“European SMA” Gives Companies a Green Light to Extend the Deadlines of Financial Reports

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued a Public Statement today to extend the deadlines for reporting financial statements ending December 2019 of listed companies due to the impact of the coronavirus outbreak.

 

ESMA and national competent authorities are aware of the difficulties encountered by issuers whose securities are admitted to trading on regulated markets to prepare their financial reports and publish them within the deadline set out in the national law transposing the Transparency Directive (TD) and the significant challenges faced by auditors concerning the timely audit of the accounts due to the COVID-19 pandemic and the related actions taken by the Member States to prevent contagion.

ESMA states in its statement that while recognising the importance of timely and transparent disclosure of financial reports, ESMA is of the view that the burdens on issuers associated with the COVID-19 outbreak should be taken into account by NCAs in a coordinated way. This is in the interest of investor protection and contributes to the integrity of financial markets in the Union.

ESMA therefore, in coordination with NCAs and considering that issuers may be prevented from fulfilling the requirements due to COVID-19, expects NCAs during this specific period not to prioritise supervisory actions against issuers in respect of the upcoming deadlines set out in the Transparency Directive (TD) regarding:

1) Annual financial reports referring to a year-end occurring on or after 31 December 2019 but before 1 April 2020 for a period of two months following the TD deadline.

2) Half-yearly financial reports referring to a reporting period ending on or after 31 December 2019 but before 1 April 2020 for a period of one month following the TD deadline.

Furthermore, ESMA encourages NCAs to generally apply a risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of applicable legislation in the area of the TD concerning the publication deadline of financial reports.