CP20/12: Consultation on delay to the implementation of the European Single Electronic Format

Open consultation: CP20/12
22/07/2020
22/07/2020
Consultation closes
28/08/2020

We set out proposed rule changes to postpone by 1 year the mandatory European Single Electronic Format (ESEF) requirements for annual financial reporting under the Transparency Directive (TD).

Read CP20/12 (PDF)

Under our proposals:

  • The requirement for all issuers to publish their annual financial reports in XHTML web browser format, replacing the current PDF format, would be pushed back to financial years starting on or after 1 January 2021, for publication from 1 January 2022.
  • The requirement for issuers who prepare consolidated annual financial statements in accordance with International Financial Reporting Standards (IFRS) to tag basic financial information would be pushed back to financial years starting on or after 1 January 2021, for publication from 1 January 2022.
  • The requirement for issuers who prepare IFRS consolidated annual financial statements to tag notes to the financial statements would be pushed back to financial years starting on or after 1 January 2023, for publication from 1 January 2024. 

Issuers will, however, be able to publish and file their annual financial reports voluntarily in the new ESEF if they choose to do so.

Why we are consulting

We are making these proposals because of the exceptional circumstances caused by the coronavirus (Covid-19) crisis. These circumstances have put significant pressures on issuers of securities. In this context, and in line with our other recent actions to relieve burdens on issuers, our proposed changes will allow issuers to focus on more immediate and significant priorities.

Who this applies to

This proposal applies to issuers with transferable securities admitted to trading on UK regulated markets, or who are considering admission to trading on a UK regulated market. It is also of interest to:

  • Issuers with securities admitted to our 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, and accountants and other advisors and service providers helping issuers with the preparation and publication of their annual financial statements.

Background to the ESEF

The ESEF introduces requirements for annual financial reporting in electronic format. This will improve the accessibility, analysis and comparability of annual financial reports. In the long term, this will make capital markets more efficient and will lower the cost of capital for issuers.

The rules implementing the ESEF requirements are already in place. To meet the current timetable set out by these rules, issuers will need to devote further and continuing management and operational resource to ensure that they will be able to submit annual financial reports in the ESEF format from the beginning of 2021. This call on issuers’ resources is likely to be particularly significant in the second half of this year and the first half of 2021.

The pressures placed on issuers by the coronavirus crisis are likely to continue and intensify over the short to medium-term. In response, we want to reduce burdens on issuers without adversely affecting consumer protection or market integrity.

Next steps

Online response form

We are asking for comments by 28 August 2020.