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ESMA "Risk of Delay" To Financial Reporting Highlights Value of FundApps' Compliance Community

Posted by Jonny Bradshaw on 6 Apr 2020



ESMA has issued a public statement on the implications of the COVID-19 pandemic. 

 

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The European Securities and Markets Authority (ESMA) recently issued a Public Statement highlighting the likely knock-on effects of the COVID-19 pandemic on the publishing of financial reports, which apply to listed issuers under the Transparency Directive.

 

Acknowledging difficulties, which will likely be encountered by many issuers and their auditors when preparing financial reports, ESMA warns that many will be unable to publish within legislative deadlines. 

 

Whist forbearance powers provide relief to issuers who may need to delay publication of financial reports, further knock on consequences loom large for compliance teams who rely on the timely publication of financial statements to collect and verify issuer data vital to shareholding disclosure checks. 

 

Despite 3rd party market data feeds providing such values to compliance systems, most find it necessary to verify specific issuer details, such as total shares outstanding, to ensure they have the most up to date information for each issuer. 

 

Variance in these values may make a real difference when determining the requirements for a public disclosure and most are forced to make manual checks, which are both time consuming and error prone. 

 

Now with the prospect of reporting delays, compliance managers face the prospect of a “triple-whammy” as they are unable to fully trust 3rd party market data; will not know when the latest issuer published values will be available; and, will have to check each issuer repeatedly to get the latest data and ensure reporting accuracy. 

 

With hundreds if not thousands of issuers to check on a daily basis, this unenviable middle-office task just got a whole lot more difficult.  

 

The Power of Community

The teams fortunate enough to be using the FundApps platform are at a clear advantage with process efficiencies afforded by being able to work with other clients.

 

Typically, clients source exactly the same information from the same data providers and are forced to undertake the same validation checks individually to make sure that the data they have is correct. Duplication of effort is rife and days often pass before corrections are reflected in data feeds.

 

Having access to the FundApps Global Company Database (GCD) solves this problem by allowing clients to consolidate and share company information. Working together, clients collate a golden source of community powered data with continuous live updates to ensure that the effort of gathering accurate issuer data is a shared burden where effort is more than halved. 

 

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And, the benefits do not stop there. 

 

As a member of the FundApps community, compliance teams also benefit from the Automated Community Denominator Check(AC/DC). Being proactively alerted to differences between denominator values uploaded by customers allows FundApps clients to quickly identify, investigate, and rectify errors, promoting confidence in the data behind their disclosure results and satisfying regulatory obligations for ensuring data quality.

 

So, if you are concerned about the current pace of regulatory change and the increased overhead associated with gathering data to support your regulatory obligations, which is currently being greatly exacerbated by the COVID-19 pandemic, please get in touch to understand how we can help you weather the storm.

 

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