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Interactive Data To Improve Financial Reporting
Feb 10, 2009 (FIND, Inc. via COMTEX) --
SUMMARY: We are adopting rules requiring companies to provide financial statement information in a form that is intended to improve its usefulness to investors. In this format, financial statement information could be downloaded directly into spreadsheets, analyzed in a variety of ways using commercial off-the-shelf software, and used within investment models in other software formats. The rules will apply to public companies and foreign private issuers that prepare their financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP), and foreign private issuers that prepare their financial statements using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Companies will provide their financial statements to the Commission and on their corporate Web sites in interactive data format using the eXtensible Business Reporting Language (XBRL). The interactive data will be provided as an exhibit to periodic and current reports and registration statements, as well as to transition reports for a change in fiscal year. The new rules are intended not only to make financial information easier for investors to analyze, but also to assist in automating regulatory filings and business information processing. Interactive data has the potential to increase the speed, accuracy and usability of financial disclosure, and eventually reduce costs.
EFFECTIVE DATE: Effective Date: April 13, 2009 except [Section] 232.406T, which is effective from April 13, 2009 until October 31, 2014.
FOR FURTHER INFORMATION CONTACT: Mark W. Green, Senior Special Counsel (Regulatory Policy), Division of Corporation Finance at (202) 551-3430; Craig E. Slivka, Special Counsel, Division of Corporation Finance at (202) 551-3430; Jeffrey W. Naumann, Assistant Director, Office of Interactive Disclosure at (202) 551-5352; or Jeffrey Ellis, Professional Accounting Fellow, Office of the Chief Accountant at (202) 551-5300, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-3628.
SUPPLEMENTARY INFORMATION: We are adding Rules 405 and 406T to Regulation S-T, *1 and revising Item 601 *2 of Regulation S-K, *3 Rules 11, *4 201, *5 202, *6 305, *7 401, *8 and 402 *9 of Regulation S-T, Rule 144 *10 under the Securities Act of 1933 (Securities Act), *11 and Rules 12b-25, *12 13a-14 *13 and 15d-14 *14 under the Securities Exchange Act of 1934 (Exchange Act). *15 We also are revising Forms S-3, *16 S-8, *17 F-3, *18 F-9 *19 and F-10 *20 under the Securities Act and Forms 10-Q, *21 10-K, *22 12b-25, *23 20-F, *24 40-F *25 and 6-K *26 under the Exchange Act.
*1 17 CFR 232.10 et seq.
*2 17 CFR 229.601.
*3 17 CFR 229.10 et seq.
*4 17 CFR 232.11.
*5 17 CFR 232.201.
*6 17 CFR 232.202.
*7 17 CFR 232.305.
*8 17 CFR 232.401.
*9 17 CFR 232.402.
*10 17 CFR 230.144.
*11 15 U.S.C. 77a et seq.
*12 17 CFR 240.12b-25.
*13 17 CFR 240.13a-14.
*14 17 CFR 240. 15d-14.
*15 15 U.S.C. 78a et seq.
*16 17 CFR 239.13.
*17 17 CFR 239.16b.
*18 17 CFR 239.33.
*19 17 CFR 239.39.
*20 17 CFR 239.40.
*21 17 CFR 249.308a.
*22 17 CFR 249.310.
*23 17 CFR 249.322.
*24 17 CFR 249.220f.
*25 17 CFR 249.240f.
*26 17 CFR 249.306.
Table of Contents
I. Introduction and Background
A. Introduction
B. Current Filing Technology and Interactive Data
C. The Commission's Multiyear Evaluation of Interactive Data and Overview of New Rules
D. Summary of Adopted Amendments
II. Discussion of Amendments
A. Submission of Financial Information Using Interactive Data
B. Phase-in Under the New Rules
1. Overview
2. Companies Covered by New Rules and Phase-in
3. Information and Documents Covered by the New Rules
a. Financial Statements, Footnotes, and Financial Statement Schedules
b. Reports Covered by the New Rules
c. Registration Statements Under the Securities Act Covered by the Rules
d. Registration Statements Under the Exchange Act Covered by the Rules
4. Initial Filing Grace Period
5. Web Site Posting of Interactive Data
C. Accuracy and Reliability of Interactive Data
1. Voluntary Program
2. Use of Technology To Detect Errors
3. Application of Federal Securities Laws
4. Officer Certifications and Integration of Interactive Data and Business Information Processing
5. Continued Traditional Format
D. Required Items
1. Data Tags
2. Regulation S-T and the EDGAR Filer Manual
E. Consequences of Non-Compliance and Hardship Exemption
III. Paperwork Reduction Act
IV. Cost-Benefit Analysis
V. Consideration of Burden on Competition and Promotion of Efficiency, Competition and Capital Formation
VI. Final Regulatory Flexibility Act Analysis
VII. Statutory Authority and Text of Amendments
I. Introduction and Background
A. Introduction
On May 30, 2008, we issued a release in which we proposed for public comment amendments requiring companies to provide their financial statements to the Commission and on their corporate Web sites in interactive data format using XBRL. *27 In this release, we are adopting the amendments substantially as proposed, but with the modifications discussed below.
*27 We proposed the amendments in Release No. 33-8924 (May 30, 2008) [73 FR 32794]. The comment letters we received in response to the proposing release were filed in File Number S7-11-08 and are available at http://www.sec.gov/comments/s7-11-08/s71108.shtml or from our Public Reference Room at 100 F Street, NE., Washington, DC 20549.
Over the last several decades, developments in technology and electronic data communication have facilitated greater transparency in the form of easier access to, and analysis of, financial reporting and disclosures. Technological developments also have significantly decreased the time and cost of filing disclosure documents with us. Most notably, in 1993 we began to require electronic filing on our Electronic Data Gathering, Analysis and Retrieval System (EDGAR). *28 Since then, widespread use of the Internet has vastly decreased the time and expense of accessing disclosure filed with us.
*28 In 1993, we began to require domestic issuers to file most documents electronically. Release No. 33-6977 (Feb. 23, 1993) [58 FR 14628]. Electronic filing began with a pilot program in 1984. Release No. 33-6539 (June 27, 1984) [49 FR 28044].
We continue to update our filing standards and systems as technologies improve. These developments assist us in our goal to promote efficient and transparent capital markets. For
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example, since 2003 we have required electronic filing of certain ownership reports *29 filed on Forms 3, *30 4, *31 and 5 *32 in a format that provides interactive data, and recently we adopted similar rules governing the filing of Form D. *33 In addition, recently we have encouraged, and in some cases required, public reporting companies and mutual funds to provide disclosures and communicate with investors using the Internet. *34 Now, as part of our continuing efforts to assist investors who use Commission disclosures, as well as filers of that disclosure, we are adopting rules to require that financial statements be provided in a format that makes the information they contain interactive.
*29 Release No. 33-8230 (May 7, 2003) [68 FR 25788 and 37044 (correction)] (required electronic filing of ownership reports) and Release No. 33-8891 (Feb. 6, 2008) [73 FR 10592] (required electronic filing of Form D [17 CFR 239.500]).
*30 17 CFR 249.103 and 274.202.
*31 17 CFR 249.104 and 274.203.
*32 17 CFR 249.105.
*33 17 CFR 239.500.
*34 See, e.g., Release No. 34-56135 (July 26, 2007) [72 FR 42222]; Release No. 34-55146 (Jan. 22, 2007) [72 FR 4148]; Release No. 34-52056 (July 19, 2005) [70 FR 44722]; Release No. 33-8861 (November 21, 2007) [72 FR 67790]; and Release No. 34-57172 (Jan. 18, 2008) [73 FR 4450].
Our adoption of the new rules is consistent with the recently announced plan to replace the EDGAR system with the Interactive Data Electronic Applications (IDEA) system. Based on a completely new architecture being built from the ground up, it will at first supplement and then eventually replace the EDGAR system. IDEA will facilitate the use and analysis of information submitted to the Commission in interactive data format. *35
*35 Press Release No. 2008-179 (Aug. 19, 2008).
The new rules build on our voluntary filer program, started in 2005, *36 that allowed us to evaluate certain uses of interactive data. The Commission has evaluated interactive data from an investor's perspective in several ways, including holding a roundtable focused on investor/analyst needs from interactive data, meeting with various investor focused data service providers to understand the ways in which interactive data could improve their ability to serve investors, and, at the staff level, experimenting with analysis capabilities using the Commission's viewer and other existing XBRL software. The voluntary program allows companies to submit financial statements on a supplemental basis in interactive format as exhibits to specified filings under the Exchange Act and the Investment Company Act of 1940 (Investment Company Act). *37 Companies that participate in the program still are required to file their financial statements in American Standard Code for Information Interchange (ASCII) or HyperText Markup Language (HTML). *38 In 2007, we extended the program to enable mutual funds voluntarily to submit in interactive data format supplemental information contained in the risk/return summary section of their prospectuses. *39 Over 100 companies have participated in the voluntary program. These companies span a wide range of industries and company characteristics, and have a total public float of over $2 trillion.
*36 Release No. 33-8529 (Feb. 3, 2005) [70 FR 6556].
*37 15 U.S.C. 80a-1 et seq.
*38 HTML is a standardized language commonly used to present text and other information on Web sites.
*39 Release No. 33-8823 (July 11, 2007) [72 FR 39290].
Interactive data can create new ways for investors, analysts, and others to retrieve and use financial information in documents filed with us. For example, users of financial information will be able to download it directly into spreadsheets, analyze it using commercial off-the-shelf software, or use it within investment models in other software formats. Through interactive data, what is currently static, text-based information can be dynamically searched and analyzed, facilitating the comparison of financial and business performance across companies, reporting periods, and industries.
Interactive data also provide a significant opportunity to automate regulatory filings and business information processing, with the potential to increase the speed, accuracy, and usability of financial disclosure. Such automation could eventually reduce costs. A company that uses a standardized interactive data format at earlier stages of its reporting cycle could reduce the need for repetitive data entry and, therefore, the likelihood of human error. In this way, interactive data may improve the quality of information while reducing its cost.
Also, to the extent investors currently are required to pay for access to annual or quarterly report disclosure that has been extracted and reformatted into an interactive data format by third-party sources, the availability of interactive data in Commission filings will allow investors to avoid additional costs associated with third party sources.
We believe that requiring issuers to file their financial statements using interactive data format will enable investors, analysts, and the Commission staff to capture and analyze that information more quickly and at less cost than is possible using the same financial information provided in a static format. Any investor with a computer and an Internet connection will have the ability to acquire and download interactive financial data that have generally been available only to large institutional users. The new interactive data requirements will not change disclosure requirements under the federal securities laws and regulations, but will add a requirement to include financial statements in a new interactive data format as an exhibit. Thus, the requirement that filers provide financial statements using interactive data will not otherwise alter at all the disclosure or formatting standards of periodic or other reports, *40 registration statements, *41 or transition reports. *42 These filings will continue to be available as they are today for those who prefer to view the traditional text-based document.
*40 These reports include reports on Forms 8-K and 6-K that either are required to be filed as a result of information regarding specified events or are filed voluntarily to disclose other information.
*41 Unless otherwise stated, when we refer to registration statements, we mean registration statements filed under the Securities Act.
*42 Transition reports generally must be filed when an issuer changes its fiscal closing date. The transition report covers the resulting transition period between the closing date of its most recent fiscal year and the opening date of its new fiscal year. See Rules 13a-10 [17 CFR 240.13a-10] and 15d-10 [17 CFR 240.15d-10]. Unless otherwise stated, when we refer to Exchange Act reports, periodic reports, or "reports," we mean quarterly and annual periodic reports as well as transition reports.
We received 79 comment letters relating to the proposing release from domestic and foreign commenters including investor groups, pension funds, corporations, accounting and law firms, vendors and service providers, individuals, and corporate, professional and trade associations. Many commenters generally supported the proposed requirement to submit financial information in interactive data format, but many also expressed concern about specific aspects of the proposed rules including, in particular, the proposed phase-in requirement, detailed tagging of footnotes and liability related to the interactive data file. The final amendments adopt the rules substantially as proposed, with some changes to address issues expressed in the comment letters. We discuss specific comments where applicable throughout this release.
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B. Current Filing Technology and Interactive Data
Companies filing electronically are required to file their registration statements, quarterly, annual and current reports, and transition reports in ASCII or HTML format. *43 Also, to a limited degree, our electronic filing system uses other formats for internal processing and document-type identification. For example, our system uses eXtensible Markup Language (XML) to process reports of beneficial ownership of equity securities on Forms 3, 4, and 5 under Section 16(a) of the Exchange Act. *44
*43 Rule 301 under Regulation S-T [17 CFR 232.301] requires electronic filings to comply with the EDGAR Filer Manual, and Section 5.1 of the Filer Manual requires that electronic filings be in ASCII or HTML format. Rule 104 under Regulation S-T [17 CFR 232.104] permits filers to submit voluntarily as an adjunct to their official filings in ASCII or HTML unofficial PDF copies of filed documents. Unless otherwise stated, we refer to filings in ASCII or HTML as traditional format filings.
*44 15 U.S.C. 78p(a).
Electronic formats such as HTML, XML, and XBRL are open standards *45 that define or "tag" data using standard definitions. The tags establish a consistent structure of identity and context. This consistent structure can be recognized and processed by a variety of different software applications. In the case of HTML, the standardized tags enable Web browsers to present Web sites' embedded text and information in predictable format. In the case of XBRL, software applications, such as databases, financial reporting systems, and spreadsheets, recognize and process tagged financial information. XBRL was derived from the XML standard. It was developed and continues to be supported by XBRL International, a consortium of approximately 550 organizations representing many elements of the financial reporting community worldwide. XBRL U.S., the international organization's U.S. jurisdiction representative, is a non-profit organization *46 that includes companies, public accounting firms, software developers, filing agents, data aggregators, stock exchanges, regulators, financial services companies, and industry associations. *47 In 2006, the Commission contracted with XBRL U.S. to develop the taxonomy or standard list of tags necessary for financial reporting in interactive format consistent with U.S. GAAP and Commission regulations. *48 In developing the taxonomy, XBRL U.S., which is responsible for the content of the taxonomy, included items required by U.S. GAAP and the Commission's regulations, however they also included other items that are commonly used by companies in their financial statements. In addition to undergoing a public review and comment period, the taxonomy was reviewed by the staff of the Financial Accounting Standards Board (FASB) and the Commission. The FASB staff is involved in the process for creating and reviewing tags for new accounting pronouncements as they are published and in the future the draft tags may even be published with the accounting standard. Currently, the Commission has a contract with XBRL U.S. to develop the standard list of tags for the risk/return summary section of mutual fund prospectuses and the schedule of investments for investment companies.
*45 The term "open standard" is generally applied to technological specifications that are widely available to the public, royalty-free, at minimal or no cost.
*46 XBRL U.S. is a 501(c)(6) organization. Internal Revenue Code section 501(c)(6) applies to "Business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues (whether or not administering a pension fund for football players), not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual." See 26 U.S.C. 501(c)(6).
*47 XBRL U.S. supports efforts to promote interactive financial and business data specific to the U.S., including U.S. GAAP.
*48 That contract has been completed.
Financial reporting in interactive format requires a standard list of tags. These tags are similar to definitions in an ordinary dictionary, and they cover a variety of financial concepts that can be read and understood by software applications. For financial statements prepared in accordance with U.S. GAAP, a filer will use the list of tags for U.S. financial statement reporting. *49 This list of tags contains descriptive labels, definitions, authoritative references to U.S. GAAP and Commission regulations where applicable, and other elements, all of which provide the contextual information necessary for interactive data *50 to be recognized and processed by software. *51
*49 Unless stated otherwise, when we refer to the "list of tags for U.S. financial statement reporting" we mean the interactive data taxonomy as approved by XBRL U.S. that is based on U.S. GAAP, Commission regulations, and common financial reporting practices used in the preparation of financial statements in the U.S.
*50 The new rules define the interactive data in machine-readable format required to be submitted as the "eractive data file," which will be required with every interactive data submission. See [Section] 232.11 of Regulation S-T.
*51 For example, contextual information will identify the entity to which it relates, usually by using the filer's CIK number. A hypothetical filer converting its traditional electronic disclosure of $1,000,000 of net sales would have to create interactive data that identify what the 1,000,000 represents, net sales, and the currency in which it is disclosed, dollars. The contextual information will include other information as necessary; for example, whether it relates to an annual report or quarterly report, the financial reporting period, continuing or discontinued operations, or actual, restated, forecast, pro forma or other type of disclosure.
Data tags are applied to financial statements by using commercially available software that guides a preparer to tag information in the financial statements with the appropriate tags in the standard list. Each element in the standard list of tags has a standard label. A company can therefore match the standard labels to each caption in its financial statements. Occasionally, because filers have considerable flexibility in how financial information is reported under U.S. reporting standards, it is possible that a company may wish to use a non-standard financial statement line item that is not included in the standard list of tags. In this situation, a company will create a company-specific element, called an extension. *52 For example, what a company identifies in its traditional format financial statements as "operating revenues" may be associated with an element that has "net revenues" as the standard label. In this situation, a company will need to change, or extend, the standard label to become "operating revenues" when it tags that disclosure with the element. *53 A company may choose to tag its own financial statements using commercially available software, or it may choose instead to outsource the tagging process.
*52 In other cases, without a relevant and appropriate tag in the list of tags, a company will be required to create an extension in order to provide interactive data that are equivalent to the corresponding portion of the traditional format filing.
*53 Unless otherwise stated, extensions, whether relating to an element or a label, are not part of the standard list of tags.
By the same process, a filer that prepares its financial statements in accordance with IFRS as issued by the IASB *54 will use the IFRS list of tags to
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create its interactive data-formatted financial statements. *55 The IFRS list of tags contains descriptive labels, authoritative references to IFRS where applicable, and other elements and concepts that provide the contextual information necessary for interactive data to be recognized and processed by software. The IASCF has developed the IFRS list of tags. To create interactive data using the IFRS list of tags, an issuer generally will need to follow the same mapping, extension and tagging process as will a company that uses the list of tags for U.S. financial statement reporting. As further discussed below, the IASCF is collaborating with XBRL U.S. and other parties to align the U.S. GAAP and IFRS lists of tags to make them more interoperable and comparable. This collaboration involves the development of the appropriate scope for the IFRS list of tags' content and technology architecture and currently totals 2,700 IFRS tags.
*54 As used in this release, the phrase "IFRS as issued by the IASB" refers to the authoritative text of IFRS, which, according to the Constitution of the International Accounting Standards Committee Foundation (IASCF), is published in English. See "International Financial Reporting Standards, including International Accounting Standards and Interpretations as at 1 January 2007," Preface to International Financial Reporting Standards, at paragraph 23. See http://www.iasb.org/xbrl/index.html. The IASCF released the 2008 taxonomy (list of tags) on March 31, 2008. See IASB Press Release, The IASC Foundation publishes IFRS Taxonomy 2008, (March 31, 2008). Following a 60-day public consultation period, the IASCF published the final list of tags in June 2008. See IASB Press Release IASC Foundation publishes IFRS Taxonomy 2008 (June 24, 2008). Recently, the IASC published the IFRS Taxonomy Guide. See IASB Press Release, The IASC Foundation publishes the IFRS Taxonomy Guide (August 28, 2008).
*55 Unless stated otherwise, when we refer to the "IFRS list of tags" we mean the list of tags for financial statements prepared in accordance with IFRS as issued by the IASB.
Because financial statements in interactive data format are intended to be processed by software applications, the unprocessed data are not readable by humans. Thus, viewers are necessary to convert or "render" the interactive data file to human readable format. Some viewers are similar to Web browsers used to read HTML files.
The Commission's Web site currently provides links to viewers that allow the public to easily read company disclosures submitted using interactive data. These viewers are intended to demonstrate the capability of software to present interactive data in human-readable form and to provide open source software to give developers a free resource they can use as is or build upon. As noted above, software also is able to process interactive data so as to automate and, as a result, facilitate access to and analysis of tagged data. In addition, we are aware of other applications under development that may provide additional and advanced functionality.
C. The Commission's Multiyear Evaluation of Interactive Data and Overview of New Rules
In 2004, we began to assess the benefits of interactive data and its potential to improve the timeliness and accuracy of financial disclosure and analysis of Commission filings. *56 As part of this evaluation, we adopted rules in 2005 that permitted filers, on a voluntary basis, to provide financial disclosure in interactive data format as an exhibit to certain filings on our electronic filing system. The voluntary program has been based on an earlier version of the list of tags for U.S. financial statement reporting, which does not include a full array of standard elements for financial statement footnotes and schedules. After more than two years of increasing participation, 100 companies have chosen to provide interactive data financial reporting. *57
*56 Press Release No. 2004-97 (July 22, 2004).
*57 A viewer for the voluntary program is available at http://www.sec.gov/spotlight/xbrl/xbrlwebapp.shtml. This viewer maintains a running total of companies and filers submitting data as part of the voluntary program. As of January 2, 2009, 125 companies had submitted over 540 interactive data reports.
During this time, we have kept informed of technology advances and other interactive data developments. We note that several U.S. and foreign regulators have begun to incorporate interactive data into their financial reporting systems. *58 In the U.S., the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, and the Office of the Comptroller of the Currency (OCC) require the use of XBRL. *59 Since 2006, approximately 8,200 U.S. financial institutions have been using XBRL to submit quarterly reports to banking regulators. *60 Internationally, countries that require or have instituted voluntary or pilot programs for XBRL financial reporting include Australia, Belgium, Canada, China, Denmark, France, Germany, Ireland, Israel, Japan, Korea, Luxembourg, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Thailand and the United Kingdom. *61
*58 However, well-developed and widespread application of XBRL to financial reports used by investors is not yet the international norm. According to the commenter EuropeanIssuers, "XBRL is permitted or required by regulators * * * only * * * for certain reports filed with banking regulators or unconsolidated financial statements filed with the commercial registries [and] XBRL is not currently being used in Europe for financial reporting to investors." EuropeanIssuers is a non-profit pan-European organization formed when the European Association of Listed Companies and the Union of Issuers Quoted in Europe combined their organizations in 2008. The organization states that it represents the vast majority of publicly quoted companies in Europe.
*59 Since 2005, the FDIC, Federal Reserve, and the OCC have required the insured institutions that they oversee to file their quarterly Consolidated Reports of Condition and Income (called Call Reports) in interactive data format using XBRL. Call Reports, which include data about an institution's balance sheet and income statement, are used by these federal agencies to assess the financial health and risk profile of the financial institution.
*60 See Improved Business Process Through XBRL: A Use Case for Business Reporting, available at http://www.xbrl.org/us/us/FFIEC%20White%20Paper%2002Feb2006.pdf.
*61 See XBRL International Progress Report (November 2007), available at http://www.xbrl.org/ProgressReports/2007_11_XBRL_Progress_Report.pdf.
We also have kept informed of relevant advances and developments by hosting roundtables on the topic of interactive data financial reporting, *62 creating the Commission's Office of Interactive Disclosure, *63 and meeting with international securities regulators to discuss, among other items, timetables for implementation of interactive data initiatives for financial reporting. *64 Also, staff of the Commission attended meetings of the Advisory Committee on Improvements to Financial Reporting (CIFiR) in which the committee discussed proposals for financial reporting using interactive data. *65 We also have reviewed written statements and public comments received by CIFiR on its XBRL developed proposal *66 that preceded its XBRL final recommendation.
*62 See materials available at http://www.sec.gov/spotlight/xbrl/xbrl- meetings.shtml.
*63 Press Release No. 2007-213 (October 9, 2007).
*64 Press Release No. 2007-227 (November 9, 2007).
*65 For example, CIFiR conducted an open meeting on March 14, 2008 in which it heard reactions from an invited panel of participants to CIFiR's developed proposal regarding required filing of financial information using interactive data. An archived Web cast of the meeting is available at http://sec.gov/about/offices/oca/cifir.shtml. The March 14, 2008 panelists presented their views and engaged with CIFiR members regarding issues relating to requiring interactive data tagged financial statements, including tag list and technological developments, implications for large and small public companies, needs of investors, necessity of assurance and verification of such tagged financial statements, and legal implications arising from such tagging. Also, CIFiR has provided to the Commission a Final Report that recommends that the Commission, over the long term, require the filing of financial information using interactive data once specified conditions are satisfied. See Final Report of the Advisory Committee on Improvements to Financial Reporting to the United States Securities and Exchange Commission (Aug. 1, 2008) (Final Report), available at http://www.sec.gov/about/offices/oca/acifr/acifr-finalreport.pdf. CIFiR's recommendation is discussed more fully in Part II.B.2 below.
*66 See Progress Report of the Advisory Committee on Improvements to Financial Reporting to the United States Securities and Exchange Commission (Feb. 14, 2008) (Progress Report), available at http://www.sec.gov/rules/other/2008/33-8896.pdf. The XBRL developed proposal appears in chapter 4 of the Progress Report. Written statements of panelists at the March 14, 2008 meeting and public comments received on the Progress Report are available at http://sec.gov/comments/265-24/265-24.shtml.
Building on our experience from the voluntary program, and our participation in the other initiatives described above, we proposed rules to require financial reporting using interactive data, and are now adopting
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those rules with the modifications discussed below. The rules will apply to domestic and foreign public companies that prepare their financial statements in accordance with U.S. GAAP, and foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB. Filers will be required to include an exhibit containing interactive data with their Securities Act registration statements, quarterly, if applicable, and annual reports, and transition reports, as well as reports on Forms 8-K *67 or 6-K that contain specified financial statements. *68 Filers also will be required to provide it on their company Web sites. *69 We believe requiring the submission and posting of interactive data has the potential to provide advantages for the investing public by making financial data more accessible, timely, inexpensive and easier to analyze.
*67 17 CFR 249.308.
*68 The specified financial statements are discussed in detail in n. 74.
*69 The new rules will not include any investment company that is registered under the Investment Company Act or any "business development company," as defined in Section 2(a)(48) of that Act [15 U.S.C. 80a-2(a)(48)]. Business development companies are a category of closed-end investment companies that are not required to register under that Act. The new rules also will not include any entity that reports under the Exchange Act and prepares its financial statements in accordance with Article 6 of Regulation S-X [17 CFR 210.6-01 et seq. ]. The new rules will not apply to these entities because the standard list of tags for investment management is under development.
By enabling filers to further automate their financial processes, interactive data may eventually help filers improve the timeliness of, and speed at which they generate, financial information, while reducing the cost of filing and potentially increasing the accuracy of the information. For example, with standardized interactive data tags, registration statements and periodic and current reports may require less time for information gathering and review. Also, standardized interactive data tagging may enhance the ability of an issuer's in-house financial professionals to identify and correct errors in the issuer's registration statements and periodic and current reports filed in traditional electronic format. Filers also may gain benefits not directly related to public financial disclosures. For example, filers that use interactive data may be able
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