If it’s not structured, is it relevant?
Still at the ESMA Meet the Market session, we heard objections from issuers about the reporting arrangements. After all, what’s wrong with PDF and other 20th century “paper under glass” reporting mechanisms?
We note that the EU is already several years behind the curve in the transformation of financial reporting for listed companies. The suggestion (oft-repeated) that “nobody uses structured data” is completely incorrect. Companies should make sure that their data can be consumed in structured form, to maximise their visibility in increasingly competitive and global capital markets. The MiFID II rules on research independence means that the number of EU companies that gain analyst coverage will fall sharply over the next couple of years.
Companies should treat structured data disclosure as a new and welcome channel for getting their investment message across.
Clearly, the ESEF arrangements will create modern reporting capabilities across Europe, while not obliging companies to report anything other than annual financial statements. In our view, the only logical response at a national level (and eventually at an EU level) — in the interests of well informed modern markets — will be to leverage those new reporting capabilities that companies will be obliged to acquire. In other words, NCAs and OAMs should introduce semi-annual structured reporting as soon as practical.
