ESMA’s ESEF: What You Need to Know

What is the ESEF mandate? The European Securities and Markets Authority (ESMA) has been tasked under the amended Transparency Directive to develop Regulatory Technical Standards for the European Standard Electronic Format (ESEF). ESEF is an electronic reporting format capable of being rendered in a standard web browser using XHTML.

For companies that produce consolidated financial statements using International Financial Reporting Standards (IFRS), there is an additional component requiring them to tag the reports using Inline XBRL, a human readable version of the XML based eXtensible Business Reporting Language. Who does it impact? ESMA’s ESEF mandate affects all issuers with securities listed on any regulated market in the European Economic Area (EEA). This includes companies from both inside and outside the EEA provided they are listed on any of these regulated markets. Issuers who do not produce consolidated financial statements in IFRS will be exempt from the Inline XBRL component of the ESEF mandate. However, note that ESMA is considering waiving this prohibition, but no decision has yet been taken on this.