ESMA decision to postpone ESEF RTS amendment
On the 15th of May, 2023, the MFSA published a circular informing the market of the European Securities and Markets Authority (ESMA)’s decision to postpone the amendment of the European Single Electronic Format (ESEF) Regulatory Technical Standards (RTS) until 2024. The reasons for ESMA’s decision to postpone said amendment are: the limited changes to the 2023 IFRS Taxonomy; the added value of increased monitoring of the ESEF implementation; and the impact of a system update on preparers and software vendors.
The ESEF Taxonomy used for the single electronic reporting format of the IFRS consolidated financial statements is based on the IFRS Taxonomy. The latter is updated annually to reflect, amongst other developments, the publication of new IFRSs, changes to existing IFRSs, the analysis of disclosures commonly reported in practice, and improvements to general content and technology. Accordingly, ESMA’s amendments to the ESEF RTS, in turn, reflect the annual update of the IFRS Taxonomy.
The 2023 IFRS Taxonomy update, on which the 2023 ESEF RTS amendment is based, contains limited changes to two standards (namely, IFRS 16 and IAS 1) which relate to general improvements to the taxonomy or common practices, and which are not mandatorily applicable for this reporting year (2023).
ESMA next steps
Over the course of this year, ESMA will be increasing its efforts to monitor the implementation of the ESEF requirements, as well as to assess possible improvements to the ESEF reporting process. In addition to the aforesaid, ESMA has committed to carry out the preparatory work required for the development of the ESEF sustainability reporting taxonomy and related reporting requirements based on the European Sustainability Reporting Standards (ESRS) currently being developed by the European Financial Reporting Advisory Group (EFRAG).
In view of this postponement, in 2024, ESMA will combine both the 2023 and 2024 IFRS updates in its proposal to update the ESEF RTS. Meanwhile, during 2023, ESMA will publish the annual update of the ESEF Reporting Manual with a view to providing the market with additional guidance on the implementation of the ESEF requirements.
Key takeaway for issuers
Issuers whose securities are admitted to trading on a regulated market ought to note that, as a result of the postponement of the 2023 ESEF RTS amendments, the ESEF reporting requirements of 2022 will also be applicable for the financial year commencing on or after 1 January, 2023.
For further information, kindly get in touch with Malcolm Falzon (malcolm.falzon@camilleripreziosi.com) or Louisa Firman (louisa.firman@camilleripreziosi.com).
