SEC To Fund XBRL Code Writing, Interactive Edgar
September 25, 2006
FEI Summary
On Sept. 25, 2006 the U.S. Securities and Exchange Commission (SEC) announced that it had award three contracts, totaling $54 million, to complete XBRL code writing and to rebuild EDGAR as an interactive database.
o Although not expressly stating if and when XBRL (eXtensible Business Reporting Language) filing will move from a voluntary program to a mandatory requirement, the SEC states the major investment in interactive data announced “presages widespread adoption of interactive data filing by companies that report their financial information to the SEC — a development that until now has only been a voluntary pilot program.”
The press release, entitled, “SEC to Rebuild Public Disclosure System to Make It ‘Interactive,’” further states:
o “To date, the SEC has not required companies to file their information in interactive format, largely because the XBRL labels haven’t all been completed, and because the SEC’s own database -- EDGAR – can’t yet utilize the extra capabilities of XBRL.“ However, today’s announcement notes:
§ “The three contracts announced today will close that cap, paving the way for universal XBRL filings by companies.”
§ “Once the work contemplated by this contract [the second contract listed below] is complete, every public company in America will be able to make its required disclosures to the Commission more accurately and more quickly—and as software applications are developed, the investors in those companies will find it easier to understand that information.”
The SEC announcement also observes, “By moving to interactive data using the XBRL computer language, the SEC will be joining the FDIC, the Federal Reserve and the Comptroller of the Currency, which already require banks to use it,” adding, “For the last year, approximately 8,200 U.S. financial institutions have been using XBRL to submit their quarterly Call Reports to U.S. banking regulators.”
SEC Chairman Christopher Cox is quoted in the announcement describing the benefits of interactive data filing as follows:
o “For investors and analysts, it will represent a quantum leap over existing disclosure technologies.
o “For companies, it will mean easier and less costly compliance with SEC requirements.”
The three contracts announced by the SEC today to rebuild EDGAR and complete XBRL coding, amounting to $54 million collectively, include:
o A $48 million contract with Keane Federal Systems Inc. (partnering with other technology firms, including Bearingpoint, Microsoft, Rivet Software, EMC and Akamai) to modernize and maintain the Edgar database to use interactive data
o A $5.5 million contract with XBRL-U.S. to complete XBRL code writing for U.S. GAAP Financial Statements
o A $500,000 contract with Rivet Software and Wall Street on Demand to provide a new generation of interactive tools for investors on the SEC’s website.
SEC Announces Upcoming Roundtable and Small Business Panel on Interactive Data
Additionally, the SEC announced on September 25 the second in its series of roundtables on interactive data (including XBRL) will be held on October 3 from 3-5 pm, with an address by Indra Nooyi, incoming CEO of PepsiCo, Inc. PepsiCo is among the public companies participating in the SEC’s XBRL voluntary filer program. According to the SEC’s announcement, “The October 3 roundtable will focus on new software to make better information a reality by using interactive data to provide investor-friendly research tools. Presenters will demonstrate a sample of currently available software and panelists will discuss how interactive data enabled software can assist investors.” The announcement also notes, “The [SEC] welcomes feedback on any aspect of the use of interactive data. The information that is submitted will become part of the public record of the roundtable.” Instructions for submitting comments can be found in the announcement.
In related news, the SEC issued a press release on September 22 announcing the panelists and agenda for its annual Small Business Capital Formation forum, to be held September 29 at the SEC’s headquarters in Washington, D.C. This year’s forum will include a special panel on the potential benefits of use of interactive data filing by small business. Among those speaking on the September 29 panel will be Greg Adams, director, chief operating officer, and chief financial officer of Edgar Online, and a vice chairman of FEI’s Committee on Finance and Information Technology (CFIT). The SEC’s small business capital formation forum will be webcast, and additional information about the forum, including registration information, is available here.
Prepared Sept. 25, 2006 by Edith Orenstein (eorenstein@FinancialExecutives.org), Director, Technical Policy Analysis, Financial Executives International (FEI). This summary does not represent FEI opinion, unless specifically noted above.