Will the UK Adopt ESEF?
With their impending exit from the European Union, will the UK adopt the European Single Electronic Format (ESEF) that becomes mandatory across the EU in January 2020?
The Financial Conduct Authority (FCA) have released an update indicating that they are preparing to adopt ESEF in a scenario where the UK remains subject to EU law on 1 January 2020.
In the quarterly consultation paper (QCP) published in September the FCA proposed a new rule in the Disclosure Guidance and Transparency Rules sourcebook (DTR) in order to implement the requirements for ESEF.
The FCA support the ESEF initiative, which aims to make disclosures across Europe comparable, searchable and digital, and will greatly improve the ease with which investors can evaluate corporate performance.
However, if the UK leaves the EU before 1 January 2020 without a withdrawal agreement or implementation period, ESEF requirements will not apply to the UK and the changes to the DTR will not come into force. The FCA are considering adopting similar electronic reporting standards under the UK’s transparency regime, however those standards would need a new and separate consultation.
As with all things Brexit, it seems the UK’s participation in ESEF or otherwise is still uncertain. Stay tuned!