SEC Announces Initiative to Test Tagged Financial Data
The U. S. Securities and Exchange Commission (SEC) is assessing the benefits of tagged data and its potential for improving the timeliness and accuracy of financial disclosure and analysis of Commission filings.
The Commission will seek public comment on alternative methods and the costs and benefits associated with tagged data. In addition, the Commission will consider a staff proposal to accept voluntary supplemental filings of financial data using eXtensible Business Reporting Language (XBRL). This voluntary program would enable the Commission staff to further investigate the types of data tagging currently available in the marketplace. The Commission may propose a rule this fall that would, if adopted, establish the voluntary program beginning with the 2004 calendar year-end reporting season.
SEC Chairman William H. Donaldson said: "This initiative is part of the Commission's broader effort to improve the quality of information available to investors and the marketplace. By working to enhance the Commission's filing and disclosure process through the use of new data formats, including tagged data, the Commission can improve how content is organized and analyzed - improvements that will benefit everyone who utilizes the SEC's public disclosure process."
The Commission has continually sought to make its filing, information collection and disclosure processes more useful to the investing public through, among other things, keeping pace with technological change. This initiative is aimed at determining:
- the benefits of tagging to reporting quality and efficiency;
- the implications of tagging data for filers, investors, the Commission and other market participants; and
- the compatibility of existing tag definitions with current disclosure requirements.
The Commission's Division of Corporation Finance, Office of the Chief Accountant, Division of Investment Management, and Office of Information Technology are working together on this initiative.
Data tagging is gaining prominence as a format for enhancing financial reporting data using eXtensible Mark-Up Language (XML) derivatives, such as XBRL. Tagging provides greater context to data through standard definitions that turn text-based information, such as the filings currently contained in the Commission's EDGAR system, into documents that can be more efficiently and effectively retrieved, searched and analyzed through automated means.
Data tags describe information such as items included in financial statements. This enables investors and other marketplace participants to analyze data from different sources and allows for the automatic exchange of financial information across various software platforms, including web services.