ESEF Reporting Requirements
As reported in an earlier Capital Markets Update on 6 January 2021, the Listing Authority updated the Listing Rules, specifically the Definitions Section, as well as Chapters 5 and 8, to reflect issuers' (whose securities are listed on the Official List of the Malta Stock Exchange) obligations to start reporting their annual financial reports (AFRs) in single electronic reporting format (ESEF) as per the Circular issued by the Malta Financial Services Authority on 24 December 2020, in order to facilitate the accessibility, analysis and comparability of data relating to AFRs.
Whilst the initial intention was to have AFRs for financial years beginning on or after 1 January 2020 prepared in the ESEF, given the economic disruption brought about by the COVID-19 pandemic, the European Parliament and the Council agreed to allow Member States (including Malta) to delay the application of the ESEF requirements by one year.
Amendments to the Transparency Directive and the Listing Rules
Following the endorsement by the European Parliament and Council to permit the delay in the application of the ESEF, the Transparency Directive was subsequently amended to allow Member States (including Malta) to postpone the application of the ESEF requirements in relation to AFRs:
"..... a Member State may allow issuers to apply that reporting requirement for financial years beginning on or after 1 January 2021, provided that that Member State notifies the Commission of its intention to allow such a delay by 19 March 2021, and that its intention is duly justified."
Following the amendments to the Transparency Directive, the Listing Authority updated Chapter 5 of the Listing Rules to reflect that issuers are to prepare all AFRs for the years beginning on or after 1 January 2021 using the ESEF format. Furthermore, Chapter 8 of the Listing Rules was amended to reflect that closed ended collective investment schemes subject to Chapter 8 of the Listing Rules are to prepare all AFRs for the years beginning on or after 1 January 2021 using the ESEF format.
Malta has duly notified the European Commission as to its position of permitting the one-year ESEF postponement. Nonetheless, issuers who wish to publish their annual financial reports in ESEF, for financial years starting on or after 1 January 2020, for publication in 2021, will still be able to do so.
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