SEC Mandates Interactive Filing; Will Start Phasing In Next Year


The news is filled with stories of how much the Securities and Exchange commission has missed but, hey, maybe some of the atrocious examples of financial skulduggery could have been caught sooner if the commission had moved faster towards interactive filing. But that tortured march at least has an end in sight now with this week’s vote to mandate electronic filing with interactive data for all public companies and mutual funds. In the short term, the result is a boon to the XBRL (eXtensible Business Reporting Language) industry even though the mark-up acronym doesn’t even appear in the SEC release. It should give anyone who works with financial data much more powerful tools and, as more data is filed this way, a better grasp of the information than EDGAR currently provides.

How it works: Each “fact” in a financial statement gets a tag that makes the information more searchable and more readable via software. SEC: “Investors will be able to instantly find specific facts disclosed by companies and mutual funds, and compare that information with details about other companies and mutual funds to help them make investment decisions.” The SEC provides open-source software for viewers.

When it takes effect: Voluntary XBRL filing is already in effect with 100-plus companies and some two dozen mutual funds taking part so far. The top 500 public companies have until the first earnings report for a quarter ending on or after June 15. That means Q209 for most of the largest companies. Other U.S. companies filing according to generally accepted accounting principles (GAAP) will be phased in over the next two years with December 2011 as the endpoint. Companies do not have to wait for the mandatory start. Mutual funds will be required to use data tags in 2011 and will have to post the data online if they have websites.

Video of the SEC’s open meeting

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