SEC Releases Rule Proposal on the use of Interactive Data (XBRL)

Here’s an item from Business Wire’s Michael Becker, VP of Global Disclosure & Reporting Services:

The US Securities and Exchange Commission (SEC) proposed that issuers provide corporate financial statement information to the Commission in interactive data (XBRL) format.

If adopted, the first interactive data provided under the new rules would be made public in early 2009. The remaining companies using U.S. GAAP would provide this disclosure over the following two years. Companies using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board would provide this disclosure for fiscal periods ending in late 2010.

Additional proposed items:

• In the initial year of a company’s filing, they would be required to provide single identifiers (tags) for each footnote and schedule but starting in year two of XBRL submission, the company would be required to provide more detailed identifiers for elements within the footnotes themselves.
• XBRL documents would be submitted in addition to the official ASCII or HTML filing and then filed at the same time. The only exception to this rule is that the first time a company submits in XBRL format and the first time they provide detailed tagging of the footnotes, the company would be allowed a 30 day grace period after the traditional filing during which they could submit the XBRL documents.
• Companies also would be required to post this information on their websites.

Business Wire is the only newswire service with in-house XBRL expertise and is prepared to help your company transition to XBRL reporting quickly and easily. Our EarningsDirect service is a simple, non-technical method for tagging EDGAR filings and earnings news releases in XBRL format.

The process couldn’t be easier; we convert the data to XBRL for you. Analysts, investors and the financial media receive your financials in XBRL format with a special PDF file, the Interactive Financial Statement (IFS). The IFS allows users to quickly understand, via detailed TagTips, how your financials have been tagged in XBRL. The IFS also contains the raw XBRL required for market participants to analyze the data in real time.

• Here are the Business Wire and CoreFiling news releases related to the announcement.
• Learn more about our XBRL joint venture, CoreFiling.
• To learn more about XBRL, contact Business Wire’s Michael Becker.

SEC Open Meeting on XBRL (Update: Date Change)

The SEC on Wednesday issued a Sunshine Act notice that on Monday, April 21, there will be an SEC Open Meeting to consider a possible rule for interactive data, also known as XBRL. The text of the rule itself will be published shortly after the meeting and we of course will keep you updated as to what develops.

Update: The SEC has changed the date of this meeting to Thursday Wednesday, May 14. The reason given in the SEC notice: “At times, changes in Commission priorities require alterations in the scheduling of meeting items.”

Knock, knock. Who’s there? Is it Mandatory XBRL?!

The SEC Advisory Committee on Improvement to Financial Reporting (CIFiR), in a Draft Decision Memo and at its January 11th meeting, recommended the SEC transition to mandatory XBRL for all companies. CIFiR recommended the SEC phase-in XBRL as follows:

• The largest 500 domestic public reporting companies should be required to “furnish” XBRL tagged face financial statements and “block tagged” footnotes;
• One year later, all domestic “large accelerated filers” (~2,000 Companies) should be required to “furnish” XBRL tagged face financial statements and “block tagged” footnotes to the SEC.
• During the phase-in period, the SEC and the Public Company Accounting Oversight Board (PCAOB) should seek input from companies, investors, and other market participants as to the experience of such persons in preparing and using XBRL tagged financial statements using the U.S. GAAP taxonomies, and related costs. The SEC should consider conducting or commissioning a study of the rate of errors by companies in using the appropriate XBRL tags in comparison to the financial statement items. At the end of the phase-in period described above, and as promptly as practicable after the preconditions to full implementation discussed above are met, the SEC should evaluate the results from the phase-in period to determine whether and when to move from furnishing to official filing of XBRL tagged financial statements for domestic large accelerated filers, as well as the inclusion of all other reporting companies.

Webcast - Transformations in Trading: A Look at the Expanding Role of News in Trading Decisions

We’ve just posted the webcast for our recent New York conference - Transformations in Trading: A Look at the Expanding Role of News in Trading Decisions.

• Listen to this webcast (2 hrs 18 mins)

This event features a panel of government, media and financial industry insiders that will explain how algorithmic trading, RSS feeds, blogs and interactive data are permanently reshaping investor relations, the news media and the investment community.

Moderator:

• Hulus Alpay - President, NIRI New York and Senior Vice President, Makovsky & Company

Panelists:

• David Blaszkowsky - Director, Office of Interactive Disclosure, United States Securities and Exchange Commission
• Keith Ackerman - Global Head, Next Generation Research, Thomson Financial
• Martin Howell - Editor, Company news, The Americas, Reuters
• Joseph Saluzzi - Partner, Co-Founder and Co-Head of Equity Trading, Themis Trading LLC

(Click Here for Bios)

SUN SPOTS: Blinded by the Light

“Sun spots” was a term used in the days of satellite transmissions to explain periodic outages that mysteriously knocked out news delivery to network recipients. It is perhaps poetic justice that Sun Microsystems’ CEO Jonathan Schwartz has given the term new meaning in the Internet Age.

Sun ballyhooed that it would meet disclosure of its quarterly earnings via a web posting on its own site, accompanied by RSS feeds to registered subscribers. Ten minutes later, Sun broadly disseminated the news release via a commercial wire service. The evidence suggests that Sun’s high-profile experiment had decidedly mixed results; in our view, it was clearly not the great leap forward that Schwartz had touted for months on his blog.

Not Simultaneous, Not Fair, Not Instantaneous
I eagerly tried to access Sun’s earnings at precisely 4 pm/Eastern. Unfortunately, I kept getting a “Page Not Found” message. It wasn’t until 4:06 pm that I was finally able to view Sun’s results. Given Sun’s enormous server capacity–after all, servers are Sun’s core business–Sun’s seeming inability to accommodate the demand speaks volumes about the real downside of web-only disclosure.

In other words, if Sun can’t handle the load, what are the realistic chances of smaller companies, with more limited server resources, to deal with spikes associated with material news announcements? Casual observers may dismiss a six-minute delay as minimal. However, in today’s financial markets, six minutes is an eternity. Program trading now drives the markets, and the new mantra on Wall Street is that milliseconds matter.

The numbers tell the story best: Reuters didn’t move its first take until 4:16; Yahoo! Finance posted Sun’s press release at 4:11 (after it moved on a commercial newswire). As for those accessing via RSS feeds, those times were all over the map and that’s because RSS feeds are not push technology, nor are they simultaneous. This means that the material information was not received simultaneously by all market participants. So what’s “full and fair” about that?

In our view, this isn’t what the U.S. Securities and Exchange Commission had in mind when it implemented Regulation FD in 2000 to “level the playing field.” We think these results fall far short of the investing public’s desire for full, fair and simultaneous disclosure.

Business Wire News: Secure, Free & Simultaneous
Business Wire has a secure (independently audited in multiple jurisdictions worldwide) real-time network that allows investors anywhere in the world to access news at no charge. For some unknown reason, Jonathan Schwartz continues to harp on the misconception that commercial news wires are only available via proprietary services. NOT TRUE. Anyone, anywhere can access Business Wire and its competitors via the world’s most popular financial portals, news sites, online services and databases–again, simultaneously, in real-time and in multiple languages.

Everyone has equal, unrestricted access to material news announcements under the current disclosure model. The playing field is indeed level. Further, Business Wire’s presence on the internet, in conjunction with its myriad distribution channels, far eclipses any individual company’s web posting. And yes, we even offer RSS feeds at no charge.

An Accurate, Third-Party Historical Record
Another key issue that has thus far been ignored is archival capabilities. All news releases transmitted over Business Wire are permanently stored in Lexis-Nexis, Factiva, and other popular databases for future reference. Further, the lack of a central clearinghouse for material news announcements under Schwartz’ web-only framework raises all sorts of interesting questions that the SEC and class action law firms, among others, will need to address.

Disclosure Innovators & Experts
Business Wire is clearly not resting on its laurels and is constantly evaluating all new technologies. Just ask our CIO, Steve Messick, who was named one of the Premier 100 IT Leaders by Computerworld Magazine in 2003. The reality is that Business Wire has and will continue to push the envelope when it comes to disclosure, from its patented NX news delivery technology, to its leading role in providing public companies with turnkey XBRL solutions worldwide. But we’ll do it in a way that enhances transparency.

As the leading disseminator of material information for 46 years, this is our “circle of competence.” We are passionate about what we do because we believe strongly that broad and simultaneous dissemination of the press release remains at the heart of the disclosure process. We trust that all the other “commentators” have the experience and credentials to speak intelligently about this important topic.

We salute Jonathan Schwartz on Sun Microsystems’ strong quarterly performance. But with all due respect, we think the CEO of Sun should “stick to his knitting” and leave the important business of disclosure to the experts.

–Cathy Baron Tamraz, President and CEO, Business Wire