ESMA skips ESEF RTS amendments this year
The European Securities and Markets Authority (ESMA) has announced that it will postpone the amendment of the European Single Electronic Format (ESEF) Regulatory Technical Standard (RTS) until 2024.
This decision has been partly attributed to the limited changes in the 2023 update to the International Financial Reporting Standards (IFRS) Taxonomy. Issuers will still be able to fulfil their regulatory obligations to mark up their 2023 IFRS consolidated financial statements by using the 2022 ESEF Taxonomy. An update of the ESEF Reporting Manual will provide guidance for those who want to use the 2023 IFRS Taxonomy, which can be used on a voluntary basis via a couple of obvious mechanisms.
In the meantime, during 2023, ESMA will continue to actively monitor the implementation of the ESEF requirements, assess improvements to digital reporting, and develop the ESEF sustainability taxonomy and requirements.
We understand the huge amount of work that ESMA and EU member state securities regulators have at present, so can appreciate that they have made a trade off in this respect and we support their pragmatic decision.
We continue to be critical of the regulatory machinery that ESMA and other ESAs are required to utilise in making amendments to taxonomies and certain other aspects of digital reporting. A more agile, faster and more certain change cycle would be helpful for all stakeholders. That means providing ESAs with more flexible rule making capabilities, that tie up fewer resources. Today, ESA’s digital and multi-faceted taxonomies need to be clumsily laid out, as text (that nobody will ever read) in subordinate legislation and published in an official journal. In our view, in our digital age, regulators need vastly more up to date approaches to the official definition of reporting requirements.
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