1 How to reduce the reporting burden whilst

1 How to reduce the reporting burden whilst still obtaining high quality data Two practical examples from Norwegian financial markets statistics Ole Petter Rygvold & Kaia Solli Statistics Norway 1

Introduction • High quality data ØHigh quality data is not an objective term, it depends on what information you are after. ØHowever, lack of errors can be considered as one general condition for high quality data. ØGood and efficient control systems and routines are a prerequisite ØGood relationships with reporting institutions – reduced reporting burden 2

• Different ways to reduce reporting burden Ø Register based information and third party data - Instead of imposing direct reporting from all the relevant institutions, the same data may be collected indirectly from one or a few administrative register - However, a prerequisite is that the registers are suitable for statistical use or can be prepared for such use Ø Detailed data sets - Discloses errors and lack of consistency more easily and is more suitable for analysis and integrated quality controls compared to more aggregated data sets. - Increased reporting burden? - No, a detailed data set reduces the burden on the reporting institution because a detailed data set can cover the demands from several user groups at once. This leads to the fact that fewer data collections are needed. Ø Collecting the same data only once - One of the most evident ways of reducing the reporting burden – Cooperation Ø Standardised and automatic reporting - Requires a technical solution that is capable of handling large amounts of complex data and has a good system for disclosing different errors such as registrations errors, missing information and lack of consistency. 3

The public reporting of accounting statistics for banks and credit institutions in Norway (ORBOF) - an example of non-register based data collection • The main goal with ORBOF is to collect high quality data from the reporting institutions. ØMeeting the demands from all the major user groups ØMinimise errors in the data 4

Data structure • The ORBOF data have a wide variety of users: ØThe Financial Supervisory Authorities of Norway ØThe Central Bank of Norway ØStatistics Norway - The national- , financial- , and foreign accounts - The credit and monetary indicators ØIMF, OECD, EUROSTAT & BIS Detailed data structure 5

Data structure cont. • We collect a wide range of variables from both the balance sheet and the profit and loss statement. ØMain finance objects/instruments - Sub instruments ØSupplementary specification ØClassification variables - Maturity Sector Industry Geography Currency 6

Close cooperation • in data collecting, use and maintenance of a common database between : Ø Statistics Norway Ø The Financial Supervisory Authority of Norway Ø The Central Bank of Norway Reducing reporting burden Minimising resource demand Question of integrity 7

ORBOF-Inn ØA highly automated electronic system which is compatible with the reporting institutions’ own accounting systems. ØThe main aim of the system is to get more efficient routines for submitting data, minimise errors in the collected data and get increased security in data transmission (encryption). ØTechnically the system is based on excel, e-mail, Internet and XML. ØThe reports are based on spreadsheets with scrollbars showing allowed combinations of the different codes, and the program has an automatic validation function which enables the reporting institutions to control their data before submission. ØA receipt is automatically sent to the reporting institution by e-mail with the results from almost 60 different automated data controls. 8

Reporting Unit Statistics Norway Excel Reporting unit Mail (Validation) Mail server Web Data base Mail Administrator Fiks receiver in Statistics Norway UNIX Internet Mail server User in Statistics Norway New versions Webserver 9

The Norwegian Central Securities Depository – an example of register based data collection • • • The Norwegian Central Securities Depository (VPS) is the only authorized central securities depository (CSD) although the legislation allows other authorized depositories to perform the same services as VPS An important data source for statistics on domestic securities and their holders Complete coverage on the following securities as they are required to be registered in an authorized CSD – all shares and subscription rights issued by Norwegian public limited companies – Norwegian bearer bonds • • Other financial instruments, like e. g. shares issued by limited companies and mutual funds, may, but are not required to be registered in an authorized CSD In addition to producing aggregate securities market statistics, the data is used as input to – – Financial accounts Bo. P and IIP Credit indicators Investment funds statistics 10

Main feature of the data collection from VPS • • The legal basis is the Statistics Act Based on a detailed approach, in contrast to an aggregate approach, meaning Ø reporting security-by-security and holder-by-holder, i. e. every single holder • • of every single security Ø direct extraction of information from the register without any further processing in VPS Ø about 7 million records are reported monthly Advantages for such an approach Ø Reporting burden is smaller Ø Detailed and flexible Ø Better control and quality of data Ø Analytical useful Disadvantages Ø Requires large IT resources in Statistics Norway to handle the huge amount of data 11

Quality of the data from VPS • As VPS is a register of proprietary rights, it is set stringent demands to the correctness of the information about ownership of the securities in the register at all times Ø data on outstanding amount, ownership and changes in ownership (i. e. transactions) should generally be of high quality • The Securities Register Act and its provision covering which information that as a minimum have to appear from any CSD, ensures that data from VPS are suitable for statistical purposes Ø However relative minor problems, shortcomings might occur due registration errors, missing values and constraints in the technical solution, particularly for information not vital for VPS’s main function as a register of proprietary rights • • Full coverage of Norwegian bearer bonds and shares issued by Norwegian public limited companies Resident investors are in practice registered in individual accounts, and not in nominee accounts (for two or more investors) 12

Reduced reporting burden by using VPS • Main benefit of using register data from VPS is the overall reduced reporting burden for respondents Ø The alternative is direct reporting from a vast number of holders and issuers that obviously will demand a substantial increased reporting burden, including the probable need to take sample surveys into account Ø Possible establishment of new CSDs will not change this conclusion, as the plausibility that there will be established more than just a few CSDs is assumed to be minimal due to economies of scale • Advantageous also from Statistics Norway’s point of view Ø Resources saved on neither having to handle a vast number of reporting units or to carry out sample surveys Ø However large IT resources may induce extra costs, it is, on the whole, assumed that the positive effects outweigh the costs 13

Conclusion ØBoth register based and non-register based data collections can be efficient ways of reducing the reporting burden on the reporting institutions whilst still obtaining good data quality. ØChallenge; - Financial markets statistics – an area in constant change The system should meet the demands of today, but also be flexible enough to meet the demands of tomorrow 14