Wednesday, December 31, 2014

SEC Leverages XBRL to Facilitate Investor Research

[This story previously appeared in Securities Regulation Daily.]

By Matthew Garza, J.D.

The SEC announced that it has launched a pilot program to provide bulk data to facilitate investor research. The Division of Economic and Risk Analysis will extract data from XBRL attachments included in EDGAR filings and present structured data sets in an easy to consume format on the SEC’s website. The data sets will be updated quarterly.

The Commission said the data will be presented in a flattened format and will consist of numeric data from the primary financial statements (balance sheet, income statement, cash flows, changes in equity, and comprehensive income). The data is collected from the XBRL data attachments to forms 10-K, 10-K/A, 10-KT, 10-KT/A, 10-Q, 10-Q/A, 10-QT, 20-F, 20-F/A, 40-F, 40-F/A, 6-K, and 6-K/A. The data currently available ranges from April 15, 2009, to the third quarter of 2014. Beginning in 2015, data in footnotes to the financial statements will be included.

Criticism. House Oversight and Government Reform Committee Chairman Darrell Issa (R-Cal) criticized the SEC in September 2013 for a lack of progress on its implementation of XBRL, calling the agency’s progress “stagnant” and requesting a report on its future plans. At the time he complained that “the SEC has given filers and markets no guidance on whether it intends to continue the transformation it began with the Interactive Data Rule.” The new program appears to respond to the Congressman’s call, which included utilizing XBRL to provide “improved market efficiency, cheaper capital costs, and the open data investors are demanding.”

The staff posted observations about the quality of filed XBRL exhibits on July 7, 2014, and also sent letters to certain companies regarding required calculations in their XBRL exhibits.