On 4 February 2020, the European Securities and Markets Authority (ESMA) published amended guidelines for Member State national competent authorities (NCAs) undertaking enforcement of financial information under the Transparency Directive.

ESMA’s amendments to the guidelines require NCAs to further harmonise:

  • the way they select issuers for examination, by requiring that their selection should be based on a combination of: a risk-based approach; random selection; and rotation;
  • the time period within which all issuers in an NCA’s jurisdiction should be examined following the peer review’s recommendation of a maximum period of 10-15 years; and
  • the way in which they undertake their examinations, including by requiring that a minimum proportion of examinations should cover the entire financial statement and entail interaction with the issuer.

ESMA’s amendments are intended to strengthen supervisory convergence across the EEA in the area of enforcement of financial information and prevent regulatory arbitrage and thus contribute to investor protection.

The guidelines will be translated into all the official languages of the EU and the amendments to the guidelines will become effective on 1 January 2022.