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Statement on the Commission’s Proposal for Inline XBRL Filing of Tagged Data

Commissioner Kara M. Stein

U.S. Securities and Exchange Commission

March 1, 2017

One of the most exciting aspects of serving as a Commissioner of the Securities and Exchange Commission is the view that I get as I watch investors, public companies, and even regulators help to build a better tomorrow.

Simply put, it’s all about tomorrow.  Investors are focused on tomorrow.  Public companies are focused on tomorrow.   Our markets are focused on tomorrow. And, today’s we are as well. 

FinTech, RegTech, and other technological tools consume large amounts of data in order to focus on key risks, forecast trends, or project scenarios of what tomorrow might bring.

And, financial services firms are growing their technology budgets with an increasing focus on parsing and utilizing data.  Recently, it was reported that one investment bank budgeted $9.6 billion for technology.[1] 

Unfortunately, our document-driven, text-based disclosure system is increasingly obsolete in an age of big data, cloud computing, and machine learning.

Today, the Commission is proposing a single reporting format for public company reports that is both human and machine readable.  Computers can quickly parse the data and humans can view the document in an ordinary way.

In addition, this one format should improve data quality while reducing the cost and burden of preparing public reports.[2] 

Under the Commission’s proposal, operating companies would provide financial information and mutual funds would provide risk/return summaries using the Inline XBRL format.  The Commission also is proposing a phase-in period for operating companies in order to provide filing agents and software vendors with time to develop tools to reduce the cost and burden of reporting using the Inline XBRL format. 

I look forward to comment from investors, issuers, and all market participants, including those that will be preparing tools to help operating companies and mutual funds navigate the Inline format.  

I also want join Acting Chair Piwowar in thanking the staff for all your hard work on this proposal, including Narahari Phatak, Mike Willis, Anzhela Knyazeva , Walter Hamscher, Matthew Slavin, Hermine Wong , Matthew DeLesDernier, and former staff member Christopher Meeks from the Division of Economic and Risk Analysis; Michael Pawluk , and John Foley  from the Division of Investment Management, and Kevin Stout, Mark Jacoby, Giles Cohen, and Michal Dusza from the Office of the Chief Accountant.

 

[1] Hugh Son, JPMorgan Software Does in Seconds What Took Lawyers 360,000 Hours, Bloomberg, February 27, 2017, available at https://www.bloomberg.com/news/articles/2017-02-28/jpmorgan-marshals-an-army-of-developers-to-automate-high-finance

[2] Under the Commission’s voluntary program, twenty-six filers have submitted 35 Inline XBRL filings as of January 31, 2017.