March 8, 2024. The DVFA, the association of investment professionals in Germany, took part in the ESMA (European Securities and Market Authority) consultation on the subject of ESAP (European Single Access Point). The DVFA Commission for Corporate Analysis, of which I am a member and focus on digitalization issues, has submitted a detailed statement to ESMA on this matter.
In the associated press release from the DVFA, the DVFA criticizes the lack of a quality assurance system as a serious design flaw in the ESAP that is being planned.
The DVFA specifically criticizes that the current proposal from ESMA, like the underlying EU directive (EU 2023/2859 of December 13, 2023), contains a fundamental weakness: there is a lack of an EU-wide uniform quality assurance system to technically guarantee minimum standards for determining data from complex electronic reports, such as IFRS consolidated financial statements. Thorsten Müller, Chairman of the DVFA board, says: “In the age of automation, AI and complex electronic reports from issuers, such as the IFRS consolidated financial statements and future reports according to the European Sustainability Reporting Standards (ESRS), it is a conceptual error, not to establish a uniform quality assurance system across the EU. Without such a quality assurance system, the risk of producing data scrap is very high!”
In my role as a digitalization expert in the DVFA Commission on Business Analysis, I added: “We should urgently learn from the US SEC’s experiences with inadequate data quality of machine-readable data. Analogous to the validation engine in the USA, 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.“
[Update, April 9 2024:] EFFAS, the European Federation of Financial Analyst Societies, has taken over this position of the DVFA, see this post in my blog
March 8, 2024. The DVFA, the association of investment professionals in Germany, took part in the ESMA (European Securities and Market Authority) consultation on the subject of ESAP (European Single Access Point). The DVFA Commission for Corporate Analysis, of which I am a member and focus on digitalization issues, has submitted a detailed statement to ESMA on this matter.
In the associated press release from the DVFA, the DVFA criticizes the lack of a quality assurance system as a serious design flaw in the ESAP that is being planned.
The DVFA specifically criticizes that the current proposal from ESMA, like the underlying EU directive (EU 2023/2859 of December 13, 2023), contains a fundamental weakness: there is a lack of an EU-wide uniform quality assurance system to technically guarantee minimum standards for determining data from complex electronic reports, such as IFRS consolidated financial statements. Thorsten Müller, Chairman of the DVFA board, says: “In the age of automation, AI and complex electronic reports from issuers, such as the IFRS consolidated financial statements and future reports according to the European Sustainability Reporting Standards (ESRS), it is a conceptual error, not to establish a uniform quality assurance system across the EU. Without such a quality assurance system, the risk of producing data scrap is very high!”
In my role as a digitalization expert in the DVFA Commission on Business Analysis, I added: “We should urgently learn from the US SEC’s experiences with inadequate data quality of machine-readable data. Analogous to the validation engine in the USA, 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.“
[Update, April 9 2024:] EFFAS, the European Federation of Financial Analyst Societies, has taken over this position of the DVFA, see this post in my blog
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