Executive Summary
Under DTR 4.1.14R and the onshored ESEF Regulatory Technical Standard (Delegated Regulation (EU) 2019/815), issuers with securities admitted to trading on a UK regulated market must prepare their Annual Financial Reports (AFRs):
- In XHTML, and
- Containing valid Inline XBRL (iXBRL) tagging for the consolidated IFRS financial statements,
- Filed to the National Storage Mechanism (NSM) in that format.
Filing XHTML or HTML documents without Inline XBRL tagging is non-compliant with UK requirements.
Background and Purpose
We are analysing AFRs published on the NSM to support market transparency, investor protection, and digital reporting innovation. During this work, we have identified a pattern suggesting that a material number of filings may not comply with the ESEF/iXBRL requirements, despite appearing to be valid XHTML.
This primer sets out:
- What issuers are legally required to file.
- What we expect to see in a compliant ESEF submission.
- Why certain current NSM filings appear inconsistent with those obligations.
- The consequences for data quality and investor outcomes.
Legal Requirements for AFR Filing
2.1 The Regulatory Framework
The mandatory electronic reporting format derives from:
- FSMA 20001 - establishing FCA rulemaking powers.
- DTR 4.1.14R-4.1.15R2 - requiring AFRs to be prepared in the single electronic reporting format.
- Onshored Delegated Regulation (EU) 2019/815 (ESEF RTS)3 - specifying the format: XHTML + Inline XBRL.
This regime has been mandatory for financial years beginning on or after 1 January 2021.
2.2 Required Format and Content
A compliant AFR must:
| Requirement | Description |
|---|---|
| XHTML Format | The entire document must be provided in XHTML. |
| Inline XBRL Tagging | All consolidated IFRS primary financial statements must contain valid iXBRL tags. |
| Block-tagging of Notes | Notes and disclosures must be block-tagged with appropriate taxonomy elements. |
| Valid Taxonomy | Tags must reference a valid ESEF or UKSEF taxonomy. |
| Extension Taxonomy | Issuer extension taxonomy files must be provided where applicable. |
| NSM Filing | The complete package must be filed to the NSM in this format. |
These are not guidelines: they are explicit regulatory obligations.
Observations and Concerns
3.1 Evidence of Untagged Filings
Non-compliant Filing Patterns
A non-trivial number of documents on the NSM:
- Are XHTML files with no Inline XBRL tags at all;
- Contain placeholders or vendor-generated XHTML exported without tagging;
- Lack the required taxonomy package;
- Contain empty or malformed iXBRL structures;
- Do not include any IFRS concept references.
These documents may render visually, but they do not meet the machine-readable purpose of ESEF, and they do not appear to satisfy DTR 4.1.14R.
3.2 Impact on the Market
Consequences of Non-Compliance
The impact of untagged or improperly tagged filings on market participants.
| Impact Area | Consequence |
|---|---|
| Data Extraction | Financial data cannot be programmatically extracted or analysed. |
| Investor Access | Investors cannot access comparable digital disclosures, undermining the intent of ESEF. |
| Market Asymmetry | Creates systemic data asymmetry between retail and institutional users. |
| Archive Integrity | Introduces inconsistency in the NSM archive, reducing confidence in UK disclosure infrastructure. |
3.3 Competitive Position
Other markets (EU, US via iXBRL for SEC filings) have achieved near-universal adherence. The UK risks:
- Reduced usability of its central storage mechanism;
- Harming transparency and comparability for listed companies;
- Falling behind international reporting standards.
Expectations for NSM Filings
We expect that all AFRs submitted to the NSM should:
4.1 Contain Valid Inline XBRL
- Every primary statement line item tagged.
- Notes and disclosures block-tagged.
- Tags correctly anchored to standard taxonomy elements.
4.2 Include a Complete Taxonomy Package
- Base (ESEF/UKSEF) taxonomy files.
- Issuer extension taxonomy.
- Linkbases for labels, presentation, definition, and calculation.
4.3 Pass Standard ESEF Validation Checks
- Valid XHTML structure.
- Valid iXBRL syntax.
- Calculation linkbase consistency.
- Anchoring requirements observed.
Working Hypothesis
Suspected Causes of Non-Compliance
We suspect several issuers may be:
- Exporting their annual report to XHTML via Adobe, Word, or vendor tools without actually applying iXBRL tags.
- Believing that XHTML alone satisfies the requirement.
- Misinterpreting vendor wording such as "ESEF-ready" as equivalent to "ESEF-compliant".
- Underestimating the need to include the taxonomy package within the filing.
If true, this would explain the XHTML-only filings appearing on the NSM.
Support We Can Provide
We can assist by:
- Providing technical diagnostics of non-tagged or weakly-tagged filings.
- Supplying examples of valid vs. invalid ESEF/iXBRL AFRs.
- Sharing statistical analysis of the proportion of filings missing Inline XBRL.
- Demonstrating the impact on investors, particularly retail.
- Offering practical recommendations for improving submission QA.
Proposed Next Steps
- Joint review of a representative sample of NSM AFRs.
- Confirm the extent of XHTML-only filings.
- Identify systemic causes, whether process-, vendor-, or issuer-driven.
- Consider enhancements to NSM submission validation.
- Establish a shared roadmap for improving digital reporting quality.
Conclusion
The structured reporting regime (ESEF/UKSEF) creates an opportunity for the UK to lead in structured, transparent financial reporting. Ensuring that all issuers meet their obligations is essential for market integrity and for unlocking the benefits this regime was designed to provide.
We are ready to collaborate on diagnostic work and targeted improvements that strengthen the NSM and support high-quality issuer disclosure.
References
1 FSMA 2000: Financial Services and Markets Act 2000, the primary legislation governing financial services in the UK and establishing the FCA's rulemaking powers.
2 DTR 4.1.14R-4.1.15R: Disclosure Guidance and Transparency Rules requiring Annual Financial Reports to be prepared in the single electronic reporting format.
3 ESEF RTS: European Single Electronic Format Regulatory Technical Standard (Delegated Regulation (EU) 2019/815), onshored into UK law, specifying the XHTML + Inline XBRL format requirements.