Enitel AS supplies network services that affect large parts of the Norwegian securities market. The decision to wind up the company will not have any immediate consequences. An announcement by Enitel AS earlier today included the statement that "After meetings between Enitel's management, representatives of the debt committee, Telenor and the Norwegian Ministry of Transport, it is however clarified that Enitel's obligations to its customers will be handled in such a way that customers' telephone and data communications will not be disrupted".
What services does Enitel AS provide to the Norwegian securities market?
Enitel AS provides the network service known as VPnett used by Oslo Børs, Oslo Børs Informasjon (OBI), the Norwegian Central Securities Depository, the Norwegian Futures and Options Clearing House and broking firms that are members of Oslo Børs, as well as by other players in the Norwegian securities market. VPnett represents the network/infrastructure that amongst other functions enables members to access the Oslo Børs trading systems for shares/bonds and derivatives respectively. In addition VPnett is used to distribute data produced by OBI to external information providers.
What steps has Oslo Børs taken to reduce any eventual adverse consequences?
VPnett is based on the use of Enitel AS´s frame relay services as its primary connection, with ISDN backup systems for critical connections. The ISDN connections are automatically activated in the event of any operational failure of the primary Enitel connection. Oslo Børs has recently taken over the ownership of these backup arrangements. In practical terms this has involved the transfer from Enitel AS to Oslo Børs of subscriptions to the ISDN lines, which are supplied by Telenor. In addition Oslo Børs has purchased from Enitel AS the communications equipment used for the backup systems. This means that the backup systems can be brought into use in the event of any disruption to the VPnett service that might result from the winding up of Enitel AS. Steps have also been taken to ensure that the members of Oslo Børs have taken over the ownership of their own ISDN backup systems.
What effect would use of the backup arrangements have on securities trading?
The backup arrangements will be activated automatically in the event of any disruption to the VPnett service. This will ensure that the trading system for the Norwegian equity and bond market will continue to operate, but with limited capacity. The backup system is a limited service, intended to operate for a limited period. The market will continue to operate since members are required to maintain ISDN lines as their backup in the event of any problems with VPnett. The backup system does not have the same capacity as VPnett. Problems have been identified with the backup systems used by four members, and work is underway to resolve these problems.
The backup systems only provide partial cover for the electronic trading system used for the derivatives market, and this means that members that have not established ISDN backup for derivatives trading would lose their connection in the event of failure of VPnett. Such members would, however, be able to trade derivatives on a manual basis via the Oslo Børs trading desk. Members that do not have fully functioning backup systems will also be offered office space in the Oslo Børs building in order to be able to access the network.
Likely problems with price and news feeds
Unlike members of Oslo Børs, other customers of OBI are not required to maintain backup systems in the form of ISDN lines for their data communication links to OBI. Many of the companies that distribute market data provided by OBI, including some of the major players in this respect, do not have backup communication links in place, and would therefore be affected by any disruption to the VPnett service. Until such time as these players establish other communications links, they will be unable to distribute market data from Oslo Børs in the event of any disruption to the VPnett service. This implies that only those players with direct access to the trading system would have real-time access to market data. Price information with a 15-minute delay would continue to be available on a number of Internet pages and on the Oslo Børs web site at www.ose.no. Work is also currently underway to establish alternative communication links for information feeds.
www.ose.no
The Oslo Børs web site at www.ose.no would not be affected by any disruption to the VPnett service. Company announcements and price information with a 15-minute delay will continue to be made available on these web pages.
Any operational disruption at Enitel AS may also have consequences for particular listed companies. Oslo Børs strongly recommends that companies which are customers of Enitel AS should review their particular situation and evaluate whether they have provided sufficient information to the market on the possible consequences that any operational disruption at Enitel AS might have for their activities.
