New European Single Access Point (ESAP) – EU Commission proposal for a regulation

New European Single Access Point (ESAP) – EU Commission proposal for a regulation

Last week, on November 25th, 2021, the EU Commission adopted a comprehensive package of measures with the aim of improving the transparency of company and trade data within the EU. The proposal directive for the European Single Access Point (ESAP) now available form part of this package of measures. Among other things, central access to the mandatory ESEF annual financial reports of all capital market-oriented companies in the EU is to be created here. In addition, the new portal is also intended for the central future publication of sustainability data (ESG data).

This EU portal flanked the new strategy of making data available in a structured form in a machine-readable manner and linking this with a visual representation of the data (xHTML, inlineXBRL).

ESAP is scheduled to go into operation in 2024 under the responsibility of the European Securities and Markets Authority (ESMA).

Sources:

Committee of European Auditing Oversight Bodies – new guidelines for auditing ESEF-Berichten

Committee of European Auditing Oversight Bodies – new guidelines for auditing ESEF-Berichten

The Committee of European Auditing Oversight Bodies published revised guidelines for auditing ESEF financial reports on November 9, 2021.

Source: Committee of European Auditing Oversight Bodies, CEAOB guidelines on the auditors’ involvement on financial statements in European Single Electronic Format (ESEF), 09.11.2021, https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/211109-ceaob-esef-guidelines-auditors_en.pdf

Technical recommendations for ESEF / inlineXBRL: Conversion of PDF documents, use of CSS

Technical recommendations for ESEF / inlineXBRL: Conversion of PDF documents, use of CSS

Based on the experience with unnecessarily longer document loading times for inlineXBRL / ESEF reports, a working group of “XBRL International” issued the following technical recommendations on October 27th, 2021:

    • The companies should ensure that the ESEF annual financial report or inlineXBRL / HTML documents are generated directly in the generation process and NOT just generated PDF documents are converted to inlineXBRL / HTML.
    • Authorities, or those collecting the data, should allow font, image and style sheet resources to be included as separate files in a reporting package rather than being embedded in the HTML code.
    • Software manufacturers should: a) avoid or at least optimize the conversion from PDF to inlineXBRL / ESEF in order to avoid an excessive number of HTML elements, b) prefer external resources to embedded resources, c) follow further recommendations for content-visibility: auto CSS property.

Source: XBRL International, Inline XBRL Rendering Performance 1.0, working group note 27 October 2021

DVFA opinion on the draft of a law for the further implementation of the transparency directive – amending directive with regard to a uniform electronic format for annual financial reports

DVFA opinion on the draft of a law for the further implementation of the transparency directive – amending directive with regard to a uniform electronic format for annual financial reports

On October 16, 20109, the German professional association of investment professionals (DVFA e.V.) commented on the draft bill for the further implementation of the transparency directive – amending directive with regard to a uniform electronic format for annual financial reports.

The objectives of the EU directive to improve the European capital market and the associated automation require valid data from the issuer; this cannot be achieved without technically enforced compliance with submission and validation rules!

Excerpt from the opinion of the DVFA e.V., Corporate Analysis Commission: “We therefore propose within the framework of the law: to authorize the Federal Gazette … to issue regulations on the “technical submission and validation rules” to be observed by the issuers. § 328 HGB, according to which these “technical submission and validation rules” must be complied with in the context of disclosure, as well as the right and obligation to impose the right and obligation on the Federal Gazette in § 329 HGB to check the ESEF data for compliance with the submission and validation rules and to reject them if necessary. “

DVFA e.V., Opinion on the draft bill of the Federal Ministry of Justice and Consumer Protection and the Federal Ministry of Finance – Draft of a law for the further implementation of the Transparency Directive – Amendment directive with regard to a uniform electronic format for annual financial reports from October 16, 2019

DVFA statement on the consultation of the EU Commission “European Single Access Point (ESAP)” – 2021

DVFA statement on the consultation of the EU Commission “European Single Access Point (ESAP)” – 2021

The DVFA e.V. responded to the the consultation of the EU Commission in January 2021 on“European single access point (ESAP) for financial and non-financial information publicly disclosed by companies” The Company Analysis Commission, of which I am a member, has given a detailed opinion on this. The statements of the various stakeholders are available on the website of the EU Commission

Excerpt from our statement:

Actually, it is relatively inefficient to use regulators` portals to gather information. Therefore financial analyzer are avoiding using such portals. In order to radically increase the transparency of capital market information, automation is one key – among others. This means that ESAP should provide appropriate interfaces to access ESAP by computer programs and to download the information automatically.

In addition, we recommend the EU commission to carefully investigate actual ESEF-obstacles. For example, “valid ESEF data” is another key to increase capital market transparency in the EU. However today ESEF data usably are not NOT VALIDATED at the OEMs. Although this is technically possible. validation (for example XBRL-validation) is mandatory for filing XBRL reports at the US SEC, since it`s beginning . At this point, one key obstacle is that the ESEF mandate does NOT include a mandate for the OEM to validate ESEF data. In addition, the technical implementation could be simplified by setting up a “open source ESEF validation engine”, which OEM have to integrate in to their national platforms. This would guarantee valid data, using the same validation rules EU-wide. In addition, this would be cost efficient for OEMs.