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The European Single Electronic Format (ESEF) Regulation requires annual financial reports of publicly listed issuers to be made available in XHTML format, with a further requirement for IFRS consolidated accounts to have iXBRL tags. This requirement does not change the content of annual reports, it only addresses the format in which they are published.
The European Single Electronic Format (ESEF) Regulation requires annual financial reports of publicly listed issuers to be made available in XHTML format, with a further requirement for IFRS consolidated accounts to have iXBRL tags. This requirement does not change the content of annual reports, it only addresses the format in which they are published.
ESEF only applies to annual reports. It does not cover interim accounts.
The ESEF Regulation can be traced back to the 2013 EU Transparency Directive (TD), which amended the previous TD and sets out transparency requirements for issuers whose securities are listed on EU regulated markets. More specifically, Article 4(7) of the 2013 TD introduced the requirement for all Annual Financial Reports to be prepared using a single electronic format for financial years beginning on or after 1 January 2020. ESMA was tasked with the responsibility of drafting Regulatory Technical Standards (RTS) to specify the electronic reporting format.
The ESEF Regulation that came into force in 2019 was the outcome of such review.
The ESEF has two key requirements:
IFRS consolidated financial statements | Individual financial statements | |
Primary financial statements | Mandatory for period beginning 1 January 2020 | Voluntary (if Member State provides taxonomy) |
Block tagging of notes | Mandatory for period beginning 1 January 2022 | |
Detailed tagging of notes | Voluntary |
The FCA is responsible for implementing the requirement in the UK and has added DTR 4.1.14 to the Handbook as follows:
“Reporting format
The annual financial report must be prepared using the single electronic reporting format specified in Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format as amended from time to time.”
Additionally, the FCA is currently consulting to delay the initial ESEF reporting by a year. The consultation will run until 28 August 2020.
Statutory auditors of companies with securities listed on EU regulated markets will have to provide an audit opinion stating:
The Committee of European Auditing Oversight Bodies has issued guidelines on how audits of ESEF compliance should be carried out. However, such guidance is subject to national transposition in each Member State.
eXtensible Hypertext Mark-up Language
eXtensible Business Reporting Language
Inline eXtensible Business Reporting Language, which is a format that enables XBRL data to be embedded directly into an HTML/XHTML format document
We believe automation of financial analysis adds considerable value for investors and that this trend is likely to extend to financial reporting by other issuers, including those investing in alternative asset classes. Sanne is currently exploring options available to have a solution tested and ready well ahead of the 2020 year-end reporting period.
Sanne can provide the full range of fund services to comply with the obligations under the law. Our team of Private Debt & Capital Markets experts spans a global office network. We take an active role in industry consultations and disseminating our knowledge into the market. We take pride in our ability to deliver the solutions required by our clients to support their alternative investment structures, in an ever-evolving industry.
