The Securities and Exchange Commission is seeking comments from industry and the public about modernizing its system for disclosing financial information to be more interactive and streamlined.
Seeking input from stakeholders is part of the 21st Century Disclosure Initiative that SEC officials announced earlier this year to examine how the agency acquires information from public companies, mutual funds, brokers and other regulated entities and shares it with investors and the public and how it might improve those processes. Comments are due by Oct. 22.
SEC officials are conducting an internal study of information technology, new ways in which investors access information, and recent developments in how companies compile and report the data that SEC requires. SEC Chairman Christopher Cox plans to produce a blueprint by the end of the year for future actions to enhance the usefulness and timeliness of information for investors and modernize the collection of data from companies.
SEC will host a roundtable Oct. 8 to discuss the data, technology and processes that companies use to comply with the agency’s disclosure requirements and how SEC might better organize and operate its disclosure system. Officials want to explore ideas to accelerate to a system “that is more dynamic, more accessible and user-friendly, and better organized around core company or fund information,” said William Lutz, the plain-language consultant to SEC who is leading the 21st Century Disclosure Initiative.
SEC officials also recently outlined plans for a successor to the 1980s-era Electronic Data Gathering, Analysis and Retrieval system to give investors and the public faster access to key financial information about public companies and mutual funds. The Interactive Data Electronic Applications system (IDEA), based on an architecture being developed, will initially supplement and then eventually replace EDGAR.
Currently, most SEC filings are available through EDGAR only in government-prescribed forms. Investors looking for information must sift through one form at a time and then retype the information for the next form. As part of the new platform, companies would use interactive data, such as Extensible Business Reporting Language, to report required financial data. With XBRL, interactive data tags uniquely identify individual items in a company’s financial statement. SEC officials are interested in whether there are other ways to structure data interactively.
With IDEA, the aim is for investors to be able to instantly collate information from thousands of companies and forms and create reports and analyses, Cox said.
“This new SEC resource powered by interactive data will give investors far faster, more accurate, and more meaningful information about the companies and mutual funds they own,” he said. The filings of companies that already use XBRL are expected to be available through IDEA beginning later this year, he added.
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