New York, NY — Today Rick Fleming, Investor Advocate of the Securities and Exchange Commission (SEC), addressed XBRL-US’s Investor Forum 2016 in New York. Fleming outlined how the SEC’s outdated “disclosure delivery methods have not kept pace with changes in technology.” Fleming said his agency should replace document-based corporate disclosures with standardized, open data, as the Data Coalition has long advocated.
The SEC has made some efforts to modernize the way it collects corporate financial filings. In June the SEC began allowing public companies to file their financial statements in the inline XBRL (eXtensible Business Reporting Language) open data format. XBRL tagging has allowed the Division of Enforcement to “detect anomalous patterns in financial statements’, said Fleming. This is good for regulatory oversight, good for market stability and good for investors.
Fleming outlined three wish list items to further modernize the SEC’s corporate disclosures:
- “[E]mbrace the Legal Entity Identifier with the goal of making public company disclosure to the SEC interoperable with disclosure to other reporting regimes, as recommended by the Data Coalition and XBRL US;”
- “Block-tagging of narrative text disclosures; and”
- “Detail-tagging within narrative text disclosures.”
Fleming also noted how modernizing the financial disclosure filing process “enables automation of financial analyses… making it easier to analyze a far greater number of companies, including smaller companies.” Searchable data would benefit both investors seeking new opportunities and small companies seeking capital investment.
“We’re pleased to hear yet another notable voice within the SEC calling for the adoption of the LEI, a globally accepted non-proprietary identification code, and expanding data-tagging across the entirety of corporate disclosures,” said Hudson Hollister, Executive Director of the Data Coalition. “The Coalition is currently advocating in Congress for the Financial Transparency Act (FTA) (H.R. 2477). The bipartisan proposal has 35 cosponsors, including good government champions Reps. Darrell Issa (CA-49-R) and Mike Quigley (IL-5-D), and Financial Services Committee Members Reps. Randy Hultgren (IL-14-R) and Carolyn Maloney (NY-12-D). If passed by Congress and signed into law, the FTA will advance the time frame for adopting these reforms by requiring the agency to move to inline XBRL faster and adopt the LEI across all reporting requirements.”
Read Rick Fleming’s full speech here.
About the Data Coalition
The Data Coalition advocates on behalf of the private sector and the public interest for the publication of government information as standardized, open data. Open data enhances accountability, improves government management, reduces compliance costs, and stimulates innovation. Representing a cross-section of the technology industry and implementers, the Coalition’s membership includes market leaders such as Workiva, RR Donnelley, Booz Allen Hamilton, and CGI Federal and growing start-ups such as idaciti and CBeyonData. For more information, visit datacoalition.org.