On 5 November 2020, the FCA published Policy Statement 20/14: Delay to the implementation of the European Single Electronic Format (PS20/14).
PS20/14 primarily affects issuers with transferable securities admitted to trading on UK regulated markets, or who are considering admission to trading on a UK regulated market. In PS20/14 the FCA sets out changes to its rules to push back by 1 year the European Single Electronic Format (ESEF) requirements for filing and publication of machine-readable financial statements and mandatory tagging of basic financial information. These were originally scheduled for financial years starting on or after 1 January 2020, but will now apply to financial years starting on or after 1 January 2021. Issuers will still be able to publish and file their financial reports in ESEF voluntarily for financial years starting on or after 1 January 2020, from January 2021, if they choose to do so. Importantly, the FCA has adjusted its proposals in relation to the implementation of mandatory tagging of notes to annual financial statements. The FCA has decided to keep this requirement to the existing timetable, and it will apply to financial years starting on or after 1 January 2022.
The new rules will come into force on IP completion day as defined in the European Union (Withdrawal Agreement) Act 2020 (that is, 31 December 2020 at 11pm).
The FCA supports the ESEF initiative as it enhances the accessibility of issuers’ financial data and will make easier the process of evaluating corporate performance by investors across industry sectors and different jurisdictions. This will help to improve the long term effectiveness of the UK capital market and reduce the cost of capital. The FCA’s decision to delay by 1 year ESEF requirements for publication and filing of machine-readable financial statements and for tagging of basic financial information should help market integrity by minimising burdens on issuers during the exceptional circumstances of the coronavirus crisis. The FCA’s decision not to delay the requirement for issuers who prepare IFRS consolidated financial statements to tag notes to the annual financial statements allows for consistency of implementation at a timetable in line with that of other markets.
To allow issuers to submit annual reports in the ESEF standard, the FCA is upgrading its National Storage Mechanism facility, and its online archive of filings by companies who are subject to the Transparency Directive and Listing Rules. The FCA currently anticipates releasing the upgrade in January 2021, ready for those issuers who wish to file reports in ESEF on a voluntary basis.