Shearman & Sterling LLP | FinReg | European Securities and Markets Authority Grants Regulatory Forbearance for Financial Reporting in Wake of COVID-19
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  • European Securities and Markets Authority Grants Regulatory Forbearance for Financial Reporting in Wake of COVID-19
    03/27/2020
    The European Securities and Markets Authority has published guidance for issuers on compliance with their financial reporting requirements in light of the challenges presented by the coronavirus (COVID-19) pandemic. Under the EU Transparency Directive, issuers of debt securities or shares must publish annual and half-yearly financial reports within four months and three months, respectively, of the end of the relevant reporting period. Annual reports for the year ended December 31, 2019 should normally be published by April 30, 2020, while half-yearly financial reports for the six months ending December 31, 2019 should have been published by March 31, 2020. Given the disruption caused by COVID-19 for both issuers and auditors, ESMA has asked national regulators not to prioritize supervisory actions against those who breach the reporting requirements for the following periods:
     
    1. For annual reports in respect of a financial year ending on or after December 31, 2019 but before April 1, 2020, two months after the Transparency Directive deadline (meaning action will not be prioritized until at least June 30, 2020); and
    2. For half-yearly reports in respect of a period ending on or after December 31 but before April 1, 2020, one month after the Transparency Directive deadline (meaning action will not be prioritized until at least April 30, 2020).
               
    ESMA still expects issuers to use their best efforts to publish their financial reports within the Transparency Directive deadlines. Where issuers need to take advantage of the regulatory forbearance proposed by ESMA, they should inform national regulators and the market of the anticipated delay, the reasons for it and the expected date by which the information will be published.
     
    View ESMA's statement on regulatory forbearance under the Transparency Directive.
     
    Details of other regulatory responses to COVID-19 are available at our COVID-19 Research Center.
     
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