Sat. Oct 1st, 2022


03 March 2021

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has written to the European Commission (EC) with its proposals to improve the Transparency Directive (TD) following the Wirecard case. The letter addresses provisions related to enforcement of financial information.

ESMA recommends that the EC considers modifying the TD to meet four aims:

  1. Enhance cooperation between authorities across the EU via:
  • Eliminating confidentiality impediments that prevent an efficient and effective exchange of information between TD competent authorities (CAs) and MAR/Prospectus CAs, audit oversight bodies, prudential supervisors, and Anti Money Laundering (AML) supervisory authorities; and
  • Developing RTS on cooperation and information exchange between accounting enforcers and audit oversight bodies, prudential supervisors as well as, where relevant, with AML supervisors.
  1. Enhance coordination and governance on a national level via:
  • Requiring that national transposition measures clarify the responsibilities, reporting obligations and roles when delegation or designation models concerning enforcement of financial information are implemented; and
  • Including regular review clauses to ensure that delegation and designation models are fit for purpose.
  1. Strengthen independence of the NCAs via:
  • Not allowing the outsourcing of the task of regular examinations of financial information to audit firms; and
  • Modifying the TD to ensure that the central competent authority, designated authorities and/or delegated entities and their staff are independent from market participants and they perform their duties and act independently from Governments.
  1. Strengthen harmonised supervision of information across the EU via:
  • Modifying the TD, to ensure that the powers of accounting enforcers are harmonised across the EU. Notably, to ensure that all accounting enforcers, including the delegated entities and designated authorities, have the binding powers to request information and to require corrective information;
  • Supplementing the powers of NCAs to, amongst others, require an independent second audit or forensic examination and carry out joint on-site inspections or investigations;
  • Reinforcing ESMA’s role in financial reporting by including the IAS Regulation into Article 1 (2) of the ESMA Regulation; and
  • Strengthening consistent application and enforcement of disclosures related to Alternative Performance Measures.

The proposed modifications to the TD are based on ESMA’s experience gained while coordinating the enforcement of financial information in Europe, notably, when preparing reports, discussing supervisory cases or preparing statements and opinions. In addition, the letter addresses some of the deficiencies encountered when conducting the ESMA Peer Reviews on the application of Guidelines on Enforcement of financial information in 2017 and in the context of the Wirecard case.


In November 2020 ESMA published the results of its Peer Review which assessed the events leading to the collapse of Wirecard and the supervisory response by BaFin and the Financial Reporting Enforcement Panel.

In July 2017 ESMA published the results of its Peer Review on the application of ESMA Guidelines on enforcement of financial information.