SEC introduces Inline XBRL for shareholder reports and compensation clawback
The US Securities and Exchange Commission (SEC) has adopted a final rule on tailored shareholder reports for those mutual funds and exchange-traded funds classed as ‘open-end funds.’ It will require them to prepare concise and visually engaging annual and semi-annual reports to shareholders that highlight key information, particularly for retail investors. “Shareholder reports are amongst the most important documents that fund investors receive,” said SEC Chair Gary Gensler, but their current length can make them difficult to sift through.
Further facilitating investor understanding of fund disclosures, the rule will also require funds to tag their reports using Inline XBRL, “to provide machine-readable data that retail investors and other market participants may use to more efficiently access and evaluate investments.”
The SEC has also adopted a second final rule on compensation recovery listing standards and disclosures. Listed issuers will be required to develop a policy on the recovery of erroneously awarded incentive-based compensation received – often known as ‘clawback.’ They will also need to make disclosures about such policies and how they are being implemented, and structure these disclosures in Inline XBRL.