Re: File No. S7-05-00; Rulemaking for EDGAR System
As technical users of EDGAR and the embedded FDS, we strongly oppose the proposed elimination of the FDS (Financial Data Schedule).
We concur with Nicholas B. Keenan, Chief Technology Officer of Global Securities Information, Inc., who writes
Global Securities Information urges the Commission to continue requiring the filing of Financial Data Schedules (FDS) as exhibits to Form 10-K and 10-Q.EdgarScan, a web application that attempts to extract financial information from 10-K's and 10-Q's, has shown us how hard this is and how important it is to have a reliable FDS section. EdgarScan processes millions of requests monthly and has a wide user base both in the corporate and academic worlds.
While the existing FDS is admittedly imperfect, it is the most nearly uniform of the disclosure documents currently required of public companies. It is the only place where investors can currently find financial information on a consistent basis, in a consistent format.
The elimination of the FDS will negatively impact the individual investor as their are a number of public access sites such as CNN FN, 10KWizard, Spredgar, and Edgarscan that allow the individual investors to look at a snapshot of a reporting company's financial health, at no cost, without reading through thousands of pages of financial information.
If anything, we feel that the FDS items should be expanded for further clarity and completeness. If done properly, individual investors would be able to summarize a public company's health quickly and accurately, as the 1940 Act rules allow with summary prospectus information. Less disclosure in this area is a step backward, not forward.
The Financial Data Schedule represents the area of EDGAR where the Commission comes closest to its goal of providing uniform disclosure to the investing community. Shortcomings in the existing process should be addressed by enhancing the FDS rather than eliminating it.
There are certain things in the FDS that are simply not available elsewhere in the filing, such as <FISCAL-YEAR-END>. When EdgarScan fails to extract information from tables it will try to find the information in the FDS. Although filers often do not fill out the FDS accurately, it is much better than reliance upon what is generally not there.
We think something more comprehensive should be put into place such as an extensible electronic vocabulary for EDGAR filings using a taxonomy such as XFRML.