Interview with Alfred Berkeley, Chairman of XBRL US
MARK STORY: Hello, and welcome to the third in a series of podcasts produced by the Office of Interactive Disclosure of the Securities and Exchange Commission, or the SEC. My name is Mark Story and I will be your host of today's inaugural podcast. This is the third in a series of podcasts designed to introduce people to interactive data, or what some people call "XBRL." The Office of Interactive Disclosure at the SEC heads up our interactive data efforts.
Before beginning, I need to let you know that the views we express today are our own and not necessarily those of the Securities and Exchange Commission, of its Chairman, of its Commissioners, or of my colleagues on the staff. Those of us who work at the SEC are all required to add that disclaimer whenever we speak publicly.
Moreover, we encourage all questions and comments. If you have one about interactive data generally, please send it to our email address: Ask-OID@sec.gov. That's A-S-K dash O-I-D@sec.gov.
With that out of the way, let me introduce my guest, Mr. Alfred Berkeley, Chairman and Chief Executive Officer, Pipeline Financial Group, Inc. and Pipeline Trading Systems LLC. Mr. Berkeley is also Chairman of the Board of XBRL US, the a local jurisdiction of XBRL International — a not-for-profit consortium of approximately 500 companies and agencies worldwide working together to build the XBRL language and promote and support its adoption. Moreover, Al has over 30 years of experience in a the financial industry. Prior to joining Pipeline, from June 1996 until August 2003, Al served as President and then Vice-Chairman of The NASDAQ Stock Market, Inc. Before NASDAQ, Al was a Managing Director of Alex. Brown & Sons, a leading investment bank. Al co-founded Alex. Brown's Technology Group in 1975. The Technology Group completed about 500 financial offerings for clients while he was associated with the Alex Brown. Al is a graduate of the Wharton School of Finance of the University of Pennsylvania (MBA) and the University of Virginia (BA). He also served as an officer in the United States Air Force.
MARK STORY: Welcome, Al.
AL BERKELEY: Well I'm so glad to be here. I think that is a very interesting subject and as such is a huge impact on it investors in the future. I'm delighted to be part of educating the community.
MARK STORY: Let's get right to it. As someone who has been involved in technology for more — I'm not saying this to embarrass you — but for more than 30 years, and is the chairman of XBRL US , you can you give us a sense of what is the most significant benefit for investors?
AL BERKELEY: If all companies were to put data in XBRL, or interactive data format, I think that XBRL format and the Internet active data format will democratize data in a way that investors can imagine until they see it. Information is going to be available thoroughly and completely and immediately in ways that have been very difficult to accomplish or very expensive to accomplish so far. Investors will be able to set up a spreadsheet, for example, to compare fields of information on various companies and have the information flow into the spreadsheets electronically, automatically when that information becomes available on the SEC system or in the company's website, So there's an immediate benefit and it cuts out all the costs of intermediaries preparing the data. I think that many investors will elect to use interactive data and find it useful in evaluating data but the data itself will become freely available to anyone who wants it. The public investors face no disadvantage versus the professional investor as well as the retail investor. For example, one could look at some of the XBRL data in viewers and people will be able to compete. companies will be able to be competing to offer these viewers and you should get rich improvements in the functionality of the viewers at very little cost to the individual investor.
MARK STORY: Great, and just a quick note for those who are listening, that there are in fact viewers in the SEC website and if you're interested in looking at some of these viewers unique you can visit www.SEC.gov/XBRL. Speaking generally, how long do you think it'll take for investors and analysts to realize the benefits?
AL BERKELEY: Well, I think that question has two parts to it. While I relate to my experience I think of how long will it take me to realize the benefits of this something and how long will it take to get the cool tools in place to make productive use them. I think that as in any technology markets, you have early adopters and you have fast followers and you have mass participation, and later you have laggards who come to it late. This is a very classic adoption pattern in technology, and adoption patterns of all types, the early adopters with XBRL tools get quite excited about it because I believe that this advance is as important to the investor as the original and best introduction of EDGAR 25 years ago where the SEC began to make information available electronically. This is an order of magnitude improvement in the data that's available to you and the usefulness of that data and the ease-of-use of that day that that being said I think that the easiest way to get started once it dawns on you that this is worth doing is to go to the SEC website and pull down out one of viewers a look at some of the data that's out there and to see what you can do with it., Then I would also get on the web and I search for other sites that have XBRL tools available and just make yourself generally familiar with what's available. I would also go to the XBRL US website which I think has a lot of explanatory information.
MARK STORY: That's terrific. I guess is someone who probably remembers the dawn of EDGAR — and that's quite a significant statement.
AL BERKELEY: I do remember the at the dawn of Edgar and there was a lot of questioning about it and now people can get along without is exactly the same thing that will happen with XBRL. People will wonder whether it's worth the effort to get it and once they do they will say how did I ever get along without it.
MARK STORY: That's fascinating, in that your statement is based upon your more than 30 years of experience at the crossroads of markets and technology. Do you have an opinion on why so few investors today are involved in interactive data?
AL BERKELEY: Well the tools are widely available. In their minds, well, one thing you should know is that the major spreadsheet vendors, the major processing vendors, the major database vendors all have all either made a XBRL implementations possible in technology or they are about to use that the underlying tools that make all these actionable by investors on the personal level. Increasingly, there is a building block for the foundation of a the effort to make this work. Look at what Microsoft, for example, has done by looking at their tools. Locate their help sections and ask about XBRL. I am sure a simple Google search could reveal some pretty good information. I think that it certainly could just go into the help sections of the spreadsheets that you're using or the word processor that you're using or the database that you're using there are basic tools of most people use for financial analysis. And managing their data, you'll see that you can also look for, if you do a search, you can look for the vendors who build XBRL tools because they have undoubtedly paid for ad words and will be popping up on searches
MARK STORY: In addition to this, in our last podcasts we spoke with Michelle Savage, also of XBRL US, and she indicated that there is quite a bit of information is available on your website which is www.XBRL.us, such as commonly asked questions for filers, it has all kinds of information about software vendors and quite a bit of information there can help people get started.
AL BERKELEY: Correct, that's absolutely correct and if you're an investor or know about this process of what's happening, what we've done is to deliver to the SEC and a large number more than 15,000 data fields that are carefully aligned across more than a dozen industries. Most of the companies in the public commentary were mostly the filers and will be filing a data using the system or the accounting firms, or service vendors. The data service vendors are looking at these offerings in great detail and are coming back into the SEC with comments. This is the great strength of our democratic process, they you don't get requirements to do things until there is a public period of comment and that will enhance or improve the program and after that, the SEC will hold more hearings and decide whether or not this will be something we'll do.
MARK STORY: Well, this has been a fascinating talk, about the world of interactive data, and I would really like to thank you for being part of today's podcast. This concludes the Securities and Exchange Commission's Office of Interactive Disclosure Podcast #3. Remember that this is the just the third in a series of podcasts about the new world of interactive data. We encourage all questions and comments. If you have one about interactive data generally, please send it to our email address: Ask-OID@sec.gov. That's ASK-OID@sec.gov.
Be sure to check back soon as we will be responding to listener inquiries in coming podcasts. For Al Berkeley, this is Mark Story saying "thanks for listening."