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DVFA calls for uniform EU quality assurance software for ESEF financial and ESRS sustainability reports from ESMA

March 8. 2024. As part of the ESMA consultation on the new European Single Access Point (ESAP), the DVFA, the association of investment professionals in Germany, criticized the lack of a quality assurance system as a serious design flaw in the ESAP. The DVFA Commission for Corporate Analysis, of which I am a member and focus on digitalization issues, has submitted a detailed proposal to ESMA on this matter.

The Problem:

In our opinion, there is a lack of uniform Europe-wide regulations for the technical enforcement of a uniform minimum quality of data. Technical filing rules are implemented inconsistently at the various OAMs (business registers and others) in Europe. In some member states they are mandatory. In others they are voluntary for the reporting companies. In addition, they are not harmonized within Europe. This seems to be a very big gap in European legislation with very significant implications, namely that a minimum data quality cannot be ensured in this way

Summary of our proposal:

ESMA should have software developed for a uniform quality assurance system, which will be made available to the national submission authorities via an open source license for mandatory implementation in the submission interfaces. In summary, based on the measures suggested, a minimum data quality in the EU could be enforced cost-effectively and the national collection bodies could be supported in a uniform manner. In addition, the national collection bodies remain free to add additional quality rules to such an engine in a cost-effective manner to the extent that this would be helpful to their national situation.

The DVFA commission on Corporate Analysis proposes the following measures to solve this “uniform minimum data quality problem”:
1. EU-wide uniform quality assurance rules are developed for each reporting standard, which will be checked and enforced automatically when submitting the data  to the OAM (enforcement of filing rules)
2. The technical implementation of such qualitative assurance rules in the EU should take place centrally. An “EU uniform quality assurance rules engine” should be developed by ESMA. ESMA could evaluate if existing open-source tools could be used and adjusted.
3. The national collection bodies/OAMs are obliged to incorporate this “EU uniform quality assurance rules engine” into their national submission interface.
4. The “EU quality assurance rules engine” should be based on a technical standard so that the national collection bodies are easily able to incorporate specific additional national quality rules into the engine for them. It might be helpful to look, how the US SEC handles validation rules.
5. The ESAP uses “EU uniform quality assurance rules engine” too. However, ESAP will not throw any errors, because the data have already passed the engine at OAM level.
6. ESMA may evaluate whether to simply provide the source code of the same “EU uniform quality assurance rules engine” to reporting software vendors (but no support).This would be extremely efficient to communicate the validation in technical detail to software manufactures. Vendors would be free to implement the engine in their software. This measure would further increase data quality. This also makes sense from an economic and cost perspective.
More information:
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Contributions to Nonprofit-Organizations

DVFA calls for uniform EU quality assurance software for ESEF financial and ESRS sustainability reports from ESMA

March 8. 2024. As part of the ESMA consultation on the new European Single Access Point (ESAP), the DVFA, the association of investment professionals in Germany, criticized the lack of a quality assurance system as a serious design flaw in the ESAP. The DVFA Commission for Corporate Analysis, of which I am a member and focus on digitalization issues, has submitted a detailed proposal to ESMA on this matter.

The Problem:

In our opinion, there is a lack of uniform Europe-wide regulations for the technical enforcement of a uniform minimum quality of data. Technical filing rules are implemented inconsistently at the various OAMs (business registers and others) in Europe. In some member states they are mandatory. In others they are voluntary for the reporting companies. In addition, they are not harmonized within Europe. This seems to be a very big gap in European legislation with very significant implications, namely that a minimum data quality cannot be ensured in this way

Summary of our proposal:

ESMA should have software developed for a uniform quality assurance system, which will be made available to the national submission authorities via an open source license for mandatory implementation in the submission interfaces. In summary, based on the measures suggested, a minimum data quality in the EU could be enforced cost-effectively and the national collection bodies could be supported in a uniform manner. In addition, the national collection bodies remain free to add additional quality rules to such an engine in a cost-effective manner to the extent that this would be helpful to their national situation.

The DVFA commission on Corporate Analysis proposes the following measures to solve this “uniform minimum data quality problem”:
1. EU-wide uniform quality assurance rules are developed for each reporting standard, which will be checked and enforced automatically when submitting the data  to the OAM (enforcement of filing rules).
2. The technical implementation of such qualitative assurance rules in the EU should take place centrally. An “EU uniform quality assurance rules engine” should be developed by ESMA. ESMA could evaluate if existing open-source tools could be used and adjusted.
3. The national collection bodies/OAMs are obliged to incorporate this “EU uniform quality assurance rules engine” into their national submission interface.
4. The “EU quality assurance rules engine” should be based on a technical standard so that the national collection bodies are easily able to incorporate specific additional national quality rules into the engine for them. It might be helpful to look, how the US SEC handles validation rules.
5. The ESAP uses “EU uniform quality assurance rules engine” too. However, ESAP will not throw any errors, because the data have already passed the engine at OAM level.
6. ESMA may evaluate whether to simply provide the source code of the same “EU uniform quality assurance rules engine” to reporting software vendors (but no support).This would be extremely efficient to communicate the validation in technical detail to software manufactures. Vendors would be free to implement the engine in their software. This measure would further increase data quality. This also makes sense from an economic and cost perspective.
More information:
← back
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