Responses to the ESMA consultation on short-termism in financial markets
09 Sep, 2019
In July 2019, the European Securities and Markets Authority (ESMA) launched a consultation that aimed to gather evidence on potential short-term pressures on corporations stemming from the financial sector. The individual responses to the consultation are now available.
Part of the consultation was a questionnaire intended to support ESMA’s analysis of potential sources of undue short-termism with an aim to identifying areas in which existing rules may contribute to mitigating undue short-termism and areas where the rules may exacerbate short-term pressures.
Section IV of the questionnaire "The role of fair value in better investment decision-making" contained questions on whether and how fair value may impact the capacity of financial reporting to provide relevant and reliable information on equity instruments held for long-term investment purposes. With these questions ESMA wanted to assess how the measurement and disclosure of fair value may impact the selection of a short-or long-term horizon.
Please click to access the press release, which offers access to the responses to the questionnaire, on the ESMA website.
