Feasibility Study for a pan-European storage system for ...

Feasibility Study for a pan-European

storage system for information disclosed

by issuers of securities - Final Report

Keith Thomas

Steve Gilbert

18 October 2011

ACTICA/PB318D004 1.3

Page ii Actica/PB318D004 1.3

Executive Summary

This document has been prepared by Actica Consulting Ltd as the final report of the study into a pan-

European storage system for regulated information disclosed by issuers of securities. It has been prepared for

Internal Market and Services DG of the European Commission in delivery of Contract No.

MARKT/2010/17/F.

The European Commission (EC) Directive 2004/109/EC, the Transparency Directive, requires issuers of

securities in regulated markets within the European Union (EU) to ensure appropriate transparency for

investors. Article 21(1) of the Transparency Directive requires such information to be immediately available

to investors and Article 21(2) requires each Member State to officially appoint at least one mechanism for

the central storage of regulated information. The Directive encourages the establishment of some kind of

interconnection of these officially appointed storage mechanisms (OAMs) across Member States.

The purpose of this study is to identify and technically assess possible options for interconnecting the

disclosed regulated information about issuers of securities at a pan-European level, beyond the existing

situation which results from the implementation of the Directive rules on storage.

In pursuit of the above, the Commission have specified the following objectives for the current study:

• examine the technical feasibility of an electronic storage system (dataset service) providing public

access to pan-European “regulated information” about issuers of securities;

• evaluate the cost of such a system considering the different solutions available;

• provide analytical conclusions.

In accordance with the expectations of the Commission, this study includes the following elements:

• examination of the technical characteristics of the existing national OAMs, including:

• how they are technically structured, including how the filing of documents is organised, how

filers are identified, which types of documents are filed, and the facilities available to end users

etc.;

• whether the OAMs comply with the quality standards in paragraphs 5 to 20 of the Commission

Recommendation of 2007;

• how the national OAMs are supervised by the national competent authorities.

• examination of the technical feasibility of a storage system providing public access to pan-

European “regulated information” about issuers of securities disclosed pursuant to the obligations

of Directive 2004/109/EC and other Directives applicable to issuers of securities. The

Commission have specified the characteristics required of such a system. The Commission has

also required the examination of at least the three options below:

o a central data set fed by the existing national OAMs;

o a network of harmonised national datasets;

o a single EU dataset;

• analysis of the costs of the storage system, including:

o the costs involved in creating and running the existing national OAMs;

Actica/PB318D004 1.3 Page iii

o the expected development and on-going running costs and benefits associated with the

options for the pan-European service;

o the expected sunk investments of national OAMs if a single EU dataset is created;

• analytical conclusions based on the technical examinations and cost analysis.

A number of previous studies have been conducted to examine the options for creating a pan-European

database of regulated information submitted by issuers of securities. The following points from these studies

are relevant to the technical and cost assessment of feasible options to be undertaken here:

• The provisions of the Directive for the storage of regulated information are generally well

understood and accepted by stakeholders.

• The 2007 Recommendations have defined, at a high level, common operational standards for all

OAMs. A full or interim OAM service based on and, to varying levels, compliant with these

standards is in place in all Member States.

• At the more detailed level, common standards have not been set covering the implementation of

the OAM solution (for example covering technical architecture, common coding structures, and

detailed process areas). As a result OAMs have developed independent solutions in these areas.

• Usage of OAMs by end users is limited. Most retail and institutional investors, analysts and other

stakeholders traditionally use the issuers’ web site as their first source of information. Whilst the

studies indicate that the OAM service is well regarded, market and issuer demand for increased

services is limited.

• A light integration of information held by OAMs has been provided through the use of CESR’s

MiFID database but this does not fully meet the expectations of even the “light integration”

model proposed by CESR in 2006.

• A number of options have been put forward to progress the pan-European network by both CESR

and Mazars 2009 external study, but to date no consensus on a firm direction has been agreed and

no progress has been made on moving forward from the current light integration position.

• There is no central list of issuers of all securities, a central list of issuers of shares only is

available as part of the MiFID database.

• The development of a central database of issuers, with appropriate coding structures, is a

prerequisite for development of an integrated OAM network;

• There is a view that an OAM based approach offers benefits compared to solutions based on a

reliance on issuers’ web sites or purely relying on commercial data vendors.

Summary of the current “status quo” position

OAMs are operating in all Member States, although the types of services offered vary considerably, with

some still operating interim solutions with limited facilities for end users. (Although some of these are due

for imminent replacement at the time of this report.)

The OAMs supplement, and are often closely integrated with, stock exchange and regulatory information

filing services and systems. The OAM has not typically acted as a replacement repository for regulated

information, and filings continue to be stored and disseminated through multiple channels.

Issuers in several Member States make use of intermediaries or commercial data disseminators to manage

their filings to both the OAM and other agencies. In these cases there are system-to-system interfaces to

support the filing process.

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Almost universally, the OAMs support the filing and storage of unstructured document formats. They

provide user tools to search for and download documents, based on a limited set of descriptive metadata

describing the nature of the document but not its detailed contents. (Some OAMs also provide full text

search of the contents of documents.)

The OAMs manage the filing process and ensure the safe storage of documents provided by issuers. Their

role is to transparently present information provided by issuers. They are not involved in the interpretation,

analysis or presentation of the information contained within the documents they manage.

Commercial providers of financial information are typically seen as the providers of structured and analytical

information regarding issuers. These providers make use of information typically obtained from regulatory

filings but tend to have their own information channels and do not rely on the OAMs to source their data.

There is very limited pan-European integration available through the ESMA (CESR) MiFID database.

Neither this nor the national OAM services appear to be actively promoted or marketed to potential users.

Most OAMs report very low volumes of end user/investor access to their services. Typically, such users

either use the analytical tools and information available from the commercial providers or directly access

information from issuers’ websites. The OAM acts as a repository of record for professionals to obtain

“official” versions of key documents on an exception basis.

Approach

In order to meet the objectives of the study as set out above, the approach has included:

• desk research, including a review of the user facilities offered by the current OAM network;

• multi-stage online information gathering surveys of the OAM operators supplemented by follow

up interviews;

• structured interviews with both representative OAMs and central bodies with a stakeholder

interest, including Eurostat, ESMA and ECB;

• structured development and assessment of cost and benefit models for technical options for the

development of a pan-European solution, compared to maintaining the status quo.

Key findings for options analysis

Although there are OAM services operating in all Member States, there exist varying degrees of readiness to

begin further integration. Except in a few cases where interim solutions still exist this is not predominantly a

technical issue, rather it reflects the varying interpretations of the Directive in business process, coding and

detailed filing practices:

• OAMs have implemented different arrangements for the creation and storage of metadata, there

are no common standards;

• OAM filing processes in several Member States are closely coupled with other exchange

disclosure, regulatory and news dissemination processes and systems – in these cases many

issuers do not file direct to the OAM;

• Information held by the OAMs is often duplicated in other exchange or regulatory systems;

• OAMs do not have existing structured processes for handling notification of changes to voting

rights.

Actica/PB318D004 1.3 Page v

Few end users make use of the OAM service in most Member States. The quality of the user experience

offered to end users is good overall, but the services offered vary considerably:

o Web sites for OAMs can be difficult to find using commercial search engines;

o Users of the information held in the OAM repositories are mainly professional

advisors and researchers;

o Individual investors tend to access commercial information services or the issuers web

sites rather than OAMs, mainly due to the extra information and analysis available;

o The OAM service is of limited value to central bodies such as Eurostat and ECB

because there is no structured or analytical data stored by the OAM that can be used

by these organisations for statistical and analysis purposes.

Technically, the OAMs are in a good position to respond to changes and extensions to the service they

provide:

o Documents and metadata held by the OAMs are mainly stored in flexible SQL

databases so can be updated relatively easily (although the contents of the documents

is not structured);

o Similarly, OAMs can provide access to their back end databases in order to facilitate a

central search tool relatively easily, although the scope and activities required would

need to be agreed;

o OAM operators agree with the requirement for pan-European interconnections but are

seeking clear long term direction on the way forward as they do not see market

demand driving such an initiative;

o OAM operators have highlighted potential issues with significant change to current

operations and processes.

Options

The options for implementing a pan-European database of securities information have been developed from

a baseline that consists of the existing options as identified by previous studies conducted by CESR (now

ESMA) and Mazars. The initial step in the options identification was to assess these options against the EC

specified requirements of this study, and discard any options that do not meet the requirements.

The remaining options were then reviewed to assess whether there were any gaps, including areas where new

technologies could provide an option or areas where a different combination of local and central services

provided a different option. The review also ensured that all options proposed by the EC in the scope of this

review were included.

There were eight options considered:

a. Option 1: Single European OAM - Replace all national OAMs with one central OAM

that stores all European data and provides all search facilities.

b. Option 2: Central database for all data - Create a central European database for

securities information which holds copies of all information stored by the national

OAMs.

c. Option 3: Central database for metadata - Create a central European database that

holds metadata for all information held by the national OAMs

d. Option 4: OAM web-ring - Standardise data storage across all national OAMs to enable

all information to be searched by current national search tools

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e. Option 5: Harmonised OAM network - Standardise data storage/metadata as for

Option 4 above together with a central search capability searching all national datasets.

f. Option 6: Central intelligent search - Make use of intelligent search tool to provide

central search facility without using central database.

g. Option 7: Combine current OAM operations with national business registers -

Create a combined OAM and national business registers’ database and its operations to

make use of the planned central access point for the business registers by linking it to the

national OAM databases. This leverages economies of scale and the existing business

registers European network to also provide OAM data centrally.

h. Option 8: Maintain status quo - Continue to provide national OAM services using

multiple different databases, with few interconnections.

Key requirements

The external study, CESR’s consultation and report and other work performed by the Commission have

identified a number of elements required to be in place in order to build an effective pan-European storage

network. The findings from the surveys and interviews conducted allow a number of key requirements to be

identified. These are:

• Common filing standards and formats;

• Harmonised methods of classification and indexing;

• Interconnection with national company registers;

• Multiple country search from a single query;

• Standardisation of telecoms and database solutions.

Initial options analysis

A number of the options identified in Section 5 can be discounted at this stage on the basis that they clearly

do not meet one or more of the requirements. The discounted options, and reasons for disqualification are

listed below.

Option 4: OAM web-ring - discounted at this stage because the EC requirements specify that a single, central

search tool is required, that allows users to conduct pan-European searches from a single, central point. This

option does not meet that requirement as no additional portals are created – users would be able to use any of

the existing OAM portals rather than being directed to a single, central portal.

Option 6: Central search and index engine - discounted at this stage because use of an intelligent tool to

index the data is seen as interpretation and carries a risk that data could be incorrectly or inappropriately

indexed. Users conducting a search of information indexed in this fashion could therefore be presented with

incorrect or inaccurate results which could be seen as the responsibility of the owner and supplier of the

search tool. This could lead to complaints or more serious action being taken against the EC (or other central

body that is responsible for the central search tool) to recover monies lost as a result of incorrect data being

supplied.

Option 7: Combine current OAM operations with national business registers - discounted at this stage for

two reasons:

• The effort required to integrate OAM databases with the Business Registers to enable the existing

international linkages to be used to share OAM information is likely to be prolonged. This extra

effort is not likely to deliver additional benefits over the previous options;

Actica/PB318D004 1.3 Page vii

• The option does not increase the efficiency of the two separate databases due to a lack of synergy

between them. The information held in the national business registers is different to that held in

the OAMs, the only point of commonality is financial reports. It is therefore unlikely that a

combined database would deliver any tangible savings and it is also unlikely that the combined

database would be able to make use of the existing international linkages to search OAM data as

these exist to share business register data rather than the different OAM data.

Option 8: Maintain status quo - discounted as it does not meet the requirement for a single European access

point and does not enable a pan-European search.

Further options analysis

A set of criteria by which the four options taken forward (Options 1,2,3 and 5) can be assessed has been

developed based on assessing the overall suitability of each option to fulfil the requirement of enabling users

to conduct pan-European searches of regulated information held on issuers of securities. These criteria are

listed below:

• ability to meet the EC requirements as described in the ITT (Annex A);

• deliverability – how easy is it to move from the current situation to that proposed by the option;

• ability to address concerns identified in previous reports;

• timescale – how long is the option likely to take to be fully implemented;

• Cost;

• governance and resourcing – How much will current governance and resourcing arrangements

need to change to implement the option;

• standardisation – to what level will the current national arrangements need to be standardised to

implement the option;

• flexibility - how easily can the proposed system be changed to include new data, storage

arrangements or processes (such as moving to XBRL);

• benefits and user experience – what are the quantifiable and unquantifiable benefits of the option,

including any improvements to the user experience;

• impact on other organisations, including 3rd party providers;

• impact on other government services such as information registers;

• risk – the likely risk of implementing the option.

Each option has been assessed against these criteria individually in order to understand how well that option

is likely to meet the overall need.

Cost model

The table below summarises the full cost model for the options and shows the additional costs incurred

centrally and the total costs associated with all four options, detailed over a 5 year period.

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Year 1 Year 2 Year 3 Year 4 Year 5

Central costs

Option 1 € 2,070,000 € 550,000 € 550,000 € 550,000 € 550,000

Option 2 € 1,240,000 € 310,000 € 310,000 € 310,000 € 310,000

Option 3 € 1,880,000 € 340,000 € 340,000 € 340,000 € 340,000

Option 5 € 1,090,000 € 260,000 € 260,000 € 260,000 € 260,000

Total costs

Option 1 € 4,090,000 € 2,060,000 € 1,560,000 € 1,050,000 € 550,000

Option 2 € 3,260,000 € 2,320,000 € 2,320,000 € 2,320,000 € 2,320,000

Option 3 € 3,900,000 € 2,360,000 € 2,360,000 € 2,360,000 € 2,360,000

Option 5 € 3,110,000 € 2,280,000 € 2,280,000 € 2,280,000 € 2,280,000

Cost model summary

Recommendation

The options analysis does not identify a clear preferred option. All of the options identified are able to meet

the majority of the requirements, have similar costs and similar timescales.

It is clear that Option 1 best satisfies the requirements, but it is also clear that this option has the highest

overall impact on users, issuers and existing OAMs, and thus is highly likely to take the longest time to

implement. However, this option also presents the best opportunity to save costs based on the reduction of

the number of national OAMs over time.

The recommendation is therefore that Option 1 should be the long term solution, and that the EC seeks to

evolve the current situation into a single, European OAM over time. Options 2 and 3 can then be used as

steps which support this evolution and allow the costs and impact on stakeholders to be borne over time, and

thus the impact and difficulty of change is reduced.

It is recognised that the implementation of a pan-European OAM network meeting all the functional

requirements specified will require progress through a number of steps and take some considerable time to

deliver and manage transition. In order to maintain focus, and to show the market there is strong commitment

to the longer term vision, we strongly recommend that a clear strategic roadmap and vision is agreed and

published showing the proposed end target model, the proposed steps for moving towards this from the

current position and the principles that will underpin this development.

The other key activities that are needed to support the implementation of this roadmap are:

• Set up a central standards and protocol body to agree and implement standards

• Define a unique pan-European issuer code

• Standardise metadata held for issuers and filings, and harmonise coding

• Harmonise other key aspects of national OAM data and processes, including time stamping and

version control

• Specify a standardised format for filing structured information

Actica/PB318D004 1.3 Page ix

List of Contents

Executive Summary ii

1 Introduction 1

1.2 General 1

1.3 Overall study context 1

1.4 Purpose of the study 1

1.5 Objectives of the study 1

1.6 Key outcomes of the study 2

1.7 Scope 2

1.8 Acknowledgements 3

1.9 Status 3

1.10 Disclaimer: 3

1.11 Structure of this report 3

2 Background 5

2.1 Introduction 5

2.2 The Transparency Directive rules on disclosure of regulated information 5

2.3 Dissemination and storage of regulated information 5

2.4 Progress on creating a pan-European network 6

2.5 Commission 2007 Recommendation and standards 7

2.6 The current position 7

2.7 Recommendations and findings of the 2009 External Study 8

2.8 Cross-border access to regulated information on SMEs 9

2.9 Interconnection with company registers and unique company identifier 9

2.10 EC 2010 consultation on the Transparency Directive 9

2.11 CESR 2010 consultation and report on development of pan-European access 10

2.12 Summary 12

3 Methodology 13

3.1 Introduction 13

3.2 Review of user facilities offered by current OAM network 13

3.3 Online information gathering surveys and follow up interviews 13

3.4 Structured interviews for impact assessment of options 14

3.5 Assessment of options 14

4 Findings 15

4.1 Introduction 15

4.2 Overview of the national OAM network 15

4.3 Technical structure of the national OAMs 18

4.4 Common code for identification of issuers 22

4.5 Consolidation of information on voting rights 23

4.6 Visibility of small listed companies 24

4.7 Alert systems 25

4.8 Integration with business registers 25

4.9 Compliance with quality standards 26

4.10 End user access to OAMs 26

4.11 Current pan-European integration 27

4.12 Use of issuers’ web sites as a source of information 27

4.13 The role of the OAM and interpretation of data 28

4.14 Relationship between OAMs and third party vendors 28

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4.15 Summary of the current “status quo” position 29

4.16 Key findings for options analysis 29

5 Options Identification 31

5.1 Introduction 31

5.2 Methodology 31

5.3 Options identified 32

5.4 Option descriptions 33

6 Options Analysis 41

6.1 Introduction 41

6.2 Key requirements 41

6.3 Initial analysis 41

6.4 Further analysis methodology 43

6.5 Cost model 48

6.6 Detailed analysis 48

6.7 Other considerations 51

7 Recommendation 53

7.1 Introduction 53

7.2 Recommendation 53

7.3 Other recommendations 56

7.4 Summary of recommendations 56

A Characteristics of a pan-European storage system 59

Actica/PB318D004 1.3 Page xi

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Actica/PB318D004 1.3 Page 1

1 Introduction

1.2 General

1.1.1 This document has been prepared by Actica Consulting Ltd as the final report of the study into a

pan-European storage system for regulated information disclosed by issuers of securities. It has

been prepared for Internal Market and Services DG of the European Commission in delivery of

Contract No. MARKT/2010/17/F.

1.3 Overall study context

1.1.2 The European Commission (EC) Directive 2004/109/EC, the Transparency Directive, requires

issuers of securities in regulated markets within the European Union (EU) to ensure appropriate

transparency for investors. This is achieved through a regular flow of information by disclosing

periodic and on-going regulated information and by disseminating such information to the

public throughout the Community.

1.1.3 Article 21(1) of the Transparency Directive requires such information to be immediately

available to investors and Article 21(2) requires each Member State to officially appoint at least

one mechanism for the central storage of regulated information. The Directive encourages the

establishment of some kind of interconnection of these officially appointed storage mechanisms

(OAMs)1 across Member States. The Directive does not however make such networks

compulsory.

1.1.4 The transposition deadline of the Transparency Directive was 20 January 2007. On 27 May

2010 the Commission published its report on the application of the Transparency Directive,

which included a review of the operation of the OAM network. In the report, the Commission

indicated that progress towards the establishment of a pan-European system of storage of

regulated information had been slow and the impact of the Directive in this area had been

insufficient.

1.4 Purpose of the study

1.4.1 The purpose of this study is to identify and technically assess possible options for

interconnecting the disclosed regulated information about issuers of securities at a pan-

European level, beyond the existing situation which results from the implementation of the

Directive rules on storage.

1.5 Objectives of the study

1.5.1 In pursuit of the above, the Commission have specified the following objectives for the current

study:

a. examine the technical feasibility of an electronic storage system (dataset service)

providing public access to pan-European “regulated information” about issuers of

securities;

1 The acronym OASM is also used.

Page 2 Actica/PB318D004 1.3

b. evaluate the cost of such a system considering the different solutions available;

c. provide analytical conclusions.

1.6 Key outcomes of the study

1.6.1 In accordance with the expectations of the Commission, the study includes the following

elements:

a. examination of the technical characteristics of the existing national OAMs, including:

1. how they are technically structured, including how the filing of documents is

organised, how filers are identified, which types of documents are filed, and the

facilities available to end users etc.;

2. whether the OAMs comply with the quality standards in paragraphs 5 to 20 of the

Commission Recommendation of 20072;

3. how the national OAMs are supervised by the national competent authorities.

b. examination of the technical feasibility of a storage system providing public access to

pan-European “regulated information” about issuers of securities disclosed pursuant to

the obligations of Directive 2004/109/EC and other Directives applicable to issuers of

securities. The Commission have specified the characteristics required of such a system.

These are summarised in Appendix A of this report. The Commission has also required

the examination of at least the three options below:

1. a central data set fed by the existing national OAMs;

2. a network of harmonised national datasets;

3. a single EU dataset;

c. analysis of the costs of the storage system, including:

1. the costs involved in creating and running the existing national OAMs;

2. the expected development and on-going running costs and benefits associated with

the options for the pan-European service;

3. the expected sunk investments of national OAMs if a single EU dataset is created;

d. analytical conclusions based on the technical examinations and cost analysis.

1.7 Scope

1.7.1 The OAMs in scope for this study are those run by all 27 EU Member States plus Iceland and

Norway, making a total of 29 OAMs. Three of those OAMs are managed by a single operator

and there are therefore 27 OAM operators in total.

2 Commission Recommendation 2007/657/EC of 11 October 2007.


1.8 Acknowledgements

1.8.1 Actica would like to thank all representatives from national OAMs and operators, the EU,

Eurostat and the ECB who contributed to this study.

1.9 Status

1.9.1 This is the final version of this report.

1.10 Disclaimer:

1.10.1 The views expressed in this document are purely those of the writer and may not, in any

circumstances, be interpreted as stating an official position of the European Commission.

1.10.2 The European Commission does not guarantee the accuracy of the information included in this

study, nor does it accept any responsibility for any use thereof. Reference herein to any specific

products, specifications, process, or service by trade name, trademark, manufacturer, or

otherwise, does not necessarily constitute or imply its endorsement, recommendation, or

favoring by the European Commission.

1.10.3 All care has been taken by the author to ensure that he has obtained, where necessary,

permission to use any parts of manuscripts including illustrations, maps, and graphs, on which

intellectual property rights already exist from the titular holder(s) of such rights or from his or

their legal representative.

1.11 Structure of this report

1.11.1 The remainder of this report is structured as follows:

a. Section 2 details background information;

b. Section 3 outlines the methodology used to conduct this study;

c. Section 4 details the findings from the information gathering stage;

d. Section 5 provides information on the options identified;

e. Section 6 analyses the options;

f. Section 7 presents the recommendations and next steps.

1.11.2 Details of the surveys carried out as part of the study, together with tabulations and analyses of

the responses to the survey questions, are presented in the Survey Analysis Annex to this report

and issued as a separate document.


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2 Background

2.1 Introduction

2.1.1 This section details the background to this study. It outlines the EC Transparency Directive as it

applies to issuers of securities and how this requirement is being met by the current situation. It

also summaries a number of previous studies that have been conducted in this area, including

their conclusions. Lastly, this section contains a summary of the relevant information that is

carried forward to the findings and analysis stage of this report.

2.2 The Transparency Directive rules on disclosure of regulated information

2.2.1 Directive 2004/109/EC (the "Transparency Directive") requires issuers of securities in regulated

markets within the EU to ensure appropriate transparency for investors. This is achieved

through a regular flow of information by disclosing periodic and on-going regulated information

and by disseminating such information to the public throughout the Community. Regulated

information consists of financial reports, information on major holdings of voting rights and

information disclosed pursuant to the Market Abuse Directive (2003/6/EC). Shareholders, or

natural persons or legal entities holding voting rights or financial instruments that result in an

entitlement to acquire existing shares with voting rights, should also inform issuers of the

acquisition of, or other changes in, major holdings in companies so that issuers are in a position

to keep the public informed.

2.2.2 The Transparency Directive contains rules on:

g. disclosure of information (such as deadlines, content, formats, language etc);

h. dissemination of information to the public and the competent authorities;

i. storage of disclosed information by the officially appointed storage mechanisms (OAMs);

j. liability of issuers regarding disclosed information;

k. supervision by competent authorities and penalties for lack of compliance.

2.2.3 The Directive determines which national law is applicable; the home/host Member State rule is

irrespective of the place of listing of the issuer. The Directive also contains provision for the

treatment of issuers whose registered office is in a third country. The transposition deadline of

the Transparency Directive was 20 January 2007.

2.3 Dissemination and storage of regulated information

2.3.1 The Directive requires issuers to disclose regulated information in a manner ensuring fast access

to such information on a non-discriminatory basis and without charging investors any specific

cost. According to the Directive, the home Member State shall require the issuer to use an

appropriate media that may reasonably be relied upon for the effective dissemination of the

information to the public throughout the EU, but may not impose an obligation to use only

media whose operators are located in the home Member State.

2.3.2 With respect to regulated information access over time, the Transparency Directive has

established a specific regime providing for a publicly accessible registry on disclosed


information. Article 21(2) of the Transparency Directive requires each Member State to

officially appoint at least one "mechanism for the central storage of regulated information" – an

OAM. The Directive tries to establish some centralisation at Member State level, not at

European level. The Directive is not prescriptive as to the practical solutions.

2.3.3 In addition to the creation of national OAMs, the Directive encourages the establishment of an

interconnection across Member States:

l. electronic networks at national level connecting OASMs to existing national business

registers;

m. the connection of those national electronic networks at European level.

2.3.4 However, the Directive is neutral as regards the architecture of OAMs and it does not directly

make those networks compulsory.

2.4 Progress on creating a pan-European network

2.4.1 Upon request of the Commission, CESR (the Committee of European Securities Regulators)

prepared, in 2005, a Progress Report3 on the implementation of the network of national OAMs.

This Progress Report was followed by a Report on cost issues in 2006 which provides estimates

in relation to the cost of setting up a national OAM and the cost of setting up a European

network of national OAMs. Finally, later in 2006, CESR delivered formal advice on the

possibility of implementing measures on storage of regulated information and filing with the

competent authority4. In its advice, CESR:

n. presents 4 alternative models (A to D) for the European network with varying degree of

centralisation;

o. suggests the minimum standards to be respected by each national OAM;

p. describes the funding implications of setting up and operating a national OAM;

q. evaluates the role of the Competent Authority in the supervision of the OAM and in

adopting the standards;

r. provides an opinion in relation to the filing of regulated information by electronic means

with the Competent Authorities.

2.4.2 The alternative models proposed by CESR in its advice were as follows:

a. Model A proposes that there is a "Central Access Point" ("CAP") application that is used

by end users to search the OAM network. The CAP is an application that sits on a central

server outside all OAMs that allows end users to search the OAM network.

b. Model B proposes that the end users use the software application of any one OAM to

search the entire OAM network. In this model, each OAM implements a common search

engine. An end user may choose to use the OAM that he or she prefers to search the

network.

3 CESR (March 2005), Progress Report regarding possible implementing measures of the Transparency

Directive on the role of the Officially Appointed Mechanism and the setting up of a European Electronic

Network of information about Issuers and electronic filing.

4 CESR (June 2006) Final technical advice on possible implementing measures concerning the

Transparency Directive – Storage of regulated information and filing of regulated information


c. Model C proposes that there is a central server hosting an application, containing a

complete list of issuers and the links to the OAM(s) holding information on that issuer.

The list is used by end users to access the OAM that stores information related to the

selected issuer.

d. Model D proposes that each competent authority carry a list of links to all the national

OAMs on its website. An end user must then select the appropriate OAM and access it

directly through the web link.

2.4.3 In its advice, CESR expressed a preference for the Model C option, a simple network model. In

accordance with the preliminary cost estimates made by CESR in 2006, the model was

considered to have adequate functionalities with lower costs than other options. Under Model C,

the pan-European network would consist of a common single interface for end users (e.g. a

website) containing a central list of all EU issuers with, for each issuer, a hyperlink to the

relevant national storage system in which regulated information can be found. By clicking on

the name of the relevant issuer, the user would be directed to the site of the relevant storage

mechanism to carry out a detailed search for the document(s) required. All data and documents

would remain at national level and the only common element would be the list of issuers.

2.5 Commission 2007 Recommendation and standards

2.5.1 Building on the CESR advice, in 2007 the Commission adopted a non-binding

Recommendation5 on the network of national mechanisms storing regulated information. The

main aim of the recommendation was to give support to work undertaken by CESR regarding

the pan-European network, and to its suggested way forward. Hence, this recommendation

suggests that Member States should take steps to set up the network model proposed by CESR

and requested CESR to draw up guidelines regarding the future development of the electronic

network. The Recommendation also contains suggestions regarding the minimum quality

standards with which OAMs should comply. Paragraphs 5 to 20 of the Recommendation

include standards covering:

a. security;

b. certainty as to information source;

c. time recording;

d. ease of access by end users.

2.6 The current position

2.6.1 CESR has set up an initial network of OAMs using CESR’s MiFID database on shares admitted

to trading on EU regulated markets. Clicking on the share’s name displayed on the database

search screen directs users to the corresponding national OAM. The MiFID database is designed

with a focus on the issued instrument rather than the issuer and excludes issuers of securities

other than shares. Currently a list of issuers of securities other than shares is not available

centrally. As a result, the solution does not fully meet the expectations of the original Model C

and is referred to by CESR as “Model C-“.



2.7 Recommendations and findings of the 2009 External Study

2.7.1 The application of the Transparency Directive was evaluated by an external study undertaken by

Mazars in 2009. Concerning the dissemination and storage of regulated information, the study

outlined the objective of the Directive to ensure that such information can be:

a. rapidly accessed by investors;

b. provided on a non-discriminatory basis;

c. provided at no cost to investors.

2.7.2 The review noted that the new elements introduced by the Directive were the requirements for

an EU wide dissemination of information and for filing to the appointed OAM as well as the

regulator of the issuers’ market. As a result, the role of Supervisors and/or Exchanges in the

overall dissemination of this information was changing and was not stable.

2.7.3 Relevant findings from the extensive survey carried out as part of the external study were as

follows:

a. The vast majority (85%) of stakeholders consider the storage of historical information to

be useful, with 70% agreeing it should be stored for a minimum of 5 years. 50% of

stakeholders consider that the information stored is relevant and investors would be in

favour of storing more information.

b. 70% of stakeholders using the information believed issuers used the appropriate media to

disseminate the information they produce and 45% did not believe the Directive had

changed the way it is made public.

c. Half of the users of information feel the information easily reached both the retail and

institutional investor, not only intermediaries.

d. Almost two thirds (60%) of users believed the Supervisor or Exchange should be the

central access point for stored information, with a preference for the Supervisor, but in

general these bodies are reticent to play such a role.

e. Issuers continue to use data disseminators to ensure a wide distribution of regulated

information. There are electronic systems available in some Member States to facilitate

this, and the integration of the OAM.

f. SMEs expressed the view that posting the information on their website should be

sufficient to comply with the dissemination obligation of the Directive.

g. While many stakeholders did not express an opinion on the effectiveness of the national

OAMs, when an opinion was expressed it was clearly positive.

h. The current national OAMs are not well known. Only 5% of users resort to them as a

primary source of information regarding a specific company, with 68% of users

indicating their first source of information was the company web site, although 38% of

investors have more confidence in the information available through an OAM.

i. Almost two thirds (63%) of stakeholders who expressed an opinion would be in favour of

a central EU storage system to facilitate cross-market searches for information.

2.7.4 The external study concluded that, two years after the introduction of the Directive, there

appeared to be no stable and consensual vision emerging on the manner in which stored


information may be accessed on a national and EU level. The study derived three possible

scenarios from the opinions expressed by stakeholders:

a. rely exclusively on the issuers’ websites, with harmonised publication in a specific

section of the issuers’ website made compulsory at EU level;

b. improve the functioning and visibility of national OAMs through more streamlined and

harmonised technical requirements to allow efficient interconnection, and more flexibility

in the way in which such systems are run to improve their business case;

c. create an EU single entry point, possibly by CESR maintaining a list of EU listed

companies with direct links to the specific section of each company’s website storing the

regulated information.

2.7.5 As a result, the study suggested the following improvement “A single EU access to Regulated

Information: The time has come for the EU to set up a single access point for stored

information, based on a serious cost benefit analysis while taking into account recent advances

in technology.”

2.7.6 The study goes on to suggest progressing the third option above, noting that the storage of

regulated information on the issuers website is already compulsory in several Member States.

2.8 Cross-border access to regulated information on SMEs

2.8.1 The Mazar’s external study in 2009 highlighted the poor cross-border dissemination of

regulated information by SMEs, and the low interest shown by analysts and investors in those

companies (the “black hole”). The majority of issuers and users of financial information either

thought the Directive had had no effect or had no opinion. There appears to be a “Catch 22”

situation – SMEs regret the low level of cross-border interest, so are unwilling to spend money

to ensure wider dissemination (e.g. by translation of their information into English) whilst the

analysts and investors believe they do not receive sufficient information from non-domestic

SMEs, and so are reluctant to invest in them.

2.8.2 The study suggested that only a change in the behaviour of the markets’ participants would fill

this gap. The specific initiatives suggested by the study to effect this change in behaviour are

outside the scope of this work.

2.9 Interconnection with company registers and unique company identifier

2.9.1 The 2010 CESR report and consultation also considered interconnection with the network

developed by national company registers. Whilst considering the link to such registers not to be

of the highest priority (a view endorsed by the proposed amendments to the Directive on the

interconnection of these registers) CESR recognised the value of defining a common company

identifier for both networks (for example the REID code developed by the BRITE project).

2.10 EC 2010 consultation on the Transparency Directive

2.10.1 The 2010 Commission report on the application of the Transparency Directive6 also addressed

the development of the OAM network. The report states that progress towards the establishment

6 COM(2010)243 final


of a pan-European network of OAMs has been slow, and the impact of the Directive in this area

has been insufficient.

2.10.2 The issue was further addressed in the Commission’s consultation on the modernisation of the

Transparency Directive held between 28 May 2010 and 23 August 2010. Question 9.3 of the

consultation paper asks:

a. “Do you think that the development of an EU database storing regulated information on

all issuers of securities in the EU will facilitate research and create interest/result in

greater attention in small listed companies by financial analysts, financial intermediaries

and investors?”

2.10.3 44 of the responses received to the consultation included comments regarding the development

of an EU database. Responses were mixed as to the market demand for such a database and the

relative cost and value to be derived from such a development. Some respondents favoured

solutions providing a portal to issuers’ websites or national databases.

2.11 CESR 2010 consultation and report on development of pan-European access

2.11.1 In response to the request in the 2007 Commission Recommendation asking CESR to draw up

appropriate guidelines for the future development of the network, in 2010 CESR produced a

report to the European Commission7 setting out its proposals for the onward development

required to address the features described in the Recommendation.

2.11.2 The final CESR report was based on a public consultation held between 2 August 2010 and 24

September 2010. CESR received 34 responses to the consultation which were considered

generally supportive of the proposals put forward in the consultation paper, and specifically to

the two proposed models for the integration of the OAM network:

a. Option 1 - A network model which would gradually develop the functionality of the

current linked model in a 3 step approach. Step 1 would extend the current solution to

cover all issuers of securities; Step 2 would enhance searching capabilities by storing

more items of metadata on issuers and filings at the Central Access Point (CAP). National

OAMs would provide harmonised metadata to the CAP and the CAP would provide end

users with a hyperlink to the stored documents in the OAMs. Finally Step 3 would allow

searching of information from documents filed in the OAM network and assumes the

need for harmonised filing formats across the network. (Note – Steps 2 and 3 above

reflect the revised proposals in the report following analysis of the consultation

responses.)

b. Option 2 – A single European OAM replacing the national OAM network. All issuers

would be expected to file regulated information to this single point in a standardised way.

2.11.3 In the consultation paper, CESR preferred Option 1 and the responses to the consultation

broadly supported this.

7 CESR/10-1507 22 December 2010 Development of Pan-European Access to Financial Information

Disclosed by Listed Companies.


2.11.4 In analysing the two options CESR made the following observations:

a. The creation of a database of the home member state of all issuers is a prerequisite for the

development of either option; as such a database does not currently exist.

b. Both options require amendments to the Transparency Directive before a fully integrated

network could be created. The network model of Option 1 does however allow

development to begin before such changes are made, as it is based on the existing

provision.

c. The network model has a closer connection to local markets. Most of the national OAMs

are operated by institutions with which issuers are in any case required to file regulated

information (e.g. competent authorities and stock exchanges). Filing with a single, central

OAM would need to be aligned with these national institutions to avoid increased

administrative burdens for issuers required to file the information twice.

d. Should future large scale development projects be anticipated, the aggregated costs of

changes to all OAMs would be more than for a single OAM, increasing the benefits of

the latter approach. Conversely, the initial implementation costs of a single European

OAM would be high and consideration would need to be taken of the aggregated

investments already made in the national OAMs.

2.11.5 In the report, CESR considered that an OAM based approach offered added value when

compared with options reliant on issuer’s websites. The relative merits of the OAM approach

included:

a. OAMs provide comprehensive, free of charge coverage of historical information;

b. the information remains publicly available even if an issuer ceases to exist;

c. OAMs enforce non-repudiation and information cannot be changed after it has been filed;

d. OAMs provide easier access to regulated information for some issuers who may not have

their own websites (e.g. Special Purpose Vehicles and corporate subsidiaries).

2.11.6 The report also recognised the benefits of the OAM as a source of regulated data compared to

commercial data vendors, considering the approach to be:

a. non-discriminatory;

b. independent;

c. providing full coverage;

d. at no cost to end users.

2.11.7 CESR did however share the conclusion made in the 2009 external study that the OAMs seem

to lack visibility. While national OAMs may be widely used at national level, CESR considered

that they are not always easy to access for investors in another country.

2.11.8 Despite suggestions from some respondents to the consultation paper, CESR did not consider

that issuers should be required to disclose information in English. They did, however, state that

where issuers voluntarily disclose information in more than one language the OAMs should

make all language versions available.

2.11.9 Overall, CESR considered that the attractiveness and visibility of the national OAMs and the

OAM network could be enhanced through developing search facilities at both national and

network level.


2.12 Summary

2.12.1 The following points from the previous studies are relevant to the technical and cost assessment

of feasible options to be undertaken here:

a. The provisions of the Directive for the storage of regulated information are generally well

understood and accepted by stakeholders.

b. The 2007 Recommendations have defined, at a high level, common operational standards

for all OAMs. A full or interim OAM service based on and, to varying levels, compliant

with these standards is in place in all Member States.

c. At the more detailed level, common standards have not been set covering the

implementation of the OAM solution (for example covering technical architecture,

common coding structures, and detailed process areas). As a result OAMs have

developed independent solutions in these areas.

d. Usage of OAMs by end users is limited. Most retail and institutional investors, analysts

and other stakeholders traditionally use the issuers’ web site as their first source of

information. Whilst the studies indicate that the OAM service is well regarded, market

and issuer demand for increased services is limited.

e. A light integration of information held by OAMs has been provided through the use of

CESR’s MiFID database but this does not fully meet the expectations of even the “light

integration” model proposed by CESR in 2006.

f. A number of options have been put forward to progress the pan-European network by

both CESR and the external study, but to date no consensus on a firm direction has been

agreed and no progress has been made on moving forward from the current light

integration position.

g. There is no central list of issuers of all securities, a central list of issuers of shares only is

available as part of the MiFID database.

h. The development of a central database of issuers, with appropriate coding structures, is a

prerequisite for development of an integrated OAM network;

i. There is a view that an OAM based approach offers benefits compared to solutions based

on a reliance on issuers’ web sites or purely relying on commercial data vendors.


3 Methodology

3.1 Introduction

3.1.1 In order to meet the objectives of the study as set out above, our approach has included:

a. desk research, including a review of the user facilities offered by the current OAM

network;

b. multi-stage online information gathering surveys of the OAM operators supplemented by

follow up interviews;

c. structured interviews with both representative OAMs and central bodies with a

stakeholder interest, including Eurostat, ESMA and ECB;

d. structured development and assessment of cost and benefit models for technical options

for the development of a pan-European solution, compared to maintaining the status quo.

3.2 Review of user facilities offered by current OAM network

3.2.1 As part of the desk research carried out for the study review, we accessed the internet sites

providing the user portal into every national OAM, as well as the CESR/ESMA MiFID database

proving the central hub of the current loosely coupled “Model C-” network. In undertaking this

work we evaluated, from a user perspective:

a. Was the site easily accessible from the published URL8 and reasonably easy to find using

public internet search engines?

b. Did the web site make it clear that it is presenting information from the official repository

of regulated information for the market?

c. Did the functionality of the user interface provide appropriate functionality and was it

easy to use, with reference to the 2007 standards on “ease of use by end users”?

3.3 Online information gathering surveys and follow up interviews

3.3.1 The Actica team issued three online surveys to 28 OAM operators - the operator of the Italian

interim OAM service requested not to be included in the study. The three surveys covered the

following subject areas:

a. basic information on the nature and operations of the OAM;

b. details of the OAM business processes and compliance with quality standards;

c. technical details of the IT solution used to deliver the OAM service.

3.3.2 The surveys were supplemented by face to face interviews with the operators of 9 of the

national OAMs. The OAMs interviewed were selected to reflect both the range of operator type

and size of local market across Member States.

8 The URL’s of the sites were as published by CESR in their 2010 report.


3.3.3 Full details of the surveys can be found in the Survey Analysis Annex to this report.

3.4 Structured interviews for impact assessment of options

3.4.1 In developing the long and short list of viable technical options for assessment, we produced

overview statements of the technical, operational and procedural implications of the

development and future operation of each potential solution. These scenarios were then used as

input to structure interviews with representatives of OAM operators and interested central

bodies.

3.4.2 Input was obtained as part of the follow-up interviews with OAMs and with other central

stakeholders. The questioning covered the following areas:

a. implications on relationships with other OAMs, financial bodies etc.;

b. impact on existing national services and filing requirements;

c. perceived feasibility and challenges of such a project;

d. approach to engagement and delivery of OAM driven elements of solution;

e. desirability of such a system (impact on local market/users);

f. issues and concerns with future service;

g. regulatory and data protection considerations.

3.5 Assessment of options

3.5.1 Each technical option identified was reviewed against the same set of criteria to determine its

technical and financial feasibility in a two stage approach. Following an initial assessment of the

long list of options a detailed cost and feasibility analysis and assessment of potential benefits of

each of the short listed options was carried out.

3.5.2 Full details of the approach are described in Section 6.


4 Findings

4.1 Introduction

4.1.1 This section presents the key results of the three surveys conducted and the key findings from

the interviews with OAMs, Eurostat and the European Central Bank. Full details of the survey

results can be found in the Survey Analysis Annex to this report, published separately.

4.1.2 The findings cover a number of areas, including the following:

s. existing technical structure of OAMs;

t. compliance with quality standards;

u. supervision and organisation of OAMs.

4.2 Overview of the national OAM network

4.2.1 This section brings together our findings on the nature and size of the current network of

national OAMs.

Type of operator

4.2.2 Most OAMs are operated by the Competent Authority (Regulator) or National Stock Exchange,

with almost half of the operators having been legally assigned the responsibility for performing

the role. There are varying local arrangements in place for the management and control of the

services by the Competent Authority.

Operator No. of OAMs

Commercial operator 1

Competent Authority 14

National Stock Exchange 10

Other/Official Journal 1

Private Entity 2

Total Responses9 28

Table 4-1: Organisation operating OAM

Year of first operation

4.2.3 Eleven of the OAMs responding have been operating since 2007 or earlier. A further eight

began operation in 2008. Others have been coming online, replacing interim solutions through

to 2011.

4.2.4 Four of the OAM operators consider their services to be interim solutions (Cyprus, Finland,

Ireland and Slovak Republic). Ireland, however, has no plans to replace the current service and

9 Data for 2 operators is based on information from CESR.


state it could continue to provide the service indefinitely. Of the remainder, two state they are

planned to be replaced by full services later in 2011 or 2012.

Size of OAM - No. of issuers

Size (Issuers) No. of OAMs

Small (1-100) 9

Medium (101-600) 15

Large ( >600) 4

Total Responses 28

Table 4-2: Size based on no. of issuers

4.2.5 In total, the OAM network contains information on approximately 11,000 issuers10

. More than

half of the OAMs are of Medium11

size, but it should be noted that the 4 Large OAMs manage

almost 60% of the total number of issuers12

.

No. of documents held

Documents held No. of OAMs

<5,000 7

5,000-10,000 2

10,001 – 20,000 3

20,001 – 100,000 7

100,001-250,000 1

250,001-500,000 1

>500,000 1

Total Responses 22

Table 4-3: Total documents held

4.2.6 Given the range of dates at which the OAMs began operation, there is a wide variation in the

number of documents held by OAMs, but the 22 respondents represent a combined knowledge

base of over 1,600,000 documents, growing at a rate of approximately 250,000 documents a

year.

Technology used at national OAMs

4.2.7 Almost all OAMs responding to the survey have adopted the approach of using a SQL database

(SQL Server, Oracle or MySQL) as the basis of the document repository. Of these, six indicate

that the database stores only the metadata and a lookup reference to the filed document held in

an external file system.

10 For three OAM’s that did not respond to the survey, the size is based on review of the public website.

11 The sizing bands used follow the convention in CESR’s earlier reports.

12 Issuers that make filings to more than one OAM are counted multiple times in this total.


4.2.8 There is more variation in the approaches that have been adopted to the provision of the web-

based user interface. Some OAMs have based their solution on proprietary web portal or content

management solutions; others have developed a bespoke coded solution using a range of

different technologies.

4.2.9 On the basis of the responses provided, the technologies adopted by OAMs are up-to-date and

form an appropriate basis for the OAM services and a platform for further development and

enhancement. Standardisation of telecommunications and database solutions should not be a

major issue for technical delivery of a pan-European service with modern technology. Current

internet and non-homogeneous search technology allow technical interconnection and

interrogation of any relational/SQL database. This is further supported by the OAM operators’

positive responses to questions regarding the flexibility of their systems to accommodate

extensions to the scope of the documents and metadata held.

4.2.10 While the technologies present no major barriers to the extension of the OAM network, the

variation in approach to the storage of the filed documents may present challenges to the

development of a distributed system implementation. There may also be issues regarding

implementation of trusted connections between systems to allow system-to-system searches or

automated transfer of data in some architectures.

4.2.11 The survey replies also indicate there should be sufficient capacity in place at the national

OAMs to cope with any increased filing volumes generated by adding new document types or

metadata or for transferring of information to a secondary central repository. Connectivity and

processing capacity also appears sufficient to allow for further growth in data transfers or

searches generated from any of the potential pan-European service models which retain local

OAMs.

4.2.12 In summary, the responses indicate that implemented solutions are generally well architected

and scalable and have capacity to allow for further development of integration capability

without the need for major redevelopment or technical change.

Development and operational costs

4.2.13 The figures provided by OAMs for the development and ongoing operating costs of the OAM

vary considerably, reflecting local conditions and the approach taken to both development and

operation. Questioning indicated that a typical development route was to base the OAM system

and service on an existing filing or news dissemination system already in use, which was not

directly included in the OAM cost base. Many OAMs have also used in-house resources for

either development or operation and have no firm basis for measuring full costs.

4.2.14 Based on the information received, we have estimated that total development costs across the

network have been of the order of 7million Euros with annual operating costs of approximately

2 million Euros. Given the variation in the costing basis across the network, we recognise that

these figures are order of magnitude estimates and should be used with caution.

Supervision of OAMs and issuers

4.2.15 All OAMs are supervised locally by the national Competent Authority. In cases where this body

is also the OAM operator internal control and audit processes apply. The Competent Authority

is also responsible for the enforcement of national filing processes for issuers.


4.2.16 Since the establishment of ESMA there is now a central body which could facilitate the

development and enforcement of technical standards for national OAMs as well as supervise the

operation of common elements of the pan-European network.

4.2.17 Cooperation with national Competent Authorities or changes in legislation would be required to

implement and manage solutions which involved issuers making direct filings to a central OAM

service.

4.3 Technical structure of the national OAMs

4.3.1 This section details our findings in a number of areas pertaining to the current technical

operations of the national OAMs

Filing processes

4.3.2 Most OAMs responding accept online submissions through uploading of individual documents

from a web portal. Few OAMs allow batch transfer direct from issuers.

Accepted filing channel No. of OAMs

Email submission 11

Upload via extranet or other online submission portal 21

Batch or mass transfer from issuers 2

Automatic transfer from other filing system (e.g. Stock Exchange) 13

Other (e.g. from third party/intermediary systems) 7

Total Responses 25

Table 4-4: Filing channels accepted

4.3.3 In addition to the standard web portal, over half of the OAMs responding have implemented

some form of system-to-system connectivity with other filing or news/data dissemination

systems. These remove the requirement for issuers to make multiple filings to different systems

within the Member State, and can streamline the filing process by allowing bulk filing from

intermediaries’ systems rather than online web forms for manual upload of documents.

4.3.4 Several OAMs comment that such integrated filing approaches account for almost all of their

filings (e.g. Denmark and the NASDAQ operated OAMs for Finland, Iceland and Lithuania).

4.3.5 Such an approach is a key enabler for the effective implementation and operation of a pan-

European OAM service. That such approaches are already in place at some OAMs illustrates

that the technology adopted is capable of supporting such functionality and indicates that there

already exists a body of knowledge and expertise on its use within the current operators.

4.3.6 An implication of the integration with such systems is that the OAM is often not the only source

of regulated information within a Member State. Other sources may be better known to end

users or provide additional information and services.


Organisation of filing process

4.3.7 OAMs have implemented systems and procedures to ensure that filings are only accepted from

valid sources – the issuers, their appointed agents or other trusted information dissemination

systems. The most commonly implemented approach, adopted by over 80% of the OAMs

responding, is to use access codes, usernames and passwords, usually in combination with one

or more additional facilities. Typically, issuers register with the OAM operator and their status

is confirmed before they are issued with the necessary codes to be able to submit filings to the

system.

4.3.8 OAMs have implemented a range of approaches to the management of the end-to-end filing

process once a submission from an issuer had been accepted. Whilst some OAMs automatically

accept electronic filings and make these available with limited additional validation, others have

implemented processes involving checking and review.

4.3.9 This variation is reflected in the variability in the delay between a filing being received and

being made available to end users in different OAMs. As summarised below, whilst over 60%

of respondents make the information available in less than a minute, others can take much

longer, sometimes several days.

Delay before filing is available to end users No. of OAMs

Immediately or less than 1 minute 16

1 minute to 1 hour 3

Same day 1

Next working day or longer 5

Total responses 25

Table 4-5: Time from receipt to publication

4.3.10 Any delay to information being available is significant as typically end-users are interested in

current, up to date information. Where the delay implies publication of information on the OAM

is delayed relative to other sources, users will tend to discount the OAM as a source of relevant

information and rely on issuers or other market or commercial information sources.

Formats accepted and use of XBRL, templates or input forms

4.3.11 A total of 25 OAMs provided details of the filing formats accepted for both financial

information and details of voting rights.

Filing Type Voting Rights Financial

Accepted Required Accepted Required

Plain Text 7 4 6 4

HTML 2 1 2

PDF 11 9 12 10

XBRL 1 1 1

Other electronic formats (e.g. MS Word)

11 1 13 1


Filing Type Voting Rights Financial

Accepted Required Accepted Required

Paper 4 4

Others (please specify) 1 (XML) 1 (web form)

3 (XML)

Information not stored 3

Table 4-6: Filing formats accepted

4.3.12 The PDF format is used across most of the OAM network; it is either Required or Accepted by

all but three OAMs. Where the OAM does not accept the PDF format then the standard is XML

(with attachments) (Bulgaria, Czech Republic and Germany). Only Spain requires XBRL filings

(these are also accepted in Germany but not required).

4.3.13 Four OAMs require plain text submission of filings, although most of these will also accept

copies in PDF or other formats.

4.3.14 Several OAMs use structured forms and templates to manage the filing process. Typically these

are used to capture the required metadata associated with the filing. The filed document is then

attached but remains an unstructured document. Apart from where XBRL is used the OAMs did

not report any use of templates to manage the structure of the content of filed documents.

4.3.15 Several OAMs see the long term benefit of moving to the use of XBRL as the standard for

structuring filings, but point out the need to agree the basic structures, coding and harmonisation

required before it could be effectively implemented. Some proposal that it could be introduced

in a phased manner (large issuers first, eventually moving to all), following other standardised

coding and harmonisation being in place.

4.3.16 An option to build on existing capability would be to focus on perhaps 10 or so key pieces of

required information where structured filing is required and either introduce standard structured

electronic templates or require a limited amount of internal tagging in existing unstructured

(PDF) documents as currently stored by the OAMs. The tagging would indicate where data,

such as ownership details were held in the document. The OAM need not extend its remit to the

processing and presentation of this information, but make it available to third parties and end

users to extract and consolidate and analyse using third party tools.

Regulated information stored

4.3.17 OAMs were surveyed on the types of information stored based on the category labels proposed

by CESR in Annex 3 of their 2010 report. All respondents store annual reports, but there is

more limited coverage for several other items of information. Thirteen (50%) of the OAMs

responding also store further information in addition to the regulated information set out in the

Transparency Directive.

Type of document held No. of OAMs

Annual Financial Reports 26

Interim Financial Reports - Half Yearly 25

Interim Financial Reports - Quarterly (if available) 25

Interim Management Statements (if available) 24


Type of document held No. of OAMs

Price Sensitive Information 23

Corporate Governance Statements 20

Major Shareholding Notifications 23

Trading on Own Shares (Acquisition/Disposal) 24

Total number of voting rights and capital 24

Changes in rights attaching to shares or securities 23

New Loan issues 20

Choice of Home Member State 18

Take over bid announcements 21

Prospectuses 14

Other additional information 14

Total Responses 26

Table 4-7: Regulated information held by OAMs

4.3.18 Almost half of Member States use the filed information for purposes additional to meeting the

needs of the Transparency Directive – predominantly for Regulatory or Supervisory purposes.

In the UK the commercial entity operating the service uses the information captured as a direct

source for other value added information products.

4.3.19 In their report, CESR recognise that the definition of regulated information is not fully

harmonised in the Transparency Directive and a common list of types of regulated information,

based on the categorisation above, would allow uniform classification and allow EU-wide

searches on the basis of type of information. The implementation of this classification is a pre-

requisite to the successful technical development of a pan-European system meeting the target

functionality.

Metadata held and common specification

4.3.20 Most OAMs store the six metadata items recommended as the minimum standard in Section 5

of the Commission’s 2007 Recommendation. Eleven respondents already store all the additional

metadata proposed in CESR’s 2010 consultation and report.

Metadata item No. of OAMs

Items in 2007 Recommendation

Regulated information indicator 21

Name of issuer 25

Title of the filed document 25

Time and date information was disseminated 25

Language of filed document 23

Type of regulated information that filing relates to 23

Additional items proposed by CESR


Metadata item No. of OAMs

Name of issuer in all languages used by issuer 12

Unique issuer identifier or code 17

Country of incorporation 16

Home Member State of issuer 16

Regulated markets where issuer's securities are admitted to trading

13

Industry code of the issuer's principal activities 11

ISIN codes for the issuer's securities 17

Reporting period to which a specific filing relates (e.g. Q4/2010)

17

ISIN codes for the securities covered by the individual filing 11

Total responses 25

Table 4-8: Descriptive metadata held concerning issuers and filings

4.3.21 With the exception of the use of the international standard ISIN code, there was no indication

that the OAMs had adopted a common specification for the metadata stored, or that coding

structures used were aligned with other storage mechanisms or other repositories of financial

information. We agree with CESR’s 2010 findings that the agreement and mandatory use of

common metadata specifications across the OAM network would be an important enabler to the

development of a pan-European system.

4.4 Common code for identification of issuers

4.4.1 As recognised by CESR in their 2010 report, the development of any form of central access

point requires that a unique issuer identifier is defined at a European level. At present each

OAM uses locally defined codes to identify the issuers in their markets. Our interviews with

OAMs reinforced CESR’s finding that there was strong demand for such a common identifier.

They also indicated that OAMs did not believe any existing standards were suitable and

required a lead on these.

4.4.2 We consider the definition and implementation of such a unique code is a pre-requisite to the

successful technical development of a system offering pan-European searches. We endorse

CESR’s view that a code should be jointly agreed which could enable the interconnection of the

OAM and company register networks, and also provide the means for interlinking with other

national and international securities databases.

4.4.3 One potential candidate for such a code is the REID code developed by the BRITE research

project (Business Register Interoperability Throughout Europe – BRITE)13

. The REID code is

based on the registration ID assigned to a company in the national Business Register, with the

ISO national identifier and the Register ID from the Directory of Registered appended. As such

it has the advantage that no new code needs to be allocated to companies with records already

held by their local business register. Such a code could form the basis of providing a unique key

13 See http://www.briteproject.eu


for all company entities across Member States, however there are considerations regarding its

potential application to all issuers of securities:

a. We understand from OAMs not all issuers are covered by the scope of the business

registers so would not have a REID code. We do not have information on whether the

number of such issuers is significant.

b. Assuming business register operators remain responsible for issuing the registration ID

for new entities, there may be considerations regarding alignment of business processes,

approvals and timing with national securities listing authorities.

c. The structure of the REID code does not allow for the identification of national branches

of the same organisation. (Although this may be resolved by other initiatives being put

forward such as the proposal to amend Directive 89/666/EEC to uniquely identify

branches of companies across the European Economic Area14

.)

d. There may be practical implications in cases where the same entity is listed on multiple

national exchanges.

4.5 Consolidation of information on voting rights

4.5.1 The requirement, set out in the terms of reference for this study, that the pan-European OAM

solution be able to “consolidate information on corporate ownership to give views of disclosed

holdings of voting rights by issuer and by investor” requires the storage and processing of

structured information on changes to shareholdings. At present this is not directly supported by

any OAM responding to the surveys.

4.5.2 Almost all of the national OAMs operate as repositories holding unstructured documents. This

meets the requirements of the Transparency Directive for the publication of regulated

information but does not provide a resource suitable for the extraction or consolidation of

numerical information. Typically, OAMs accept and store unstructured documents, be they in

PDF, Word or other format (only one requires filing in XBRL format and one other accepts it).

These documents have no defined internal structure to identify the information they contain, for

example, on ownership or turnover or other financial data. Value added commercial operators

may, in some markets and/or for some issuers, extract and make this information available

commercially, but the current OAM process does not make such capability available to its user

community.

4.5.3 Whilst the current OAM filing processes remains, there is only limited progress that can be

made in meeting this or any other requirements which imply the need for such structured

information. Extending the metadata stored regarding an issuer or filing simply improves the

search capability available to return the documents, but does nothing to allow the extraction and

consolidation of the information they contain. The filing requirements and processes in Member

States would need to be amended to require issuers to provide structured information using a

centrally defined standard or template. These could be XBRL documents or standard forms or

templates for the notification of major holdings defined by ESMA in pursuit of Article 12.9 of

the Transparency Directive. The OAM would store these documents in the same way they do

today and either provide tools for their analysis and consolidation or (more simply) allow them

to be downloaded and analysed by interested parties using 3rd

party software.


4.5.4 In addition, to allow consolidation of the information, Europe-wide codes would need to be

adopted and used in all template filings to uniquely identify both the issuing and investing

entity.

4.5.5 Experience in Belgium, where shareholding information is provided using a structured (Excel)

file format based on the European Standard form, has highlighted the difficulties in ensuring

quality, consistency and the need for interpretation of such information. Whilst all shareholders

use the centrally defined form to submit information to issuers and the Regulator, it is not

directly filed to the Belgian OAM. The issuer uses the information in the structured filing to

create a return of regulated information, and this is then submitted to the OAM in unstructured

PDF format.

4.5.6 Technically, most OAM databases are capable of receiving different file types. It should

therefore be possible to simply extend the OAM databases to store structured document filings

as additional database objects. Searching for and downloading files containing structured data

could use the capabilities already in place at OAMs. Additional OAM development, either at

national or local level would, however, be required to present analyses and consolidations, but a

decision could be made to leave this to end-users or third party service vendors interested in

such information.

4.5.7 Subject to the definition and adoption of such standard forms as part of the scope of the OAM

service, technically, any of the options for a pan-European service could deliver the building

blocks for the consolidation of information on voting rights.

4.6 Visibility of small listed companies

4.6.1 As referenced in Section 2, earlier studies have identified the “black hole” of apparently poor

cross-border visibility and access to regulated information on SMEs. The 2010 consultation

received mixed responses on whether the development of an EU wide database would improve

this situation.

4.6.2 All of the options considered by the study could positively impact the visibility of small listed

companies. By making high quality, standardised and reliable information more widely

available through a central service there is the potential to promote and encourage greater use by

end investors. The existence of a free to use, centralised, open standard data source should

lower barriers and entry costs for new commercial information providers that may wish to enter

the market to focus on addressing the gap in the provision of information on smaller companies.

Equally, SMEs themselves may also be encouraged to invest in producing improved

information and document formats targeted at cross border investors.

4.6.3 As such, in the longer term, improved visibility may be best delivered through the development

of an open, accessible source of information and its promotion to potential information vendors.

4.6.4 More immediately, we note the NASDAQ operated OAMs allow end users to select and search

for documents from issuers by size of their market capitalisation (Small is considered less than

150 million Euros). The availability of such a search can assist interested investors to focus on

information from such companies. In the short term, a similar approach could be adopted across

the network or included in the services provided by a central access point, subject to capturing

metadata on market capitalisation for issuers.


4.7 Alert systems

4.7.1 Two further requirements set out in the terms of reference for the study are for requirements

for the pan-European system to “integrate alert systems on information filed for the benefit of

supervisory authorities” and to “allow for the possibility to integrate notification or alert

systems on information filed for the benefit of market participants”.

4.7.2 Our research has indicated that several national OAMs already offer market participants (end

users) the ability to sign up to email notifications or RSS feeds in order to receive information

when new filings are received from selected issuers. The technology involved is a

straightforward extension of the filing process, although it does require the service to accept and

store user information/email addresses. This type of service could be further extended using

modern Web 2.0 technologies and approaches to streaming and provision of data feeds for

integration with users “apps” or “widgets” to “push” information to subscribers.

4.7.3 Such technical solutions could easily be incorporated into any of the options considered for the

European service. A central access point would allow users to register once and receive alerts

from one source whenever information of interest was received from any member state.

4.7.4 Technically, a similar approach could be adopted for the benefit of supervisory authorities. A

centralised alert system could benefit Europe-wide authorities wishing to obtain an overview of

an issuer’s activities. As regards national supervisors, a central service may provide limited

additional value over a service provided by their national OAM, covering the markets for which

they are directly responsible. It remains questionable whether provision of alerts at national or

European level would contribute towards removing the need for issuers to file with both the

OAM and the national supervisor in parallel. At present several OAM services receive their

filings via the supervisor’s filing mechanism rather than directly from the issuers.

4.8 Integration with business registers

4.8.1 As regards the integration of OAMs with the network of national business/company registers we

endorse CESR’s view in their 2010 report that a common company identifier across both

networks would provide a valuable foundation for such integration. Business registers typically

contain information on many more entities than the corresponding OAMs, as the number of

unlisted companies held in the registers far exceeds the number of listed companies.

4.8.2 It is not clear what value the link from an OAM to a Business Register would provide to either

issuers or end users as there is little extra data held on the Register that is not available in the

OAM. The reverse link however could allow users of the Registers to access more in depth

information held by the OAM on a listed company and potentially allow the Registers to rely on

information filed at the OAM and reduce the need for parallel filing. On this basis, the focus for

the development of the integration would be with the Registers, based on an agreed mechanism

for sending web-based queries to either local or central OAMs and the aforementioned common

company identifier. Such integration would be most appropriately developed through the

integration of the proposed Business Register central access point with an OAM central access

point, using a single integration standard.


4.9 Compliance with quality standards

4.9.1 Paragraphs 5 to 20 of the Commission Recommendation of 200715 include General Standards

for OAMs as well as specific standards covering:

a. security;

b. certainty as to information source;

c. time recording;

d. ease of access by end users.

4.9.2 Of the 23 OAM operators providing a response, 17 (75%) rated themselves as either fully or

mostly compliant with both the General Standards and also the standards in all four of the areas

listed above specified in the Commission Recommendation. Our analysis of other technical

responses, desk research and follow-up interviewing generally supports this position.

4.9.3 Of the OAMs with lower stated compliance levels, the main area highlighted is in ensuring

certainty of information source. This may be an issue where email is used as a significant filing

mechanism and there is less opportunity to implement strong authentication as to source.

4.9.4 Further details of our findings regarding the facilities available for end users and their ease of

use follow in the next section.

4.10 End user access to OAMs

4.10.1 During interviews several operators expressed the view that the OAM was not seen as a prime

source of investor information and this view is supported by the very low usage statistics for

several of the OAMs. OAMs do not have detailed statistics on types of user but believe they are

mainly professional advisors and researchers.

4.10.2 The low levels of use also reflect the availability of other more established information sources

within the market and the visibility of the OAM services. It is, however, noticeable that this is

not a universal position and some Member States report very high usage, for example, Germany

where the OAM is integrated with other register searches, Spain and Portugal.

4.10.3 Central bodies such as Eurostat and ECB make limited use of information from OAMs due to

difficulty of searching for and extracting information from within the documents. They also

experience difficulty consolidating information from multi-national issuers and have

commercial arrangements with third party suppliers to get the data they require.

4.10.4 All OAMs provide search screens in the language of the home Member State and 80% also

provide a version of the search screen in English. Several OAMs also provide the screen in

additional languages. Users can obtain online access to the search screens through the public

internet, without the need for registering with the OAM. It is possible for users to view,

download or print stored documents through their web browser.

4.10.5 Whilst user search screens are not standardised across the network, our own usability research

indicates that, with some exceptions, they are intuitive to use for the casual user, especially one

already familiar with the facilities in another OAM.



4.10.6 Most OAMs which responded meet the recommended standard of accepting and storing

multiple language filings if submitted by the issuer. A number of OAMs note that many issuers

voluntarily file in English even where this is not required.

4.11 Current pan-European integration

4.11.1 At present the interconnection of national OAMs is delivered through the CESR (ESMA)

MiFID database (http://mifiddatabase.esma.europa.eu). The database is structured to report on

securities rather than issuers/companies. There is a limited user search capability and the ability

to sort results by any displayed field. Securities where there is a link available are highlighted

and users can click-through to the home page of the relevant OAM to search for further

information on the issuer.

4.11.2 Maintenance and update of the service appears to be an issue. The links provided from the

securities sometimes point to an unavailable, incorrect or out of date location, or the generic

home page for the OAM operator rather than the specific OAM page. For some OAMs and

some issuers there is no link available from the MiFID database.

4.11.3 The utility of the current level of integration for pan-European searches is limited. There is no

common coding to identify issuers across different OAMs, hence users must rely on full or

partial ISIN code or name of the security to determine if there are multiple filings across the

OAM network.

4.12 Use of issuers’ web sites as a source of information

4.12.1 Several Member States have introduced a requirement for issuers to maintain a copy of

regulated information on their web sites and the Mazars external report of 2009 identified the

option of extending this approach to form the basis of a pan-European system. Under this model

a list of all European issuers would be maintained – presumably coordinated from submissions

from Regulators in Member States or via extensions to a consolidated Business Register, and

central metadata would be limited to a link to a defined area on the issuer’s website which

would contain all the appropriate regulated information.

4.12.2 The CESR report of 2010 highlighted a number of issues with this approach, including:

a. comprehensive coverage of historical information;

b. information remains publicly available even if issuer ceases to exist;

c. non-repudiation; information cannot be changed after it has been filed;

d. OAM provides easier access to regulated information for some issuers who may not have

their own websites (e.g. Special Purpose Vehicles and corporate subsidiaries).

4.12.3 The Belgian OAM operator, until early 2011, relied on the publication on issuers’ websites as

an interim solution. Issuers were required to maintain a designated area of their website for this

purpose and there were periodic checks by the Regulator on compliance. Despite these

arrangements there were issues and problems with the approach:

a. The information is controlled by the issuers’ webmasters and there were instances of

information being expired or moved in line with internal procedures rather than in

accordance with specified requirements for the maintenance of regulated data.

b. Each issuer developed their pages for regulated information separately – there were issues

with consistency and it was difficult to compare across issuers’ sites.


c. It was difficult to police to ensure information was not edited or removed after

publication and ensure non-repudiation.

4.12.4 In light of the above, there appears to be a case for not considering the use of issuers’ web sites

as a primary source of regulated information moving forward. In any case without a

consolidated source of metadata provided by national or central OAMs, useful search or alerts

as defined in the reference requirements for this study would be all but impossible.

4.13 The role of the OAM and interpretation of data

4.13.1 OAM operators have made the point that their role is to manage the filing, storage and access to

information as provided by issuers, but not its interpretation. The OAM is seen as responsible

for checking adherence to filing standards (for example that a valid, uncorrupted file is

received) but not for validating or endorsing the accuracy of the content of the filing. There is

concern that any involvement would leave them open to legal challenge and the liability implied

would be significant. By extension, any potential technical solutions involving the use of

software to interpret the content of filings, for example to establish where multiple filings refer

to branches of a multinational or to generate additional descriptive metadata not directly

provided by the issuers, may raise issues of liability for the operator.

4.14 Relationship between OAMs and third party vendors

4.14.1 The results of our survey and interviews with OAM operators have indicated that generally the

OAM is seen as a useful repository of the definitive version of regulated information, but it is

little used by investors for active searches. Rather it is a source to resolve legal issues or for

other specialised professional uses.

4.14.2 Interviewees also expressed the view that commercial data vendors have their own channels to

obtain and process information and do not tend to use the OAM data as a prime source for their

products. (An exception is the UK, where such a provider is the operator of the national OAM.)

As a result, many potential operators did not see a business case for providing the OAM service

when it was set up.

4.14.3 The position put to us was that most institutional or individual investors will rely on existing

exchange electronic news services, 3rd

party added value tools and commercial data vendors to

present information on which to base investment decisions. If this is the case, there is a view

that OAMs should focus on ways of making the information they hold more attractive to such

3rd

parties, rather than attempting to develop more sophisticated tools in order to attract

additional end users.

4.14.4 The above approach is consistent with the wider end-user marketplace for the provision of

added-value IT services and applications and recognises that OAM providers would be unlikely

to be willing or able to compete with the major suppliers of such tools. A more appropriate

“business model” for OAMs might be to focus on ensuring that the information they hold is

made available to third parties to integrate and deliver added value through their existing

platforms. The OAMs could focus on delivering a core filing process and structured repository

with open links to enable 3rd

parties to access and present the data stored. The key here will be

to make the information easy to access through open standards and then to encourage (or

mandate) the value added data and applications vendors to use the OAM as the prime source of

the raw information rather than using other parallel information feeds. Such a market driven


approach may be most likely to deliver the greatest value to end investors and aid the visibility

of information on small companies.

4.14.5 Following this model the OAM network need not invest in improving its end user search and

query features (several OAMs commented these were little used by active investors) but retain

the ability for professionals to obtain “official” versions of key documents on an exception

basis (for e.g. legal purposes) using the relatively simple tools available at present.

4.15 Summary of the current “status quo” position

4.15.1 OAMs are operating in all Member States, although the types of services offered vary

considerably, with some still operating interim solutions with limited facilities for end users.

(Although some of these are due for imminent replacement at the time of this report.)

4.15.2 The OAMs supplement, and are often closely integrated with, stock exchange and regulatory

information filing services and systems. The OAM has not typically acted as a replacement

repository for regulated information, and filings continue to be stored and disseminated through

multiple channels.

4.15.3 Issuers in several Member States make use of intermediaries or commercial data disseminators

to manage their filings to both the OAM and other agencies. In these cases there are system-to-

system interfaces to support the filing process.

4.15.4 Almost universally, the OAMs support the filing and storage of unstructured document formats.

They provide user tools to search for and download documents, based on a limited set of

descriptive metadata describing the nature of the document but not its detailed contents. (Some

OAMs also provide full text search of the contents of documents.)

4.15.5 The OAMs manage the filing process and ensure the safe storage of documents provided by

issuers. Their role is to transparently present information provided by issuers. They are not

involved in the interpretation, analysis or presentation of the information contained within the

documents they manage.

4.15.6 Commercial providers of financial information are typically seen as the providers of structured

and analytical information regarding issuers. These providers make use of information typically

obtained from regulatory filings but tend to have their own information channels and do not rely

on the OAMs to source their data.

4.15.7 There is very limited pan-European integration available through the ESMA (CESR) MiFID

database. Neither this nor the national OAM services appear to be actively promoted or

marketed to potential users.

4.15.8 Most OAMs report very low volumes of end user/investor access to their services. Typically,

such users either use the analytical tools and information available from the commercial

providers or directly access information from issuers’ websites. The OAM acts as a repository

of record for professionals to obtain “official” versions of key documents on an exception basis.

4.16 Key findings for options analysis

4.16.1 Although there are OAM services operating in all Member States, there exist varying degrees of

readiness to begin further integration. Except in a few cases where interim solutions still exist


this is not predominantly a technical issue, rather it reflects the varying interpretations of the

Directive in business process, coding and detailed filing practices:

a. OAMs have implemented different arrangements for the creation and storage of metadata,

there are no common standards;

b. OAM filing processes in several Member States are closely coupled with other exchange

disclosure, regulatory and news dissemination processes and systems – in these cases

many issuers do not file direct to the OAM;

c. Information held by the OAMs is often duplicated in other exchange or regulatory

systems;

d. OAMs do not have existing structured processes for handling notification of changes to

voting rights.

4.16.2 Few end users make use of the OAM service in most Member States. The quality of the user

experience offered to end users is good overall, but the services offered vary considerably:

a. Web sites for OAMs can be difficult to find using commercial search engines;

b. Users of the information held in the OAM repositories are mainly professional advisors

and researchers;

c. Individual investors tend to access commercial information services or the issuers web

sites rather than OAMs, mainly due to the extra information and analysis available;

d. The OAM service is of limited value to central bodies such as Eurostat and ECB because

there is no structured or analytical data stored by the OAM that can be used by these

organisations for statistical and analysis purposes.

4.16.3 Technically, the OAMs are in a good position to respond to changes and extensions to the

service they provide:

a. Documents and metadata held by the OAMs are mainly stored in flexible SQL databases

so can be updated relatively easily (although the contents of the documents is not

structured);

b. Similarly, OAMs can provide access to their back end databases in order to facilitate a

central search tool relatively easily, although the scope and activities required would need

to be agreed;

c. OAM operators agree with the requirement for pan-European interconnections but are

seeking clear long term direction on the way forward as they do not see market demand

driving such an initiative;

d. OAM operators have highlighted potential issues with significant change to current

operations and processes.


5 Options Identification

5.1 Introduction

5.1.1 This section presents the methodology used to identify the initial options for a pan-European

database of securities information and outlines the options identified using this methodology.

5.2 Methodology

5.2.1 The options for implementing a pan-European database of securities information have been

developed from a baseline that consists of the existing options as identified by previous studies

conducted by CESR (now ESMA) and Mazars (as detailed in Section 2). The initial step in the

options identification was to assess these options against the requirements of this study as

detailed in Appendix A, and discard any options that do not meet the requirements. Summaries

of these options and the results of the initial verification can be seen in table 5-1 below.

Source Option Comments Review result

CESR 2006 Model A – Central dataset fed by existing OAMs

Architecture is as proposed for CESR Network Model (Option 1)

Remains valid – taken forward as option 2 below

CESR 2006 Model B – Network search across OAMs

Uncoordinated development of national OAMs makes such a solution technically challenging. Progress with Model C now makes reversion to such an approach unattractive.


CESR 2006 Model C – central list of links Remains the current extant solution although without full coverage. Forms the starting point for CESR Network Model (Option 1)


CESR 2006 Model D – light touch approach with each OAM publishing links to all other OAMs on its site

Such a limited approach will not meet the aspiration for pan-European searches

Discounted as this does not provide a mechanism for creating a pan-European search

Mazars 2009

A – Rely on issuers web sites Not recommended by the external study and offers

Discounted as this does not provide for a pan-European search

Mazars 2009

B - Improve the functioning and visibility of national OAMs

Addresses some recommendations whilst retaining the current solution

Remains valid – taken forward as part of Option 8 below

Mazars 2009

C - An EU single entry point maintaining a list of EU listed companies with links to each company’s website

Relies in individual issuers keep websites updated

Discounted as this would not enable a pan-European search

CESR 2010 Option 1 – Network model Makes use of central search Remains valid –


facility using OAM databases taken forward as option 5 below

CESR 2010 Option 2 – Central European OAM Replaces all OAMs with single European OAM


Table 5-1: Review of existing options

5.3 Options identified

5.3.1 The remaining options were then reviewed to assess whether there were any gaps, including

areas where new technologies could provide an option or areas where a different combination of

local and central services provided a different option. The review also ensured that all options

proposed by the EC in the scope of this review were included.

5.3.2 The elements of the service that were reviewed to ascertain what different combinations of local

and central provision could be provided were:

a. the user-facing portal that allows users to search for and view documents;

b. the database that holds all documents submitted by issuers – including what information

should be held in the database;

c. the search facility that allows users to conduct a pan-European search.

5.3.3 This review highlighted a further three options that were not included in any of the previous

studies. These were:

a. implementation of a central database to hold metadata only, rather than a duplicate of all

OAM documents. This is taken forward as Option 3 below;

b. making use of intelligent search technology to automatically index all documents

currently held by OAMs. This is taken forward as Option 6 below;

c. combining OAM operations with national business registers to make use of the existing

pan-European links created for business registers. This is taken forward as Option 7

below.

5.3.4 There were therefore eight options considered:

a. Option 1: Single European OAM;

b. Option 2: Central database for all data;

c. Option 3: Central database for metadata;

d. Option 4: OAM web-ring;

e. Option 5: Harmonised OAM network;

f. Option 6: Central intelligent search;

g. Option 7: Combine current OAM operations with national business registers;

h. Option 8: Maintain status quo.

5.3.5 These options are now described in more detail.


5.4 Option descriptions

5.4.1 Option 1: Central EU dataset

5.4.1.1 Summary: Replace all national OAMs with one central OAM that stores all European data and

provides all search facilities.

5.4.1.2 Detail: This option involves the total replacement of all 29 OAMs in the scope of this study

with one, central OAM that holds all of the data and offers the same basic functionality as all of

the current organisations. Issuers would be required to file information directly with this central

OAM and all users would access data and search facilities through a portal provided by the

central OAM rather than the current, national websites.

5.4.1.3 Impact on OAMs: The 29 current OAMs would be closed down, transferring all data and

responsibilities to the new, central OAM.

5.4.1.4 Impact on issuers: Issuers would be required to file data directly with the new central OAM

rather than with the current national OAMs. This may require effort and resources to be used to

change any automated process to send data to different systems, and may also require training

where manual processes exist to send the data to the OAM. Issuers may also need to change the

format in which they send data, depending on how the central OAM is set up and how data is

stored and accessed. This could require significant effort from issuers.

5.4.1.5 Impact on private sector: This option would deliver a pan-European search of all regulated

information. Currently, users can only get this from 3rd

party data providers and so

implementation of this option may provide competition for these providers, particularly as the

OAM information is free. However, the range of services provided by 3rd

parties will remain

much greater than that provided by the consolidated OAM service and so it is not anticipated

that this option will create issues for the 3rd

party providers. This view has been confirmed

during interviews with a number of these providers.

5.4.1.6 Impact on users: Users will need to access data through a different portal, going to a web

address for the new central OAM rather than existing national ones. They may also take time to

learn how to use the new portal, depending on how different the navigation and search tools are

from a users current OAM. Users will be able to search all European data easily through the

new portal, and may be offered improved and increased functionality compared to their existing

OAM website.

5.4.1.7 Infrastructure: It is expected that the infrastructure for this option will be provided as a

managed service, hosted as a private cloud in a data centre. The infrastructure for this option

would consist of:

a. 4 quad-core web servers running Windows Server 2008;

b. 2 quad-core database servers running Oracle enterprise edition;

c. 2 five Tb data storage arrays;

d. Suitable PKI-based security software;

e. A suitable piece of bespoke software allowing issuers to submit documents.

5.4.1.8 Potential costs: This option is likely to require significant expenditure to implement new IT

systems, to change existing submission processes and to close down the existing OAMs,

including potentially very large costs associated with terminating existing staff contracts,


decommissioning existing systems and communicating the changes to users. There will also be

costs associated with recruiting and training new staff, and in creating any interfaces required

between the new OAM systems and external systems such as stock exchanges and financial

institutions.

5.4.1.9 Potential timescales: This option is likely to take a number of years to implement, mainly due

to the activities and costs associated with closing down the existing OAMs. The likelihood is

that this option would be implemented in stages, creating the new IT systems first and then

transferring the data and responsibilities for individual OAMs over time. It is anticipated that

this process would take up to five years.

5.4.2 Option 2: Central dataset fed by existing OAMs

5.4.2.1 Summary: Create a central European database for securities information which holds copies of

all information stored by the national OAMs.

5.4.2.2 Detail: For this option the national OAM services continue to operate as at present. The OAM

will continue to accept filings of regulated information from issuers, for which they are the

home member state, storing the information and providing search and query services on this

database. In addition the OAM will forward a copy of each filing to a central OAM service

managing an aggregated database across all states. The central OAM will provide search and

query facilities across all records in its own database, allowing search on a pan-European level.

Additional flexible search and indexing of the central database may be added as users’ demand,

without further impacting the national OAMs.

5.4.2.3 Impact on OAMs: Whilst the OAMs will continue to operate as they do now there will be

additional requirements to forward information to the central OAM in specified formats,

utilising a common filing platform. (Assuming the responsibility for multiple concurrent filing

is not devolved to data disseminators or issuers.) The OAMs may also have to change the

metadata associated with filings (or provided by the issuer) in order to conform to a common

central model. Depending on the degree of match to the metadata held, this may involve levels

of change ranging from translation of the data in the sent files to a redesign of the national

OAM database and metadata information required from filers. There may be a reduction in the

number of visits and queries to the national OAM web sites as the services of the central OAM

develop.

5.4.2.4 Impact on issuers: Issuers would continue to follow current filing procedures. While

procedures will be unchanged, the need of the central OAM to provide a harmonised pan-

European database may result in requirements for revised or additional metadata to be placed

upon the issuer, data disseminator or other intermediary. Potentially the responsibility for

concurrent filing to national and central OAM could be passed on to the issuer. As the central

OAM service develops some issuers may also take advantage of the wider visibility of the

service to make information available in multiple languages.

5.4.2.5 Impact on private sector: This option would deliver a pan-European search of all regulated

information currently held by OAMs. This is a similar provision to Option 1, although with

potentially less information due to differences in the amount of regulated information currently

held by OAMs. It is therefore expected to have a similar impact on the private sector i.e. their

current business will be unlikely to be impacted.


5.4.2.6 Impact on users: Users will have the choice of continuing to use national OAM services or

make use of the central service to query copies of information from one, some or all of the

national OAMs.



would consist of:


b. 2 quad-core database servers running Oracle enterprise edition;

c. 2 five Tb data storage arrays;


e. A suitable piece of bespoke software allowing OAMs to copy documents to the database.

5.4.2.8 Potential costs: The creation and operation of the central service would involve similar costs to

Option 1 above. While there would be no costs for decommissioning the existing national

OAMs, each national OAM would have the additional cost of implementing and operating the

dataset feed interface to the central service. There would also be costs for resourcing a central

implementation team to co-ordinate and manage the integration of the 29 national OAMs

5.4.2.9 Potential timescales: Given the range of existing national solutions the overall timescale for

delivering a fully pan-European service with feeds from all 29 national OAMs could be

significant. Experience from the integration of electronic Business Registers indicates that

whilst the effort required to integrate a single national service may be modest (30-80 person

days) other factors lead to a delivery timescale of between 3 and 18 months per integration. As

such a timescale of 3 to 5 years to manage take on of all 29 national OAMs may be a reasonable

expectation.

5.4.3 Option 3: Central metadata store

5.4.3.1 Description: Create a central European database that holds metadata for all information held by

the national OAMs

5.4.3.2 Detail: This option is identical to Option 2 above except the national OAMs forward only the

metadata concerning each filing to the central OAM service. The central database does not hold

the filed document itself and is hence much smaller, but still provides the basis of pan-European

searches and queries against the metadata stored there. When a user requires viewing of a

document the central service retrieves the document from the national OAM, which holds the

sole master version of the document.

5.4.3.3 Impact on OAMs: Compared to Option 2 the meta-data only interface to the central OAM may

be less onerous to implement and operate. It may also be a more appropriate requirement to be

passed on to the issuer to manage as a message that a submission has been made to the national

OAM. Whatever the approach taken, the national OAMs will have the requirement to respond

to system-to-system requests for documents from the central OAM, potentially requiring

systems development and changes in operational services.

5.4.3.4 Impact on users: As Option 2.

5.4.3.5 Impact on Issuers: As Option 2.


5.4.3.6 Impact on private sector: As Option 2.



would consist of:


b. 2 quad-core 1Tb database servers running SQL server 2008 enterprise edition;

c. Suitable PKI-based security software;

d. A suitable piece of bespoke software allowing OAMs to copy metadata to the database

and searches of all current in scope OAM databases to be conducted.

5.4.3.8 Potential costs: These would be higher than Option 2, given the additional requirement to

manage distributed data requests to the OAMs.

5.4.3.9 Potential timescales: similar to Option 2.

5.4.4 Option 4: Web ring (no central portal)

5.4.4.1 Summary: Standardise data storage across all national OAMs to enable all information to be

searched by current national search tools

5.4.4.2 Detail: This option involves ensuring that all OAMs store their data in a similar fashion, to

allow the current search tools in use to be modified to search either the national data (as now) or

all European data by connecting to the other national databases. This would allow users to

create a Europe-wide search if need and would preserve the current functionality.

5.4.4.3 Modifications would be needed to many of the databases currently in use, and agreement would

need to be reached on a set of data standards that every national OAM would adhere to. All data

currently stored would then need to be updated to make sure it met the new data standards, and

every national database would have to ensure that others could easily and securely connect to it

in order to search the data when needed.

5.4.4.4 Impact on OAMs: This option could have a significant impact on OAMs as they would

potentially need to update all their data according to the new standards, and would need to

modify their database access controls to allow other OAMs search tools to connect. This could

involve a lot of change.

5.4.4.5 Impact on users: This option would allow users to search Europe-wide data as needed, based

on selecting search parameters from centrally defined metadata. These searches may be slow as

a result of the large amount of data needed to move across international networks, and the large

number of individual databases that would need to be searched. It is also possible that the

different search tools in use would mean that variations were seen in searches done using

different tools.

5.4.4.6 Impact on issuers: Issuers would not be impacted by this option as they would continue to file

their information with the national OAMs. The OAMs would be responsible for converting the

data into the required format for international searches.

5.4.4.7 Impact on private sector: This Option would be unlikely to impact the private sector as the

increase in functionality is small given that no new central facility is created.


5.4.4.8 Infrastructure: No new, central infrastructure would be required for this option.

5.4.4.9 Potential costs: This is likely to be a costly option due to the amount of change that may be

required for each OAM, to ensure compatibility with others. There may also be a large cost

associated with educating users about the new search facilities, including how to interpret the

results.

5.4.4.10 Potential timescales: This is likely to require a number of years to implement on the basis that

the majority of OAMs will need to make changes to their systems.

5.4.4.11 Possible challenges: The major challenge for this option will be getting agreement from the

national OAMs to the data standards to be used. There may also be a technical challenge

associated with making searches across 29 different databases.

5.4.5 Option 5: Network of harmonised national OAMs

5.4.5.1 Summary: Standardise data storage/metadata as for Option 4 above together with a central

search capability searching all national datasets.

5.4.5.2 Detail: This option is very similar to Option 4. The difference is that a central portal is created

that has the capability to search the national OAM databases, rather than using the existing

search functions. Users will be able to conduct national searches from the existing OAM

portals, as now, but will need to go through the central portal to conduct a Europe-wide search.

No metadata or documents are held at the central access point. The portal generates search

requests which are sent to multiple national OAMs, which then return the results of the local

searches to the centre.

5.4.5.3 Impact on OAMs: As option 4. There may be a small amount of difference as OAMs will not

need to modify their search facility but this is a minor difference – the effort required from

OAMs is still likely to be high.

5.4.5.4 Impact on users: This option would allow users to conduct Europe-wide searches, based on

selecting search options from centrally defined metadata. These searches are likely to be quicker

than the search in Option 4, but may still take some time due to having to query a large number

of databases for each search. Users may also have trouble understanding the difference between

the central portal and national OAM portals.

5.4.5.5 Impact on Issuers: No impact, as Option 4.

5.4.5.6 Impact on private sector: As Option 2.

5.4.5.7 Infrastructure: The infrastructure for this option would need to be capable of sending search

requests to multiple OAM databases, receiving these results and them combining them into a

single result to be displayed to the user. It is expected that this infrastructure will be provided as

a managed service, hosted as a private cloud in a data centre. The infrastructure for this option

would consist of:


b. A suitable piece of bespoke software allowing searches of all current in scope OAM

databases to be conducted.


5.4.5.8 Potential costs: The costs for this option are likely to be higher than Option 4 as development

work will still be needed for the majority of the OAMs, and additionally the central portal will

need to be created.

5.4.5.9 Potential timescales: This option is also likely to take a number of years to implement due to

the work needed within the OAM operations as in Option 4, followed by the development and

implementation of the central search portal.

5.4.6 Option 6: Central search and index engine

5.4.6.1 Summary: Make use of intelligent search tool to provide central search facility without using

central database.

5.4.6.2 Detail: This option involves setting up a central portal which is connected to all of the national

OAM databases. This portal would make use of an intelligent search tool to automatically index

all of the content of the national portals, and enable this data to be searched. The Europe-wide

search facility will make use of the indexed information, and the information in the national

databases.

5.4.6.3 Impact on OAMs: This option would have little or no impact on OAMs. The search would be

optimised if national OAMs allowed the search tool direct access to their databases, but the tool

would still work if it used the current portals to find and index all information.

5.4.6.4 Impact on users: This option is likely to provide users with the most functionality due to the

rich functionality of the search tool and the use of indexing to make searches quick. Users

would have to be educated on the difference between the central search tool and the national

portals.

5.4.6.5 Impact on Issuers: This option would not impact issuers – they would still send information to

the national OAMs.

5.4.6.6 Impact on private sector: As Option 1, however there is a potential to use the intelligent search

software to index the content of the documents in addition to the documents themselves. This

functionality would duplicate an increased proportion of the functionality provided by 3rd

party

providers and may start to erode their income. Is it still anticipated that this would be a small

proportion of income on the basis that no analysis of the information could be provided by the

search tool, and that the total information available from the OAM portal would still be limited.



would consist of:


b. 4 quad-core web servers running the intelligent search tool

c. 2 quad-core 1Tb database servers running SQL server 2008 enterprise edition;


e. A suitable piece of bespoke software allowing OAMs to copy metadata to the database

and searches of all current in scope OAM databases to be conducted.

5.4.6.8 Potential costs: Not clear as these costs depend on what services are provided and what

supplier is chosen.


5.4.6.9 Potential timescales: This option is likely to be quick to implement as there is no involvement

needed from the OAMs.

5.4.7 Option 7: Combine current OAM operations with national business registers

5.4.7.1 Summary: Create a combined OAM and national business registers’ database and its operations

to make use of the planned central access point for the business registers. This leverages

economies of scale and the existing business registers European network to also provide OAM

data centrally.

5.4.7.2 Detail: This option involves making use of the existing European interconnections for business

registers and looking for synergies between the national business register databases and OAM

databases in order to combine the two to deliver a central OAM and business registers database

which reduces overall costs through economies of scale. The proposed central access point for

Business Registers would be extended to also search regulated information on issuers held in

the national OAM databases based on making use of the existing business registers

interconnections to search and share OAM information from different countries. This would be

achieved by linking the proposed central access point to the national OAM databases.

5.4.7.3 Impact on OAMs: This option would require all national OAM operations to provide access to

the business registers operations at a process and ICT infrastructure level. This would have a

large impact on OAMs, potentially impacting both staff and contracts with 3rd

party suppliers.

5.4.7.4 Impact on users: Integrating the OAM and Business Register central access points would

provide a “one stop shop” for interested users. This may generate more interest and increased

user volumes compared with two separate services. It would also provide a common user

interface to two sources of financial information. It will provide users with more information on

companies, and will potentially have benefits for national business register users as well as

OAM users.

5.4.7.5 Impact on Issuers: This option may impact issuers if the combined databases require different

input arrangements to the current national databases – issuers may then need to change their

submission processes.

5.4.7.6 Impact on private sector: This option would have minimal impact on the private sector as no

new information is being provided to users.

5.4.7.7 Infrastructure: The infrastructure required for this option is not known, as it depends on the

current infrastructure in place for both the national OAMs and the national business registers.

The infrastructure to be used would need to be agreed as part of the implementation planning

process. The infrastructure required for the proposed Business Register central access point

would need to take into account the integration of the OAM databases.

5.4.7.8 Potential costs: The costs of this option are likely to be higher than Option 5 but lower than

Option 1 due to the degree of national change involved. There are some minor central costs for

this option associated with updating the central access point to include data from OAMs.

5.4.7.9 Potential timescales: This option is likely to take a number of years to implement, mainly due

to the activities and costs associated with linking 29 different national processes and services.

The likelihood is that this option would be implemented in stages, creating the new IT systems

first and then transferring the data and responsibilities over time. It is anticipated that this

process would take up to five years.


5.4.8 Option 8: Maintain status quo

5.4.8.1 Summary: Continue to provide national OAM services used different databases, with few

interconnections.

5.4.8.2 Detail: This option involves making no change to the existing arrangements and continuing to

develop international linkages between OAM databases over time. Existing users will continue

to access OAM information where they are aware of its existence and it meets their needs, and

will continue to make use of commercial data providers to access pan-European information or

to access more detailed information about issuers that is no held by the OAMs. This will include

central organisations such as Eurostat and ECB who will continue to have to pay for this

information.

5.4.8.3 Impact on OAMs: This option would have no impact on OAMs, as no changes are being made.

5.4.8.4 Impact on users: This option will have no impact on users, the current provision will continue

to be supplied, and users will continue to have to pay for information that is not held by OAMs

or for access to pan-European information.

5.4.8.5 Impact on Issuers: This option would not impact issuers – they would still send information to

the national OAMs.

5.4.8.6 Impact on private sector: This option would also have no impact on the private sector.

5.4.8.7 Infrastructure: The current implementation using different databases to provide national OAM

services would not be changed.

5.4.8.8 Potential costs: There are no costs associated with this option as no changes are being made.

5.4.8.9 Potential timescales: This is the current situation, so there are no associated implementation

timescales.


6 Options Analysis

6.1 Introduction

6.1.1 This section carries forward the options from Section 5 and analyses these at a high level to

produce a short-list of preferred options. This short list is then analysed in detail to produce a

recommendation.

6.2 Key requirements

6.2.1 The external study, CESR’s consultation and report and other work performed by the

Commission have identified a number of elements required to be in place in order to build an

effective pan-European storage network.

6.2.2 The findings from the surveys and interviews conducted allow a number of key requirements to

be identified. These are:

a. Common filing standards and formats;

b. Harmonised methods of classification and indexing;

c. Interconnection with national company registers;

d. Multiple country search from a single query;

e. Standardisation of telecoms and database solutions.

6.3 Initial analysis

6.3.1 A number of the options identified in Section 5 can be discounted at this stage on the basis that

they clearly do not meet one or more of the requirements. The discounted options and reasons

for disqualification are listed below.

Option 4: OAM web-ring

6.3.2 This option proposes that the data storage standards and search tools are harmonised across all

current OAMs to allow users to easily conduct searches across all OAM databases from any

national OAM portal.

6.3.3 It is discounted at this stage because the EC requirements specify that a single, central search

tool is required, that allows users to conduct pan-European searches from a single, central point.

This option does not meet that requirement as no additional portals are created – users would be

able to use any of the existing OAM portals rather than being directed to a single, central portal.

Option 6: Central search and index engine

6.3.4 This option proposes to implement an intelligent search tool within a central portal that can

automatically search and index all data held in OAM databases. This indexed data can then be

searched by users to effectively conduct a pan-European search.

6.3.5 The option is discounted at this stage because use of an intelligent tool to index the data is seen

as interpretation and carries a risk that data could be incorrectly or inappropriately indexed.

Users conducting a search of information indexed in this fashion could therefore be presented


with incorrect or inaccurate results which could be seen as the responsibility of the owner and

supplier of the search tool. This could lead to complaints or more serious action being taken

against the EC (or other central body that is responsible for the central search tool) to recover

monies lost as a result of incorrect data being supplied.

Option 7: Combine current OAM operations with national business registers

6.3.6 This option involves creating a single database by combining the information contained in the

current OAM databases with that contained in the national business registers. This would make

best use of the existing European linkages between national business registers.

6.3.7 This option is discounted at this stage for the following reasons:

a. The effort required to integrate OAM databases with the Business Registers at a national

level to enable the existing international linkages to be used to share OAM information is

likely to be prolonged. This extra effort is not likely to deliver additional benefits over the

previous options;

b. The option does not increase the efficiency of the two separate databases due to a lack of

synergy between them. The information held in the national business registers is different

to that held in the OAMs, the only point of commonality is financial reports. It is

therefore unlikely that a combined database would deliver any tangible savings and it is

also unlikely that the combined database would be able to make use of the existing

international linkages to search OAM data as these exist to share business register data

rather than the different OAM data.

Option 8: Maintain status quo

6.3.8 This option does not involve making any changes to the current situation. The national OAMs

will continue to provide national databases and facilitate national searches, and will continue to

make slow progress in forging European linkages to share regulated information.

6.3.9 This situation allows all member states to manage their OAM operations separately, and to

coordinate OAM operations with national regulators as needed. This has resulted in a large

number of different approaches to the storage of regulated information and many areas where

this data is duplicated across a number of systems to fit with existing national processes.

6.3.10 Maintaining the sataus quo means that users will continue to rely on commercial data providers

to provide consolidated, cross-European access to regulated information in addition to analysis

and non-regulated information about issuers of securities. This will mean that central

organisations such as Eurostat and the European Central Bank will have to continue to pay for

all the information that they need, and individual users will also continue to pay for their

information due to the lack of understanding about what is available from OAMs as well as the

lack of analysis available from the OAMs.

6.3.11 This option would be the easiest to implement as it does not involve making any changes,

however it would not meet the requirements of the Transparency Directive, or the other

requirements as stated in Appendix A.

6.3.12 This option is discounted as it does not meet the requirement for a single European access point

and does not enable a pan-European search.


6.4 Further analysis methodology

6.4.1 A set of criteria by which the four options taken forward (Options 1,2,3 and 5) can be assessed

has been developed based on assessing the overall suitability of each option to fulfil the

requirement of enabling users to conduct pan-European searches of regulated information held

on issuers of securities. These criteria are listed below:

a. ability to meet the EC requirements as described in the ITT (Annex A);

b. deliverability – how easy is it to move from the current situation to that proposed by the

option;

c. ability to address concerns identified in previous reports;

d. timescale – how long is the option likely to take to be fully implemented;

e. Cost;

f. governance and resourcing – How much will current governance and resourcing

arrangements need to change to implement the option;

g. standardisation – to what level will the current national arrangements need to be

standardised to implement the option;

h. flexibility - how easily can the proposed system be changed to include new data, storage

arrangements or processes (such as moving to XBRL);

i. benefits and user experience – what are the quantifiable and unquantifiable benefits of the

option, including any improvements to the user experience;

j. impact on other organisations, including 3rd

party providers;

k. impact on other government services such as information registers;

l. risk – the likely risk of implementing the option.

6.4.2 Each option is then assessed against these criteria individually in order to understand how well

that option is likely to meet the overall need.

6.4.3 Table 6-1 summarises how each option performs against these criteria, in comparison with the

current situation (Option 8).


Current Situation Option 1: Central everything

Option 2: Central copy of documents and search

Option 3: Central metadata and search

Option 5: Central search only

Fit with EC requirements

Provides limited single access point via Mifid

Not all OAMs hold all regulated information required

Is extensible

Very partial search facilities

Current databases can accept minor changes required for standardisation of finance and voting rights

Can’t consolidate info on corporate ownership and voting rights

Could provide alerts – some provided already

Partially meets quality standards

Provides multi-lingual single access point

Can provide access to all regulated information dependent on common standards, regulation and compliance process, and unique ref number for issuers

Extensible

Complete search facilities as needed

Allows for input standards to be used (need to be mandated on issuers)

Cannot consolidate information on corporate ownership without interpretation or increased document tagging (not in current functionality anywhere)

Could provide alerts (users only register in one place)

Respects quality standards due to regulation and enforcement


Cannot provide access to all regulated information as dependent on compliance processes being implemented locally

Extensible





Partially meets quality standards due to local variation



Extensible








Extensible






Deliverability Already implemented and working

Likely to need legislation change

Could base on existing national solution

Need to inform issuers and change dissemination

Need to consult and agree integration and duplication process with all in scope OAMs

Need to consult and agree integration process with all in scope OAMs

Most technically complicated of 2,3 and 5

May need to consult and agree integration process with all in scope OAMs – tool may be able to index without any involvement from current OAMs


process (sign up process)

Need to consult and agree integration process with 29 states

Addresses concerns No, by definition Addresses all concerns Does not address all concerns – local autonomy remains

Does not address all concerns – local autonomy remains

Does not address all concerns – local autonomy remains

Timescales Already implemented Last current contract expires in 2014 for services and 2018 for infrastructure

Exclude lead times for agreeing this is solution

1 year procurement

Concurrent year to agree standards for metadata and pragmatic unique ref number (see findings section)

1 year to implement

3 years transition / migration (1 per month)

5 years total (+ EC agreement s)

1 year procurement

Concurrent year to agree standards for metadata and pragmatic unique ref number (mention EBR etc)

6 months to implement

2 years integration and initial population (1 per month)

3.5 years total

1 year procurement



2 years integration and initial population (1 per month)

3.5 years total

6 month procurement



Governance / resourcing

Weak governance and limited adherence to OAM quality standards.

High regulation due to close linkages to local regulators.

Limited interconnections between OAMs

Need to work out how to manage pan-Euro governance and compliance, and how this may apply to issuers

Need Euro governance for standards and network

Need Euro governance for standards and network – applied to OAMs

Need Euro governance for standards and network – applied to OAMs

No Euro governance for standards needed – although would improve indexing performance

Standardisation No enforced standardisation of metadata

Enforced standardisation of issuer ref number and metadata



Enforced standardisation of issuer ref number and metadata through indexing


Flexibility Low European flexibility due to requirement to change all databases etc. in order to effect change

High flexibility as all info in one place = easy to change

Low European flexibility due to requirement to change all databases etc. in order to effect change

Low European flexibility due to requirement to change all databases etc. in order to effect change

Very flexible due to low impact of implementation

Benefits / user experience

Zero benefit. Users tend not to find docs on OAM, except professional finance / lawyer types who need original source and historical info

Save operating costs of local OAM model

Delivers most functionality required

Of benefit to ECB and Eurostat but does not meet all requirements

Would still not provide any analysis on information submitted

Quick search as all data centrally

Increased compliance

Quick search as all data held centrally

Can easily index document as / when needed


Quick search of metadata but slow search for document as required to go to local OAM

Will not miss documents as all information on docs held centrally


Potentially very slow search as required to search all OAMs for documents

Unreliable search – may miss documents due to service issues etc


Relationship with 3rd

party providers

Issuers work with disseminators. Disseminators file with SE/OAM/market simultaneously. May also file with 3

rd party at same

time, or 3rd

party picks up from market / SE feed.

3rd

parties do not use OAM as source of regulated info.

Most investors use 3rd

party as source of regulated and other information rather than OAM.

May be more attractive to 3

rd party providers as

source of information

May remove some simple value add of 3

rd parties

through improved company linking etc.

May be more attractive to 3rd

party providers as source of information


rd parties


May be more attractive to 3rd

party providers as source of information


rd parties


Unlikely to be attractive to 3rd

party providers due to long search timescales and potential difficulty of consolidating results.

Relationship with business registers

No relationship with EBR

No relationship with

Ability to introduce common filing processes

May be able to link central database to business

Unlikely to be able to link OAM data to business

Unlikely to be able to link OAM data to business


national business register

No commonality in filing processes across BRs and OAMs

and coding as required registers in order to add value

registers as data is still held in national databases. Likely to be more effective to pursue national linkages

registers as data is still held in national databases. Likely to be more effective to pursue national linkages

Risks Zero – no change Lose extended local storage currently in place or countries have to store elsewhere

Lose ability to easily search historic data as difficult to codify to new standards without interpretation

Duplicate dataset created therefore risk of incorrect duplication and risk of incorrect timing

Risks slow search results for users, and potential user confusion

Risk of very slow search results, and variety of presentation of documents returned may confuse users


6.5 Cost model

6.5.1 A full cost model, including a detailed list of assumptions made and details of costs over 5 years

for all four options has been developed as an annex to this report. Table 6-2 below summarises

this model and shows the additional costs incurred centrally and the total costs associated with

all four options, detailed over a 5 year period.

Year 1 Year 2 Year 3 Year 4 Year 5

Central costs

Option 1 € 2,070,000 € 550,000 € 550,000 € 550,000 € 550,000

Option 2 € 1,240,000 € 310,000 € 310,000 € 310,000 € 310,000

Option 3 € 1,880,000 € 340,000 € 340,000 € 340,000 € 340,000

Option 5 € 1,090,000 € 260,000 € 260,000 € 260,000 € 260,000

Total costs

Option 1 € 4,090,000 € 2,060,000 € 1,560,000 € 1,050,000 € 550,000

Option 2 € 3,260,000 € 2,320,000 € 2,320,000 € 2,320,000 € 2,320,000

Option 3 € 3,900,000 € 2,360,000 € 2,360,000 € 2,360,000 € 2,360,000

Option 5 € 3,110,000 € 2,280,000 € 2,280,000 € 2,280,000 € 2,280,000

Table 6-2: Cost model summary

6.6 Detailed analysis

6.6.1 Option 1: Central EU dataset

6.6.1.1 Implementation of this option would be the most efficient way of storing and allowing users to

search the information across Europe. This is because it is a single large database, rather than

multiple separate databases and hence would realise a number of efficiencies around operational

costs, such as improved used of IT infrastructure and reduced complexity of management

processes (as compared to multiple individual instances).

6.6.1.2 Implementation of this option would meet the majority of the requirements listed in Appendix A

and would also lead to a number of cost savings when aggregating costs of OAM provision

across all countries in the scope of this study. The cost savings are likely to come from

economies of scale in the use of ICT infrastructure, reduced management and operational

resource costs and improved flexibility and ease of change.

6.6.1.3 It would not meet the requirement to consolidate information on corporate ownership as this

would require the information submitted to be analysed and consolidated in a different form.

For this reason none of the potential options will meet this requirement.

6.6.1.4 This option was considered by CESR in their report of 2010 and was rejected due to the noted

difficulty and complexity of moving from the current arrangement directly to a single, European

OAM.


6.6.1.5 It can be seen from the cost model above that the initial costs of this option are high, this is due

to the large requirement for change in IT systems, central processes and national processes.

However, the total costs associated with this option decrease quickly and by year 2 this becomes

the cheapest of the options to run because it involves cutting the costs associated with running

the national OAMs.

6.6.1.6 It is also very likely that there will be high degrees of change associated with this option, mostly

associated with agreeing the process changes needed to allow issuers to provide data centrally

for OAM purposes, and locally for change to national regulatory processes such as those

maintained by national stock exchanges. Current OAMs will also need to make plans to

maintain information currently stored by the OAM that is not regulated by the UE.

6.6.1.7 It is therefore considered that this option should be seen as the best long term option in order to

realise the cost saving benefits whilst providing opportunities and time for the processes

changes needed to be discussed and agreed.

6.6.2 Option 2: Central dataset fed by existing OAMs

6.6.2.1 This option retains the national OAMs and provides a central database and search facility that

holds copies of all documents held by them. Implementation of this option would meet many of

the EC requirements, but these would be subject to local variations in the types of documents

held and in the filing processes in use.

6.6.2.2 This option would provide a very quick and efficient search across all data held by OAMs, but

would not necessarily provide access to all required information across Europe as provision of

this information would still be dependent on national compliance to the quality standards. It is

envisaged that the level of compliance would increase over time.

6.6.2.3 There are also concerns with this option around the timeliness of data held in the central

database. National OAMs have different timescales for making documents filed public, for

example publishing documents 24 hours after they are submitted by issuers to allow for quality

checks. It is therefore possible that information found in the central database will be different

from information available to users searching national facilities. It is also possible that the

process used to copy documents from the national OAM databases to the central database may

take some time and hence users may receive different results when searching central or local

databases.

6.6.2.4 This option would therefore require a number of additional UE processes to be created in order

to effectively manage and maintain standards around the provision of information to the central

database.

6.6.2.5 The initial costs for this option are likely to be lower than Option 1 as less process change is

required and fewer resources will be needed to manage relationships as the central team will

only need to manage relationships with the OAMs rather than with all EU issuers. The technical

costs are likely to be similar on the basis that both options will require creation of a searchable

database that holds all pan-European regulated information.

6.6.2.6 This option will require less total change than Option 1, and is therefore appealing as it delivers

a similar level of functionality for users, although does not deliver the cost saving benefits

associated with Option 1. It is therefore only likely to be a good option if the level of change

associated with Option 1 is not acceptable.


6.6.3 Option 3: Central metadata store

6.6.3.1 This option is similar to Option 2 – the only difference is that the searchable central database

only holds metadata about documents contained in the national OAM databases rather than

copies of the documents themselves.

6.6.3.2 This means that there are not likely to be any issues around different copies of documents being

available to users conducting searches in different places. There are also not likely to be any

timing issues as the metadata about the documents can be sent to the central database as soon as

it is submitted by the issuer, rather than waiting for any quality checks to be performed.

6.6.3.3 This option also does not ensure that all regulated information is available as this is still

dependent on local quality standards, as for Option 2.

6.6.3.4 This option is likely to be the most technically complicated of the potential options, on the basis

that it requires the central database to hold copies of information (metadata) held by the national

OAMs and also requires the central service to be able to link back to documents held in national

databases rather than centrally. This is likely to require some development by all OAMs in

addition to central development. The amount of this development work required is likely to be

less than Option 2 as less information needs to be exchanged between the local and central

OAM databases.

6.6.3.5 The technical complexity of this option can be seen in the costs for this option – the initial costs

are higher than Option 2 on the basis that more development and integration with existing OAM

systems will be required. The ongoing costs for this option are very similar to Option 2. This is

because less software is required for this option as the database for metadata is far smaller than

the full database of Option 2, but additional resource is required to manage a more complex

overall system, balancing out the reduced software cost.

6.6.3.6 The risk of incorrect documents being provided to users associated with this option is less than

that for Option 2 because the OAM documents are not duplicated. The overriding requirement

for accuracy and timeliness of data held by OAMs is such that this option is likely to represent a

better approach to providing a central search facility than Option 2 as the costs are similar but

the overall level of risk is lower.

6.6.4 Option 5: Network of harmonised national OAMs

6.6.4.1 This option only provides a central search tool, no central database is specified. This would

mean that when a user conducts a pan-European search, the central search engine is required to

search for the required information in all of the current national databases, formatting the search

query as needed to make use of each individual database.

6.6.4.2 This is likely to require a technically complex solution as the central search tool will need to

interface with the existing databases, which is likely to require creation of a large number of

subtly different interfaces in order to ensure the searches created are effective.

6.6.4.3 The pan-European searches conducted using this central tool are also likely to take some time

compared to other options due to the requirement to conduct multiple individual searches to

build up the central search result. Every time a user conducts a central search, each of the OAM

databases will need to be queried in order to compile a pan-European result, and therefore this

search is likely to take longer than searching a single database (as in Options 2 and 3) as 27

individual searches are needed. The total time to complete a search is therefore dependent on


network performance across Europe and on the time taken to complete 27 individual searches of

the individual OAM databases.

6.6.4.4 The costs of this option are the lowest of the four options considered as fewer ICT infrastructure

resources are required to provide the solution and the level of additional operational resources

required is lower than Option 3 as the relationships required with OAMs are slightly less

complex.

6.6.4.5 This option is unlikely to meet the requirements of users based on the likely long search times

and the difficulty of comparing results retrieved from a number of different databases. The costs

are also not significantly lower than the other options proposed and therefore this option is

discounted at this stage.

6.7 Other considerations

6.7.1 There are a number of baseline standards and protocols which need to be in place in order to

implement any of the four options above to deliver a solution which meets all the EC

requirements. Without such changes, any pan-European searches conducted would not be

effective and the value of the technical development adversely impacted.

6.7.2 The changes identified, based on our findings, are listed below and discussed further in the

Recommendations section following:

a. definition of a unique pan-European issuer code;

b. standardisation of the metadata held on issuers and filed documents;

c. standardisation, or harmonisation, of approach to time stamping and versioning.

6.7.3 In addition, in order to meet the requirement for, consolidation of information on corporate

ownership, standardised structured formats for filing such information will need to be defined

and implemented.


INTENTIONALLY BLANK


7 Recommendation

7.1 Introduction

7.1.1 This section makes a number of technical recommendations to implement a pan-European

search of regulated information on issuers of securities. The recommendations take account of

the European Commission’s requirements, of the previous studies as detailed in Section 2 and of

the findings of this report as detailed in Section 4. The recommendations are based on the

Options Analysis in Section 6 above.

7.2 Recommendation

7.2.1 Summary

7.2.1.1 The options analysis does not identify a clear preferred option. All of the options identified are

able to meet the majority of the requirements, have similar costs and similar timescales.

7.2.1.2 It is clear that Option 1 best satisfies the requirements, but it is also clear that this option has the

highest overall impact on users, issuers and existing OAMs, and thus is highly likely to take the

longest time to implement. However, this option also presents the best opportunity to save costs

based on the reduction of the number of national OAMs over time.

7.2.1.3 The recommendation is therefore that Option 1 should be the long term solution, and that the

EC seeks to evolve the current situation into a single, European OAM over time. Options 2 and

3 can then be used as steps which support this evolution and allow the costs and impact on

stakeholders to be borne over time, and thus the impact and difficulty of change is reduced.

7.2.2 Publish a strategic roadmap for the future storage of regulated information

7.2.2.1 It is recognised that the implementation of a pan-European OAM network meeting all the

functional requirements specified will require progress through a number of steps and take some

considerable time to deliver and manage transition.

7.2.2.2 The effective delivery of such a major programme of change will involve the management of

technical, legislative and organisational dependencies and change streams.

7.2.2.3 In order to maintain focus, and to show the market there is strong commitment to the longer

term vision, we strongly recommend that a clear strategic roadmap and vision is agreed and

published showing the proposed end target model, the proposed steps for moving towards this

from the current position and the principles that will underpin this development.

7.2.2.4 The recommendation is that the roadmap shows the pre-work needed to support the

implementation of any of these options (as discussed below), and then details the order in which

the options could be implemented. The recommendation of this report is that Option 3 could be

implemented first to ensure that the standardisation works and to allow users initial access to a

pan-European search. This implementation of a central search tool holding metadata from all

current OAMs could then be upgraded to also hold copies of the documents held by OAMs on a

country-by-country basis. This will lead to Option 2 being fully implemented when all

documents are stored in both the originating countries OAM and the central database.


7.2.2.5 These initial steps will then facilitate Option 1 being rolled out as circumstances allow by re-

directing individual country OAM pages to the central facility, for both users and issuers.

7.2.2.6 We consider the publication of a strategic roadmap to be an early key requirement and

prerequisite for success, without which there will be little basis on which to build the onward

development or gain the active engagement of key market participants required in order to

deliver the stated requirements.

7.2.3 Align roadmap, standards and delivery with proposals for interconnection of business

registers

7.2.3.1 Coordinate development, and approach, with proposals for business registers to set common

coding and interconnection standards and manage and coordinate the impact of changes on

issuers and listed companies.

7.2.4 Develop main strands of the roadmap

7.2.4.1 There are three strands which need to be progressed in order to reach a full solution:

a. specification and procurement of central access functionality;

b. agreement and implementation of common metadata, coding standards and process

standards;

c. implementation and migration planning.

7.2.4.2 The following points form a recommended way forward to manage central standards and

governance.

7.2.5 Set up a central standards and protocol body to agree and implement standards

7.2.5.1 A central body will be needed to bring together OAMs and other interested parties to agree and

enforce technical and data/metadata standards. The body should also determine transfer

protocols to apply to metadata and filings and develop interoperability agreements if required.

7.2.5.2 Such a body may also be assigned the responsibility for the project management of the

implementation and migration to the pan-European service.

7.2.5.3 We note the comments in CESR’s 2010 report regarding the potential future role of ESMA in

these areas.

7.2.6 Define a unique pan-European issuer code

7.2.6.1 We consider the definition and implementation of such a unique code is key to the successful

technical development of pan-European searches across the OAM network and endorse CESR’s

view in their 2010 report that a single code should be agreed for use by both the OAM and

company register networks. We also note the recent endorsement by the International

Standardization Organization of the Society for Worldwide Interbank Financial

Telecommunications (SWIFT) as the registration authority to create and distribute global legal

entity identifiers (LEIs).


Link between business registers and unique issuer code

7.2.6.2 The business registers project aims to create a unique identification number for legal entities

across Europe, potentially based on adding a country code to the current national identifiers.

However, there is not a direct relationship between legal entities and issuers of securities, and

hence this project cannot guarantee that each issuer of securities will have a unique

identification number.

7.2.6.3 National business registers provide a unique identification number to all legal entities created in

that nation, whether or not the legal entity is able to issue securities. There are therefore many

legal entities with an identification number that are not able to issue securities (because they are

not publically listed) but still have a name and identification number and hence may drive

confusion. Of greater importance, there are also organisations that are able to issue securities

which are not registered in national business registers.

7.2.6.4 A further issue is that the national business registers do not consolidate information, as noted in

the BRITE project details. A multi-national issuer of securities is likely to have entries in many

different national business registers. These are unlikely to have the same company name and

will have different identification numbers which are not linked. In order to ensure the integrity

of the pan-European OAM data search, these multi-national entities must be linked together by

assigning a single pan-European identification number to the issuer, in addition to the multiple

national identification numbers.

7.2.7 Standardise metadata held for issuers and filings, and harmonise coding

7.2.7.1 The enhanced metadata proposed in the 2010 CESR report should be adopted as a common

standard across Member States. Where required, the OAM filing processes should enhanced to

capture this information from issuers. This should include a common definition of the types of

regulated information stored (also see CESR 2010 proposals)

7.2.7.2 The metadata held should be based on a common coding structure to allow cross country

searches to be based on these codes rather than text/names. For example, by introducing a

common code for a type of regulated information (1=Annual Report for example) as well as

ISIN code for security etc.) This standardisation and code based search could be introduced at

the central CAP/hub– not necessarily required at national OAM level.

7.2.8 Harmonise other key aspects of national OAM data and processes

7.2.8.1 In order to move the OAM network forward, and allow effective high quality searching across

the network, there is a need to introduce a minimum set of common definitions of the key data

items and basic rules of processing. These need not be extensive or onerous, but need to cover

the following:

a. A common approach to docketing/time stamping across the network;

b. A harmonised approach to management of versioning where issuers submit revised

versions of a document.

7.2.9 Specify a standardised format for filing structured information

7.2.9.1 The current OAM technology and filing processes could be extended without, in most cases,

major re-engineering, to include acceptance and storage of filings containing structured

information, for example for holdings of voting rights. In order to achieve this, a common


format needs to be developed which could provide comprehensible and usable information

which could be made available to end users without further processing or interpretation by the

OAM operator. The specification of the format would need to be centrally driven, perhaps by

ESMA, and the responsibility for compliance placed with issuers. In regards to notification of

major holdings, these could be XBRL documents or standard forms or templates defined by

ESMA in pursuit of Article 12.9 of the Transparency Directive.

7.3 Other recommendations

7.3.1 Promotion of current OAM services

7.3.1.1 The OAM services currently provided by the 29 countries included in this study would benefit

from increased marketing and promotion to ensure that all potential users are aware of their

existence and of the services and information that can be provided. This marketing and

promotion could include:

a. Improving the search rankings when searching for OAM in popular internet search

engines;

b. Promoting OAM services on other financial services web pages such as those of national

regulators;

c. Linking to OAM sites from related services such as national business registers;

d. Advertising on popular share dealing portals.

7.4 Summary of recommendations

1 Publish a strategic roadmap for the future storage of regulated information

2 Align roadmap, standards and delivery with proposals for interconnection of business registers

3 Develop main strands of the roadmap

Including:

4 Specify requirements of central access functionality (CAP)

5 Plan implementation, migration and/or integration of CAP service

6 Set up a central standards and protocol body to agree and implement standards

7 Define a unique pan-European issuer code

8 Standardise metadata held for issuers and filings and harmonise coding

9 Harmonise other key aspects of national OAM data and processes

10 Specify a standardised format for filing structured information

Table 7-1: Summary of recommendations


INTENTIONALLY BLANK


A Characteristics of a pan-European storage system

A.1 Each of the potential options for the pan-European system must be assessed against

achievement of the following functional characteristics, as specified by the Commission and set

out in Box 2 on Page 21 of the study Invitation to Tender MARKT/2010/17/F:

a. A single access point with a multilingual interface;

b. Access to ALL regulated information;

c. Allow for extension to cover other related areas not covered by the current Directive;

d. Offer searching facilities based on a wide range of reference data;

e. Allow the imposition of the use of input standards for the filing of financial information

(e.g. statements prepared with XBRL){eXtensible Business Reporting Language -

http://www.xbrl.org/Home/ };

f. Allow the imposition of the use of input standards for the filing of information on

corporate ownership (e.g. standard electronic forms);

g. Consolidate information on corporate ownership to give views of disclosed holdings of

voting rights by issuer and by investor;

h. Integrate alert systems on information filed for the benefit of supervisory authorities – to

avoid the need for parallel filing to these authorities;

i. Allow for the possibility to integrate notification or alert systems on information filed for

the benefit of market participants;

j. Reflect the quality standards in the Commission’s Recommendation of 2007;

k. Other enhancements to improve the visibility of small listed companies.


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