XBRL will enable easy-to-find financial data on the web, US SEC Chairman says

26 April 2006

The US Securities and Exchange Commission intends to use XBRL to enable a move from long, hard-to-read disclosure documents to easy-to-navigate web pages that let investors to find the data they want, SEC Chairman Christopher Cox told the Senate Banking Committee.

In testimony to the committee about current securities issues, Mr Cox said the SEC was strongly committed to interactive data based on the XBRL electronic language: “This is why we have taken major steps to promote it.  We have offered significant incentives for companies to file their financial reports using interactive data.  These include expedited review of registration statements and annual reports.  A number of well known firms – the list is 17 and growing – have already begun to lead the way and are filing their reports using interactive data.”

The SEC was planning a set of roundtable meetings this year on the move to XBRL.  These will focus on:

· What investors and analysts really need from interactive data;

· How to encourage the development of software for companies, institutions, and retail investors that takes full advantage of the potential of interactive data

· How to redesign the SEC's disclosure requirements to maximize the advantage of using interactive data.

“Our aim is to move from long, hard-to-read disclosure documents to easy-to-navigate Web pages that let investors click through to find what they want,” Mr Cox said.  The SEC currently used some 800 different forms to collect a range of overlapping data from companies.  Key information was buried in long, weighty documents.

People should be able to search for data independently of the forms, using computer-readable tags to help them quickly to find precisely the information they want. 

“For individual investors, this means they'll be able to quickly search for any information they want without slogging through an 80-page document.  And it means they could search through our database not by the names of individual reports, but instead just by looking up the companies that file them,” Mr Cox said. 

“With today's SEC reports, an investor or analyst who is looking to compare, say, data on annual capital expenditures of two companies, has to search through perhaps hundreds of pages of the filings of each company page-by-page.  Not surprisingly, the burden of this time-consuming, tiresome task has led to the creation of a cottage industry in re-keyboarding the information in SEC reports,” he continued.  “One hates even to think of the human error and data corruption that inevitably occurs in this process.  We know from experience that the error rate is unacceptably high.

“Interactive data is a way to eliminate these problems, and to connect investors directly to the information in a company's filings – accurately, cheaply, and quickly.  It will allow anyone to easily search, extract, compile, compare, and analyze financial and qualitative data according to each individual's preferences.

“What about the benefits beyond retail investors?  For preparers of financial reports, interactive data could streamline and accelerate the collection and reporting of financial information to the SEC and the public.  Further down the road, the potential exists for companies to use interactive data as a means of getting real-time management control information.”

The full text of Mr Cox’s testimony is avaliable at http://banking.senate.gov/_files/ACF42F1.pdf.

Announced by:

Peter Calvert

XBRL International

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