The Securities and Exchange Commission issued its first formal response today to House Oversight Committee Chairman Rep. Darrell Issa’s Sept. 10 letter, which asked the agency to restart the stalled transformation of its corporate disclosures from inaccessible documents into structured, open data.
The letter, which was unveiled by Rep. Issa at our Data Transparency 2013 conference last month, initiated an inquiry into the agency’s stalled progress in implementing machine-readable open data formats for corporate financial statements. On September 30, SEC officials met with Oversight Committee staffers from both parties on Capitol Hill.
The SEC’s response letter unfortunately takes a pass at Rep. Issa’s primary question about what the SEC’s overall plan is for transforming its hundreds of disclosure forms into open data. Only a few of these forms have been converted; the rest continue to be processed using unwieldy PDF formats and paper documents. We still don’t what the agency’s plan is — or if it even exists. Chairman Issa, the House Appropriations Committee, and the agency’s own investor advisory committee have been unable to obtain an answer thus far.
Nevertheless, the SEC’s letter does open the possibility for some positive incremental change. SEC Chairman Mary Jo White has confirmed that her agency is considering implementing the iXBRL (inline XBRL) format for corporate financial statements. The agency currently collects this information twice — once as a document and once as structured data. This redundant process wastes taxpayer dollars and produces low quality structured data. Instead of using automated processes to analyze XBRL formatted data, the SEC is still using pencils and calculators to spot check the antiquated document-based versions of these statements. Therefore, errors in the data are passing through the process unchecked. The iXBRL format, as iXBRL pioneer John Turner has explained on the Coalition’s blog, would combine the human-readable document and the machine-readable structured data into a single submission.
The Data Transparency Coalition encourages Chairman Issa to keep up the pressure until the American people get a full answer about the SEC’s plans to bring its corporate oversight practices into the 21st century. We encourage him to continue to involve congressional supporters of open data in future follow-up letters, inquiries, and hearings on this issue.