EFTG: The new gateway of financial reporting

gateway

/ˈɡeɪtweɪ/

noun: gateway; plural noun: gateways

something in a system that allows you to use its other parts

From the figurative ‘Gateway’ to heaven to the ‘Gateway of India’ – the arch-monument built in the early twentieth century in the city of Mumbai, we’ve witnessed gateways in different contexts. Gateways are always located poignantly; entryways that will allow you access to a different world, whether virtual or physical.In today’s day and age, the most important gateways have a virtual address. One such gateway, the European Financial Transparency Gateway is all set to become EU’s most powerful financial data bank.

EFTG

What is the European Financial Transparency Gateway?

For practicality and a more precise understanding of EFTG, let’s look at a few scenarios first.

EFTGGrace is an investor looking for potential investment opportunities in the European capital market.

EFTGHector is an auditor who is looking for an in-depth competition analysis of FMCG companies based in Europe.

Transparency in data reportingDavid is a fund manager who is developing a new fund portfolio that will invest in sustainable technology/brands.

Currently, for all three scenarios, the financial information required is not available on a common platform, it’s in different languages and there is no standard format for the data. This makes it very difficult for Grace, Hector and David to make crucial business decisions. The EFTG intends to change that.

As the European Commission’s pilot project, EFTG solves these issues by enabling cross-border investment and providing investors with easy access to regulated information in the form of a decentralized common platform. EFTG was developed as part of the EC’s Transparency Directive, a means to a very important end: effective execution of business opportunities using financial data.

The EFTG’s mechanism

A tremendous amount of effort has driven the creation and execution of EFTG. When you consider the introduction of IFRS (International Financial Reporting Standard) in 2005, it’s a work in progress that started more than a decade ago. A lot of steps, like the EC’s Transparency Directive, set-up of OAM (Officially Appointed Mechanisms) an official registry for the individual EU Member States and ESMA’s iXBRL mandate lead to standardization and collection of the financial data provided by companies across the European Union. EC built a powerful foundation to ensure EFTG’s effectiveness.

EFTG will deliver all this information securely, powered by blockchain technology to citizens and investors interested in accessing data about the EU capital market. The data collected by each OAM will be available on EFTG’s decentralized network, securely. Since EFTG is cloud-based, when each OAM is updated with issuer information, it will be reflected automatically on EFTG as well.

User Access of EFTG

The ingenuity of this entire exercise lies in its simplicity. At the end of the day, all Grace needs to do is type in a simple search bar: I want to know about European companies with at least 50% ROI. And she will have data on potential companies for investment in a matter of seconds. More importantly, her data will come from the most legitimate and secure financial data source in Europe. This applies to anyone else who visits the EFTG portal for any kind of financial data on European Companies. Right now the EFTG is still in its Pilot Phase and is being tested for issues. But it’s only a matter of time before the portal is finalized.

When you delve into the actions of the European Commission and ESMA, you will realize that in the end, they did it for your benefit. From you as an issuer, the only demand is compliance regarding filing formats, presentation of information, timely submission and other aspects about your organization that no one except you can control. Make sure you don’t compromise on the quality of your data because it’s going to play a major role in your company’s present and future.

We hope you found this article helpful. As Software Solution Providers, we have worked with thousands of clients to help them streamline the last mile of their reporting process and transition smoothly to XBRL/iXBRL. Our solution IRIS CARBON® has been specifically designed to enable companies to produce top-notch XBRL/iXBRL reports on time without compromising on quality. More importantly, IRIS CARBON® has been updated with features to ensure that its user will prepare his/her report in comfort, with the reassurance of knowing that the user will have an error-free filing. When you choose IRIS CARBON® you choose a better and smarter way. We wish you the very best for your next filing.

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EFTG: The new gateway of financial reporting

EFTG: The new gateway of financial reporting