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FCA Policy Statement delays ESEF implementation and extends publication deadlines for listed companies

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10 Nov 2020

The Financial Conduct Authority (FCA) has published Policy Statement (PS) 20/14. The Policy Statement sets out the FCA’s decision to delay by one year mandatory requirements related to the European Single Electronic Format (ESEF). The Policy Statement also provides an update on extending deadlines for the publication of financial statements by listed companies in response to COVID-19.

The ESEF initiative includes requirements for publication and filing of machine readable financial statements and the electronic tagging of basic financial statements and notes to these financial statements. It will enhance the accessibility of issuers’ financial data and will make easier the process of evaluating corporate performance by investors across industry sectors and different jurisdictions.

The Policy Statement confirms the FCA’s decision to push back by one year ESEF requirements originally scheduled for financial years starting on or after 1 January 2020. This means:

  • The requirement for all issuers to publish and file their annual financial reports in XHTML web browser format, replacing the current PDF format, will 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 will be pushed back to financial years starting on or after 1 January 2021, for publication from 1 January 2022.
  • However, the requirement for issuers who prepare IFRS consolidated annual financial statements to tag notes to the financial statements will apply to financial years starting on or after 1 January 2022, for publication from 1 January 2023.

Issuers will, however, 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.  The FCA has published guidance for the preparation of annual reports in European single electronic format which is available on the FCA website here.  The Department for Business, Energy and Industrial Strategy (BEIS) has updated its policy paper on ESEF to set out its view on the role of auditors.  This is available on the BEIS webiste.

With regards to publication of financial statements by listed companies, the FCA previously announced relaxation deadlines in March (for annual reports – extension from 4 to 6 months) and May (for interim reporters – extension from 3 months to 4 months). The FCA indicated that the temporary extensions would be kept under review and, at a suitable time, would announce how the policy would be removed in a fair, orderly and transparent way.

Due to the ongoing disruption caused by COVID-19, the FCA has indicated that these reliefs will, at a minimum, continue to be available to listed companies with financial periods ending before April 2021.  This includes measures related to both annual and half-yearly financial statements.

The full Policy Statement is available on the FCA website.

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