The Importance of Maintaining Transparency While Reporting Financial Data to ESMA

The use of data is no longer limited to big corporations and data analytic companies. Most enterprises today use analytics in some capacity; it’s fair to say the process is widespread. Maintaining transparency in data reporting is equally essential. The European Securities and Markets Authority (ESMA), for instance, has gone through great lengths to ensure transparency of financial information for investors by maintaining a regular disclosure of periodic and on-going regulated information. The regulated information refers to the financial reports, information about significant holdings of voting rights, etc.

Let’s understand why it is essential for an organization to maintain data transparency.

1. Accurate Data Reporting Helps Connects the Dots

Transparent reporting leads to a healthy financial position.

ESMA transparency mandate lets you see not only what’s happening in the financial aspect of your business but also how it is related to a broader strategy, vision, or goal. It is the very essence of ESMA’s efforts to consolidate financial data from European issuers. The reported financial data needs to be accurate and trustworthy, giving a fair view of your company’s financial position. Remember, a transparent reporting system leads to clean and healthy financial records.

2. Cultivates Trust Within and Outside the Organization

Providing transparent reporting, whether via an annual financial report or any other report, demonstrates integrity and efficiency. Investors want to work with, stand behind, and promote a company that complies with all the rules and regulations of the ESEF reporting system.

3. Encourages Data Consistency

By complying with the transparency mandate from ESMA, your company can maintain a good flow of consistency in the financial data being reported and ensure data integrity. Data transparency encourages accountability, and this further strengthens the management to take ownership of the decisions, which helps the investors feel more confident and engaged.

4. Transparency in Data Reporting Pays Well in the Markets

The best part about maintaining transparency in data reporting is that whenever you feel the need to expand business operations or invest in a new product line, your data reports can provide a real picture of your financial position. This sits well with the investors as they can be assured that the data being shared with them boasts a high level of authority and accuracy.

5. Data Transparency is the End Goal

When it comes to financial reporting via the ESEF system, everything is done electronically in the iXBRL format, the complex taxonomy, and rigorous quality checks, making sure that any qualifying entity is not reporting inaccurate data.

Begin your cost-effective digital transformation of your regulatory reporting today. DataTracks can help you comply with ESMA’s mandates and play a massive role in improving the quality of your iXBRL data being reported. To stay on top of your financial data and information related to ESMA’s iXBRL mandate, connect with us at, or you can give a call on +31 (0) 20 2253 702.

Schedule A Demo

Schedule A Demo