requires statutory auditors to provide an audit opinion on whether the financial statements included in the annual financial reports comply with the relevant statutory requirements laid down in the ESEF Regulation. Under the Transparency Directive, third-country issuers are required to disclose annual financial reports drawn-up in accordance with all the requirements in the ESEF Regulation, together with an audit report prepared in accordance with the Audit Directive. As a result, it is the responsibility of a third-country issuer to ensure that its auditors provide an audit opinion on whether the financial statements included in the annual financial report comply with the relevant statutory requirements laid down in ESEF Regulation.
    • Clarifications on EU provisions on use of an E-Signature. The note clarifies that the existing EU law does not prevent issuers or statutory auditors from using an e-signature for signing the annual financial reports, documents included therein, or the audit reports, respectively. In the absence of specific rules in force at the national or regulated market level, issuers and/or statutory auditors may apply their preferred option, including a handwritten or an e-signature.
    • Clarifications on EU provisions on the responsibility and liabilities of issuers. The note clarifies that an issuer’s administrative, management, or supervisory body is responsible for drawing up and disclosing the annual financial reports in compliance with the ESEF Regulation. EU law does not prevent issuers from expressing, on a voluntary basis, for instance, in the responsibility statement within the annual financial report, a specific statement regarding the compliance of the annual financial report with the ESEF Regulation. EU law does not prevent issuers from disclosing additional versions of their annual financial reports that are non-ESEF compliant or that include ESEF-compliant financial statements for which compliance with ESEF was not checked by the statutory auditors. However, it should be made clear that these additional non-ESEF compliant versions of the annual financial reports constitute non-official versions.

    The note also clarifies provisions concerning the use of ESEF files to fulfil other EU obligations. In case of a limited liability company with securities listed on the regulated markets in EU, the EU law does not prohibit the use of the audited financial statements prepared and published in accordance with the ESEF Regulation to fulfil legal obligations other than the ones stemming from the Transparency Directive. The EU law, therefore, does not prevent the implementation of national and/or administrative rules that would allow issuers to file the ESEF-compliant financial statements as accounting documents with a business register. Besides, the officially appointed mechanisms are also required to disseminate at least the ESEF-compliant annual financial reports submitted by issuers. 


    Related Links

    Keywords: Europe, EU, Banking, Securities, ESEF, Q&A, EU Law, ESEF Regulation, Transparency Directive, iXBRL, EC

    Related Articles

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News

    APRA Consults on Prudential Standard for Operational Risk

    The Australian Prudential Regulation Authority (APRA) is seeking comments, until October 21, 2022, on the introduction of CPS 230, which is the new cross-industry prudential standard on operational risk management.

    July 28, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8422