ESMA Consultation Paper - Guidelines on Alternative Performance Measures
- Hocine Kebli
ESMA published a Consultation Paper Guidelines on Alternative Performance Measures (the 'APMs') on 13 February 2014. The Consultation Paper followed on from ESMA's decision to review and replace the recommendation on alternative performance measures issued in October 2005 by the Committee of European Securities Regulators ('CESR') with new guidelines on Alternative Performance Measures issued under Article 16 of the ESMA Regulation. The guidelines set out the principles that issuers must follow when presenting alternative performance measures. On 26 March 2014, EFRAG issued its draft comment letter on ESMA Consultation Paper Guidelines on Alternative Performance Measures.
On 12 May 2014, EFRAG issued its final comment letter. EFRAG believed that Alternative Performance Measurement ('APMs') could provide useful information when properly used and presented, and therefore, supported the idea that APMs should be clearly defined and explained by preparers, and presented consistently over time to improve the understanding of the performance by users of financial information.
However, EFRAG observed that ESMA had not provided clear evidence on why the existing CESR Recommendation was no longer considered to provide adequate guidance and was in need of replacement. Further EFRAG recommended that the scope of the requirements be supported by an underlying principle so as to target the requirements more narrowly and hence contribute to effective disclosures.
The final Guidelines were issued in June 2015.