ESMA Single Electronic Format Consultation Update
The European Securities and Markets Authority has published the responses it has received to its consultation on a single electronic format (ESEF) for financial statement filings. This is part of the EU’s amended Transparency Directive, which mandates listed companies to prepare their annual financial reports in an ESEF from 1 January 2020. The goal is to improve accessibility, analysis and comparability for investors and regulators across Europe. The paper specifically asked for comment on the use of XBRL and iXBRL. There were over 100 responses received and make for interesting reading.
In our view, a range of new transformational technologies are rapidly being created, including distributed ledgers, AI supported decision making and big data supported systems that allow the enterprise to truly look across silos. Together, they herald serious new capabilities. Combined, these innovations will fundamentally change the way that finance and capital raising is done. Any suggestion that today’s document-centric reporting will be nearly as relevant inside 5 years, let alone 10, seems implausible.
Markets and their regulators the world over need to embrace the shift from paper to structured data, including the use of XBRL, the business reporting standard. We are optimistic that policy makers in Europe, as well as in many other regions, are fully cognisant of this wider picture. The original consultation, supporting documents and responses can be found here.