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More “Interactive Data”

February 14, 2009
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The SEC has adopted a rule amendment that will require mutual funds to disclose risk/return information in XBRL format. Pursuant to the rule amendment, mutual funds will provide risk/return summary information in an XBRL exhibit to prospectuses and registration statements as well as on their public websites. In addition, rules were adopted to permit investment companies to submit portfolio holdings information in the SEC’s voluntary interactive data (the SEC’s term for XBRL tagged data) program without being required to submit other information. These modifications are an addition to the already enacted rules requiring XBRL reporting of company registration, quarterly and annual statements as well as investment company XBRL reporting.

The rule amendment is intended to improve the usefulness of risk/reward and portfolio holding information to investors. Under the rules, the information could be downloaded directly into spreadsheets and analyzed in a variety of ways using commercial off-the-shelf and investment models in other software formats. The rules are intended not only to make risk/return summary 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 mutual fund disclosure, and eventually reduce costs.

Welcome to an XBRL enabled new world. In the future more information will be electronically available for use by us in a variety of ways. Transparency and automated access will increase as new standard XBRL taxonomies are developed for all kinds of information. We will be able to access information on our laptops, PDA/phones and other devices in a focused and disaggregated way.  Companies will begin to see benefits of using XBRL within their firewalls as well. Information within a company will be tagged to enable seamless movement of data between systems, to internal users and to and from suppliers and customers. Governments will get into the act as well (many already have). Imagine being able to see in a granular way all that spending that congress likes to do, or seeing how all of our representatives voted on various bills, are seeing each “pork spending” addition to good legislation (that would be true transparency President Obama). The sky is the limit on where we can go with XBRL and information access.

What do you want to know?

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