New SEC Initiatives
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New SEC Initiatives

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  • yeah right ... we have checked it 2 months back .... but probably in pakistan its very difficult to invest such amount of money just to pass information to SECP
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  • To demonstrate the power of XBRL Viewer that allows users to see each line item has a tag and corresponding definition
  • Log onto the SEC.gov website. At the SEC home page you will see the menu on the left. At the bottom left you will see the link for Interactive Data (XBRL). You would then choose the link for viewers and choose Mutual Fund Reader. The Viewer Home page would appear. To compare up to three Funds simply choose Fund Comparison Report and use the pull down menus to choose the funds/classes/period dates you will compare.
  • Like I mentioned, you can view by single fund or comparison of multiple funds. The viewer reads the XBRL tags to search for the information that you are asking for. We know that no two fund companies are branded the same – but in XBRL all of that branding goes away and you are left with the information that is most important to investors in a format that makes it easy to compare. So XBRL is part of the natural evolution making it easier for investors to understand where they are putting their money. With all of that said, it should be noted that although XBRL is gaining more exposure since the proposed mandates for Mutual Funds and Public Companies it has been a consideration at the SEC for almost 10 years.
  • July 2006 - Swedish regulator launches service for filing of company accounts in XBRL   The Swedish Companies Registration Office, Bolagsverket, has launched a service for the filing of company accounts in eXtensible Business Reporting Language (XBRL).    The service will accept full annual accounts from small and medium sized entities (SMEs).  It covers primary financial statements, notes, the Directors’ Report and Audit Report.  Several hundred thousand companies are eligible to use the service, which was launched on 1 July.   The service uses taxonomies to categorise concepts in Swedish Generally Accepted Accounting Principles (GAAP) which were developed by the Swedish XBRL jurisdiction.  One taxonomy covers annual reporting by SMEs, which follows a standard format, and another covers Swedish audit reporting.   Bolagsverket’s service does not yet handle listed companies, which file under International Financial Reporting Standards (IFRS), financial companies, consolidated or interim reports.  However, it will gradually extend to these areas, beginning with consolidated and interim reports.    The service supports automatic validation of accounts by software, display in human readable form as PDF files and digital certification of documents. July 2006 -- Canadian Securities Regulators seek market feedback on XBRL The Canadian Securities Administrators (CSA) has launched a survey to gather views from the securities markets and public on XBRL, saying the CSA is committed to improving how information is collected and provided to investors.   The CSA is the council of the securities regulators of Canada’s provinces and territories.  Its objectives are to improve, coordinate, and harmonize the regulation of Canadian capital markets.   The CSA has issued a notice to the market providing information about XBRL, with a link to an on-line survey asking about the market’s level of awareness of XBRL and what the CSA’s role should be in relation to XBRL.   “ The CSA is committed to improving how information is collected and provided to investors,” said Jean St-Gelais, Chair of the CSA.  “This includes finding ways to use technology that could make it easier and more efficient for investors to receive, find, compare and analyze financial information.   “ There have been a number of significant developments with XBRL around the world, and we are interested in understanding the level of awareness of XBRL in the Canadian marketplace.”    To ensure that the survey reaches market participants, the CSA is e-mailing a copy of the Notice and survey to all public companies across Canada.   The full text of the CSA announcement is available at http://www.csa-acvm.ca/html_CSA/news/06_10_CSA_52-314.htm   The survey is available at https://data.grapevinesurveys.com/survey.asp?sid=20066274643546   June 2006 Dutch government and business agree to cooperate on introduction of XBRL from start of 2007   Netherlands also publishes its taxonomy for broad range of financial reporting   The Dutch government and business organisations have agreed in detail on cooperation to introduce XBRL by the start of 2007 for a range of financial reporting in the Netherlands.   An accord was signed in a ceremony in The Hague on 9 June between four ministries, representing the government, the employers’ organisations and businesses involved in accounting, software supply and as intermediaries in financial reporting.   The agreement sets outs specific obligations on the government, which is leading a project to introduce XBRL in order to reduce the administrative burden on all parties involved in financial reporting.  These obligations include: ·                 The maintenance of the taxonomy, or classification scheme, which defines the terms used in XBRL financial reporting in The Netherlands. ·                 The creation and support of the infrastructure for reporting, including a network for exchanging data. ·                 Ensuring government systems are ready to handle XBRL data on a large scale from the beginning of 2007.         Businesses agreed to take steps to facilitate the production of data in XBRL.  Software suppliers agreed to incorporate XBRL support in their financial reporting products before the end of this year.  Accounting firms and other intermediaries agreed to take steps support businesses in producing XBRL, so that large scale filing in XBRL can take place from the start of 2007.   At the same time, the Government-led project group working on the Dutch taxonomy released its Version 1.0_2005 of the Dutch taxonomy – the first general publication of the taxonomy following a period of development and testing.   Officials said they hope that filing in XBRL would rapidly expand during 2007, with several hundred thousand companies using XBRL within a reasonably short period.   The system will support the filing of a range of business data to the appropriate authorities, including accounts, tax returns and statistical information.   Ministries involved in the signing ceremony were Justice, Finance, Government Reform and Economic Affairs.  Statistics Netherlands, responsible for official statistics, and the Dutch Chamber of Commerce were also among official bodies which signed the accord.   The Dutch XBRL project would “enable reduction of administrative burdens for businesses in the financial reporting chain by simplifying the exchange of financial reports with government bodies,” the agreement said.  “By using the open standard XBRL, it will be possible to collect, record and exchange financial reports more quickly, more efficiently and more easily, as well as to record data once only.”   More information on the Dutch project can be found on http://www.xbrl-ntp.nl/ .    An English version of the covenant is available at:  http://www.xbrl.org/Announcements/Covenant-9June.pdf A press release by the Dutch Taxonomy Project on the covenant is at: http://www.xbrl.org/Announcements/Covenant-PR-9June.pdf The list of parties which have already signed the covenant is at: http://www.xbrl.org/Announcements/NL-signed-9June.pdf The list of parties who are proposing to sign is at http://www.xbrl.org/Announcements/NL-to-sign-9June.pdf  
  • In connection with their annual and transition reporting on forms 10-K or 20-F, filers may be required under existing financial reporting requirements to include certain supplementary financial statement schedules with their financial statements
  • but would not require interactive data submissions for other financial statements that may be required of filers, including those provided pursuant to Rules 3-05, 3-09, 3-10, 3-14, and 3-16 of Reg S-X Transition Reports generally must be filed when an issuer changes its fiscal closing date. The transition report covers the resulting transition period between the closing date of its most recent fiscal year and the opening date of its new fiscal year
  • New US GAAP Taxonomy Project to be completed in April 2008 Draft rule expected in Spring 2008 Likely that the top 500+ companies (by market capitalization) will be required to file in XBRL in 2009 XBRL Interactive Data Viewer, Interactive Executive Compensation Viewer, and Financial Explorer are available on the SEC website Includes data and analytical tools for 60+ companies & 200+ filings in voluntary filing program

New SEC Initiatives New SEC Initiatives Presentation Transcript

  • Global Capital Markets RR Donnelley SEC Hot Topics Interactive Data (XBRL) Prepared and Presented by: John Truzzolino Director, E-Solutions RR Donnelley September 24, 2008
  • Agenda
    • Interactive Data Electronic Applications (IDEA)
    • XBRL Technology Overview
    • Summary of SEC Proposed Rule
    • Data tagging alternatives
  • Interactive Data Electronic Applications (IDEA): Overview
    • On 8/19/08, SEC announced IDEA, the successor to EDGAR
    • Stated goal: To give investors faster and easier access to key financial information about public companies and mutual funds
      • Will first supplement, then replace EDGAR
      • EDGAR will become archive for pre-XBRL filings
    • Marks shift from submission of documents to submission of data
    • Consistent with Interactive Data Initiative and previously announced $50M investment in EDGAR replacement
    • Gradual phase-in of five years
    • “ By tapping the power of interactive data to tear down barriers to quick and meaningful investment information, markets can become fairer and more efficient while investors can possess far better quality data than was ever possible before.” (David Blaszkowsky, Director of the SEC’s Office of Interactive Disclosure)
  • What Is XBRL?
    • What does it do?
    • Creates machine-processed data for re-use and easy comparison
    • What is XBRL?
    • eXtensible Business Reporting Language (Interactive Data)
    • Each line item is given data tag standardized by US GAAP and different industries
  • Key XBRL Terms to Know
    • Tag
    • Machine-readable “barcode” that gives a standard definition for each line item in an income statement, SCF, or balance sheet
    • Taxonomy
    • A “dictionary” of tags for:
    • Specific accounting standards (US GAAP, IFRS)
    • Industry segments (e.g., energy, REIT’s, Broker-Dealers, Commercial)
    • Company-specific tags
    • Instance document
    • Collection of tags that is the building block to viewing and analyzing data
  • How Does XBRL Work? Financial Statements XBRL-Tagged Financial Statements SEC Consumed by:
    • Analysts / Research
    • Investors (corporate & individual)
    • Newswires / data aggregators
    XBRL Taxonomy Tagging Software XBRL-Tagged Financial Statements Scenario 1 RRD EZ Start Scenario 2 XBRL in GL system XBRL-Enabled Financial Reporting Software XBRL Taxonomy Financial Statements Internal External
  • XBRL in Action
  • XBRL in Action Mutual Fund viewer on the SEC website to view XBRL for Risk/Return Summaries.
  • XBRL in Action Fund A Fund B Fund A Fund B Fund Comparison
  • XBRL Adoption Around the World Expected to be mandated in 75% of the World’s Market Cap by end of 2008 EUROPE Belgium -France – Bank de France, AMF Netherlands -4 Major Ministries Norway - Exchange Spain - Bank of Spain Sweden – Companies House UK – HMRC (Companies House) ASIA/PACIFIC Australia – Government Wide China – Shanghai & Shenzhen Exchanges, CSRC, SFC India – Bombay & India National Exchange, Bank of India Japan – Tokyo Exchange & Bank of Japan Korea – KOSDAQ Singapore - ACRA Thailand – Thailand Exchange MIDDLE EAST/AFRICA Abu Dhabi – Exchange Israel - Securities Authority South Africa - Exchange SOUTH AMERICA Argentina – Bank of Argentina Bolivia - Government-wide Brazil – Bank of Brazil Chile – Bank of Chile Columbia – Bank of Columbia Peru – Bank of Peru NORTH AMERICA Canada – CSA, Toronto Exchange Cayman Islands - CIMA US – FDIC, SEC, IRS World Bank – Micro Lending
  • XBRL Progression in US SEC gets involved in XBRL 1999 2000 SEC adopts HTML standard FDIC adopts XBRL 2005 2006 XBRL Voluntary Program for ‘ 34 Act filers 2007 XBRL Voluntary Program for ‘ 40 Act filers SEC mandates XBRL 2008 RRD among first to file in new HTML Standard RRD/EOL among the first to file XBRL in SEC’s Voluntary Filing Program RRD/EOL the first to file XBRL mapped to new US GAAP Taxonomy
  • SEC Proposed Rules Released – May 30th, 2008 XBRL Mandate Phase-in Schedule
    • Proposed three year phase-in schedule :
      • In year 1, the proposed rules would apply only to domestic and foreign large accelerated filers that use U.S. GAAP and have a worldwide public float above $5 billion (measured as of 2 nd Q of the fiscal year), estimated to cover approximately 500 companies.
      • In year 2, all other domestic and foreign large accelerated filers using U.S. GAAP would be subject to interactive data reporting.
      • In year 3, all remaining filers using U.S. GAAP, including smaller reporting companies, and all foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB would be subject to the same interactive data reporting requirements.
    • If proposed rules are adopted, the first phase would begin with fiscal periods ending on or after December 15, 2008
  • SEC Proposed Rules Released – May 30th, 2008 What Needs to be Tagged in XBRL?
    • Face Financial Statements
    • Financial statements refer to the statements of financial position (balance sheet), income statement, statement of comprehensive income, statement of cash flows and statement of owner’s equity
    • Interactive data would be required for all periods included in the filer’s financial statements.
      • The disclosure in interactive data format would supplement, but not replace or change, disclosure using the traditional electronic filing formats in ASCII or HTML.
    • Footnotes & Schedules
    • The financial statement footnotes and financial statement schedules also would be tagged in each filer's first year, but in block text only.
    • After the first year of such tagging, a filer also would be required to tag the detailed disclosures within the footnotes and schedules.
  • SEC Proposed Rules Released – May 30th, 2008 XBRL Submission Timing
    • Interactive data would be required to be provided to the Commission, and posted on company websites, at the same time as the related report or registration statement, with two exceptions:
      • A 30 day grace period would be permitted for the first interactive data exhibit of each filer
      • A 30 day grace period would be permitted for the first interactive data exhibit that is required to include the footnotes and schedules tagged in detail.
  • SEC Proposed Rules Released – May 30th, 2008 EDGAR Submissions Affected
    • Periodic & Transition Reports
    • Interactive data would be required to be provided as an exhibit to Annual and Quarterly reports and transition reports
    • XBRL files would supplement, but not replace or change, disclosure using the traditional electronic filing formats in ASCII or HTML.
    • Registration Statements
    • All registration statements filed under the Securities Act, including IPOs, will be required to include interactive data when financial statements are included directly in the registration statement
    • Interactive data would not be required as an exhibit to a Securities Act registration statement that does not contain financial statements (such as a Form S-3 filed by an issuer that is eligible to and does incorporate by reference all required financial statements from its periodic reports).
    • Business Combinations
    • Under the proposed rules, interactive data would be required for the acquiring company, the filer, but not for the company being acquired, in the context of a business combination.
  • SEC Proposed Rules Released – May 30th, 2008 Liability Framework The Proposed Liability Framework There’s no additional requirement for an auditor attestation or senior officer certification of XBRL data. What is Furnished What is Filed
    • Interactive data file itself (instance documents)
    • What the machines read (non-viewable to humans)
    • Viewable interactive data as displayed through software available on the Commission’s web site
    • What humans read
    • Would carry forward the pilot program’s liability regime
    • Subject to the same liability under the federal securities laws as the corresponding portions of the official HTML or ASCII format filing
  • SEC Proposed Rules Released – Summary of Comments
    • Implementation timeline
    • Delay implementation 6-12 months to give technology and tools more time to mature
    • Extend grace period for all filings for the first year (60 days for initial, 30 for subsequent)
    • Detailed footnotes
    • Requirement to separately tag each number and narrative disclosure within each footnote excessive
    • Lower level of specificity to avoid custom tags
    • Create permanent grace period once detailed footnotes required
    • Delay concurrent filings
    • Continue to file as 8-K
    • Provide a five day grace period between HTML and XBRL
    • Form Types
    • Start with 10-Qs, not 10-Ks
    • Do not include Registration Statements – too burdensome
  • XBRL Adoption Schedule for the US Timeline For Mandatory XBRL Filing SEC Proposed Rules SEC Final Rules SEC mandate to file XBRL for Largest Accelerated Filers (Public float > $5B) SEC mandate to file XBRL for remaining companies that report in US GAAP End of May, 2008 Sept – Nov 2008 ( for fiscal periods that end on or after 12/15/2008) 2009 / 2010 Results Expected Dates 2008 Results
  • Alternatives for Tagging Your Data in XBRL Enterprise Solution Integrate the XBRL mapping into your financial reporting system Self Tagging Software Solution Export your financial statements, then use software to assign tags to each line item Full Service Solution Provide your financials to service provider for tagging, then review and validate
    • Identify XBRL software compatible with your enterprise GL system
    • Hire firm for enterprise implementation
    • Train staff on XBRL mapping
    • Map data at the GL level
    • Export data for creation of XBRL submission documents
    • Purchase XBRL tagging software
    • Output your financial statements
    • Train staff on XBRL mapping
    • Select taxonomy, then map each line item to the correct XBRL element
    • Prepare documents for SEC submission
    • Select full service provider
    • Provide financial statements
    • Review and verify XBRL tags
    • Sign off for submission of documents to SEC
  • Estimated Costs from SEC Proposed Rule
  • Additional Resources
  • Corporate Use of Websites Making the Most of the SEC’s Latest Website Guidance David M. Lynn September 24, 2008
  • Background
    • Use of Electronic Media Releases
    • Adoption of Regulation FD
    • SEC Embraces Web Posting for Some Corporate Disclosure
    • Sun Microsystems and Jonathan’s Blog
    • Advisory Committee on Improvements to Financial Reporting
  • Good News or Bad News?
    • The SEC recognizes the importance of technology for disseminating information in a disclosure-based system of regulation.
    • For the first time, the SEC indicates that companies can post information and have that information be considered “disseminated” without having to place the same information on a newswire or file (or furnish) it on a Form 8-K.
    • Principles-based guidance that companies can apply to their own circumstances.
  • The Framework
    • In the interpretive release, the SEC sets forth three considerations to help determine whether information posted on a corporate website is considered public:
      • Recognized channel of distribution—Whether a company’s website is a “recognized channel of distribution.”
      • Broad dissemination—Whether information is posted in a manner calculated to reach investors.
      • Waiting period—Whether information is posted for a reasonable period of time so that it has been absorbed by investors.
    • The SEC also describes how website postings can satisfy the public disclosure requirement of FD when selective disclosure occurs.
  • An Opportunity
    • Companies now have an opportunity to revisit the Investor Relations portion of their website:
      • How well does it work for investors?
      • Can investors find the information they are looking for?
      • Will investors think of the company’s website as a “one stop shop” for all of the important information they need about the company?
      • What is the company doing to “market” its website to investors as a place where they can find information?
      • How usable is the website for investors?
      • How can Web 2.0 technologies be used to “get the word out” to the company’s investors?
  • Usability
    • How Do Investors Use the Web?
      • Scanning vs. Reading
      • Use of Search Engines
      • Placement of Links and Information
      • Use of Effective Keywords
      • Use of Visual Cues
      • Appropriate Formats for Documents
      • Pushing the Information Out
      • Avoid Overload!
  • An Example: GM Note: It is easy to find investor information from the home page, either under the Corporate Information or Investors links.
  • An Example: GM Note: Scrolling across Corporate Information provides easy to follow links with effective key words.
  • An Example: GM Note: The Corporate Information page provides links to Investor Information as well as information for other stakeholders along the left side.
  • An Example: GM Note: The Investor Information page includes 12 key links listed on the left side in alphabetical order.
  • Additional Guidance
    • Antifraud Considerations
      • Previously Posted Materials
      • Liability for Hyperlinks
      • Using Summaries
    • Disclosure Controls and Procedures
    • Formatting and Readability
  • Corporate Use of Websites Making the Most of the SEC’s Latest Website Guidance David M. Lynn September 24, 2008
  • Background
    • Use of Electronic Media Releases
    • Adoption of Regulation FD
    • SEC Embraces Web Posting for Some Corporate Disclosure
    • Sun Microsystems and Jonathan’s Blog
    • Advisory Committee on Improvements to Financial Reporting
  • Good News or Bad News?
    • The SEC recognizes the importance of technology for disseminating information in a disclosure-based system of regulation.
    • For the first time, the SEC indicates that companies can post information and have that information be considered “disseminated” without having to place the same information on a newswire or file (or furnish) it on a Form 8-K.
    • Principles-based guidance that companies can apply to their own circumstances.
  • The Framework
    • In the interpretive release, the SEC sets forth three considerations to help determine whether information posted on a corporate website is considered public:
      • Recognized channel of distribution—Whether a company’s website is a “recognized channel of distribution.”
      • Broad dissemination—Whether information is posted in a manner calculated to reach investors.
      • Waiting period—Whether information is posted for a reasonable period of time so that it has been absorbed by investors.
    • The SEC also describes how website postings can satisfy the public disclosure requirement of FD when selective disclosure occurs.
  • An Opportunity
    • Companies now have an opportunity to revisit the Investor Relations portion of their website:
      • How well does it work for investors?
      • Can investors find the information they are looking for?
      • Will investors think of the company’s website as a “one stop shop” for all of the important information they need about the company?
      • What is the company doing to “market” its website to investors as a place where they can find information?
      • How usable is the website for investors?
      • How can Web 2.0 technologies be used to “get the word out” to the company’s investors?
  • Usability
    • How Do Investors Use the Web?
      • Scanning vs. Reading
      • Use of Search Engines
      • Placement of Links and Information
      • Use of Effective Keywords
      • Use of Visual Cues
      • Appropriate Formats for Documents
      • Pushing the Information Out
      • Avoid Overload!
  • An Example: GM Note: It is easy to find investor information from the home page, either under the Corporate Information or Investors links.
  • An Example: GM Note: Scrolling across Corporate Information provides easy to follow links with effective key words.
  • An Example: GM Note: The Corporate Information page provides links to Investor Information as well as information for other stakeholders along the left side.
  • An Example: GM Note: The Investor Information page includes 12 key links listed on the left side in alphabetical order.
  • Additional Guidance
    • Antifraud Considerations
      • Previously Posted Materials
      • Liability for Hyperlinks
      • Using Summaries
    • Disclosure Controls and Procedures
    • Formatting and Readability