I’VE BEEN following the Securities and Exchange Commission’s (SEC) moves around eXtensible Business Reporting Language (XBRL) for the past few years and I’m confused about why they chose now to announce that they will be launching a new database to host XBRL for companies and mutual funds.
The only real news at the conference, which I was invited to comment on via a live blog with the Financial Times‘ Alphaville (see the replay below), was the announcement of a name and a logo for the new database.
It is to be called Interactive Data, Electronic Applications (IDEA). There’s officially no comma in the name, but there should be one because that’s the general idea. The database will host billions of bits of data tagged and uploaded by companies, and the private-sector software and web industries are — hopefully — going to build applications that will be able to read and analyze that data for investors.
Chairman Chris Cox did a demonstration of how applications will be able to access data on the IDEA database. However, he used the SEC’s prototype viewers that have been available for a couple of years already. And the data he used wasn’t from the new database, but from XBRL filings made to Edgar via the SEC’s voluntary XBRL filing program.
Cox said the new IDEA database, which will coexist with Edgar for the foreseeable future and won’t require the SEC to request “significant amounts” of new money from congress, will be “mature” in five years.
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| SEC chairman Chris Cox demonstrates the utility of XBRL during the webcast. |
Some other tidbits picked up
There was a lot of the same talk about how “interactive data” will make life easier for investors, and how data aggregators and websites like Yahoo! Finance will be able to take the data and do a lot of whiz bang stuff with it. There was the usual talk about how other countries are already ahead of where the SEC is at. Japan was mentioned, but everyone knows that China is what is on everyone’s mind.
The only interesting tidbits I picked up were that the SEC is probably thinking of relaxing its proposal for XBRL implementation in 2009. It seems to me the Chairman is thinking the first XBRL filings will be first-quarter 2009 10-Qs rather than the more bulky and difficult 10-Ks. I extrapolated that out of Cox’s comment that the final rule will probably be approved later this year, which wouldn’t be enough notice for companies to get ready to convert their 10-Ks to XBRL.
The other bit of information I picked up came from Bill Lutz, the plain English guru and academic who is heading the SEC’s 21st Century Disclosure Project. He mentioned that “interactive data” would help to reverse the trend by individual investors to stop managing their own portfolios and fob everything off to mutual funds. I thought that was an interesting comment. I didn’t think the SEC viewed deretailization of the capital markets as an issue it needs to tackle. I’m glad they do, though.
Surprising that it was such a surprise
Other than that, I was more confused than enlightened by the news conference. Why did the SEC choose to announce IDEA at a press conference where they really didn’t have anything to show off? Even the logo doesn’t look entirely finished, but that might just be the poor resolution in Windows Media Player.
Ed Hodder at Bowne’s XBRL Blog reached the same conclusion as me: “Most of today’s material has been used in the past and there was not much new here other than the name,” he writes.
One thing I know for sure is that Chris Cox is a master politician who doesn’t do things for the sake of a bit of PR. Or maybe he does. Come to think of it, the most interesting thing I learned from the conference was that for a lot of people today’s announcement was all new information.
Here’s a list of some of the publications taking note of the announcement:
- The Financial Times notes SEC set to overhaul data filing system
- Reuters says Out with EDGAR, in with IDEA; US SEC’s new system
- UPI says SEC filing system goes to hyper-drive
- ZDNet notes SEC introduces IDEA
- PC World writes US SEC Unveils New Electronic Filing System
- PC Magazine chimes in with SEC Dumping Edgar Reporting System for ‘IDEA’
- CFO.com says The Slow Death of Financial Forms
- Eweek writes Enterprise Applications An IDEA Whose Time Has Come
That suggests the SEC needs to do a lot more jawboning of XBRL to make sure people know about it. For me, and probably a lot of you, I’m getting rather impatient and can’t wait for the day when XBRL is more than a mere idea.
Update: OK, call me slow, but it wasn’t until I saw the SEC’s homepage a few hours after posting this that I realized what is going on. (See screenshot below). The IDEA announcement is little more than a publicity stunt, a way to get the word out that the SEC is serious about moving ahead with XBRL. The still-high lack of awareness among corporations about the pending SEC mandate for XBRL is still a big problem. That’s why if you go to SEC.gov now, there’s a Flash ad for IDEA dominating the homepage. The fact that there isn’t anything to really look at yet isn’t the point. The point is that you are supposed to pay attention. OK, I get it now. I guess I’m just not attuned to the idea of regulators as marketers. Considering the coverage they attracted, it worked.
FT Alphaville Live Blog Replay
A couple hours before yesterday’s webcast, I got a call from Stacy-Marie Ishmael of the Financial Times asking if I would participate in a liveblog of the event on their Alphaville site. This was the first liveblog I’ve done, and also a first for the FT. I thought it was a good experience. The technology for this is provided by CoveritLive, which is also pitching the technology to securities analysts who cover earnings calls for their clients. There are definitely some interesting IR uses for this technology as well. Click the green replay circle arrow thing and see what you think.
[...] help of the always excellent summaries of Edith Orenstein at the FEI Financial Reporting Blog. The IR Web Report’s Dominic Jones and I connected with Stacy via Twitter! My quote is below. The whole story is [...]
[...] IDEA is the latest in a string of significant announcements that have come out of the SEC including, XBRL mandate and the guidance on web disclosure and RegFD. There have already been a number of posts regarding this announcement and it seems to be well covered by the financial media (see bottom of IR Web Report’s post – SEC unveils IDEA — and that’s all it is). [...]
Dominic,
I try to follow your blog/twitter posts and while I have a cursory idea of what XBRL is from your postings(it’s been a little too dry for me to really dig deep into it– not a fault on your part more on my lack of understandiing/interesting in XBRL as of yet) but with the SEC’s massive tweeting on this and the initial buzz this morning I definitely took more note.
As far as my personal experience goes this event certainly caused me to take a double-take.
I thought that it was a bit of PR, XBRL had never been launched to the market, and CC was using words like “interactive data”, rather than the barcode analogy, for a while now.
The Elephant in the Room was social media that the SEC and Lutz frankly endorsed. Expect some comment, or even better: innovation, to come out of the newswires now.
Derek,
On the social media elephant in the room, I didn’t mention that because it wasn’t really new to me either. I was on their first conference call with bloggers. I guess I’m just spoiled and follow things too closely.
[...] help with softwareNo changes please, we’re PR Newswire’s Disclosure Advisory BoardSEC unveils IDEA — and that’s all it is for nowCox to announce IDEA will replace EDGARDespite poor retail vote, SEC may relax E-proxy [...]
@Dominic quite so. Do you think communications to market could become more rich (never mind social) – eg: press release would come to include related video, audio, suggested tags?