PS20/14: Delay to the implementation of the European Single Electronic Format (ESEF)

Read PS20/14 (PDF)[1]

We set out rules changes to push back by 1 year 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. 

However, we have adjusted our proposals in relation to implementation of mandatory tagging of notes to the annual financial statements. We have decided to keep this requirement to the existing timetable, and it will apply to financial years starting on or after 1 January 2022. Details of our decision are set out in Section 3 of this Policy Statement (PS) and our new rules are set out in Appendix 1.

What we are changing

We are postponing ESEF requirements originally scheduled for financial years starting on or after 1 January 2020 by 1 year. These requirements will commence for financial years starting on or after 1 January 2021, for publication from 1 January 2022. 

ESEF requirements for tagging of notes to the financial statements will keep to the original timetable, commencing for financial years starting on or after 1 January 2022, publication from 1 January 2023. 

Who this applies to

This PS affects 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 and our proposals

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

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).