EUROPEAN COMMISSION Brussels, 25.11.2021 SWD(2021) 344 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT REPORT

Accompanying the documents Proposal for a Regulation of the European Parliament and of the Council

establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability Proposal for a Regulation of the European Parliament and of the Council







amending certain Regulations as regards the establishment and functioning of the European single access point





















Proposal for a Directive of the European Parliament and of the Council







amending certain Directives as regards the establishment and functioning of the European single access point {COM(2021) 723 final} - {SEC(2021) 572 final} - {SWD(2021) 345 final}

{COM(2021) 724 final}

{COM(2021) 725 final}



TABLE OF CONTENTS 1Introduction: Political and legal context 1.1Political context 1.2Market and legal context 2Problem definition 2.1What is/are the problems? 2.2What are the problem drivers? 2.3What are the consequences? 2.4How will the problem evolve? 3Why should the EU act? 3.1Legal basis 3.2Subsidiarity: Necessity of EU action 3.3Subsidiarity: Added value of EU action 4Objectives: What is to be achieved? 4.1General objectives 4.2Specific objectives 5What are the available policy options? 5.1What is the baseline from which options are assessed? 5.2Description of the policy options

5.3Options discarded at an early stage 6What are the impacts of the policy options and how do they compare? 6.1Impacts and of policy options on the scope of information 6.2Impact and comparison of the policy options regarding the format of the information accessible via ESAP 6.3Impact and comparison of the policy options regarding the collection of the information accessible via ESAP and the interconnection of the existing collection points 6.4Impact and comparison of the policy options regarding open data 6.5Impact and comparison of the policy options regarding governance 7Preferred “aggregated” option 7.1Summary of preferred aggregated option 7.2Impacts of preferred aggregated option 7.3Implementation of preferred aggregated option via phased approach 7.4REFIT (simplification and improved efficiency) 8How will actual impacts be monitored and evaluated? 8.1Monitoring the extent with which the specific objectives are met 8.2Other sources of monitoring Annex 1: Procedural information Annex 2: Stakeholder consultation – synopsis report Annex 3: Who is affected and how? Annex 4: Workshops, bilateral meetings with stakeholders, expert groups, and committees Annex 5: Benchmarking – the US EDGAR and Japanese EDINET

Annex 6: Users Annex 7: SMEs Annex 8: Union strategies in relation to ESAP Annex 9: List of relevant EU legal acts and categorisation of the information - open public reporting obligations Annex 10: National Competent Authorities, OAMs and Business Registers per Member State Annex 11: Mapping of public disclosure data in the context of the ESAP implementation process – BR-AG Annex 12: Coherence of ESAP with relevant EU policies Annex 13: How are the preferred options supporting a future proof evolutionary ESAP Annex 14: Ancillary/Technical/non-core aspects of the ESAP Annex 15: Policy options discarded at an early stage Annex 16: Phased approach for implementation of preferred aggregated option Annex 17: Infrastructure and costs Annex 18: Legal Entity Identifier Annex 19: Terms of use – an overview of five major representative financial centres in the EU Annex 20: Portable Data / Data Extractable Formats / Machine Readability Annex 21: BR-AG summary report Annex 22: Private initiatives – an overview

LIST OF FIGURES

Figure 1: Number of public reporting obligations per legislative framework Figure 2: Number of reporting requirements affecting entities, by type of information Figure 3: Electronic format of entities’ public information encountered by users Figure 4: Problem Tree Figure 5: Results of the IMF’s Capital Market Union Survey Figure 6 : Objectives Figure 7: Cumulative number of public reporting obligations implemented per phase and per option examined LIST OF TABLES Table 1: Intervention logic Table 2: Overview of how the 5 key dimensions address the specific objectives Table 3: Overview of the policy options for the 5 key dimensions Table 4: Funding sources per governance model Table 5 Overview of the impact of the policy options for the 5 key dimensions Table 6: Monitoring whether specific objectives are met



GLOSSARY Term or acronym Meaning or definition AI AIFM or AIFMs AIFMD APA API BRIS CCP CMU CSD CSDR CSV CTP EBA EDGAR EDINET EEAP EIOPA ESA ESAP ESEF ESG ESMA EuSEF EuVECA FISMA HLF HTML IASB IFRS IMF iXBRL KID MAR MiFID II MiFIR MTFs NCA or NCAs OAMs OTC PDF POC PEPP PRIIPs Retail investor SEC SFDR SME TESG TFEU UCITS URD XBRL xHTML XML Artificial intelligence Alternative Investment Fund Manager Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers Approved Publication Arrangement Application Programming Interface Business Registers Interconnection System Central clearing counterparty Capital Markets Union Central Securities Depository Corporate Sustainability Reporting Directive Comma Separated Value(s) (database export/import format and file extension) Consolidated Tape Provider European Banking Authority Electronic Data Gathering, Analysis, and Retrieval Electronic Disclosure for Investors' NETwork European Electronic Access Point The European Insurance and Occupational Pensions Authority European system of financial supervision European Single Access Point European Single Electronic Format Environment, Social and Governance (sustainability related topics) European Securities and Markets Authority European Social Entrepreneurship Fund European Venture Capital Fund Directorate-General for Financial Stability, Financial Services and Capital Markets Union High-Level Forum on the Capital Markets Union HyperText Markup Language (and file extension) International Accounting Standards Board International Financial Reporting Standard(s), issued by the IASB International Monetary Fund Inline eXtensible Business Reporting Language is an open standard that enables a single document to provide both human-readable and structured, machine-readable data Key Information Document Market Abuse Regulation Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (OJ L 173, 12.6.2014, p. 349, as amended) Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (OJ L 173, 12.6.2014, p. 84, as amended) Multilateral trading facility National Competent Authority(ies) Officially Appointed Mechanisms Over-the-counter Portable Document Format (Adobe Acrobat) Proof of Concept pan-European Personal Pension Product Packaged Retail Investment and Insurance Products Regulation) An investor who is not a professional investor Securities & Exchange Commission (US government) Sustainable Finance Disclosure Regulation Small and Medium Enterprises Technical Expert Stakeholder Group on SMEs Functioning of the European Union Undertakings for Collective Investment in Transferable Securities Universal Registration Documents eXtensible Business Reporting Language is an open international standard for digital business reporting, managed by a global not for profit consortium, XBRL International. Extensible HyperText Markup Language is a hybrid language between XML and HTML that allows humans and machines to read data Extensible Markup Language is a simple and extensible text-based format for representing structured information



1Introduction: Political and legal context 1.1Political context The Capital Markets Union (CMU) Action Plan of September 2020 aims to foster diversified sources of finance for companies and to tackle barriers to the flow of capital. In these respects, the High Level Forum on CMU found that access to data by investors is crucial to reach a fully-fledged Capital Markets Union. SMEs or start-ups - need access to the full range of funding sources, including private and public equity, to finance innovation and growth over the long-term. The International Monetary Fund (IMF) underlines the lack of integration as regards information at the EU level and believes that one of the obstacles to CMU is insufficient transparency, including access to data on listed and unlisted entities . The Commission is equally committed to achieving a green transition of the EU economy, as set out in the European Green Deal communication of December 2019 and its Strategy for Financing the Transition to a Sustainable Economy. In the European Green Deal Investment Plan of January 2020, the Commission reiterated the need to place sustainable finance at the heart of the financial system. This is a precondition to create an enabling framework for private investments in sustainable projects and activities. To further support the developments in this area, the Commission tabled a revision of the Corporate Sustainable Reporting in April 2021 which will improve and expand information published by entities as regards Environmental, Social and Governance (ESG) matters. Overall, making the EU fit for the digital age over this decade is a key priority of the Commission. Europe wants to strengthen its digital sovereignty and set its own standards, with a focus on data, technology, and infrastructure. Empowering businesses in a sustainable and more prosperous digital future will need the digitalisation of public services and the digital transformation of businesses. Industrial and commercial data are key drivers of the digital economy. In its European Data Strategy, the Commission declared its intention to make more data available for use in the economy and society. The strategy suggests the roll out of common data spaces in crucial sectors, including the financial sector. The Commission Digital Finance Strategy sets out general lines on how Europe can support the digital transformation of finance in the coming years, and in particular to promote a data-driven finance. 1.2Market and legal context Most legislation in the financial services and capital markets area require the disclosure of information to the public, as shown in figure 1. There are around 200 public reporting obligations in total impinging on private entities, i.e. companies that are issuers of securities, asset managers, funds, banks, insurance entities, credit rating agencies, auditors, advisors, market intermediaries. Further details are provided in Annex 9. Public reporting obligations also impinge on regulators or other public bodies (not included in the figure). Source - BR-AG Public disclosure requirements were introduced – inter alia – to ensure a high level of investor protection, to facilitate cross-border investments, to reduce asymmetry of information between company insiders, external investors, market participants, and for some reporting obligations (corporate sustainability reporting) also with a view to inform a broad range of stakeholders beyond financial services. In order to make sound investment decisions, investors in capital markets must have access to information, including information published by entities, whether entity-related or product-related. Investor confidence and willingness to invest in capital markets, will depend on the easy availability, quality and comparability of this information. Likewise, the same is true for financial services in general. There are various types of information that entities must publish due to reporting obligations. As shown in figure 2, most of these are entity-related with, for instance, the measurement of a company’s financial performance, the description of its governance and its environmental or social policies. Product-related information is the next typical type of information with, for instance Key Information Documents prepared by those who produce or sell investment products. These may be intermingled in a certain type of reporting obligations as shown in the figure. A few additional reporting obligations relate to compliance with certain rules or relate to certain events relevant for the markets. Source: BR-AG Certain types of information are particularly valued. For instance, in response to the move towards sustainable finance, there is an increasing market push to get access to sustainability–related information. The Commission proposed in April 2021 the Corporate Sustainability Reporting Directive (CSRD to expand and improve ESG disclosures by private entities. Many stakeholders flagged this as critical information to support the identification of sustainability risks and opportunities and prevent greenwashing and to comply with the EU obligations in the financial services. Acknowledging that access to information is an important aspect of capital markets, regulators of major third country market places have implemented a central access point to machine readable data: ·In the U.S., the Securities and Exchange Commission implemented the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system in the 1990’s. EDGAR performs automated collection, validation, indexing, acceptance, and forwarding of submissions by regulated entities and others who are required by law to file forms. EDGAR offers a Federal access point to users to information that can be often machine readable. Information is freely available on an itemised basis via the Internet.

·In Japan, the Financial Supervisory Authority launched EDINET（Electronic Disclosure for Investors' NETwork) in 2008. EDINET is an electronic corporate disclosure system under the Financial Instruments and Exchange Act. All listed or major fund-raising entities and investment funds in Japan are required to file their disclosure documents using the system, which are then made publicly available on the Internet through EDINET. All filers are, in principle, mandated to submit in XBRL format the financial statements included in their Annual Securities Reports, Semi-annual Securities Reports, Quarterly Securities Reports and Securities Registration Statements for fiscal years starting in or after April 2008. ·In Canada, the System for Electronic Document Analysis and Retrieval (SEDAR) is a filing system developed for the Canadian Securities Administrators to facilitate the electronic filing of information and allow for its public dissemination across Canada. The PDF format is the standard for SEDAR filings, but SEDAR filing application has been changed to also accept XML format for XBRL filings and XLSX format for certain exempt market filings. In the EU, capital markets are regulated on a decentralised basis. National competent authorities (NCA) are responsible in each Member State for supervising securities and capital markets. The European Securities and Markets Authority (ESMA) was established to foster supervisory convergence amongst NCAs. As a result, the EU has shaped the collection, dissemination, storage and standardisation of information published by entities in relation to financial services and capital markets mostly on a decentralised basis, and with various channels. In the capital markets, the Transparency Directive organises the collection and dissemination of issuers’ reports and insider information from a repository perspective at the Member States level, by entrusting national Officially Appointed Mechanisms (OAM) to perform that function. The OAMs are most often a public body (often the NCA) and less often a private body (such as a market operator). The European Securities and Markets Authority (ESMA) offers in addition access to certain information, such as prospectuses or credit ratings. Overall, about 17% of the EU entities’ public reporting obligations with interest for financial sector (excluding purely transaction related reporting obligations) are funnelled towards a national (Business Registers, Officially Appointed Mechanisms, NCAs – see list in Annex 10) or an EU repository (such as the European Supervisory Authorities - ESA) to offer an access point for the public. For the rest, i.e. around 83% of the reporting obligations in the area of financial services and capital markets, the EU law specifies each company’s web site as publication channel for about half of these, or provides no specific channel for the other half. Sometimes, the EU law prescribes that for repository purposes, the information should be available in various places. For instance, pursuant to the Prospectus Regulation, prospectuses and Universal Registration Documents must be filed with an NCA which shall publish them on its website when approved. The NCA must then provide ESMA with an electronic copy together with metadata. Finally, ESMA makes them accessible on its register. As a result, prospectuses are made available to the public in multiple locations at national and EU level. In practice, one can expect to find in the EU a great portion of the information on the web. Users need to look for this information across multiple web sites or places (entities, registers, specialised bodies…). It is estimated that around 16% of the public reporting requirements has structured content based on layouts, templates or forms. This is due to the combined action of the EU law, national laws and ESAs, preparing the grounds for machine readability. Certain private initiatives seek to develop templates as well. Structured information prepares the ground for machine readability, when a proper format is applied. A specific IT format is mandated for only a few of these reporting obligations. In practice, IT formats are rarely defined at EU level, hence the PDF format has become commonplace. Some machine readable formats are determined at the EU, national or even at entity level. Formats encountered in the law include mainly XML, but also XHTML/iXBRL and MS-Excel. For instance, for the Annual Financial Reports of issuers of securities, the EU has developed the European Single Electronic Format (ESEF), applicable from fiscal year 2021. The Commission has proposed with the CSRD to extend the ESEF to companies’ sustainability reporting. Metadata can be also used as a proxy to machine readability. This is the case for instance for information stored by OAMs and for prospectuses and Universal Registration Documents (URD) which must be accompanied by structured metadata in XML format for the classification in ESMA’s register. Users report (figure 3) that PDF, HTML and Excel remain the most common format and that two of the most commonly encountered, namely PDF and HTML formats are rather not or hardly useable by electronic means (data extraction). Certain formats commonly encountered can be nevertheless considered machine readable (CSV, Excel, XBRL...). Other formats include for instance images or videos or proprietary formats which are likewise hardly digitally usable. Source European Commission - stakeholder consultation, results of response to question 4 (several responses allowed) 2Problem definition The Fitness Check on financial and sustainability public reporting by companies conducted by the Commission until 2021 covers a portion of the public reporting obligations that are relevant for financial services and markets. The Fitness Check assessed primarily whether the EU framework on corporate reporting has achieved its objective of providing stakeholders with financial and non-financial information that is sufficient in quantity and quality to enable them to make informed decisions and protect their interests, make investment decisions, and hold companies publicly accountable. Its conclusion highlighted the positive impact of the adoption of IFRS in the EU for listed companies, which has improved transparency. However, both for financial and non-financial reporting, the Fitness Check noted that digital policies have not been developed to their full potential, thus reducing considerably the efficiency of the EU transparency measures. In addition, the Fitness Check noted that even though preparers tend to see digitalisation as a source of additional burden, users of information demand that data become further digitised in order to enable electronic use in modern ways. Key features are whether data is i) digitally readable (enabling easier use); ii) properly disseminated (where and when information can be accessed); and iii) trustworthy (i.e. ensuring reliability, identification and integrity of information). The Fitness Check noted that the EU framework provides large leeway to Member States in developing national digital approaches and solutions. Some Member States have ambitious digitisation programmes. However national approaches are not prone to being interoperable at EU level. The High Level Forum on CMU noted that Market-based financing is hindered by inefficiencies of the EU ecosystem including the lack of easily accessible, reliable, understandable and comparable information in the financial services and capital markets area. This is also one of the reasons why companies, in particular in smaller market places, struggle to attract investors. The problem tree in Figure 4 summarises the drivers, problems and consequences of this situation. Source: European Commission

2.1What is/are the problems? 2.1.1Scattered access to information Stakeholders report that nowadays, the most popular channel to get information is the companies’ web sites (79% of respondents). Next in line data aggregators are often a key source of information (64%). Finally, public repositories are also mentioned as a source (59%). Other channels include direct access (e.g. a bank can request documents directly to a company), media and social networks, annual general meetings of shareholders, business registers, gazettes, specific platforms on the internet and NGOs’ reports. Stakeholders consulted (preparer-users, users, regulators and other stakeholders) report that they experienced difficulties in accessing information of relevance for the financial services and capital markets, including information which market participants and other entities must publish pursuant to EU law. Barriers to access are multiple, starting with the multiplication of access points, as most of the information published by private entities is accessible solely from those entities’ individual web sites. In the case where repositories are implemented (OAMs, NCAs), those are dispatched by Member State. And within each Member State, there may be several repositories containing part of the information divided thematically, or along other factors (e.g. several repositories with the same mission). Given this multiplication of access points, and a lack of standardised metadata or search criteria users report, and despite web search engines, stakeholders report that they face important barriers to discovery, raising questions where to search information, whether complete information can be gathered, and whether certain information even simply exist. Additional barriers include whenever access fees (even the smallest) is claimed. Uneasy retrieval, unfriendly user interfaces, inability to bulk download are also problematic. In terms of access fees, it can be considered that when legislation requires a company to publish information on its web site, this makes it de facto available for free. The EU law may also require that entities provide direct access free of charge to certain information. In addition, most of the OAMs, NCAs and ESAs provide access free of charge on their own registers, at least on an itemised basis. Hence, all in all, it is estimated that access free of charge to raw data is ensured by legislation for at least 50% of the reporting obligations. 2.1.2Information not ready for digital use Once a user has managed to get access to information, stakeholders consulted (67%) report that they encounter hurdles to use and compare this information. The most frequent reasons for this are the use of formats that do not allow easy extraction of data (pdfs, images...), insufficient data structuring, quality issues, linguistic barriers, as well as usage restrictions due to terms of use or copyrights. This makes the exercise of using and especially comparing data difficult and costly. 2.2What are the problem drivers? 2.2.1Reporting requirements with different channels as regards information to be published. Digital access and use of information in the area of capital markets and financial services are driven to a large extent by the EU law. The latter is organised by specific economic sectors or functions, resulting in a silo prone approach, where public information is ancillary to core measures attaching to each sector addressed, with its own technical specifications and publication channels. For instance, in the capital markets, the EU law drives the repository functions to be organised mainly on the basis of national repositories, i.e. OAMs, and NCAs, whilst only a small part of information is to be made accessible at the level of ESMA. ESMA has a duty to build a number of registers , covering in part information published by entities such as credit ratings, prospectuses or UCITS management entities. These include an estimated 8% of the public reporting obligations of entities. As observed in the mapping of current legislation (annex 21), practices are diverse depending on each legislation as regards the channels to be used for the public reporting obligation, formats, etc. The EU law also drives to a large extent as a result the fact that a significant proportion of the information is published by companies on their own web site rather than through national repositories or NCAs, either because this is how the reporting obligation is framed by the EU law, or because the reporting obligation remains silent as to how that information should be published. 2.2.2Data repositories not interconnected Despite efforts at the EU level to start interconnecting the OAMs via a web portal to be built by ESMA, the “European Electronic Access Point”, this portal is not yet operational. The EEAP aimed to permit central access to the annual financial reports and other information published by issuers of securities in regulated markets. A number of private attempts to develop central access points as an alternative to data aggregators were identified but these do not match all the desired functionalities (including access for free to timely and re-usable information) and scope (complete geographical and thematic information) (annex 22). 2.2.3Machine readable formats for a few datasets Market forces have driven entities to draw up information generally in PDF, which has become the most commonly found format. Depending on how information was embedded (for instance scanned PDFs), documents in PDFs may not always allow for simple data extraction.

Users report that in many instance, information published by entities is in formats that simply do not allow to extract data (images, proprietary formats, scanned pdfs...). This is a problem because if information available online is mainly human readable but not readily usable electronically, processing costs to make data usable electronically can be significant as they generally require human intervention: scanning and recognition software, rekeying, etc. In terms of machine readability, the EU has undertaken to digitise an increasing part of the information to be published with various levels of ambition. Currently the EU law prescribes not more than 5% of the reporting obligations in the financial area to be effectively machine readable. These are mainly the IFRS consolidated financial statements of issuers of securities in regulated markets (ESEF), prospectuses (XML metadata) and a few additional information. Whereas users report that machine readability is the primary issue is relation to formats, there are various degrees and steps in reaching full machine readability (Annex 20). Intermediate steps having to do with machine readability include for instance data portability or data extractability. Nowadays, full machine readability requires in addition data structuring. Stakeholders may have had different views on the level and extent of issues when reporting problems in connection with machine-readability during consultation: focus could be with varying degrees depending on the respondent on standardised formats, data extractability or underlying data structuring. 2.2.4Language and other barriers insufficiently addressed Six EU legislation (out of more than 30 in the area of financial services and capital markets), covering 24% of the entities’ public reporting obligations address the language in which information is drawn up and published, in different ways: ·three legislations consider that the information should be drawn up at least in the official language of the Member State where the information is made publically accessible; ·one legislation considers language from the prism of the native language of consumers; ·five legislations permit information to be drawn up in a language accepted by the national authority other than the national language (in addition to, or alternatively to the national language). Out of these, three legislations specify that this additional language should be one that is “customary in the sphere of international finance” and implement a right for emitters of information to override any other language on that basis. In practice, whilst some efforts are made to make the information available in a language that is understandable by the intended users, the language will vary depending on the EU provisions applicable by type of information (depending on the applicable EU law), but also on Member State’s laws, market practices and private entities’ decisions. Whereas consultation outlined the need for accurate and high quality data, this is largely driven in terms of content – and should remain the prerogative – of sectoral legislation. Nevertheless, consultation outlined problems encountered by stakeholders such as data errors, inconsistent formatting, inefficient data tagging, lack of completeness/accuracy of data, especially in the area of ESG information. These problems drive the perception that there are barriers to use as reported by 67% of respondents to the consultation. These problems are in the scope of this initiative, from the angle of compliance with IT specifications, in other words, outline the general need for digital validation checks on information. Other barriers, include varied or inadequate terms of use and re-use. These are generally not addressed by the EU sectoral or other legislation in the area of financial services and capital markets. Terms of use, if any, are therefore largely left to Member States, access points or private entities to define. As observed on the basis a limited survey, national or specific own terms of use are introduced as regards national repositories. At the EU level, ESMA has also its own terms of use for information accessed from its website. Companies may introduce their own terms of use. The terms of use are varied and sometimes rely on open licenses designed at national level or building on Creative Commons type. In addition they sometimes limit the reuse of information by introducing copyrights, database rights, limits to commercial reuse or specific obligations. The integrity and credibility of the sources were mentioned as important characteristics by stakeholders consulted (respectively 63% and 83%) of information, and underlined as a potential source of problem if not properly addressed by 85% of respondents. Nowadays, the EU legislation in the financial services and capital markets offer limited directions or provisions in this regard. Finally, 79% of stakeholders outlined timeliness as a key characteristic of information. Timeliness should be understood from the perspective of information being made available once a company makes it public, as otherwise the frequency and delays of reporting obligations depends on each sectoral legislation and is not covered by this initiative. In terms of machine readability, the EU has undertaken to digitise an increasing part of the information to be published with various levels of ambition. Currently the EU law prescribes not more than 5% of the reporting obligations in the financial area to be effectively machine readable. These are mainly the IFRS consolidated financial statements of issuers of securities in regulated markets (ESEF), prospectuses (XML metadata) and a few additional information. 2.2.5No prevailing market standards for disclosure formats and expensive channels (data aggregators) Given the leeway offered by the EU law, the market has driven formats towards open source Portable Document Format (PDF) in many cases. However depending on how information was embedded (e.g. PDF based on scanned images), this format may not always allow for simple data extraction and it is generally not suitable as a machine readable format. As seen in consultation activities, stakeholders report as a common practice the use of paid services from data aggregators to access information. This market led solution enables to alleviate the problems identified however come with a price tag for the service and other drawbacks such as own (non-interoperable) formats and standards and digested information. 2.2.6Drivers out of scope Difficulties in comparing information due a lack of semantic interoperability observed among the various sectoral legislation is out of the scope of this initiative. Whereas there is no reason to downplay the importance of this problem in enabling the digital use of information, semantic interoperability has to do with the inner building of the information, the design and content of which has largely to do with the objectives and design of sectoral legislation, including by ways of own definitions and concepts underlying the content. The Commission has undertaken to advance on this front in a separate initiative with the development of a common data dictionary under its supervisory data strategy, to ensure data consistency and standardisation across financial sectors. This dictionary will describe the content and format of all data collected under various reporting frameworks in a structured, comprehensive, consistent and unambiguous manner, using terms anchored in legislation to establish a clear link between collected data items and the relevant legislative requirements. While this initiative will address primarily supervisory reporting, it will also aim to coordinate the data specifications with public disclosures. Therefore it is expected to have ramifications over public reporting.

Nevertheless, the development of a common data dictionary will have little impact on the design of this initiative, in particular its scope and costs. This is because the data dictionary is a longer term initiative, and it aims to describe the reported (and disclosed) information, whereas this initiative focuses on making the disclosed information more accessible and more easily readable by machines. The two initiatives are complementary as, the development of a common dictionary has the potential to aid the interpretation and comparability of disclosed information and hence facilitate its use. 2.3What are the consequences? 2.3.1Users are hit by a lack of integration Fragmentation as regards the information flows on the European markets and financial services drives the costs up for discovering, accessing and processing the information users need. This is also a deterrent to research, and cross border analysis. About half of stakeholders consulted find that costs for retrieving and processing information are generally high. Users, preparer-users and other stakeholders, who reported ‘high” costs generally justified their opinion by the fact that they use data aggregator services for a fee. Retail investors and civil society tend to find this source quite costly (or even unaffordable). The problems identified drive the significant search and processing costs experienced by stakeholders to get information and compare it. The situation is also a hindrance for users to compare information, either directly or indirectly. About half of respondents to our consultation find that costs for retrieving and processing information are high. Costs to acquire data and bring it in a stage where it can be digitally used generally require human intervention: scanning and recognition software, rekeying, etc. Such costs are comprised mainly of staff costs, licensing or access fees, software, translations. As a result, on average respondents find that costs for retrieving and processing information that is mandatorily published in the area of financial services and capital markets are high, either with licenses acquired from data vendors or without such licenses. This is particularly acute as regards sustainability-related data which is currently more difficult and costly to obtain than standardised financial information publicly disclosed by listed entities. For basic use, one respondent estimated that the annual cost of a licence to use a commercial database platform for capital markets is between €7,500 and €17,500. A fund respondent estimated that a mid-sized fund manager can spend anywhere between EUR 250-600k on ESG data while a larger fund manager can spend anywhere between EUR 600k – EUR 1.5mn (fund managers will often use multiple data vendors to enhance the coverage and as part of the analysis and validation). A large insurance company estimated its own costs reached millions of euros. 2.3.2The problems hinder access to ESG information Another consequence is that the increasing demand for ESG information by market participants is not met. A vast majority of respondents to the ESAP targeted consultation underlined their difficulties to easily access and digitally use ESG and other types of information published by entities. This statement has been echoed by members of the Technical Expert Stakeholder Group on SMEs (TESG), as one of their recommendations is to “facilitate the process of data collection”. The European Green Deal aims to place sustainable finance at the heart of the financial system. Introduction of new disclosure obligations, such as those related to EU Taxonomy, SFDR and recently proposed CSRD, will on one hand increase transparency on sustainability impacts and risks, but also further increase demand for access to reliable sustainability, related data. Continued uneasy access to sustainability-related data and barriers to their digital use hinder the ability of investors to reflect sustainability-related risks and impacts in their decisions and hence to effectively contribute to the Green Deal via sustainable investments. This reduces as well the ability of investors, governments and civil society to hold companies accountable for negative environmental, social and human rights impacts, resulting in lower incentive for companies to become more sustainable and resilient. 2.3.3Users are impacted in the same way, although on a different scale Different types of users report that they experience similar problems, however on a different scale. Users are varied (e.g. large professional investors, retail investors, funds, civil society, data aggregators, consumer organisations) with different size, objectives and hence their data consumption needs are also varied. As a result, the impacts of the problems are of different scale and nature for different user types. One aspect that illustrates this is the different scale and frequency of data that stakeholders need to access: while professional investors seek frequent access to large volumes of information, retail investors typically find smaller volumes of information and occasional access sufficient. National and EU public bodies have shared their interest in accessing information notably for statistical, supervisory or other public-interest purposes. Correspondingly, the magnitude of search costs or impairments to decision making due to missing or difficult to use data that different users bear also differs. Data aggregators interviewed or consulted, despite being in the business of disseminating information, report similarly that these issues are an annoyance for them in harvesting raw data for their business, and a driver for loss of productivity. During the workshop with users (Annex 4), there was a strong message that access to information is not optimal. Despite their different backgrounds and different degree to which they are impacted by the observed problems, users generally indicated that their needs could be well addressed in a similar way, either directly or indirectly, by a system that provides easy access to publicly available financial and sustainability-related “raw” information (Annex 4). 2.3.4Problems for entities in smaller capital markets and smaller entities / SMEs The prevailing fragmentation in access to data is one of the long-standing barriers to the integration of financial markets across the EU. By making it difficult and costly for investors to find, analyse and ultimately compare relevant information (including for retail investors and financial advisors to compare financial product information), this situation also presents a barrier to optimal allocation of capital. As such, this problem undermines the functioning of the internal market. On the funding side, the problem is acute for smaller companies and / or companies in smaller capital markets which have generally less visibility due to the situation. For instance, it has been noted that it makes SME research more difficult. As a result, their attractiveness to investors is not optimal, especially from a cross border perspective. Home bias is in the EU a natural barrier to integration for cultural, historical and linguistic reasons. This is observed on the demand side as regards funds flow but also on the demand side as more than 95% of EU companies going public do so on their local exchange. In finance, the fragmented European market affects in particular SMEs, which can in turn hamper their ability to expand beyond their own borders. Due to home bias, SMEs and non-listed entities often have to rely on national markets. This reduces their chances of finding capital/investment opportunities, as investors tend to rely on more developed capital markets in cross border situations. This national or home bias furthermore limits the Union’s economic resilience by hindering geographical and sectoral diversification of funding sources. A survey of the IMF (figure 5) shows the large discrepancies between Member States’ attractiveness for capital, where access to data on unlisted SMEs plays a role. It also shows that data on unlisted SMEs are of high concern in multiple Member States. The International Monetary Fund (IMF) stated that “European finance is still sharply segmented along national lines, with savers and investors depending heavily on national banking systems. Although the landscape is dotted with many different types of investors and intermediaries, their focus is mostly domestic—“home bias” is pervasive. […] This is a problem because it results in an uneven playing field: the financing costs companies pay depend hugely on their country of incorporation, collateral-constrained start-ups find it hard to get any funding at all, and consumption is not shielded from local economic shocks.”

Source: IMF As seen during the examination of barriers to the single market, risk capital continues to be scarce for high-growth SMEs. As echoed by business organisations, the difficulty in accessing funding affects both domestic and non-domestic businesses alike. However, it would affect disproportionately those businesses that are trying to expand in the markets with limited access to capital, compared to already established businesses. Among root causes, insufficient level of available credit information, insufficient legal/financial information about potential business partners in other countries, and the fragmentation of EU capital markets along the national lines were mentioned. Indeed, as an illustration a Netherland Industry paper stated that the “lack of access to finance still constitutes a significant drag on doing business in the euro area, especially for smaller companies. In the wake of the covid crisis, the prospects for SME finance have become bleaker still. The Netherlands stands out negatively in the euro area, with SME finance having shrunk as a percentage of GDP since the 2008-09 financial crisis. [...] A key reason companies, in particular small and innovative ones, have difficulty obtaining funding, is a lack of readily-available corporate data.” 2.3.5Other consequences Fragmentation of capital markets is detrimental to a smooth functioning of the market and drives higher cost of capital, especially for listed companies which in turn makes becoming or staying listed less attractive. The situation is also a hindrance to developing new digital services, such as services around the digital comparison of EU wide complete sets of data for a given sector, which is key for investment decisions. Companies in the rating business (ESG or creditworthiness) report that the lack of digitalisation and easy access are barriers to their ability to develop complete, reliable and forward looking service offers. Overall, the situation undermines the achievement of the CMU objectives, the European Data Strategy, the Digital Finance Strategy and the European Green Deal. 2.4How will the problem evolve? During consultation, some stakeholders contended that the emergence of new technologies such as artificial intelligence (AI) and machine learning (ML) combined for instance with Optical Character Recognition (OCR) could in the future improve the digital use of documents that contain non-structured data in any IT format, with the potential of solving, at least partly, the problem. It is difficult to predict whether such emerging technologies would enable any user to obtain reliable results at a reasonable cost in the foreseeable future, absent any intervention. There are nevertheless reasons to believe that this hypothetical scenario will not solve the problem. Building solutions based on artificial intelligence or machine learning would require that vast amounts of available data are readily available, accessible and usable. Without an intervention, information would continue to be collected from thousand different sources including companies‘ websites, local databases or storages – possibly however easier to search with search engines but still subject to various terms of use, various user interface etc. preventing easy access and re-use. For this purpose, the Commission aims precisely to build common data spaces, recognising that easier access and usability are a premise to the emergence of such new technologies. In addition, the problems noted on harmonization in several dimension like document metadata, data structuring and semantic interoperability would impinge negatively on the quality of the output information that would be based on a fully automated interpretation of data. Addressing these inefficiencies from the market angle would require huge investments in not only technologies but also human resources and gathering of data. As a result the total cost of investment would be high, raising doubts whether this would result economically more efficient in the medium term than services offered by data aggregators. Given the persistence of the problem and absent new impetus, it is unlikely that EU markets and financial services would start integrating naturally, in a coordinated move, overcoming, for instance, the home bias observed on information flows. A number of ongoing initiatives at regulatory level may nevertheless modify slightly the landscape. There are medium to longer terms plans for the ESAs (ESMA, EIOPA, EBA) to provide a better and/or centralised access and more usable digital formats of certain information published by entities in their remit, such as PEPP-KIDs, insurance companies’ solvency and financial condition report, banks’ transparency ‘pillar 3’ reports, credit ratings. Whereas these initiatives could address partly the problem, this would remain confined to a few reporting obligations, based on each ESA’s agenda, specifications and access point. Company Law mandates that by August 2023, all documents and information submitted as part of the formation of a company, the registration of a branch, or a filing by a company or a branch, is stored by the registers in a machine-readable and searchable format or as structured data. The impact of this initiative would remain limited for the objectives of ESAP, given the very limited overlap of information covered between Company law and this initiative, whilst other problems noted are not addressed. The Open Data Directive (EU) 2019/1024 (ODD) – to be transposed by 17 July 2021 – is a prominent initiative. An implementing Regulation on High Value Datasets will ensure an open data approach at national level as regards information delivered by certain national bodies (where public) offering access to on companies and company ownership, that is an estimated three reporting obligations within the scope of this intervention. This policy builds on national systems, hence access would remain scattered on this basis. In terms of format, the EU adopted in 2019 the European Single Electronic Format which implements a machine readable format (XHTML combined with inline XBRL) of the consolidated Annual Financial Reports in IFRS of issuers of securities on regulated markets, that is an estimated 3 500 companies. Same information of around 1 000 additional issuers in the EU regulated markets would become data extractable (XHTML) by the same token. The ESEF is an important stepping stone – not yet fully implemented in the markets – that will deliver on the objective of increased digital use of information, however for a limited number of reporting obligations and market participants. As regards ESG information, the European Commission adopted on 21 April 2021 a legal proposal as regards corporate sustainable reporting which will cater for the need of structured and machine readable corporate sustainability reporting, addressing one of the key concerns on ESG information raised during consultations. This Commission proposal for sustainability reporting concerns 37 500 listed (regardless of size) and large non-listed entities publishing corporate sustainability reports. If adopted by the Union, this would represent undeniable progress but would not solve the problem globally. On the access side, the EU envisaged a European Electronic Access Point (EEAP) as a web portal gathering in a single access point information collected by the OAMs. This portal has not been developed and the EEAP has now lost relevance considering the scale of the problem examined: it would have a rather limited coverage (6% of the reporting obligations) and access through web portal planned for the EEAP is no longer future-proof considering technological developments. Furthermore, the EEAP does not address problems such as terms of use, quality, integrity of information, etc. For these reasons, the EEAP cannot solve the problem in an extensive way. 3Why should the EU act? There is a widespread belief that capital markets remain underdeveloped in Europe”. The European Parliament has long been stressing the need for deepening European capital markets in order to ensure access to financing from sources other than banks and to address barriers to cross border investments. Adding to this, the shift towards sustainable investment and digital finance drive this initiative where information has a key role to play in the wider dimension of financial services area. Data should be more easily accessible and ready for digital use for investors, including on a cross border basis. An EU intervention to reduce fragmentation, by ways of e.g. a single access point, would remove one of the main obstacles that discourage investors – especially from other Member States or third countries – from accessing smaller national capital markets or from providing funding to SMEs.

3.1Legal basis The Treaty on the Functioning of the European Union (TFEU) confers upon the European institutions the competence to lay down appropriate provisions that have as their object the establishment and functioning of the internal market (Article 114 TFEU). The aim and content of the legal acts to be amended as a result of this intervention could also include acts based on Articles 50(g) on the coordination of Member States requirement for EU companies with a view to making such safeguards equivalent throughout the Union in relation to the right of establishment, and/or Article 53(1) TFEU on the taking-up and pursuing of activities by self-employed persons, which is used to regulate financial intermediaries, their investment services and activities. 3.2Subsidiarity: Necessity of EU action The objectives of this initiative cannot be sufficiently achieved by the Member States individually. The Member States have currently certain leeway for the design of rules on mechanisms and formats of corporate reporting obligations set out by the EU legislation, with heavy reliance on national systems. The resulting geographical and thematic fragmentation of disclosure mechanisms and formats is pervasive in the Union and increases costs for users of corporate information. Further individual actions by Member States would not reduce this fragmentation unless they move in the same direction to build a single access point and address a number of barriers, which is unlikely without a coordinated approach. 3.3Subsidiarity: Added value of EU action Enabling better access to information at the EU level, considering the scale and the effects of such a project, is an objective that can be better achieved at Union level. In addition, the design of suitable formats, terms of use, language specifications, etc. necessitates a certain degree of harmonisation at the EU level so as to enable interoperability and cross border access and use. There is widespread support for such initiative from governments, regulators, regional or national market participants, users, civil society, etc. Therefore, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, this initiative should not go beyond what is necessary in order to develop and operate the ESAP. This intervention will not add to, or modify existing reporting obligations in terms of content, as this is the prerogative of sectoral legislation. In order to minimise the burden on entities and national authorities, it would be appropriate for the ESAP to build as much as possible on the existing data reporting channels and infrastructure. Nevertheless, the EU intervention will add value by streamlining in an efficient way the delivery of usable information to users on a cross border basis which would not be possible through different national access points. 4Objectives: What is to be achieved? Source: European Commission 4.1General objectives In response to the problems identified, the overall objective of the European Single Access Point is to contribute to integrating the European capital markets and the financial services (including across borders within the Union) and to foster a more efficient allocation of capital across the EU. This would strengthen the resilience of the EU’s economy through broader private risk sharing and would thus contribute to the objectives of the Capital Markets Union and the Digital Finance Strategy. In addition, the intervention supports better access to sustainability-related data. Efficient allocation of capital encompasses the re-orientation of investments towards more sustainable activities, thus contributing to making Europe climate neutral by 2050 in the frame of the Commission’s Green Deal . The intervention should have regard primarily to users’ needs, especially investors, financial analysts and market intermediaries such as asset managers, advisers or data aggregators. Other types of users may see an interest in obtaining the information, for instance civil society, public authorities, law-makers or economists and this also contributes to an efficient functioning of the internal market. As mentioned in a paper studying EU markets, “consolidating corporate information into a ‘EuroEdgar’ will help” [integrating the markets]. “Particular focus could be placed in on removing the many hidden (and not so hidden) national barriers for investors, intermediaries and exchanges”. Barriers to access and use of information published by entities in the financial services and capital markets area will therefore have to be examined, as well as the numerous existing channels and lack of interconnection of existing national or EU repositories. The intervention would not create any new reporting obligation in terms of content, but build on existing requirements. It would address information that is relevant in the financial services, capital markets and sustainable finance areas, pursuant to the overall EU strategy for data in these areas. In addition, the intervention’s objective should not go beyond addressing “raw” information published by entities as requested by the EU law. 4.2Specific objectives Two major specific objectives are identified in relation to public reporting obligations would contribute to the general objective set out above, as seen in Table 1. Problem drivers Specific objectives linked to them Reporting requirements with different channels as regards information to be published. Data repositories (channelling a small portion of information) are not interconnected Expensive channels (data aggregators) Increasing the flows (i.e. circulation) of information / Seamless and integrated access to data published by companies Language and other barriers insufficiently addressed. Machine readable formats specified for only for a few datasets. No prevailing market standard for disclosure format(s). Increasing digital use (and re-use) of data Source: European Commission 4.2.1Increasing the flows (i.e. circulation) of information / Seamless and integrated access to data published by entities

The first specific objective is to enable a seamless and integrated access to data published by entities subject to disclosure obligations in the area of financial services and capital markets, including sustainability related data, whilst avoiding disproportionate administrative costs for entities, in order to increase the circulation of information within the Union. Increasing the circulation of information published in relation to financial services is necessary both within Member States and cross-border to support, at least in part, the general objectives of integration. The intervention should remove barriers to access, and improve discovery. This should be addressed keeping in mind the need to keep costs to a minimum and alleviate other additional constraints, such as multiple filings . The intervention should have regard to ongoing actions facilitating access to data at national level and at EU level. 4.2.2Increasing digital use (and re-use) of data The second specific objective is to increase the digital use (and re-use) of data, addressing barriers or hurdles currently in place. From the digital use angle, the ESAP should seek to standardise the way in which information is drawn up in order to make it easier digitally use, analyse and possibly compare, thus reducing processing costs for users. The intervention should remove barriers such as unnecessary restrictions to re-use, linguistic barriers, etc. This should be consistent with actions which will facilitate use of data at national level and at EU level. A minimum viable product should be implemented by end 2024 . The intervention should also ensure that these measures enable the EU framework to remain dynamic in order to be able to accommodate future technological progress and remain evolutionary. 5What are the available policy options? 5.1What is the baseline from which options are assessed? Considering how the problem will evolve, the main characteristics of the baseline scenario (i.e. no additional EU action) are that overall there will continue to be limited pan EU access to information in the financial services area and pervasive barriers to digital use and re-use of such information. At the same time, users’ needs tend to evolve. The existing pan EU access to information that is relevant for this initiative is currently and essentially ESMA’s registers (and somehow the EBA). These cover 17 reporting obligations, that is 8% of the total considered for this initiative. As part of the baseline, other existing pan EU interconnection systems or databases are considered. In this regard, the Business Registers Interconnection System (BRIS) is identified as the pan EU system that presents, at first sight, relevance for the baseline. Other European Supervisory Authorities (ESAs), such as the European Banking Authority and the European Insurance and Occupational Pensions Authority (EIOPA) offer generally limited access to their constituent’s information. Business registers under EU law are in charge of the disclosure of limited liability company information to ensure publicity of such information towards third parties. To ensure disclosure and publicity at EU level, the Company Law Directive (EU) 2017/1132 regulates the BRIS, which interconnects the EU business registers of the Member States, Norway and Liechtenstein). As regards information in the financial services area, OAMs and NCA collect only a small portion of the available information. Without a proper EU dissemination system for information stored by OAMs and NCA, the information they collect remains not easily available to end users. This is also valid for companies willing to disclose voluntarily information relevant for financial services. Considering whether BRIS could play a role in the baseline scenario, it is important to recall that BRIS performs two main functionalities: a) it allows citizens, entrepreneurs and companies to obtain data on more than 20 million EU limited companies and branches through the “Find a Company” functionality of the European e-Justice Portal and b) allows business registers to exchange information on e.g. foreign branches and cross-border mergers of companies. There are however a number of factors that prevent retaining the BRIS in the baseline. The main reasons are this initiative and BRIS have different intended users, consuming different information in a different way. In addition, there are different collection bodies with limited overlap on the data collected. In particular: ·This initiative focuses mainly on entity and product related information that is relevant mainly for investors, with the purpose of serving market needs. By contrast, BRIS covers the company information to be disclosed under EU Company Law to the general public (such as citizens, professionals and companies) in order to provide legal certainty of such information. ·Whereas users in the financial markets may consider business registers as a source of information, the information of interest, for instance the annual financial reports of listed companies, is also found in the OAMs for market participants. The vast majority of information otherwise offered in the BRIS, based on the Company Law Directive, would have no immediate interest to investors for the purpose of this initiative. ·Time wise, the BRIS delivery of information about financial statements of listed companies differs from OAMs. While a maximum of 12 months is allowed by the EU law for filing financial statements with a business register, the delay is reduced to 4 month for an issuer (i.e. listed company) to file this information with an OAM. ·The overlap on data collected by BRIS and ESAP would be limited and focused on the accounting documents required from companies issuing securities on regulated markets by the Company Law, the Accounting Directive and the Transparency Directive, namely: financial statements, audit reports, management reports including corporate sustainable reporting, country-by-country reporting by extractive industries, i.e. a few reporting obligations. This overlap concerns currently up to around 12 000 companies depending on the type of document, and in the future possibly up to 49 139 companies, should the Commission proposal of 21 April 2021 for a corporate sustainability reporting Directive be endorsed by the co-legislators. Therefore, considering the above, BRIS is not relevant in the baseline scenario. With regards to digital use, some progress is expected under the baseline scenario thanks to the entry into application of the European Single Electronic Format (ESEF), ensuring that a good portion of issuers’ annual financial reports (i.e. around 3,500 entities issuers of securities on the EU regulated marketsthat prepare consolidated financial statements in IFRS) become readily machine-readable from fiscal year 2021. And this is only for one reporting obligation. Therefore despite significant progress over the last years, the widespread digital use of information would remain hampered by the situation. As a result, in the baseline scenario, discovery and processing costs would remain significant for users. Reduced flow and digital use of information represent a barrier to integrated financial services and capital markets at the Union level, leading to losses of funding or investment opportunities, sub-optimal allocation and higher costs of capital, hampering the full potential of the internal market in the financial sector. In parallel, users’ needs tend to evolve. The main message during consultation is the emerging need for access to ESG information. This information is increasingly demanded, notably by investors, fund managers, intermediates, advisors, as well as civil society and public authorities due to recent regulatory evolutions in the Union, but also by the public at large for various purposes out of the general fight against climate change. This bottleneck may become a significant barrier to achieving the sustainable finance angle of the Green Deal.

From the market side, extant registers (other than data aggregators) are not satisfactory solutions as none can fully solve all the problems identified (Annex 12). One can expect that technologies relevant to this problem will continue to emerge but there is no clear indication that they would resolve a substantial part of the problem in a timely manner. 5.2Description of the policy options The policy options focus on how to establish a single access point in order to achieve the specific policy objectives outlined in section 4, rather than considering a single access point as one possibility among others to tackle the problems. This is because a vast majority could support an EU single access point as a way of improving access, even though some recognised that there could be other avenues to improve access on the basis of numerous sources of information or other ways – however providing no clear alternative efficient direction. There is a strong support among all stakeholders for a single access point at the EU level as the best solution to address the problems. Asked during the public consultation on the Renewed sustainable finance strategy (April-July 2020) if EU policy action is needed to help maximise the potential of digital tools for integrating sustainability into the financial sector, most respondents indicated that digital tools have a role to play to ensure accessible, reliable data (e.g. centralized and open-source EU wide ESG database, free of charge). Only some suggested other ways such as promote innovation, create new instruments (e.g. through research grants and award programs). There was a strong support during workshops (Annex 4) for a single access point (confirmed by survey on the spot, including for users). A few users believed that having access to the information in a centralized manner was not key – however not providing a clear description what other solutions might consist of. A group of Member State working on the CMU (Next CMU) reported their clear support for a central access point as a way to facilitate cross-border investments and access to the EU pool of liquidity . Both the Council and the European Parliament supported the CMU Action plan as regards the “European single access point” The Parliament calls in particular with a view to potential efficiency gains, to consider gradually granting ESMA direct supervisory powers as well as greater product intervention powers in this respect. The European economy has historically suffered from a lack of diversified sources of funding for companies, hence the need to tackle the barriers to the flow of capital, to remove regulatory and non-regulatory barriers to the free movement of capital across borders. The final report of the High Level Forum (HLF) on Capital Markets Union, published in June 2020, has highlighted the need to set-up a European Single Access Point (ESAP), which will aim at improving access to entities’ financial and sustainability-related information. Indeed, the purpose of the members of the HLF on CMU was to reflect on a new vision for the Europe’s capital markets. Hence, members have stressed that the EU suffered from a market competition disadvantage and insufficient EU market-based financing compared to e.g. the United-States notably due to the lack of easy access, reliable, understandable and comparable public information in the financial services and capital markets area. To tackle these issues, members of the HLF saw merit in mirroring in the EU solutions in place in comparable markets of third countries, that is a single access point to information however with a broader scope to also capture sustainability-related and other information. The final report of the HLF on CMU stated that the ESAP would be a “game-changer for investors, companies and financial intermediaries.” Hence, this initiative has been flagged as the first action of the Capital Markets Union (CMU) Action Plan, published in September 2020. A single access point is consistent with the European strategy for data and on digital finance which both herald common data spaces in the financial sector for enhanced access to data and data sharing. This section presents the different policy options for the following five main dimensions that are crucial to ensure relevant objectives are met: (1) scope of the information accessible via ESAP; (2) format of the information accessible via ESAP; (3) collection of the information accessible via ESAP and interconnection of existing collection points; (4) open data, and (5) governance. These are considered to be the core aspects in terms of addressing the identified problems and they are also the principal determinants of costs. An overview of which policy options can serve the objectives is provided in Table 2. Table 3 provides a summary of the options presented in this section. The following aspects are considered to be more technical and less crucial for the achievement of the ESAP specific objectives: (i) ESAP functionalities; (ii) timeliness of information accessibility via the ESAP; (iii) ensuring data integrity and credibility of the source; (iv) ensuring data quality; (v) addressing language barriers; (vi) removal of certain barriers to access; (vii) file only once principle; (viii) grand fathering; (ix) retention period; (x) principles about “voluntary information” which will be accessible via the ESAP; These aspects are important but do not represent a key dimension in addressing the identified problems and determining costs, and are therefore presented in Annex 14. Annex 15 specifies policy options (both for the main dimensions and for the technical/non-core aspects) that were considered but discarded at an early stage, explaining the reasons for such choice. Key dimensions Scope of the information accessible via ESAP Format of the information accessible via ESAP Collection of the information and interconnection of existing collection points Open data Governance Specific objectives Seamless and integrated access to data published by entities / increased circulation of information X N/A X X X Increased digital use (and re-use) of information N/A X X X N/A Source: European Commission Scope of the information Format of the information Collection of the information and interconnection of existing collection points Open data Governance Option 1 Core information:

Only entity-related info mandatorily published by listed entities. No product-related nor other mandatory info. No voluntary info accepted. Option 2 Fair coverage: All entity-related info published by listed entities + certain entity-related info published by non-listed entities + certain product-related info published. No other mandatory info. Certain voluntary info accepted. Option 3 Widest possible scope: All info published by entities in the scope of EU financial markets legislation to be included progressively. All relevant voluntary info accepted. Option 1 Low intensity: All existing formats are accepted + common minimum metadata for all info disclosed + specific metadata for non-machine readable formats. Option 2 Somehow prescriptive: Certain info to be in an open and widely used data extractable format (see annex 20). For the remaining info, all existing formats accepted + specific metadata for non-machine readable formats. Common minimum metadata for all types of information / documents. Option 3 Very prescriptive: Only open and widely used data extractable formats are accepted + common minimum metadata for all info. Option 1 Entities submit the information directly to the OAMs or to other collection points that send it to the OAMs. Only OAMs are interconnected with the ESAP. Option 2 Entities submit the information to a collection point that is interconnected with the ESAP at the same time as they make the information public. OAMs, ESAs (where needed), NCAs (where needed) and other collection points are interconnected with the ESAP Option 3 Entities submit the information/documents only to the OAMs, which send it to the national/EU supervisory authorities. Only the OAMs are interconnected with ESAP. Option 1 A single open licence Option 2 Various similar open licenses Option 3 licensing system based on collection points Option 1 Private entities supervised by ESMA Option 2 A concession overseen by the Commission Option 3 ESMA in charge 5.2.1Options for the scope of the information accessible via ESAP This section presents the policy options for the information that would be accessible via ESAP. The scope (and related options) is driven by the objectives. This confines the scope to be examined to information that is relevant for use in the financial services and capital markets area, as well as in relation to sustainability. On the basis of a wide encompassing mapping of EU law, the Commission services identified the Directives and Regulations potentially serving this purpose. During the mapping exercise it appeared that certain market participants had reporting obligations that confine to being a register, in relation to transaction based information, and not always for the purpose of making that information primarily available to the public. This includes the central securities depositories – CSD, the Central clearing counterparty – CCP, market operators, Data Reporting Services Providers, Consolidated Tape Providers – CTP, Approved Publication Arrangements – APA, Systemic Internalisers. By nature, this information does not respond to the objectives of this initiative. For instance, some requirements may imply an obligation for timely disclosure (15 minutes after the event), others require specific access means with the ability to address massive amounts of data with high frequency. For that matter, these transaction-related reporting obligations should remain out of the scope of the ESAP. Nevertheless, any low frequency entity-related or product-related reporting obligations impinging on these bodies, such as governance reports, would represent relevant information for the ESAP. For the purpose of this impact assessment, the information that EU/third country entities have to publish under EU financial markets law (i.e. the mandatory information) can be divided into the following subcategories: a) entity-related information; b) product-related information; c) other information. Some reporting obligations may pertain to several categories.

For the purpose of this impact assessment, “voluntary information” means information relevant for financial markets that EU/third-country entities in the scope of the EU financial markets law publish on a voluntary basis or in any case beyond EU requirements. Third countries entities whose securities are traded on an EU regulated market will have to mandatorily make available via the ESAP any information required by EU law. 5.2.1.1Option 1 – Only entity-related information published by listed entities under EU law. No voluntary information. In this option focusing on essential core information demanded by investors, the ESAP would provide access only on entity-related information (financial and sustainability-related) that has to be published under EU law by issuers with securities admitted to trading on the EU regulated markets (i.e. all the information to be disclosed under the Transparency Directive representing 8 reporting obligations). This option includes listed entities’ entity-related sustainability-related information. No other mandatory information, such as financial and sustainability information by large non-listed entities, would be accessible via the ESAP. No information published by EU/third-country entities in the scope of EU financial markets law on a voluntary basis or beyond the specific EU requirements would be accessible via the ESAP. 5.2.1.2Option 2 – All entity-related information published by listed entities + key entity-related information published by non-listed entities + key product-related information. Certain voluntary information. In addition to the information disclosed under Option 1, the ESAP would provide access to key entity-related information required under the EU law the access to which is overall highly supported by users (i.e. prospectuses/URD, Corporate sustainable reporting by non-listed entities, shareholders’ rights reports, takeover bids, audit firms’ reports, market abuse - representing altogether around 53 reporting obligations), as well as key product-related information published by entities (i.e. essentially in laws pertaining to sustainable finance and on indices used as benchmarks to measure the performance of investment funds representing 5 reporting obligations). Adding 21 more information that is related to both entity and product the option would address altogether around 79 reporting obligations. The ESAP would enable EU/third-country entities in the scope of EU financial markets law to make similar information accessible on a voluntary basis via the ESAP. 5.2.1.3Option 3 – All information published by entities in the scope of EU financial markets legislation. All relevant voluntary information The ESAP would progressively provide access to all entity, product and other information that has to be published by any entity under the EU financial markets legislation (see the list of relevant EU legal acts in Annex 9), representing around 200 reporting obligations. The ESAP would (accept and) provide access to all similar information published by EU/third-country entities in the scope of EU financial markets law on a voluntary basis or in any case beyond the EU specific requirements. 5.2.2Options for the format of the information mandatorily accessible via ESAP This section presents the policy options for the format of the information accessible via ESAP. The information that respondents to our targeted consultation most commonly preferred to be made machine-readable were financial statements (86%), half-year financial reports of listed entities (78%), sustainability-related information (73%), management reports (68%) and audit reports (58%), representing altogether 4 reporting obligations. In addition, there was some interest (>40%) in ensuring the machine readability of the information on the number of voting rights in entities, reports on payments to governments (country-by-country reporting), remuneration policies, prospectuses, solvency and financial condition reports of insurance entities, notifications of acquisition or disposal of major holdings, and key information documents, that is another 6 reporting obligations. For the purposes of this impact assessment, “data extractable format” is defined (Annex 20) as a portable data format that allows computers at least to identify and extract string of characters or data but not necessarily to recognise its nature or compute it straight away electronically. Formats such as PDF can be considered as data extractable if the file contains the characters, i.e. this is not a scanned PDF. A subset of these, “machine-readable formats”, are meant to be a portable data extractible format that – in addition – allows computers to identify, extract and compute straight away electronically the data. For instance, the ESEF format for annual financial reports of listed entities in XHTML in combination with the XBRL mark-up language, i.e. a specific coding technique with “tags” to define elements within a document, allows the presentation of information in a way that both machines and humans can search, read and analyse more easily. Making information machine readable on a systematic basis may be envisaged as an option. In such a setting, the information published by entities would have to be mandatorily drawn-up and submitted in one (or a few) predetermined specific single machine-readable format(s) in order to be accepted by the ESAP. This option is however discarded at an early stage for the following reasons: I)Machine readability depends to a great extent on the preliminary existence of structured data on the basis of, for instance, layouts, taxonomies, templates, forms associated with certain information, and a format. For instance, a template + CSV, or a taxonomies standard + XHTML/XBRL allow for machine readability because of the combination of a data structure and of a format. If the template or taxonomies are missing the information will not be truly machine readable even if a machine readable format is adopted, because the machine will not recognise the nature of information it is dealing with. Data structuring is therefore a prerogative of the sectoral legislation, having to do with its inherent objectives, which is beyond the objectives of the ESAP initiative addressing the accessibility and digital use of information. II)The majority of respondents to the fitness check consultation did not support extending electronic data structuring to all (including non-listed) entities’ financial statements in the EU, even less so to management reports and other reporting, as this would be a non-proportionate measure leading to unnecessary standardisation and compliance costs; III)Based on our consultation activities, most stakeholders (except retail investors and data aggregators) could cope with different formats for different types of information . They did not necessarily support a single format and could live with different formats. In fact, with tools such as viewers, readers, software etc., ensuring easy and actual machine readability, many users believed that this could be sufficient to ensure digital use including comparability and analysis of information; IV)As machine readable formats come with their own characteristics, constraints and benefits, a tailor-made approach is necessary to assess which format, if any, is the most appropriate for a given information depending on the content, perceived importance or needs of the users for each reported information, as well as costs and benefits. Whereas the ESEF was widely supported by many types of users during consultation, there are other valid formats to ensure machine readability, as seen during consultation (CSV, XML, XBRL...). Imposing the same machine readable format for all information would also prove disproportionate if some semantic interoperability and data searchability is otherwise ensured and commensurate to users’ needs, such as e.g. in the prospectus domain. An analysis has to be conducted at the level of each sectoral legislation (rather than on a central basis) to ensure proportional approach. Against this backdrop, the option of a “one size fits all” single machine-readable format for all the information accessible via ESAP would be disproportionately burdensome and/or inappropriate. In particular, having a “one size fits all” approach would require substantial changes in most of the existing EU financial markets legislation and create additional administrative burden and unnecessary costs for entities and collection points. Nevertheless, aiming for machine readability is key to reach the objective of increased digital use and re-use of data (consultation). Hence as an overarching principle for all the options examined below, it is considered that the intervention will confer powers on the Commission to adopt machine readable formats by ways of level 2 measures (secondary law such as Commission Decision) in each relevant sectoral legislation concerned. This would allow to examine the case for machine readability on a wide scale, yet possibly on a case by case basis, not pre-empting any solution or having any impacts at this stage. The following options were identified as regards formats:

5.2.2.1Option 1 – All existing formats are accepted + common minimum metadata for all information disclosed + specific metadata for non-machine readable formats The ESAP would accept information/documents prepared in all the existing formats (regardless of whether they are open and widely used data extractable formats). This would effectively mean that most information available through ESAP would not be data extractable or machine readable. The ESAP would specify a common minimum set of metadata for all the information to be disclosed (including a legal entity identifier). In addition, the Commission would be provided with delegated powers to define via delegated acts specific metadata for each type of document where the existing required format is not machine-readable. 5.2.2.2Option 2 – Certain information/documents to be in an open and widely used data extractable format. For the remaining information/documents, all existing formats accepted + specific metadata for non-machine readable formats. Common minimum metadata for all types of information/documents. The ESAP would specify a list of key information/documents that would have to be drawn-up in an open and widely used data extractable format. The Commission would have delegated powers to specify a machine readable format. For the information/documents not on this list, the ESAP would accept all the existing formats (regardless of whether they are open and widely used data extractable formats), and would provide the Commission with delegated powers to define via delegated acts specific metadata for each type of document where the existing required format is not machine-readable. A common minimum set of metadata (including a lei) would be specified for all kinds of information/documents. 5.2.2.3Option 3 – Only open and widely used data extractable formats are accepted + common minimum metadata for all information/documents The ESAP would accept only documents prepared in an open and widely used data extractable format. The ESAP would specify a common minimum set of metadata for all the information to be disclosed (including a legal entity identifier). 5.2.3Options for the collection of the information accessible via ESAP and the interconnection of the existing collection points This section presents the policy options for the collection of the information accessible via ESAP and the interconnection of the existing collection points (OAMs, NCAs, and ESAs). 5.2.3.1Option 1 – Entities submit the information directly to the OAMs or to other collection points that send it to the OAMs. Only OAMs are interconnected with the ESAP. Entities would keep submitting the information to the existing national/EU collection points specified under EU law and would keep publishing the information via the existing publication channels. The existing national/EU collection points other than the OAMs would subsequently submit the information to the OAMs. In the absence of a collection point specified under EU law, the entities would submit the information (including voluntary information) directly to the OAMs. Only the OAMs are interconnected with the ESAP. 5.2.3.2 Option 2 - Entities submit the information to a collection point that is interconnected with the ESAP at the same time as they make the information public. OAMs, ESAs (where needed), NCAs (where needed) and other collection points are interconnected with the ESAP. Entities would keep submitting the information to the existing national/EU collection points specified under EU law and would keep publishing the information via the existing publication channels. OAMs, NCAs (where entities submit information to the NCA) and ESAs (where entities file information directly to the ESAs) are interconnected with the ESAP. In the absence of a collection point specified under EU law, the entities would submit the information (including voluntary information) directly to a collection point interconnected with the ESAP at the same time as they make such information public. 5.2.3.3 Option 3 - Entities submit the information/documents only to the OAMs, which send it to the national/EU supervisory authorities. Only the OAMs are interconnected with ESAP. Entities submit the information (including voluntary information) only to the OAMs. The national/EU supervisory authorities do not collect information directly anymore but the information reaches them via the OAMs. Only the OAMs are interconnected with the ESAP. 5.2.4Options for open data The ESAP will contain information that is of high value for users in the financial services and capital markets area. Many end users will re-use information in a way or another, for personal consumption or commercial purposes. Determining rights on data use and re-use is necessary to ensure uniform application and user rights. This is key to enable legally sound use and re-use on a pan-Union basis. The ESAP should aim to ensure fair, proportionate and non-discriminatory conditions for the re-use of such information. The terms of re-use should also have regards to the public interest, hence allow for commercial re-use. Conditions for re-use laid down in the Open Data Directive could be used as a benchmark. In particular, there should be no obstacle to re-use for commercial purposes (including value added services, new products, or use to package products). In line with the Open Data Directive, information shall be available free of charge (in principle there should be no access fees), the re-use of such information shall be free of charge and not limited by database rights. According to anecdotal evidence, providing data free of charge could increase the overall number of users accessing the ESAP by a factor of 100, therefore increasing visibility of the entities whose information is accessible. The Open Data Directive develops minimum harmonisation of national rules and practices on the re-use of public sector documents and data. National and EU public bodies, private registers (OAMs) often impose specific terms of use. These may include restrictions stemming from copyright on the content or database (sui generis) rights. Certain terms of use require a specific agreement between the body and the end user (Annex 19). Certain information, such as Annual financial reports of issuers of securities, is in the scope of the implementing act about High Value Datasets of the Open Data Directive.

Against this backdrop, three options are envisaged as regards open data: 5.2.4.1Option 1 – A single open licence (i.e. no impediment to re-use data) All datasets retrieved from ESAP are subject to a single license adopted by the EU that allows users to re-use data without any impediments, for instance the Creative Commons license CC BY. Collection points must apply the same single open licence on the data that they make available on the ESAP. 5.2.4.2Option 2 – Equivalent open licenses Each collection point determines the license applying to the data within the terms equivalent to those of a reference licence determined at EU level (e.g. a commonly used open license such as CC BY allowing commercial re-use, creation and distribution of derivative works). The Commission has delegated powers to determine the terms and which licenses can be considered equivalent. Datasets retrieved from the ESAP are subject to different (but equivalent) terms of use. 5.2.4.3Option 3 – Licenses chosen by each collection point Each collection point determines the license applying to each piece of information, assuming that such license is in conformity with the Open Data Directive. Datasets retrieved from the ESAP are therefore subject to different terms of use. 5.2.5Options for the governance Governance is an important dimension attracting the interest of stakeholders and with potentially significant budgetary implications. Nevertheless, the choice of the governance model would have no significantly different impacts on the collection points, preparers and users and no noticeable economic, environmental, social and fundamental rights impacts. The governing body’s tasks would include developing the infrastructure of the ESAP, managing technical solutions, managing access rights within the legislative boundaries, ensuring high quality of service delivery, possibly managing fee based model (price list, retrocessions, billing), monitoring, ensuring adequate consideration of user or other stakeholders’ feedback, ensuring budgetary compliance, etc. At this stage, an integrated approach on the basis of the BRIS is discarded upfront. As mentioned earlier, this initiative focuses mainly on entity and product related information that is relevant mainly for investors, with a view to serving the financial services’ and markets’ objectives. By contrast, BRIS covers the information that are mandatory to be disclosed by companies under EU Company Law, in order to provide the general public (such as citizens, professionals and companies) legal certainty of such information. BRIS also provides for the exchange of certain data between business registers to ensure i.e. they have up-to-date files on limited liability companies with cross-border aspects. Hence BRIS has a governance and scope that would not serve the purpose of this initiative. Using BRIS to enable access to market information would entail tangible impact on the governance and infrastructure of BRIS to a point where this could alter the original intended legal functions. In terms of infrastructure and costs, the different characteristics along with some key functionalities required for ESAP suggest the following development needs for the BRIS system in order for ESAP to be built on top of the same infrastructure: modify the BRIS database structure to add a broad set of new metadata, developing the BRIS user interface to make use of new structural data or AI based solutions, developing support for new global identifiers (e.g. for products), enable a whole new set of communication with new reporting entities (e.g. OAMs), making use of the added metadata to facilitate search for entities and data, developing application programming interfaces, implement new translation systems, developing functionalities like allowing subscription by users to a certain data set. Whereas the costs of developing such features on BRIS have not been assessed, there is no reason to believe that these would be significantly lower than costs estimated for an alternative infrastructure built from scratch, as the BRIS infrastructure in this setting would need to be thoroughly modified. Furthermore, collection points are clearly distinct at Member States level. All but one (Germany) have chosen to rely on specific national repositories for the markets (OAMs) distinct from the business registers. Due to these distinct scope, objectives and orientations and intended characteristics of the two systems, and as mentioned in the CMU Action Plan, the Commission services consider therefore that the ESAP should be built separately from the BRIS. As said in the CMU Action Plan, the ESAP should be complementary to BRIS, without altering its function. When asked whether specific categories of stakeholders should be involved in the governance of ESAP, 85% of the respondents to the consultation supported involvement of EU authorities, including the ESAs, the Commission, individually or in a form of a committee. Around half of the respondents supported that the governance should in addition involve a wider range of stakeholders such as issuers (51%), investors (46%), and NCAs (46%). Against this backdrop, three options with high potential for effectiveness were identified. 5.2.5.1Option 1 – Private entities supervised by ESMA In this option, private companies established in the EU would volunteer to be registered as “an ESAP” with ESMA, and would be supervised by ESMA. Specifications for the registration would be developed, and provide at least for the obligation for each private ESAP to cover the full intended scope of information, both geographically and thematically, as well as comply with full intended specifications (including free access, licensing terms, etc.). ESMA would enforce EU rules on the ESAP (i.e. scope, functionalities...) These private ESAPs would have the obligation to provide access for free to information but would have a right to charge fees on users in need of premium services, such as obtaining high volumes based on frequent queries. Collection points would have the obligation to provide free and unencumbered access to the information they collect, possibly via APIs, to each ESAP. 5.2.5.2Option 2 – A concession overseen by the Commission In this option, the ESAP is operated by a private body based on a contractual relationship (concession) for a delegation of service. The service is procured by the Commission.

The contractor has the obligation to provide access for free to information but has a right to charge fees on users in need of premium services, such as obtaining high volumes based on frequent queries. The Commission and the contractor are advised by a permanent ad hoc expert group comprised of ESAs, OAMs, NCAs and other relevant public bodies, private representative stakeholders including users, preparers, and other stakeholders. 5.2.5.3Option 3 – ESMA in charge In this option, ESMA has, by legislation or other means, the mandate to govern the ESAP (including to set up the access point up and operate it). ESMA has the obligation to provide access for free to informat