The Financial Conduct Authority (FCA) has published a consultation paper on streamlining and simplifying its rules requiring DTR 4.1 issuers to prepare, publish and file with the FCA their annual financial report in an electronic format and for the financial statement within it to be in a structured digital format. The consultation is open until 23 February 2023, and subject to feedback received and the obtaining of the necessary approvals, it is intended that the changes will be applied as soon as practicable in spring 2023.
Read More: Consultation Paper
The FCA is proposing to simplify the structure of the current rules by:
- Deleting the existing Technical Standard referred to in DTR 4.1.14R and relocating key provisions directly into DTR 4.1, including the obligations that all annual financial reports be prepared in the XHTML format and that consolidated IFRS annual financial statements be prepared and published in the tagged, structured digital format; the option for UK-incorporated preparers of solo-company IFRS financial statements to report in the tagged, structured digital format; and certain conditions on companies publishing other parts of the annual financial report in the tagged, structured digital format.
- Introducing a new DTR rule requiring in-scope issuers to tag IFRS consolidated annual financial statements using a ‘generally accepted taxonomy’.
- Providing guidance on generally accepted taxonomies in a Technical Note replacing provisions in the Technical Standard. A generally accepted taxonomy for this purpose means one which is generally used in the UK for disclosures in regulated markets, is based on taxonomy standards published by the IFRS Foundation and is up to date. The FCA will update the list of taxonomies currently within the Technical Standards to reflect new taxonomy updates published during 2022.
- Including the European Single Electronic Format (ESEF) 2022 taxonomy as a generally accepted taxonomy.
- Making minor changes relating to matters currently dealt with in the Technical Standard (including to specify that all companies (not just UK-incorporated issuers) who prepare solo-company IFRS annual financial statements may report them in the tagged structured digital format if they choose, provided they follow the rules and guidance applicable to issuers who prepare IFRS consolidated annual financial statements; and to clarify that structured digital reporting for non-IFRS financials is not currently permitted) and proposing a new rule and guidance clarifying that, where the National Storage Mechanism (NSM) has rejected a filing, the company should correct and resubmit it.