Deal reached on ESAP to provide investor access to EU data
This week the European Parliament and Council negotiators agreed on the timeline and processes for establishing the European single access point (ESAP), a common data platform that will merge digital data crucial for capital markets, financial services, and sustainable finance from across Europe.
The ESAP initiative was initially proposed by the EU Commission in early 2021, promising to provide a free single point of access for information on EU listed companies, investment products and sustainability information by 2024. Until this announcement, Europe has missed out on the ability to easily access filings from across the continent in one place – a critical function offered in the US via EDGAR and in Japan through EDINET. Investment within the EU, as well as in-bound investment into the EU is constrained today by the complexity associated with finding relevant information.
The latest decision from the European Parliament and Council, subject to legislative approval, sets the timeline for ESAP’s introduction at 42 months after the legislation comes into force – so, meaning it is likely to be fully operational no earlier than the summer of 2027.
The deal this week also expanded the remit of ESAP to make available information that EU businesses voluntarily disclose, alongside mandatory filings. Information provided voluntarily would have to be uniform in format and comparable in substance, value, use and reliability to that submitted on a mandatory basis. Additionally, the scope of ESAP has been expanded to include information on crypto assets, green bonds, and the activities of institutions for occupational retirement provision.
ESAP will not create any new reporting requirements, rather, it will collate the information reported under existing disclosure arrangements – such as the Corporate Sustainability Reporting Directive (CSRD) – in a useful, accessible, free of charge platform.
The aim of ESAP is to enhance the efficiency of EU capital markets, increase visibility for SMEs, and support the green transition through access to data on sustainable finance. The availability of comprehensive and accessible information will empower investors and market participants to make informed investment decisions.
While this week’s announcement represents a delay on the initial 2024 deadline, we are pleased to see progress on this valuable initiative and have significant confidence in the cross-functional team involved in its implementation.
Our own experience with filings.xbrl.org, (or ‘FXO’) the “poor man’s ESAP” that contains as many ESEF filings as we can access, demonstrates that:
- visibility and discoverability help focus the attention of a wide range of stakeholders, from investors and data providers to the audit profession, issuers and their vendors.
- provision of the disclosures with a viewer and availability of the data in easy-to-consume xBRL-JSON makes the creation of a host of analytics straightforward.
- the different approaches and policies associated with disclosure across Europe make it all the more important that ESAP arrives, and quickly.
We are a little biased, but remain concerned that this is a substantial and complex project and could wish for a more iterative and agile implementation plan that might help de-risk the overall initiative.
All of that said, congratulations to all involved at DG FISMA, ESMA and the other ESAs, as ESAP kicks off.
Read more here.
