European Securities and Markets Authority (ESMA) launches Consultation on Considerations of materiality in financial reporting

The objective of financial statements is to provide information to a range of users for the purpose of economic decision making. To be useful, such statements must present fairly the financial position, performance and cash flows of the reporting entity. Where information which is required by the relevant financial reporting framework is omitted or misstated and such information could influence the economic decision making of a user, financial statements cannot be said to achieve a fair presentation. The concept of ‘materiality’ is used to describe such information.

A recurring theme of discussions at the European Enforcers Coordination Sessions (a forum in which all European National Enforcers of financial information meet to exchange views and discuss experiences of enforcement of IFRS) is the apparent differing views regarding the practical application of the concept of materiality amongst preparers, auditors, possibly users of the financial reports and, in some instances, accounting enforcers. The purpose of this consultation paper is to seek comments from interested parties on their understanding of various aspects of materiality in an effort to contribute to a consistent application of this important concept in financial reporting.

The Consultation is available here: http://www.esma.europa.eu/popup2.php?id=8053

All contributions should be submitted online at www.esma.europa.eu under the heading ‘Consultations’ by 29 February 2012.

Who should read this paper

All interested parties are invited to comment on this consultation paper. It will be primarily of interest to those charged with the governance of issuers who prepare their financial statements under IFRS, the users of the financial reports prepared by same, the auditors of such entities, and other parties who have a particular interest in the concept of materiality and the application of same in an IFRS context.

Next steps

ESMA will consider the feedback it received to this consultation paper in Q2 2012. Based on the outcome of the consultation paper, ESMA will go further and publish a final report later in 2012.

Eurobank EFG Bulgaria AD can start offering in Bulgaria the units of two new Sub Funds

At a meeting held on 16 March, 2011, FSC took a decision that Eurobank EFG Fund Management Company (LUX) S.A., Luxembourg, through its representative for Bulgaria, Eurobank EFG Bulgaria AD, can begin offering in the Republic of Bulgaria the units of the managed by it Sub Funds of LF Mutual Fund: (LF) Fund Special Purpose Equity Formula Bonus (RON) and (LF) Fund Special Purpose – EUR/PLN FX Formula.

ESMA’s Statement on Investment Recommendations on Social Media


The European Securities and Markets Authority, the EU’s securities markets regulator, explains the rules that apply in situations where someone, based in or outside the EU, spreads information proposing an investment decision about EU financial instruments (e.g. stocks or bonds), aimed at a broad audience. Spreading information would include sharing an opinion about the present or future price of a particular stock for example. In EU law, this is called an investment recommendation.
What is an investment recommendation? EU law defines an investment recommendation as information recommending or suggesting an investment strategy, explicitly or implicitly, concerning one or several financial instruments or the issuers, including any opinion as to the present or future value or price of such instruments, intended for distribution channels or for the public. Distribution channels can be analyst reports, articles, the traditional media, or even social media. Who should read this Statement? Anyone who recommends investments in some way or form via any platform and anyone who makes investment decisions based on investment recommendations done on any platform. This includes social media.
What is the problem here? The potential to mislead investors. Investment recommendations must be done in a specific – and transparent – way so that investors, before making any investment decision, can know and assess: 1) the credibility of the recommendation – and how objective it is; and 2) any interests of those making the recommendations. This way, everyone is free to express opinions without potentially harming others in the process.
Who produces investment recommendations? Usually, firms like banks and brokers but also financial analysts. However, other individuals who propose an investment strategy could be also thought to produce an investment recommendation when the proposal is intended for wider distribution. That would include posting on social media. On top of that, if one produces investment recommendations frequently, intends to reach a large audience, and presents himor herself as having financial expertise, that may mean that one can be considered to be an expert. In such a case, more disclosures are required by the law.
Where are the rules? The rules are in the EU Market Abuse Regulation. They require those making investment recommendation to disclose identities, present recommendations in an objective way, and disclose all relationships or circumstances that would impair objectivity. For experts, additional rules need to be followed.

ESMA ПУБЛИКУВА ПУБЛИЧНО ИЗЯВЛЕНИЕ ЗА ОБЩИТЕ ЕВРОПЕЙСКИ ПРИОРИТЕТИ ВЪВ ВРЪЗКА С ПРАВОПРИЛАГАНЕТО ОТНОСНО СПАЗВАНЕТО НА МЕЖДУНАРОДНИТЕ СТАНДАРТИ ЗА ФИНАНСОВО ОТЧИТАНЕ (МСФО) В ГОДИШНИТЕ ФИНАНСОВИ ОТЧЕТИ ЗА 2019 г.

В публичното изявление за общите европейски приоритети във връзка с правоприлагането са посочени общите приоритети за финансовата 2019 г., които включват следните основни теми:
  • специфични въпроси, свързани с прилагането на МСФО 16 „Лизинг“;
  • специфични въпроси, свързани с проследяване на прилагането на МСФО 9 „Финансови инструменти“ за кредитни институции и МСФО 15 „Приходи от договори с клиенти“;
  • специфични въпроси, свързани с прилагането на МСС 12 „Данъци върху дохода“.
  • оповестяване на нефинансова информация и
  • специфични аспекти при прилагането на Насоките на ESMA относно алтернативните показатели за финансови резултати (APMs).
Превод на български език на Насоките на ESMA относно алтернативните показатели за финансови резултати (APMs) може да намерите на интернет страницата на КФН www.fsc.bg, раздел Нормативна уредба/  Насоки и препоръки на европейските надзорни органи/ ESMA.

Емитентите и техните одитори следва да вземат предвид основните въпроси, разгледани в публичното изявление на ESMA, при изготвянето и одитирането на годишните финансови отчети (ГФО) за 2019 г.

При прегледа на ГФО за 2019 г. ESMA и националните компетентни регулатори ще следят за спазване на посочените по-горе специфични изисквания на МСФО. При откриването на съществени несъответствия ще бъдат предприемани  съответни мерки.

Повече информация за публичното изявление е достъпна на интернет адрес –   https://www.esma.europa.eu/press-news/esma-news/eu-enforcers-must-monitor-closely-new-reporting-standards.

Превод на български език на текста на публичното изявление може да намерите на интернет страницата на КФН www.fsc.bg, раздел Европейски въпроси/ ЕС новини/ уведомления.

ESMA публикува публично изявление за общите европейски приоритети във връзка с правоприлагането относно спазването на Международните стандарти за финансово отчитане (МСФО) в годишните финансови отчети за 2018 г.

В публичното изявление за общите европейски приоритети при правоприлагането са посочени общите приоритети за финансовата 2018 г., които включват следните основни теми:  
Общите приоритети за финансовата 2018 г. включват следните теми, които са подробно описани в изявлението, а именно:

  • специфични въпроси, свързани с прилагането на МСФО 15 „Приходи от договори с клиенти“;
  • специфични въпроси, свързани с прилагането на МСФО 9 „Финансови инструменти“;
  • оповестявания, свързани с очакваното въздействие от прилагането на МСФО 16 „Лизинг“;
  • оповестяване на нефинансова информация и
  • специфични аспекти на Насоките на ESMA относно алтернативните показатели за финансови резултати (APMs).

 
Превод на български език на Насоките на ESMA относно алтернативните показатели за финансови резултати (APMs) може да намерите на интернет страницата на КФН www.fsc.bg, раздел Нормативна уредба/ Насоки и препоръки на европейските надзорни органи/ ESMA.
 
Емитентите и техните одитори следва да вземат предвид основните въпроси, разгледани в публичното изявление на ESMA при изготвянето и одитирането на годишните финансови отчети (ГФО) за 2018 г.
 
При прегледа на ГФО за 2018 г., ESMA и националните компетентни регулатори ще следят за спазване на посочените по-горе специфични изисквания на МСФО. При откриването на съществени несъответствия ще бъдат предприемани  съответни мерки.
 
Повече информация за публичното изявление е достъпна на интернет адрес на ESMA – тук
 
            Превод на български език на текста на публичното изявление може да намерите на интернет страницата на КФН www.fsc.bg, раздел Европейски въпроси/ ЕС новини/ уведомления.
 
 
 
 
 
 

ESMA публикува предупреждение относно продажбата на спекулативни продукти на инвеститори на дребно

Днес Европейският орган за ценни книжа и пазари (ESMA) публикува предупреждение относно продажбата на договори за разлики (CFD), бинарни опции и други спекулативни продукти към инвеститорите на дребно, които не са запознати с риска, които тези продукти носят. Също така предупреждението посочва регулаторните действия, предприети по отношение на няколко инвестиционни посредника на територията на Кипър.
 
Превод на Предупреждението за инвеститорите е публикувано на интернет страницата на КФН, на следния линк: http://www.fsc.bg/bg/evropeyski-vaprosi/preduprezhdeniya-kam-investitorite/

 Повече информация за дейността на ESMA в тази област, можете да намерите на следния адрес:
https://www.esma.europa.eu/press-news/esma-news/esma-issues-warning-sale-speculative-products-retail-investors

ESMA публикува допълнение към Документа с въпроси и отговори относно предлагането на договори за разлика и други спекулативни продукти на непрофесионални клиенти

На 11 октомври 2016 г. Европейският орган за ценни книжа и пазари (ESMA) публикува допълнение към Документа с въпроси и отговори относно предлагането на договори за разлика и други спекулативни продукти на непрофесионални клиенти в съответствие с Директива 2004/39/EC за пазарите на финансови инструменти.

Актуалната версия на документа е публикувана на страницата на КФН в раздел Европейски въпроси/ ЕС Законодателство/ Въпроси и отговори.

ESMA statement on investment recommendations through social media

In order to inform the supervised entities and the public in the Republic of Bulgaria and to the commitments made by the Financial Supervision Commission in the person of Boyko Atanasov, Chairman of the Commission to EIOPA and ESMA, the Communications Directorate presents the statement of the European Securities and Markets Authority (ESMA). The EU Securities Regulator explains the rules that apply when someone established inside or outside the EU disseminates information offering an investment solution for financial instruments issued in the EU (e.g. stocks or bonds) aimed at wide audience. Dissemination of information would involve, for example, sharing an opinion on the current or future price of a share.

In EU law, this is called an investment recommendation.

What is an investment recommendation? EU law defines an investment recommendation as information that recommends or proposes an investment strategy, directly or indirectly, on one or more financial instruments or their issuers, including opinions on the current or future value or price of such instruments intended for dissemination channels or for the public. Dissemination channels can be analytical reports, articles, traditional media or even social media.

Who should read this statement? Anyone who recommends investment in any way or form through any platform, and anyone who makes investment decisions based on investment recommendations made on any platform. This includes social media.

What’s the problem here? The possibility of investors being misled. Investment recommendations must be made in a specific and transparent way so that investors, before making an investment decision, can know and evaluate: 1) the reliability of the recommendation and its purpose; and 2) all the interests of the authors of the recommendations. In this way, everyone is free to express an opinion without harming other people in the process.

Who prepares investment recommendations? Usually companies such as banks and brokers, but also financial analysts. However, other persons proposing an investment strategy may be deemed to make an investment recommendation when the proposal is intended for wider dissemination. This includes social media posts. In addition, if someone often makes investment recommendations with the aim of reaching a wide audience and he presents himself as having financial expertise, this may mean that the person could be considered an expert. In this case, the law requires more disclosures.

Where are the rules? The rules are contained in EU Regulation (EU) No. 596/2014 on market abuse. They require those who make investment recommendations to disclose their identities, present recommendations in an objective manner and disclose any relationships or circumstances that could impair objectivity. Additional rules must be followed by experts.

What happens if the rules are not followed? EU regulators proactively monitor the behaviour, orders and transactions of market investors. An investigation shall be carried out if there are grounds for doing so. If the rules related to investment recommendations are not followed, fines or further supervisory actions may be imposed, which may include a referral to the prosecutor’s office.

ESMA Statement on disclosures related to sovereign debt to be included in IFRS financial statements

PUBLIC STATEMENT

ESMA Statement on disclosures related to sovereign debt to be included in IFRS financial statements

According to European Regulation no 1095/2010 establishing the European Securities and Markets Authority (“ESMA”), ESMA shall act in the field of financial reporting, to ensure the effective and consistent application of European Securities and Markets legislation.

As a result of recently increased market interest in sovereign debt[1], ESMA has increased its coordination of the monitoring activities of competent authorities in response to the specific market circumstances and developments in this area.

Consequently, ESMA would like to stress the need for enhanced transparency in European listed issuers’ interim and annual financial statements using International Financial Reporting Standards (IFRSs)[2]. In doing this, ESMA would point out that IFRSs are issued by the International Accounting Standards Board, and the IFRS Interpretations Committee provides the authoritative guidance on the interpretation of IFRSs. Consequently this statement should not be understood as constituting guidance or recommendations on IFRS, but rather as assisting issuers in preparing disclosures on sovereign debt.

ESMA underlines that an appropriate application of relevant IFRS is essential in order to ensure adequate disclosures by listed companies of their exposures to sovereign debt and related instruments. ESMA considers that, when material, disclosures should be provided country by country.

Whilst ESMA acknowledges that reporting requirements for interim financial statements prepared under IFRS are not the same as for annual financial statements, ESMA believes that the IFRSs that most closely address those issues related to holdings of sovereign debts as financial assets, within the scope of this document, for all financial statements are: IFRS 7 – Financial instruments: Disclosures, IAS 1 – Presentation of Financial Statements, IAS 34 – Interim financial reporting and IAS 10 – Events after the Reporting Period. Without constituting an exhaustive list, particular attention should be given to the IFRS provisions mentioned in the Appendix to this Statement.

ESMA would like to encourage all issuers to provide any additional information that might be relevant to investors’ understanding of the financial information. For example, an entity might consider including or making reference in its financial reporting to any disclosures made in relation to stress testing on exposures to sovereign debt performed by the issuer or a third party organisation.

ESMA will continue to coordinate competent authorities’ monitoring of the application of the relevant requirements by listed issuers with respect to sovereign debt exposures in order to ensure an adequate level of transparency.

The whole Public statement can be found on the following link: http://www.esma.europa.eu/popup2.php?id=7685

[1] Sovereign debt, for the purpose of this statement, refers to bonds issued by and loans given to central and local government and governmental bodies.

[2] European Regulation 1606/2002 regarding adoption of the International Accounting Standards.