Ireland has opted to defer the application of the European Single Electronic Reporting Format (ESEF) obligation by one year. It will now apply in respect of financial years beginning on or after 1 January 2021 to issuers of retail debt securities listed on a regulated market.
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As mentioned in our October 2020 briefing (Single Electronic Reporting Format: Reminder for Issuers) issuers of retail debt securities listed on EU regulated markets are required, under the Transparency Directive,1 the Irish Transparency Regulations2 and the ESEF Regulation,3 to prepare their annual financial reports using the ESEF for financial years beginning on or after 1 January 2020.
Political Agreement On One-Year Deferral
In December 2020, political agreement was reached at EU-level to allow Member States to opt to defer the application of the ESEF obligation by one year, so that it would instead apply in respect of financial years beginning on or after 1 January 2021. This political agreement formed part of a suite of measures proposed by the European Commission to mitigate the adverse effects of the COVID-19 pandemic on the capital markets.
Ireland Will Avail Of One-Year Deferral
The Central Bank of Ireland (Central Bank) confirmed on 2 February 2021 that Ireland will avail of the option to defer the application of the ESEF obligation by one year. A number of other EU Member States (such as Belgium, France, Luxembourg, Malta and the Netherlands) had already signalled their intention to do so, and the UK has also taken equivalent steps.
While an amendment to the Transparency Directive will be needed to formally allow Member States to exercise their option to defer, that amendment is unlikely to come into effect before March 2021. As a result, Member States have been allowed to defer the application of the ESEF obligation by one year on the basis of the political agreement reached at EU-level.
Impact On In-Scope Issuers
For issuers impacted by the ESEF obligation (i.e. issuers of debt securities with denominations per unit of less than ?100,000 (i.e. retail, rather than wholesale, debt securities) listed on an EU regulated market (such as Euronext Dublin's regulated market)):
- the Central Bank will continue to accept annual financial reports in PDF format for financial years beginning between 1 January 2020 and 31 December 2020;
- issuers who wish to publish their annual financial reports using the ESEF for financial years beginning between 1 January 2020 and 31 December 2020 will still be able to do so, providing that they comply with all relevant requirements of the Irish Transparency Regulations and the ESEF Regulation.
1 Directive 2004/109/EC (as amended).
2 SI 277/2007 (as amended).
3 Commission Delegated Regulation (EU) 2019/815.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.