Financial reporting

Supervision

Finanstilsynet oversees that annual financial statements (at both group and company level), management reports, half-yearly financial statements, other financial reporting (including sustainability reporting), as well as audit committees, of issuers with financial instruments that are listed, or for which admission to listing has been requested on a regulated market in the EEA, and for which Norway is the home state, are in compliance with laws or regulations.

About financial reporting

Pursuant to the Securities Trading Act, section 19-1, subsection (2), Finanstilsynet oversees the periodic financial reporting and audit committees of issuers of listed transferable securities. This includes ensuring that the periodic financial reports are published by the relevant deadline.

Financial reporting refers to annual financial statements, management reports, half-yearly financial statements and sustainability reporting.

Supervision is carried out of issuers with Norway as their home state regardless of the accounting language used by the issuer.

Publication, storage and reporting format

Periodic financial reports are to be published via media which can reasonably be expected to communicate the information to the public throughout the EEA. See further rules in the Securities Trading Act, section 5-12, cf. the Securities Trading Regulations, section 5-9. It is customary to publish such material via a news distributor. 

Financial reporting that is published shall simultaneously be sent electronically to Oslo Børs, which is the designated officially appointed storage mechanism (OAM). The storage mechanism in Norway is located at NewsWeb. Finanstilsynet would like to point out that the entire reporting must be stored directly in the OAM. It is not sufficient to post a link to another website where the reports are available.  

The statutory requirement to file periodic financial reports with Finanstilsynet in accordance with the Securities Trading Act, section 5-12, subsection (2), is fulfilled by storing them in the OAM. This applies to both annual and half-yearly reporting.  

The entire annual financial report shall be prepared in XHTML format (Extensible Hypertext Markup Language), cf. the Securities Trading Regulations, section 5-13. Consolidated financial statements prepared in accordance with IFRS must also be tagged in accordance with the applicable ESEF taxonomy. For consolidated financial statements prepared in accordance with IFRS, individual amounts in the income statement, balance sheet, cash flow statement and statement of changes in equity shall be tagged, while the notes shall be tagged in blocks. 

The taxonomy is published by the European Securities and Markets Authority (ESMA) and is updated annually. Finanstilsynet expects issuers to use the most updated version of the taxonomy. 

Home state in the EEA

According to the Transparency Directive, issuers of transferable securities admitted to trading on a regulated market in the EEA must have a home state. Issuers with Norway as their home state are specified in the Securities Trading Act, section 5-4.

Equivalence

For issuers from non-EEA states having Norway as their home state, Finanstilsynet may consider whether the requirements concerning the content of the management report, declaration of responsibility and the statutory accounts of the parent company pursuant to the law of the third country meet the requirements of the Securities Trading Regulations, Section 5-7.

Finanstilsynet has concluded that certain US reporting requirements (related to Form 20-F) are equivalent to requirements in the Norwegian legislation incorporating the Transparency Directive. Thus, Finanstilsynet has granted certain exemptions related to the annual financial report to third country issuers listed in the US and on Oslo Børs with Norway as their home state in the EEA.

Even though Finanstilsynet has concluded on equivalence, issuers wishing to apply US reporting requirements have to submit an application to Finanstilsynet for an exemption.  

Review of financial reporting

Financial reporting refers to annual financial statements, management reports, half-yearly financial statements and sustainability reporting.

Finanstilsynet checks that the content of the financial reporting is in accordance with laws and regulations. Finanstilsynet's review focuses on identifying significant reporting inconsistencies.

Finanstilsynet has established a three-pronged model under which companies are selected for review on the basis of risk assessments/signals, rotation or random selection.  

Initially, the company’s financial reporting is reviewed, along with other publicly available information, such as stock exchange statements. If Finanstilsynet finds it necessary, it will send the company a letter with questions concerning one or more aspects of the company’s financial reporting. Finanstilsynet normally sets a three-week deadline for response.

Finanstilsynet will often arrange a meeting with the company during the review process. The company's auditor normally attends such meetings.

If Finanstilsynet disagrees with the company's accounting treatment of one or more items, it may decide that this must be rectified or that further information must be provided. Finanstilsynet may also decide that the company must present its annual or interim accounts again. Before a decision is made, Finanstilsynet will always notify the company of the decision, presenting the facts and Finanstilsynet's assessment. The company will have the opportunity to respond.

The review process is concluded with a final letter summarising the review. Any decision made will be presented in the final letter. The letter will be made available on Finanstilsynet's website and be published on Oslo Børs NewsWeb.

Companies may appeal against Finanstilsynet's decision. The deadline for appeal is three weeks after the company was informed about the decision. The appeal must be sent to Finanstilsynet and will be considered by the Financial Supervision Appeals Board.

Finanstilsynet may also carry out a review of selected parts of a company’s financial reporting in the form of a thematic review which is presented in a summary report. 

Review of audit committees 

Finanstilsynet oversees that audit committees of issuers of listed transferable securities comply with laws and regulations. 

Fines, suspension and halt to trading

Finanstilsynet may impose fines on companies if their financial reporting is not in compliance with laws or regulations, or if the company breaches the rules on audit committees.  

European cooperation

The EU/EEA countries cooperate on overseeing listed companies’ financial reporting through their participation in the European Securities and Markets Authority (ESMA). Finanstilsynet places emphasis on organising its enforcement activities in accordance with the principles drawn up by ESMA (Guidelines on the Enforcement of Financial Information/Sustainability Information), and takes the annual European Common Enforcement Priorities into consideration, but is not bound by them. Finanstilsynet actively participates in ESMA’s Financial Reporting Working Group (FRWG) and Sustainability Reporting Working Group (SRWG), which have been established to enable national supervisory authorities to discuss relevant issues and decisions concerning financial reporting and sustainability. 

Relevant information from ESMA