Coalition to SEC: Replace Corporate Disclosure Documents with Open Data


In April, the Securities and Exchange Commission published a  341-page Concept Release exploring the future of corporate disclosure in the United States. Yesterday the Data Coalition responded.

Yesterday’s comment letter calls for the SEC to completely replace its current system of old-fashioned, plain-text disclosure documents with open data.

This is the Coalition’s third major appeal for the SEC to transform its disclosure system. We provided a detailed comment on the agency’s strategic plan in March 2014 and submitted a full road map for open data transformation to the agency’s Division of Corporation Finance in October 2015.

Last April’s Concept Release shows that we’re making progress! The Concept Release says (at page 249) that the SEC is thinking about transforming public companies’ subsidiaries disclosure – one of the documents that needs open data most desperately – into open data fields, just as we’ve recommended. It asks for suggestions (at page 255) about how to start using the global Legal Entity Identifier (LEI) to match public companies’ SEC filings with their filings to other agencies, just as we’ve recommended. And a whole section (section V.G)  of the Concept Release asks how to fix the agency’s embattled open data reporting program for corporate financial statements, just as we’ve … you get the idea.

In fact, the Concept Release even cites our previous comment letter several times.

On the other hand, the Concept Release still assumes that the future of corporate disclosure will be based on documents, not on data.

The Concept Release invests a lot of energy (questions 286-306!) asking for suggestions about how to use cross-referencing, incorporation by reference, and hyperlinks in corporate disclosures, to save investors from having to read lengthy documents. Open data makes these techniques unnecessary! If all corporate disclosure information were published as open data, then companies like idaciti and Bloomberg could deliver that information to investors at whatever level of detail they want. With open data, the SEC won’t have to worry any more about snowing investors with too much detail.

The Concept release also asks (starting at page 318) if the SEC should prescribe new graphic layouts for corporate disclosures. In an open data world, there’s no need for the government to prescribe how corporate information needs to look on a page.

To make progress on corporate disclosure, the SEC needs to question its assumption that document disclosure is the wave of the future. Our comment letter says so, with lots of footnotes.

Read the Coalition’s full comment here.