NU Online News Service, Feb. 4, 2005, 4:20 p.m. EST
Securities regulators want to see whether a new approach to identifying bits of electronic information will make life easier for investors and public companies.[@@]
The U.S. Securities and Exchange Commission has decided to establish a voluntary program that will let insurance companies and other public companies submit batches of XML data with their electronic annual report filings and other electronic report filings.
The program will take effect for reports for 2004 and later years filed after March 16.
XML is an internationally accepted set of rules for using hidden “tags” to identify bits of data. Computers can use the tags to speed up the process of finding bits of information, converting a file into another type of file, and using one computer system to read data stored on another type of computer system.
The SEC is asking companies that want to submit XML financial data to use standards developed by the XBRL Consortium, New York, a nonprofit group that is developing “standard taxonomies” for identify all of the revenue figures, income figures and other figures in financial reports.
The consortium says it hopes to complete work on a standard insurance taxonomy and taxonomies for industrial companies, banks, savings institutions and ordinary commercial companies by Feb. 28.
The consortium also hopes to complete an investment company standard by March 31.
Although the XML program is voluntary, participating companies must use the appropriate XBRL standard taxonomy, the SEC says in a program announcement.
Companies can put the XBRL data in exhibits attached to their official EDGAR financial data filings.
SEC officials have published a final rule implementing the XML program.
In a discussion that accompanies the final rule, SEC officials report that some members of the public have questioned whether XBRL has come up with enough types of data “tags” to identify all of the many different types of information in companies’ financial reports.
“We expect that the voluntary program will enable us to better analyze the adequacy of the standard taxonomies and whether it would be desirable to develop our own taxonomy for some or all regulatory reporting requirements,” the SEC officials write in their discussion.
SEC officials also note that investors and other data users will need special software to convert the XML data into a form that ordinary human beings can read.
The SEC had considered developing a special XML data viewer, but members of the public told the SEC developing a viewer would be impractical because companies will have to use homemade “extensions” to the XBRL taxonomy to tag their financial data, officials write.
SEC officials decided the SEC’s viewer probably would not be able to cope with the extensions.
Users still will be able to view the official filings in the current text and HTML formats.
Links to the SEC release, the final rule and other documents related to the XBRL data program are on the Web at http://www.sec.gov/spotlight/xbrl.htm