All issuers who are required to prepare annual financial reports under our Disclosure, Guidance and Transparency Rules (DTRs) must be ready to meet our new requirements to prepare, publish and file those reports in the new single, electronic reporting format.
Background
Our requirements, which originate in the EU legislation for the European single electronic reporting format (ESEF) that came into force in the UK before the end of the EU Withdrawal period on 31 December 2020, introduce a structured format for annual financial reports. This includes the ability to ‘tag’ (i.e. label) individual disclosures in the report according to a published taxonomy. Compared to an unstructured format (such as *.pdf), structured files allow the contents of the report to be machine-readable using specialist software tools aiming to improve the accessibility, analysis and comparability of the information.
Preparing annual financial reports in the new electronic format
In general, companies with transferable securities admitted to trading on UK regulated markets must prepare their annual financial reports in a XHTML web browser format, replacing the current PDF format, for financial years starting on or after 1 January 2021, for publication from 1 January 2022. They also need to file them with the FCA’s National Storage Mechanism (NSM).
We also require in-scope issuers who prepare annual consolidated accounts in accordance with International Financial Reporting Standards (IFRS), whether UK, EU or international IFRS, to mark up those financial statements with tags selected from one of the permitted taxonomies.
Issuers can find out more information on these requirements in the Handbook section of our website in the Disclosure, Guidance and Transparency Rules (DTRs) (see DTR4.1.1R and DTR4.1.14R) and the Technical Standards for the Transparency Directive which include the UK Version of the ESEF Regulation, as amended.
Certain issuers of securities on regulated markets are, however, exempt from these requirements (see DTR 4.4), including:
- Public sector issuers (DTR 4.4.1).
- Issuers that exclusively issue debt securities admitted to trading, the denomination per unit of which is at least 100,000 euros (or an equivalent amount) (DTR 4.4.2).
Phased implementation
In our rules, we have maintained a phased introduction to the mandatory tagging obligations as set out in the following table:
| Date | Obligation | Financial period |
|---|---|---|
| January 2021 |
Voluntary ESEF filing can begin. The National Storage Mechanism upgraded to accept Annual Financial Reports in ESEF. |
Financial years starting on or after 1 January 2020. |
| 2022 |
The first phase of mandatory electronic format reporting requirements apply for in-scope issuers preparing consolidated financial statements in line with IFRS. Annual financial reports for all issuers in scope to be published and filed in an electronic format specified in our technical standards. Mandatory tagging of basic financial information. |
Financial years starting on or after 1 January 2021. Publication from 1 January 2022. |
| 2023 | Second phase – in-scope issuers as above must tag notes to the annual financial statements. |
Financial years starting on or after 1 January 2022. Publication from 1 January 2023. |
Application of the Disclosure Guidance and Transparency Rules (DTRs)
DTR 6.2.2R requires issuers in scope to file their AFRs with us for publication on our NSM.
DTR 6.2.3G, which allows issuers to meet their DTR 6.2.2R filing obligation by using a Primary Information Provider (PIP) to disseminate information, does not apply to the filing of ESEF-prepared AFRs.
Guidance on how to file financial reports in electronic format with the FCA
Companies, advisors and other parties assisting with the filing of annual financial reports can find a step by step summary of the process on our website here.