European system of financial supervision (ESFS) was introduced in 2010. It consists of the the European Systemic Risk Board (ESRB), and three European supervisory authorities (ESAs), namely:
- the European Banking Authority (EBA), based in London
- the European Securities and Markets Authority (ESMA), based in Paris
- the European Insurance and Occupational Pensions Authority (EIOPA), based in Frankfurt
ESMA replaced the Committee of European Securities Regulators in January 2011.
In December 2016, ESMA has today published a feedback statement setting out the digital format which issuers in the European Union (EU) must use to report their company information from 1 January 2020. It concluded that Inline XBRL is the most suitable technology to meet EU requirement for issuers to report their annual financial reports in a single electronic format because it enables both machine and human readability in one document.
The digital format will allow users such as investors, analysts and auditors to carry out software supported analysis and comparison of large amounts of financial information. Access to annual financial reports for both professional and retail investors is essential for creating robust capital markets across the EU.
Steven Maijoor, ESMA Chair, said “Financial reports are crucial for a full understanding of a company’s situation and moving to electronic reporting will facilitate analysis, comparability and accessibility of issuers’ financial statements. We believe that the vast pool of free, structured financial information that will emerge once electronic reporting starts will trigger technological innovation. The Inline XBRL format has the potential to bring financial reporting into the digital age.”
ESMA will focus on developing the detailed technical rules, field test its proposed solution and afterwards submit the technical standard to the European Commission for endorsement around year-end 2017.