Interactive Data To Improve Financial Reporting, 6776-6821 [E9-2334]
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Federal Register / Vol. 74, No. 26 / Tuesday, February 10, 2009 / Rules and Regulations
SECURITIES AND EXCHANGE
COMMISSION
17 CFR Parts 229, 230, 232, 239, 240,
and 249
[Release Nos. 33–9002; 34–59324; 39–2461;
IC–28609; File No. S7–11–08]
RIN 3235–AJ71
Interactive Data To Improve Financial
Reporting
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AGENCY: Securities and Exchange
Commission.
ACTION: Final rule.
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.
DATES: Effective Date: April 13, 2009
except § 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
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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.
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
1 17
CFR 232.10 et seq.
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.
2 17
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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.
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.
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
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 https://www.sec.gov/
comments/s7-11-08/s71108.shtml or from our
Public Reference Room at 100 F Street, NE.,
Washington, DC 20549.
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].
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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.
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
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
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].
35 Press Release No. 2008–179 (Aug. 19, 2008).
36 Release No. 33–8529 (Feb. 3, 2005) [70 FR
6556].
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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.
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
37 15
U.S.C. 80a–1 et seq.
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].
38 HTML
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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 textbased document.
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.
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.
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B. Current Filing Technology and
Interactive Data
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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
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 nonprofit organization 46 that includes
companies, public accounting firms,
software developers, filing agents, data
aggregators, stock exchanges, regulators,
financial services companies, and
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).
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, realestate 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).
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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.
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
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.
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 ‘‘interactive data file,’’ which will be required
with every interactive data submission. See § 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
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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.
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
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.
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.
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 https://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 60day 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
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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.
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 humanreadable 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.
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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
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.
56 Press Release No. 2004–97 (July 22, 2004).
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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
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,
57 A viewer for the voluntary program is available
at https://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.
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 nonprofit 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
https://www.xbrl.org/us/us/
FFIEC%20White%20Paper%2002Feb2006.pdf.
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Sweden, Thailand and the United
Kingdom.61
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.
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
61 See XBRL International Progress Report
(November 2007), available at https://www.xbrl.org/
ProgressReports/
2007_11_XBRL_Progress_Report.pdf.
62 See materials available at https://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
https://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 https://
www.sec.gov/about/offices/oca/acifr/acifrfinalreport.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
https://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 https://sec.gov/comments/265-24/26524.shtml.
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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.
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 to
consolidate enterprise financial
information more quickly and
potentially more reliably across
operating units with different
accounting systems. However, we
recognize that at the outset, filers will
most likely prepare their interactive
data as an additional step after their
67 17
CFR 249.308.
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.
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financial statements have been
prepared.
D. Summary of Adopted Amendments
The principal elements of the new
rules are as follows:
• Domestic and foreign large
accelerated filers 70 that use U.S. GAAP
and have a worldwide public common
equity float above $5 billion 71 as of the
end of the second fiscal quarter of their
most recently completed fiscal year 72
will provide to the Commission a new
exhibit.73 The exhibit will be required
with such filers’ Securities Act
registration statements, quarterly, if
applicable, and annual reports, and
transition reports, as well as reports on
Form 8–K or Form 6–K that contain
revised or updated financial
statements.74 The exhibit will contain
70 Exchange Act Rule 12b–2 [17 CFR 240.12b–2]
generally defines ‘‘large accelerated filer’’ as an
issuer that has common equity held by unaffiliated
persons with a value of at least $700 million, has
been subject to the Exchange Act’s periodic
reporting requirements for at least 12 months, has
filed at least one annual report, and is not eligible
to use the disclosure requirements available to
smaller reporting companies for its periodic reports.
71 The $5 billion cutoff will establish a category
of approximately 500 filers that will be subject to
the interactive data requirements in the first year.
72 The proposing release at n. 89 stated our
intention that the float measurement date be
consistent with the measurement date for
determining large accelerated filer status.
Throughout the proposing release, however, we
inadvertently characterized the measurement date
as the end of the most recently completed second
fiscal quarter rather than the end of the second
fiscal quarter of the most recently completed fiscal
year. We now characterize the measurement date in
the latter manner to conform it to our stated
intention.
73 Interactive data will be required as an exhibit
to a Securities Act registration statement that
contains financial statements, such as a Form S–1
[17 CFR 239.11], but not required in connection
with an initial public offering. Interactive data will
not be required as an exhibit to a Securities Act
registration statement that does not contain
financial statements, such as a Form S–3 or other
form filed by an issuer that is eligible to and does
incorporate by reference all required financial
statements from its periodic reports. Also,
interactive data will not be required as an exhibit
to an Exchange Act registration statement.
74 In connection with registration statements
where historical financial statements are
incorporated by reference, issuers often file under
cover of Form 8–K or 6–K their revised audited
annual financial statements when their previously
filed annual financial statements are required to be
revised, pursuant to applicable accounting
standards, to reflect the effects of certain
subsequent events, including a discontinued
operation, a change in reportable segments, or a
change in accounting principle. Also, foreign
private issuers occasionally may file current interim
financial statements pursuant to the nine-month
updating requirement of Item 8.A.5 of Form 20–F
under cover of Form 6–K which are incorporated
by reference into a registration statement. In these
circumstances, the interactive data exhibit will be
required to be included in the Form 8–K or 6–K to
accompany the traditional format financial
statements to which they relate. Interactive data
exhibits related to financial statements that have
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the financial statements 75 and any
applicable financial statement schedules
in interactive data format. The
requirement will apply beginning with
a periodic report on Form 10–Q, Form
20–F or Form 40–F containing financial
statements for a fiscal period ending on
or after June 15, 2009.
• All other domestic and foreign large
accelerated filers using U.S. GAAP will
be subject to the same interactive data
reporting requirements the following
year, beginning with a periodic report
on Form 10–Q, Form 20–F or Form 40–
F containing financial statements for a
fiscal period ending on or after June 15,
2010.
• All remaining filers using U.S.
GAAP, including smaller reporting
companies,76 and all foreign private
issuers that prepare their financial
statements in accordance with IFRS as
issued by the IASB,77 will be subject to
the same interactive data reporting
requirements beginning with a periodic
report on Form 10–Q, Form 20–F or
Form 40–F containing financial
statements for a fiscal period ending on
or after June 15, 2011.
• Filers that first become subject to
the requirement to submit interactive
data after year three (i.e., companies that
become subject to our reporting
requirements after the phase-in is
complete), will first be required to
been restated to correct an accounting error will be
required to be included in any amended registration
statement or periodic report or transition report that
contains the restated traditional format financial
statements. The requirement to submit restated
financial statements in interactive data format in
such an instance would depend on whether the
original filing contained financial statements for
fiscal periods regarding which the filer was subject
to the interactive data requirements. For instance,
for those filers in the first phase-in period, the
financial statements being restated would only have
to be submitted in interactive data format if they
were originally for fiscal periods ending on or after
June 15, 2009.
75 When we refer to financial statements, we
mean the face of the financial statements and
accompanying footnotes. The face of the financial
statements refers to the statement of financial
position (balance sheet), income statement,
statement of comprehensive income, statement of
cash flows, and statement of owners’ equity, as
required by Commission regulations. References to
the financial statements as required for interactive
data reporting include any required schedules to
the financial statements, unless we expressly state
otherwise.
76 Item 10(f)(1) of Regulation S–K [17 CFR
229.10(f)(1)], Rule 405 under the Securities Act [17
CFR 230.405] and Rule 12b–2 under the Exchange
Act [17 CFR 240.12b–2] define the term ‘‘smaller
reporting company,’’ in general, as a company that
has common equity securities held by non-affiliates
with a market value of less than $75 million or, if
that value cannot be calculated, had less than $50
million in revenue in the prior fiscal year.
77 The amendments will not require or permit
foreign private issuers that prepare their financial
statements in accordance with a variation of IFRS
as issued by the IASB to provide interactive data.
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submit an interactive data file for their
first periodic report on Form 10–Q or
first annual report on Form 20–F or
Form 40–F, as applicable.
• The amendments will not alter the
requirements to provide financial
statements and any required financial
statement schedules with the traditional
format filings.
• Financial statements in interactive
data format will be provided as exhibits
identified in Item 601(b) of Regulation
S–K and Forms F–9, F–10, 20–F, 6–K
and 40–F.78
• Financial statement footnotes and
financial statement schedules initially
will be tagged individually as a block of
text. After a year of such tagging, a filer
also will be required to tag the detailed
quantitative disclosures within the
footnotes and schedules and will be
permitted, but not required, to the
extent they choose, to tag each narrative
disclosure.
• The amendments will require the
financial information and document and
entity identifier elements, such as the
form type, company name, and public
float, to be tagged according to
Regulation S–T and the EDGAR Filer
Manual.79
• Interactive data exhibits will be
required at the same time as the rest of
the related report or Securities Act
registration statement, except for the
following two circumstances. The initial
interactive data exhibit of a filer will be
required within 30 days after the earlier
of the due date or filing date of the
related report or registration statement,
as applicable. In year two, a filer will
have a similar 30 day grace period for
its first interactive data exhibit that
includes detailed tagging of its footnotes
and schedules.
• A filer required to provide financial
statements in interactive data format to
the Commission also will be required to
post those financial statements in
interactive data format on its corporate
Web site not later than the end of the
calendar day it filed or was required to
file the related registration statement or
report with the Commission, whichever
is earlier.80
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78 The
adopted interactive data requirements
would not apply to asset-backed filings because
issuer financial statements are generally not
required or provided in filings made pursuant to
Regulation AB (17 CFR 229.1100 et seq.).
79 New Rule 405 of Regulation S–T will directly
set forth the basic tagging requirements and
indirectly set forth the rest of the tagging
requirements through the requirement to comply
with the EDGAR Filer Manual. Consistent with new
Rule 405, the Filer Manual will contain the
technical tagging requirements.
80 The day the registration statement or report is
submitted electronically to the Commission may
not be the business day on which it was deemed
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• Filers that do not provide or post
required interactive data on the date
required will be deemed not current
with their Exchange Act reports and, as
a result, will not be eligible to use the
short Form S–3, F–3, or S–8, or elect
under Form S–4 or F–4 to provide
information at a level prescribed by
Form S–3 or F–3. Similarly, such filers
will not be deemed to have available
adequate current public information for
purposes of the resale exemption safe
harbor provided by Rule 144.81 A filer
that is deemed not current solely as a
result of not providing or posting an
interactive data exhibit when required
will be deemed current upon providing
or posting the interactive data.
Therefore it will regain current status
for purposes of short form registration
statement eligibility, and determining
adequate current public information
under Rule 144. As such, it will not lose
its status as having ‘‘timely’’ filed its
Exchange Act reports solely as a result
of the delay in providing interactive
data.82
• Companies that are not required to
provide interactive data until a later
time will have the option to do so
earlier and may provide interactive data
at their discretion until required by the
amendments. Such a company may also
tag footnotes individually as a block of
text until required to tag the detailed
quantitative disclosures within the
footnotes and schedules, but otherwise
must follow the same requirements as
those mandated and can only use a
grace period for its initial submission
and the initial detail-tagged-footnote
submission, whether submitted
voluntarily or as required by the
amendments.
• Companies may cease voluntary
submissions at any time and need not
tag their financial data at a pace other
than at which the rules otherwise would
require.
• The voluntary program rules will be
modified to permit investment
companies to participate, but to exclude
non-investment company participation.
As a result, the voluntary program will
continue for the financial statements of
investment companies that are
registered under the Investment
Company Act, and business
officially filed. For example, a filing submitted after
5:30 p.m. generally is not deemed officially filed
until the following business day. Under the new
rules, the Web posting will be required at any time
on the same calendar day that the related
registration statement or report is deemed officially
filed or required to be filed, whichever is earlier.
81 17 CFR 230.144.
82 Filers that do not provide or post required
interactive data on the date required with respect
to a Securities Act filing will be deemed not current
with their Exchange Act reports.
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6781
development companies and other
entities that report under the Exchange
Act and prepare their financial
statements in accordance with Article 6
of Regulation S–X.83
• An interactive data file generally
will be subject to the federal securities
laws in a modified manner similar to
that of the voluntary program if the filer
submits the interactive data file within
24 months of the time the filer first is
required to submit interactive data files
but no later than October 31, 2014.
During the time a filer’s interactive data
files are treated in this modified
manner, they will be
Æ Deemed not filed for purposes of
specified liability provisions; and
Æ Protected from liability for failure
to comply with the tagging requirements
if the interactive data file failed to meet
those requirements but the failure
occurred despite the filer’s good faith
effort and the filer corrected the failure
promptly after becoming aware of it.84
• Also similar to the voluntary
program, interactive data files will be
excluded from the officer certification
requirements under Rules 13a–14 and
15d–14 of the Exchange Act.
The principal changes from the
proposing release include:
• Modified treatment of liability for
the interactive data files under the
federal securities laws only will be
available for interactive data files that a
filer submits within 24 months of the
time the filer first is required to submit
interactive data files and no later than
October 31, 2014.
• The phase-in schedule has been
changed from the proposal. The filers
that will be phased in during year one
will first be required to submit an
interactive data file for a periodic report
on Form 10–Q, Form 20–F or Form 40–
F containing financial statements for a
fiscal period ended on or after June 15,
2009. Filers that are phased in during
years two and three will be treated in a
similar manner. Filers that first become
subject to the requirement to submit
interactive data after year three will first
be required to submit an interactive data
83 On December 17, 2008, the Commission voted
to adopt rules requiring interactive data for the risk/
return summary section of mutual fund
prospectuses. See Press Release No. 2008–300
(December 18, 2008). See also Release No. 33–8929
(June 10, 2008) [73 FR 35442] (mutual fund
proposing release).
84 Although the interactive data formatted version
of the financial statements will be provided in a
separate exhibit and subject to modified liability
during the specified period, the financial statements
themselves will, of course, continue to be part of
the registration statement or report and therefore
subject to the full panoply of the federal securities
laws, including, without limitation, Sections 11,
12(a)(2) and 17 of the Securities Act and Sections
10(b), 13 and 18 of the Exchange Act.
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file for a quarterly report on Form 10–
Q or annual report on Form 20–F or
Form 40–F, as applicable.
• The amendments will require that
interactive data be submitted with a
Securities Act registration statement
filing only after a price or price range
has been determined and any later time
when the financial statements are
changed, rather than requiring
interactive data submissions with each
filing.
• The amendments will require
companies to submit interactive data for
financial statements contained in
additional forms—Securities Act
registration statements on Forms F–9
and F–10 and periodic reports on Forms
40–F 85 as well as reports on Forms 8–
K and Form 6–K that contain revised or
updated financial statements.86
• The timing of the required Web site
posting has been eased. A filer must
post the interactive data exhibit on its
corporate Web site not later than the
end of the calendar day it submitted or
was required to submit the interactive
data exhibit, whichever is earlier. As
proposed, Web site posting would have
been required by the end of the business
rather than calendar day.
• Interactive data will be required to
be posted for at least 12 months on an
issuer’s Web site. The proposing release
did not specify this, but commenters
requested clarification.
• While the amendments will require
filers to tag separately each amount
within a footnote or schedule (i.e.,
monetary value, percentage, and
number), the rules will permit, but not
require, filers to tag, to the extent they
choose, each narrative disclosure.
We intend to monitor implementation
and, if necessary, make appropriate
adjustments to the adopted
amendments.
II. Discussion of Amendments
A. Submission of Financial Information
Using Interactive Data
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For several years XBRL U.S. and its
related entities, in consultation with the
Commission staff and FASB staff, have
developed and refined the list of tags to
classify and define financial information
in accordance with U.S. financial
reporting practices and Commission
regulations.87 Many investors,
accountants, and others, including
companies that have been providing
85 Similar to Form 20–F, Form 40–F may be used
either as a periodic report or a registration
statement under the Exchange Act. As adopted, the
amendments will require interactive data for Form
40–F only when used as a periodic report.
86 See note 74 above.
87 Press Release No. 2006–158 (Sept. 25, 2006).
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interactive data disclosure in the
voluntary program, have helped in this
process.
Interactive data financial statements
using the list of tags for U.S. financial
statement reporting have been
submitted voluntarily to us by over 100
companies, some of which have done so
since the start of the voluntary program.
The list of tags for U.S. financial
statement reporting has expanded
significantly since the original version
available for the voluntary program.88
During this period, there has been a
continuous increase in both the number
and capabilities of software products
and applications for users of interactive
data, as well as of the services to assist
companies to tag their financial
statements using interactive data.89 The
growing number of software
applications available to preparers and
consumers is helping make interactive
data increasingly useful to both
institutional and retail investors, as well
as to other participants in the U.S. and
global capital markets. On this basis, we
believe interactive data, and in
particular the XBRL standard, is
growing and that the updated list of tags
for U.S. financial statement reporting is
now sufficiently comprehensive to
require that U.S. GAAP-reporting
companies provide their financial
statements in interactive data format
using XBRL.90 We anticipate that there
will be a further update of this list of
tags in February 2009 but that the newer
tags will not differ significantly from the
old list and that any update would not
pose an additional burden to the tagging
process.
With respect to the list of tags for
IFRS financial reporting, the IASCF has,
over several years, developed a list of
tags designed to classify and define
financial information in accordance
with international accounting standards
as issued by the IASB. Over the course
of the past year, the IASCF has worked
to strengthen the development of its list
of tags by forming an XBRL Advisory
Committee and an XBRL Quality
Reporting Team, both consisting of
international representatives from
investors, auditors, accountants,
regulators and others. On March 31,
88 When
we adopted the voluntary program, the
list of tags for U.S. GAAP financial statement
reporting contained approximately 4,000 data
elements. The list of tags released on April 28, 2008
contains approximately 13,000 data elements, with
the most significant additions relating to the
development of elements for standard U.S. GAAP
footnote disclosure.
89 Press Release No. 2007–253 (Dec. 5, 2007).
90 As previously noted, however, the new rules
will not apply to investment companies registered
under the Investment Company Act and other
entities.
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2008, the IASCF published a near final
version of the list of tags for IFRS
financial reporting,91 which was subject
to public comment through May 30,
2008.92 On June 24, 2008, the IASCF
published the final version.93 In
addition, the IASCF is collaborating
with XBRL U.S., other foreign
regulators, accounting industry
members, analyst/investor groups,
XBRL technology/software service
providers, and others to align practices
designed to improve and broaden the
IFRS list of tags. This collaboration
involves the development of the
appropriate scope for the IFRS list of
tags’ content and technology
architecture. On this basis, we believe
that the updated IFRS list of tags will be
sufficiently advanced to require that
foreign private issuers that prepare their
financial statements in accordance with
IFRS as issued by the IASB provide
their financial statements in interactive
data format under the phase-in schedule
we are adopting.
As discussed in more detail below,
the new rules set forth a phase-in period
that begins with domestic and foreign
large accelerated U.S. GAAP filers with
a worldwide public common equity
float above $5 billion as of the end of
the second fiscal quarter of their most
recently completed fiscal year. These
large accelerated filers will be subject to
the new rules beginning with their first
quarterly report on Form 10–Q, or
annual report on Form 20–F or Form
40–F, that contains financial statements
for fiscal periods ending on or after June
15, 2009. Although it will not be
required, we encourage other U.S.
GAAP filers to provide financial
information in interactive data format
during the phase-in period. In such an
instance, these filers’ voluntary
interactive data submissions will be
under the rules as adopted instead of
the existing rules of the voluntary
program. We also encourage foreign
private issuers that prepare their
financial statements in accordance with
IFRS as issued by the IASB to provide
financial information in interactive data
format once EDGAR will accept such
91 Unless stated otherwise, when we refer to the
‘‘list of tags for IFRS financial reporting’’ we mean
the interactive data taxonomy that is based on IFRS
as issued by the IASB.
92 See Press Release, The IASC Foundation
publishes IFRS Taxonomy 2008 (March 31, 2008),
available at https://www.iasb.org/News/Press+
Releases/The+IASC+Foundation+publishes+IFRS+
Taxonomy+2008.htm.
93 See Press Release, The IASC Foundation
publishes IFRS Taxonomy 2008 (June 24, 2008),
available at https://www.iasb.org/News/Press+
Releases/IASC+Foundation+publishes+IFRS+
Taxonomy+2008.htm.
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filings.94 Prior to this time, such foreign
private issuers will be unable to submit
financial information in interactive data
format.
The new rules will require filers to
provide the same type of information in
interactive data format that companies
have been providing in the voluntary
program,95 together with the following
items: The footnotes to the financial
statements; any applicable schedules to
the financial statements; and document
and entity identifier tags, such as
company name and public float. As is
the case in the voluntary program, the
new requirement for interactive data
reporting is intended to be disclosure
neutral in that we do not intend the
rules to result in companies providing
more, less, or different disclosure for a
given disclosure item depending upon
the format whether ASCII, HTML, or
XBRL.
Because we believe that the various
electronic formats have uses for which
each is best suited, we will continue to
require the existing ASCII and HTML
electronic formats now used in filings.96
We also believe it is necessary to
monitor the usefulness of interactive
data reporting to investors and the cost
and ease of providing interactive data
before we consider discontinuing the
use of ASCII and HTML formats and the
integration of formats. However, the
new rules will treat interactive data as
part of the official filing, instead of as
only a supplement as is the case in the
voluntary program.97 Further evaluation
also will be useful with respect to the
availability of inexpensive and
sophisticated interactive data viewers.
In fact, there are many software
providers and financial printers that are
developing interactive data viewers. We
anticipate that these will become widely
available and increasingly useful to
investors.
We expect that the open standard
feature of the XBRL format will facilitate
the development of applications and
software, and that some of these
applications may be made available to
94 Pursuant to the EDGAR Filer Manual, we will
notify filers of the ability to file in IFRS on our Web
site.
95 Unlike the voluntary program, unless otherwise
stated, an interactive data file will be required to
be provided with the traditional format filing to
which it relates. Companies will not be permitted
to provide an interactive data file with a Form 8–
K or 6–K unless it presents in interactive data
format the revised or updated financial statements
included in that Form 8–K or 6–K as described in
footnote 74. See Part II.B.4 for a further discussion.
96 For example, HTML currently is best suited for
providing human-readable text.
97 As further discussed below in Part II.C.3,
however, interactive data generally will be deemed
not filed for purposes of specified liability
provisions.
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the public for free or at a relatively low
cost. The expected continued
improvement in this software should
give the public increasingly useful ways
to view and analyze company financial
information. As we continue to evaluate
the use of the new interactive data
technologies, software, and lists of tags,
we may consider proposing rules to
require a filing format that integrates
HTML with XBRL or eliminate financial
statement reporting in ASCII or HTML
format.
We believe XBRL is the appropriate
interactive data format with which to
supplement ASCII and HTML. Our
experience with the voluntary program
and feedback from company,
accounting, and software communities
point to XBRL as the appropriate open
standard for the purposes of this rule.
XBRL data will be compatible with a
wide range of open source and
proprietary XBRL software applications.
As discussed above, many XBRL-related
products exist for analysts, investors,
public and private companies, and
others to create and compare financial
data more easily; still others are in
development, and that process will
likely be hastened by increased public
company reporting using interactive
data.
Most commenters generally supported
the required submission of interactive
data,98 but a significant number did
not.99 Some commenters that supported
the required submission of interactive
data believed it would improve the
usefulness of financial information to
companies and investors, and that
mandated interactive data use would
provide the incentives to drive
sufficient investment in software to
enable widespread adoption of
interactive data.100 Commenters that
provide interactive data services stated
that issuers would need to expend only
modest cost and effort to comply with
the proposed requirements.101 One
commenter stated that it expected that
98 See, e.g., letters from American Bar Association
(ABA), American Institute of Certified Public
Accountants (AICPA), Astoria Financial Corp.
(Astoria), California Public Employees’ Retirement
System (CalPERS), EDGAR Online, Inc. (EDGAR
Online), and Financial Executives International
(FEI).
99 See, e.g., letters from Council of Institutional
Investors (CII), Financial Services Information
Division of the Software and Information Industry
Association (FISD), EuropeanIssuers, Committee of
Annuity Insurers (COAI), Valero Energy Corp.
(VEC), and Wellpoint, Inc. (WellPoint).
100 See, e.g., letters from American Business
Conference (ABC), AICPA, National City
Corporation (National City), New York State Society
of Certified Public Accountants (NYSSCPA), and
United Technologies Corporation (UTC).
101 See, e.g., letters from Enterprise Compliance
International (ECI), EdgarFilings, and UBMatrix,
Inc.
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6783
costs would fall quickly, especially for
small companies, as interactive data
became part of standard corporate
accounting software packages.102
Another commenter stated that, based
on its experience in the voluntary
program, costs would fall significantly
for subsequent submissions.103 One
commenter stated that it expected that
preparing financial information in
interactive data format would result in
less manual effort and provide the
foundation to improve business
processes.104 Similarly, comments on
our 2004 concept release and proposed
rules in 2004 and 2007 generally
supported interactive data and XBRL in
particular.105
Many commenters objected to some or
all of the requirements as proposed and
suggested alternatives.106 For instance,
one commenter argued that
implementing interactive data would
add significant costs to purchase
software, and pay for assistance and
annual maintenance fees for that
software.107 This commenter believed
that the costs of using interactive data
outweighed the benefits. Several
commenters also claimed that
complying with the proposed
requirements would not reduce the
likelihood of human error or would not
reduce costs for issuers.108 In this
regard, one commenter stated that the
additional costs would make the U.S.
market less attractive to foreign
issuers.109
Some commenters that objected to the
required submission of interactive data
believed that interactive data would not
102 See
letter from James Angel, PhD (Angel).
letter from PepsiCo., Inc.
104 See letter from UTC.
105 Release No. 33–8497 (Sept. 27, 2004) [69 FR
59111] (concept release); Release No. 33–8496 (Oct.
1, 2004) [69 FR 59098]; Release No. 33–8781 (Feb.
12, 2007) [72 FR 6676]. See, e.g., letter from Deloitte
regarding the voluntary program proposing release
and letter from PR Newswire Association LLC
regarding the concept release. We also note that
participants in the voluntary program provided
positive feedback with respect to possible required
use of XBRL. For example, the vast majority of
voluntary program participants that submitted
responses and views to a questionnaire answered in
the affirmative to the question ‘‘Based on your
experience to date, do you think it would be
advisable for the Commission to continue to explore
the feasibility and desirability of the use of
interactive data on a more widespread and,
possibly, mandated basis?’’ See question V.f in the
Interactive Data Voluntary Program Questionnaire
available at https://www.sec.gov/cgi-bin/
XBRL_Questionnaire.
106 See, e.g., letters from ABA, ACLI/AIA,
AllState, Astoria, CSG, FEI, FirstEnergy, IBM, Intel,
National City, Pfizer and SCS.
107 See, e.g., letter from Florida Power and Light
Company (FPL).
108 See, e.g., letters from CSG, EEC, National City,
Southern and VEC.
109 See letter from EuropeanIssuers.
103 See
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at this point improve the usefulness of
financial information to analysts or
investors.110 Some of these commenters
suggested that there was not a
widespread demand for interactive data
in the market, and that the Commission
should allow market forces to provide
incentives for more widespread
voluntary implementation of interactive
data.111 Other commenters believed that
before adopting this requirement a way
needs to be developed to independently
verify that financial data have been
tagged accurately and ensure that
information that is consistent with that
in the traditional format filing is
provided to investors.112
Although commenters generally
favored XBRL as the most appropriate
interactive data format, some
commenters expressed concerns about
XBRL itself or the manner in which it
is proposed to be implemented in
connection with the proposals. These
concerns ranged from the availability of
adequate software products 113 to the
potential that customized taxonomy
extensions could grow so common that
they would directly interfere with the
comparability of inter-company data.114
A significant number of commenters
suggested ways to facilitate interactive
data tagging, including exposing for
comment the Commission’s
maintenance and support agreement for
XBRL,115 as well as monitoring,116
cataloging,117 providing guidance on 118
and discouraging 119 extension use. We
acknowledge these concerns and
suggestions and believe that the rules as
adopted will address many of them.
Widespread, mandatory adoption is
expected to foster a network effect and
encourage development of cost reducing
and improved analytical products.
Additionally, we believe that the
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110 See, e.g., letters from BDO Seidman, LLP
(BDO), CII, EuropeanIssuers, and VEC.
111 See, e.g., letters from EuropeanIssuers and Jay
Starkman (Starkman).
112 See, e.g., CII and VEC.
113 See, e.g., letter from Robert Gilmore (Gilmore).
114 See, e.g., letter from EuropeanIssuers.
115 See, e.g., letters from Center for Audit Quality
(CAQ), Deloitte Touche LLP (Deloitte), E&Y, and
PricewaterhouseCoopers LLP (PWC).
116 See, e.g., letter from CFA.
117 See, e.g., letter from ABA.
118 See, e.g., letters from CFA Institute Centre for
Financial Market Integrity (CFA),
ConstellationEnergy (Constellation), Deloitte, FEI,
Grant Thornton, Morgan Stanley, and Rivet
Software Inc (Rivet).
119 See, e.g., letters from Grant Thornton, CFA,
Morgan Stanley, and Rivet.
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taxonomy will become even more
comprehensive over time as common
extensions are incorporated into the
base in annual releases thus minimizing
any interference that common
extensions might have with data
comparability.
B. Phase-in Under the New Rules
1. Overview
The new rules initially will require
interactive data reporting only by
domestic and foreign large accelerated
filers that prepare their financial
statements in accordance with U.S.
GAAP and have a worldwide public
common equity float above $5 billion as
of the end of the second fiscal quarter
of their most recently completed fiscal
year.120 The first required submissions
for issuers that file on domestic forms
will be for quarterly reports containing
financial statements for a fiscal period
ending on or after June 15, 2009. For
calendar year companies, this
requirement will first apply to their June
30, 2009 quarterly reports filed on Form
10–Q.121
Filers under the new rules will be
required to submit their financial
statements in an interactive data file
using the list of tags for U.S. GAAP or
IFRS as issued by the IASB, in either
case as approved for use by the
Commission. The submission also will
be required to include any supporting
files as prescribed by the EDGAR Filer
Manual. Interactive data will be
required for the entirety of their
financial statements, although tagging of
the footnotes and schedules at a deeper
level of detail will be phased in the
following year.
We did not propose, and are not
adopting, a requirement that filers
provide interactive data for their
Management’s Discussion and Analysis
(MD&A), executive compensation, or
other financial, statistical or narrative
120 Approximately 500 companies initially will be
required to submit interactive data. Other
companies, however, initially will be permitted to
submit interactive data if they use U.S. GAAP or
IFRS as issued by the IASB.
121 For most U.S. companies and foreign private
issuers filing on domestic forms, the periodic report
to which this will first apply will be the June 30,
2009 quarterly report. For a company that files on
domestic forms with a June 30 fiscal year, the first
report will be the September 30, 2009 quarterly
report. Foreign private issuers not using domestic
forms that are in the first phase-in group will first
provide interactive data in connection with their
first Form 20–F or Form 40–F annual reports for the
year ended on or after June 15, 2009.
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disclosure.122 Many commenters
supported this position.123 Some
commenters supported the idea of
eventually tagging non-financial
statement information because of its
usefulness to investors,124 while others
expressed concern that variations
among companies in executive
compensation practices may not lend
themselves to the development of
standard tags 125 and should at the most
be voluntary rather than required.126
Another commenter supported the
application of interactive data format to
MD&A because of a belief that
interactive data format for MD&A
disclosures would be more useful to
investors than detailed tagging of the
footnotes to the financial statements.127
This commenter recommended block
tagging each section of the MD&A, with
some level of detailed tagging for the
numbers and tables. In deciding not to
require the tagging of this information at
this time, we agree with the commenters
who believed that more experience with
interactive data and a greater
understanding of the costs and time
associated with compliance with the
requirements as proposed is needed
before expanding the requirement to
other information. We will continue to
consider, however, the advisability of
permissible optional or required
interactive data for disclosures made
outside a set of financial statements
prepared in accordance with U.S. GAAP
or IFRS as issued by the IASB or related
financial statement schedules required
under Commission rules.
The following tables identify the
reports for which a filer would first be
required to include interactive data for
the company’s financial statements
according to the company’s filing
status.128
122 Tagging this information is neither required
nor permitted under the amendments.
123 See, e.g., letters from ABA, General Mills (Gen.
Mills), KPMG, Pfizer, Inc. (Pfizer) and The Society
of Corporate Secretaries, and Governance
Professionals (SCS).
124 See, e.g., letter from CalPERS.
125 See, e.g., letters from ABA, Johnson & Johnson
(J&J), Pfizer, Gen. Mills, and SCS.
126 See, e.g., letter from UTC.
127 See, e.g., letter from National City.
128 Transition reports that contain financial
statements of the type and for the periods specified
also will be required to be submitted in interactive
data format under the new rules. These dates apply
to the initial required interactive data disclosure;
detailed tagging of the financial statement footnotes
and schedules will not be required for an additional
year.
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Domestic and Foreign Large Accelerated Filers Using U.S. GAAP
with Worldwide Public Common Equity Float above $5 Billion as
of the End of the Second Fiscal Quarter of Their Most Recently
Completed Fiscal Year.
All Other Large Accelerated Filers Using U.S. GAAP ..........................
All Remaining Filers Using U.S. GAAP .................................................
Foreign Private Issuers with Financial Statements Prepared in Accordance with IFRS as Issued By the IASB.
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2. Companies Covered by New Rules
and Phase-in
The new rules will cover all
companies that report either in U.S.
GAAP, including smaller reporting
companies and foreign private issuers
that report in U.S. GAAP or, in the case
of foreign private issuers, in accordance
with IFRS as issued by the IASB.129 On
November 14, 2008, we issued a release
proposing to allow certain domestic
issuers to prepare financial statements
in accordance with IFRS as issued by
IASB.130 The phase-in will require
domestic and foreign large accelerated
filers that report in U.S. GAAP and meet
the minimum worldwide common
equity float of greater than $5 billion to
provide their initial interactive data
submissions in year one of the phase-in
period discussed above. All other U.S.
GAAP filers that meet the definition of
large accelerated filer will be required to
provide their initial interactive data
submissions in year two of the phase-in
period. All remaining U.S. GAAP filers,
including smaller reporting companies
and companies not previously subject to
periodic reporting requirements, will be
required to provide their initial
interactive data submissions in year
three of the phase-in period.
Foreign private issuers that prepare
their financial statements in accordance
with IFRS as issued by the IASB will be
required to provide their initial
interactive data submissions in year
three of the phase-in period.
The additional phase-in time for all
but the largest accelerated filers is
intended to permit companies to plan
and implement their data tagging with
the benefit of the experience of year one
filers. It also is intended to enable us to
monitor implementation and, if
129 As noted above, however, the new rules would
not apply to investment companies registered under
the Investment Company Act, business
development companies, or other entities that
report under the Exchange Act and prepare their
financial statements in accordance with Article 6 of
Regulation S–X.
130 See Release No. 33–8982 (Nov.14, 2008) [73
FR 70816].
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Quarterly report on Form 10–Q or annual report on Form 20–F or
Form 40–F containing financial statements for a fiscal period ending on or after June 15, 2009.
Quarterly report on Form 10–Q or annual report on Form 20–F or
Form 40–F containing financial statements for a fiscal period ending on or after June 15, 2010.
Quarterly report on Form 10–Q or annual report on Form 20–F or
Form 40–F containing financial statements for a fiscal period ending on or after June 15, 2011.
Annual reports on Form 20–F or Form 40–F for fiscal periods ending on or after June 15, 2011.
necessary, make appropriate
adjustments during the phase-in period.
With respect to foreign private issuers
that report using IFRS as issued by the
IASB, the additional phase-in time for
these issuers is to allow greater
development of the IFRS list of tags and
our ability to accept filings using them.
Our multiyear experience with the
voluntary program has helped us to
better understand the extent to which a
filer will incur additional costs to create
and submit its existing financial
disclosures in interactive data format.
Based on that experience, we believe
that the process of preparing an
interactive data file will not impose a
significant burden or cost. The
voluntary program clearly
demonstrated, although that program
was limited to face financial statements
only and not footnotes, that companies
can, if they choose, tag their financial
statements using currently available
software without need of outside
services or consultants; alternatively,
they can rely on financial printers,
consultants, and software companies for
assistance, although they will retain
ultimate responsibility for both their
financial statements and their tagged
data. As discussed in more detail in the
cost-benefit analysis below,131 we
believe that first-year costs for a
company will decrease in subsequent
periods, particularly after detailed
footnote tagging has been implemented.
We also believe that these costs will be
justified by interactive data’s benefits.
As with domestic registrants, we believe
foreign private issuers that report in
U.S. GAAP or prepare their financial
statements in accordance with IFRS as
issued by the IASB will be able to
comply with the rules without incurring
significant costs.
We expect that smaller companies,
which generally are disproportionately
affected by regulatory costs, also will be
able to provide their reports in
interactive data format without undue
effort or expense. While interactive data
131 See
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Frm 00011
reporting involves changes in reporting
procedures, mostly in the initial
reporting periods, we expect that these
changes may provide efficiencies in
future periods. As a result, there may be
potential net savings to the filer,
particularly if interactive data become
integrated into the filer’s financial
reporting process. While we recognize
that requiring interactive data financial
reporting will likely result in start-up
expenses for smaller companies, these
expenses may be lower than those of
larger filers, given that smaller filers
tend to have simpler financial
statements than larger companies, with
fewer elements and disclosures to tag. In
addition, we expect that both software
and third-party services will be
available to help meet the needs of
smaller filers. We expect that the phasein will foster the improvement and
availability of inexpensive software and
that a firmly established phase-in
deadline could stimulate the
development of such software. We also
intend that the third-year phase-in for
smaller reporting companies will permit
them to learn from the experience of the
earlier filers. It will also give them a
longer period of time over which to
spread first-year data tagging costs.
As noted above,132 CIFiR issued its
final report recommending that the
Commission, over the long term, phase
in the requirement that companies file
financial statements using interactive
data after the satisfaction of specified
preconditions:
• Successful testing of the list of tags
for U.S. financial statement reporting;
• The ability of reporting companies
to file interactive data on the
Commission’s electronic filing system
using the new list of tags for U.S.
financial statement reporting; and
• The ability of the Commission’s
electronic filing system to provide an
accurate human-readable version of the
interactive data.
CIFiR recommended that we phase in
financial statements using interactive
132 See
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data by requiring the largest 500
domestic registrants,133 as determined
by the value of shares held by
unaffiliated persons, to furnish (rather
than file) interactive data for the face of
their financial statements and, in blocktagged form,134 the footnotes to the
financial statements. The Final Report
also recommends that, one year after we
impose this requirement on the first
group of registrants, we impose the
same requirement on the remaining
domestic registrants that fall within the
definition of ‘‘large accelerated filer.’’
Finally, the Final Report recommends
that, once the specified conditions have
been satisfied and the second phase-in
period has been implemented, we
evaluate whether and when to require
that the domestic large accelerated filers
file rather than furnish financial
statements in interactive data format, as
well as the inclusion of all other
reporting companies.
Several commenters suggested a later
phase-in for all companies with start
dates of the second half of 2009 and
when these pre-conditions are met.
These commenters generally reasoned
that the additional time would help
companies and service providers to
prepare.135
We believe that sufficient progress has
been made regarding each of CIFiR’s
preconditions, particularly with respect
to the list of tags for U.S. financial
statement reporting.136 While
admittedly there has been only limited
experience with footnote tagging, the
current list of tags for U.S. financial
statement reporting has been in wide
use by participants in the voluntary
program in submissions to us.137 We
133 The recommendation does not address foreign
companies. We do not believe that whether a U.S.
GAAP reporting company is domestic or foreign
should determine the applicability of the rules, and
therefore foreign companies using U.S. GAAP will
be included in the phase-in schedule along with
their domestic counterparts. As noted, foreign
private issuers that prepare their financial
statements in accordance with IFRS as issued by the
IASB also will be subject to the interactive data
submission requirements, although they would not
be phased in until year three. We also note that the
CIFiR Final Report does not expressly address
filings other than Exchange Act periodic reports.
134 ‘‘Block’’ text means that the entire footnote or
other discrete item, such as a schedule or table,
would be tagged as an individual element.
135 See, e.g., letters from National City, Safeway,
Inc. (Safeway), and Emerson Electric Company
(EEC).
136 We are still working on the ability to use the
IFRS list of tags with our system, but expect it to
be operational by the time filers that report in
accordance with IFRS are required to submit
interactive data files. As will be provided in the
EDGAR Filer Manual, we will publish on our Web
site when EDGAR can support filings that use the
IFRS list of tags.
137 Since June, when it became available on
EDGAR, approximately 60 companies have
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15:23 Feb 09, 2009
Jkt 217001
understand that the list also is being
used by companies that are tagging their
financial statements outside of the
voluntary program, including
experimenting with footnote tagging.
The tags also will be updated in an
expected January 2009 version. The
updated list is expected to contain
improvements such as the reflection of
new accounting pronouncements. The
Commission’s IDEA system into which
companies actually will submit
interactive data has been effectively
implemented and the ability of
companies to do so is now established.
Finally, the Commission has developed
a viewer to provide an accurate humanreadable version of interactive data.
Both the filing and viewing capabilities
are fundamentally enhanced versions of
applications and processes that were
already in place for the voluntary
program.
We have also carefully considered the
Committee’s thoughtful
recommendation, including the
recommended phase-in of 500 initial
companies and delayed consideration of
non-accelerated and other filers until
after two years. We are adopting a
phase-in schedule similar to that
suggested by the Committee.138
However, instead of waiting until after
the second year to determine whether to
propose extending the applicability of
the rules to all filers, the new rules will
establish a phase-in for the remaining
companies’ required interactive data
submissions that will begin in the third
year. Based on comments received on
the proposing release, participants’
experience with the voluntary program
and our consultations with filers,
software providers and filing
intermediaries, we believe the new rules
will accelerate the improvement and
availability of inexpensive software.
This, in turn, should generate more
options and assistance for nonaccelerated filers in general and, in
particular, smaller reporting companies
and foreign private issuers that prepare
their financial statements in accordance
with IFRS as issued by the IASB in
particular so that they could become
proficient in the use of interactive data
without undue burden.
One commenter expressed concern
about whether the initial phase-in of
500 issuers would involve enough
companies to create a ‘‘network effect’’
so users of financial reporting obtain the
benefits of interactive data in peer
completed approximately 100 submissions using
the new taxonomy.
138 As previously noted, the worldwide public
float cutoff of $5 billion will result in
approximately 500 companies subject to the new
rules in year one.
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comparisons that are most useful and
likely to occur if many or all filers
provide financial reporting using
interactive data.139 Although including
a larger number of filers in the initial
phase-in might increase the overall
commercial and analytical value of the
interactive data, which in turn would
likely increase the supply of software
for analyzing and presenting interactive
data to analysts and investors, we
believe a firm schedule for all U.S.
GAAP and IFRS reporting companies to
file their financial statements using
interactive data can provide an
incentive to stimulate the further
development of interactive data-related
software and services, while also
affording most companies additional
time to learn from the experience of
others.
We also believe that concurrently
adopting a phase-in for non-accelerated
filers in general and, in particular,
smaller reporting companies, and
foreign private issuers using IFRS as
issued by the IASB will establish an
appropriate and measured timeline,
which we will be able to monitor and,
if necessary, reconsider during the first
two years of the phase-in.
Commenters generally supported the
proposed phase-in schedule. A
substantial majority of the commenters,
however, suggested that the initial
submission required be a Form 10–Q for
domestic companies.140 Other
commenters recommended that the
phase-in commence with filings made
for fiscal periods 141 or years 142
beginning on or after December 15, 2008
or fiscal years beginning after December
31, 2008,143 as opposed to fiscal periods
ending on or after December 15, 2008,
as proposed. The reasons cited by
commenters included assuring that
issuers would submit an interactive data
file for three Forms 10–Q before
submitting it for a Form 10–K,144
providing more time for issuers and
service providers to prepare 145 and
allowing bugs to be detected in
quarterly filings before the more widely
distributed annual filings.146
The commenters suggesting that the
initial submission required be a Form
139 See
letter from CalPERS.
e.g., letters from ABA, American Council
of Life Insurers/American Insurance Association
(ACLI/AIA), AICPA, AllState Corp. (AllState),
Credit Suisse Group (CSG), and Comcast Corp.
(Comcast).
141 See, e.g., letter from Constellation.
142 See, e.g., letters from Comcast, Grant
Thornton, and Pfizer.
143 See, e.g., letter from Astoria.
144 See, e.g., letters from Astoria and Comcast.
145 See, e.g., letter from Constellation.
146 See, e.g., letter from Grant Thornton.
140 See,
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10–Q for domestic issuers generally
reasoned that it would be helpful to
companies and service providers alike if
they could begin with a relatively
simple form. Many of these commenters
suggested that the content requirements
of quarterly reports would be less
burdensome than those of annual
reports and allow companies to allocate
more staff to initial tagging and provide
a tagged template on which to build for
subsequent filings.147 At least one
commenter acknowledged, however,
that despite the greater initial effort
posed by tagging an annual report, the
comprehensiveness of this report would
cause companies to address most of the
issues in quarterly reports.148 Some
service providers commented that
although a complete annual report is
more effort for preparers, creating a
related XBRL document is about the
same level of effort for both a Form 10–
K and Form 10–Q (assuming the
footnotes are block tagged) and that the
biggest difference between the forms is
the larger number of footnotes in a Form
10–K, resulting in a nominal number of
additional hours of effort.149 These
commenters further stated that allowing
the tagging of a Form 10–Q instead of
a Form 10–K would delay the use and
development of XBRL by issuers while
providing no significant savings of time
or money. Overall, the commenters that
generally supported the proposed
phase-in schedule took the view that
companies and service providers would
be ready and the date certain together
with the significant number of issuers
involved would encourage potential
vendors of interactive data products and
services to invest in the development
and marketing of new and improved
products and services.150
Many of the commenters that
suggested that the phase-in be slower
had concerns related to the potential
costs and burden of detailed footnote
tagging.151 Some commenters suggesting
a different initial phase-in period than
what was proposed cited the ability to
assess costs and technology
advancements.152 Commenters also
were concerned that such detailed
tagging could result in more company
specific extensions than anticipated,
which might not be comparable between
companies and present information out
of context.153
One commenter suggested that the
phase-in should be faster for some filers,
and specifically recommended that all
large accelerated filers reporting in
accordance with U.S. GAAP be made
subject to the filing requirements in the
first year, perhaps starting with a
quarterly report.154 Other commenters
stated that not only is tagging relatively
simple and inexpensive, but that we
should endeavor to get more companies
tagging sooner in order to enhance the
value of information available and to
provide further impetus for software
development.155
Some commenters also suggested that
the rules should exclude or defer foreign
private issuers because of the possibility
that there might be a disproportionate
burden on these issuers.156 As to foreign
private issuers reporting in accordance
with U.S. GAAP and who meet the
criteria for the first phase-in period in
particular, several commenters stated
that these issuers could face extra
burdens potentially due to less access to
service provider help, language barriers,
a need to address both the U.S. GAAP
list of tags and, possibly, relatively soon
after, the IFRS IASB list of tags (such as
those issuers that have signaled an
intention to report in accordance with
IFRS as issued by the IASB and
discontinue reporting in U.S. GAAP),
and have a potential competitive
disadvantage in comparison to foreign
private issuers already reporting in
accordance with IFRS as issued by the
IASB who would not have to tag until
the third year.157 One commenter
suggested treating all foreign private
issuers the same and placing them on
the later phase-in schedule (or at least
the ones that have announced an
intention to switch to IFRS as their sole
reporting standard).158
One commenter expressed the desire
that the phase-in not be delayed due to
a possible conversion away from U.S.
GAAP to IFRS. The commenter noted in
this regard that it believed interactive
data could facilitate such a conversion
if similar items were to receive similar
tags.159 In light of the differing opinions
among commenters, the experience of
those in the voluntary program, the size
and resources of those issuers in the
first group, and our ability to monitor
the experiences of those larger first
phase companies, we believe that the
phase-in period as modified from the
proposal generally addresses the burden
and expense concerns expressed by
some commenters. In this regard, as
noted above, a filer first will be required
to submit an interactive data file for a
Form 10–Q, Form 20–F or Form 40–F,
as applicable and the phase-in period
will begin later than proposed. We
believe that this approach will provide
issuers more time to prepare their
financial statements and service
providers more time to deliver adequate
software to support them. The staff also
will consider requests to defer the
phase-in on a case-by-case basis for
issuers with special circumstances,
particularly where the filer is committed
to switching its basis of reporting to
IFRS as issued by the IASB. Issuers
could make such requests by applying
for a continuing hardship exemption
under amended Rule 202 of Regulation
S–T.160
With respect to Canadian issuers, one
commenter stated that such issuers
filing forms under the
Multijurisdictional Disclosure System
(MJDS) 161 should be able to submit
interactive data regardless of whether
reporting in U.S. GAAP in order to
avoid placing such issuers at a
competitive disadvantage to other
issuers permitted or required to submit
interactive data.162 The commenter
stated that if it would not be feasible to
enable such issuers to submit interactive
data using a Canadian GAAP taxonomy,
then the Commission should permit
such issuers to tag a U.S. GAAP
reconciliation. Consistent with the
commenter’s concern and our
solicitation of comment in the
proposing release, we are adding MJDS
Forms F–9, F–10 and 40–F to the forms
we expressly proposed to be subject to
the interactive data requirements in
adopting the requirements. The rules
will not, however, require or permit
interactive data related to these MJDS
forms to be submitted when the
financial statements they contain are
147 See, e.g., letters from EEI, IBM, Pfizer,
Southern Company (Southern), United States Steel
Corporation (USS) and UTC.
148 See letter from Association of the Bar of the
City of New York (NYCBA).
149 See, e.g., letters from EDGAROnline and Rivet.
150 See, e.g., letters from PepsiCo., EDGAROnline
and Rivet.
151 See, e.g., letters from ABA, Constellation, SCS
and Intel. See Part .II.B.3.a below for a more
detailed discussion of footnote tagging.
152 See, e.g., letters from EEI, Cisco Systems
(Cisco), Comcast, and PPG Industries Inc. (PPG).
153 See, e.g., the letters from ABA, ACLI/AIA,
CSG. FEI, IBM and Intel.
154 See letter from Grant Thornton.
155 See, e.g., letters from UBMatrix,
EDGAROnline.
156 See, e.g., letters from CSG, Nippon Keidanren
(NK), Philips International B.V. (Philips) and
Sullivan & Cromwell (S&C).
157 See, e.g., letters from Credit Suisse Group
(CSG), NK, Philips, S&C, and J.P. Morgan (JPM).
158 See letter from Philips.
159 See letter from CFA.
160 As further discussed in Part II.E, Rule 202 will
permit an issuer to apply in writing for a continuing
hardship exemption from the requirement to
provide interactive data if the issuer cannot do so
without undue burden or expense.
161 Certain Canadian foreign private issuers file
registration statements and annual reports under
the MJDS, which permits eligible Canadian
companies to use their disclosure documents
prepared in accordance with Canadian
requirements in filings with the Commission.
162 See letter from Canadian Pacific Railway (CP).
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prepared in accordance with Canadian
GAAP or as a U.S. GAAP reconciliation.
There is no taxonomy for Canadian
GAAP or a U.S. GAAP reconciliation
and, as a result, there is not sufficient
tagging guidance to produce tags that
would be comparable across companies
using Canadian GAAP.
As proposed and as adopted,
investment companies registered under
the Investment Company Act, business
development companies or other
entities that report under the Exchange
Act and prepare their financial
statements in accordance with Article 6
of Regulation S–X will not be subject to
the new rules. The one commenter to
address the exclusion of these
companies agreed with this approach
and stated that the investment
management financial reporting
taxonomy is not sufficiently developed
and that the degree of investor benefit
from tagging that occurs in the case of
other types of issuers is not present for
investment company and similar
issuers.163
3. Information and Documents Covered
by the New Rules
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a. Financial Statements, Footnotes, and
Financial Statement Schedules
The rules will require interactive data
tagging of a filer’s complete financial
statements and any required financial
statement schedules.164 As with the
voluntary program, the new rules will
require companies to provide the
interactive data in an exhibit. Interactive
data will be required for all periods
included in the filer’s financial
statements.165 As proposed and as
adopted, the new rules will not,
however, require interactive data
submissions for other financial
statements that may be required of
filers, including those provided
pursuant to Rules 3–05, 3–09, 3–14, and
3–16 of Regulation S–X.166 This
163 See letter from the Investment Company
Institute.
164 As previously noted, new Rule 405 of
Regulation S–T will directly set forth the basic
tagging requirements and indirectly set forth the
rest of the tagging requirements through the
requirement to comply with the EDGAR Filer
Manual. Consistent with new Rule 405, the EDGAR
Filer Manual will contain the detailed tagging
requirements.
165 References in the rules to the financial
statements of the filer or issuer also include
financial statements of its predecessor to the extent
they are included in the related registration
statement or report pursuant to Rule 3–02 of
Regulation S–X, Instruction 1 to Item 8 of Form 20–
F or the requirements applicable to Forms F–9, F–
10 or 40–F.
166 17 CFR 210.3–05, 17 CFR 210.3–09, 17 CFR
210.3–14, and 17 CFR 210.3–16. Additionally, pro
forma financial statements prepared under Article
11 of Regulation S–X are not subject to the
interactive data requirements.
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approach was generally supported by
commenters.167
As with the voluntary program, the
new rules will require that the line item
descriptions and amounts presented on
the face of the financial statements in
the traditional format filing be the same
as in the interactive data format. Also,
the rules will prohibit partial
presentation of face financial statements
in interactive data format. For example,
filers will not be permitted to exclude
comparative financial information for
prior periods.
Unlike the voluntary program, our
new rules require companies using U.S.
GAAP or foreign private issuers using
IFRS as issued by the IASB to provide
tagged data for the footnotes and
schedules to the financial statements.
The 2005 adopting release for the
voluntary program stated that we
recognized that technical issues made it
difficult to tag the notes to the financial
statements. We did, however, provide
volunteers with the option of tagging the
notes to the financial statements.168
Since the time of the adopting release,
the necessary list of tags has been
completed and the available software
has advanced sufficiently to require that
the financial statement footnotes and
schedules be included in the new rules.
The voluntary program adopting
release recommended that if
participants voluntarily provided
footnotes in interactive data format,
then they should provide enough detail
so that the tagging would be of practical
value to users. The release stated that a
single tag for the entire group of
footnotes in a filing would cover too
much information to be useful to the
user. We still believe that one tag for the
entire group of footnotes would be
confusing and provide little benefit. If
filers tag each footnote separately,
however, users will be able to compare
footnote disclosure between periods and
across filers while minimizing the
burden on preparers. We are therefore
adopting the requirement that footnotes
be tagged using four different levels of
detail:
(i) Each complete footnote tagged as a
single block of text;
(ii) Each significant accounting policy
within the significant accounting
policies footnote tagged as a single block
of text;
(iii) Each table within each footnote
tagged as a separate block of text; and
(iv) Within each footnote, each
amount (i.e., monetary value,
167 See,
e.g., letter from Deloitte.
Part II.E. of Release No. 33–8529 (Feb. 3,
2005) [70 FR 6556].
168 See
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percentage, and number) separately
tagged.
To allow filers time to become
familiar with tagging footnotes, in each
filer’s first year of interactive data
reporting, only level (i) will be required.
All four levels will be required starting
one year from the filer’s initial required
submission in interactive data. In year
two, for the first filing required to have
detailed tagging of footnotes and
schedules, the filer will have an
additional 30 days to submit the
interactive data exhibit. This is similar
to the grace period provided for a filer’s
first required filing with interactive
data. Subsequent interactive data
exhibits using all of the levels will be
required at the same time as the rest of
the related report or registration
statement. We believe the 30 day grace
period will help a filer comply with the
more detailed tagging requirements.
The requirement that in the second
year a filer tag separately each amount
within a footnote (i.e., monetary value,
percentage, and number) should not
affect a filer’s decisions regarding what
to disclose. We are aware of questions
as to whether the contextual
information or data elements chosen
from the standard list of tags could
potentially reveal information that the
rest of the related registration statement
or periodic report would not otherwise
make known. However, we do not
believe that the contextual information
or data elements chosen should provide
any additional substantive disclosure.
To clarify the intent of the interactive
data requirements, new Rule 405 of
Regulation S–T, that sets forth tagging
requirements, includes an instruction
that states that the rule requires a
disclosure format, but does not change
substantive disclosure requirements. As
proposed and as adopted, the rules also
state clearly that the information in
interactive data format should not be
more or less than the information in the
ASCII or HTML part of the related
registration statement or report.169
As briefly noted above, commenters
provided a mix of views on the footnote
tagging requirements we proposed.
Many commenters objected to some or
all of the requirements as proposed and
suggested alternatives.170 In terms of
burden, a significant number of
commenters objected, in particular, to
level (iv) tagging in whole or part.171
169 See Preliminary Note 2 of Rule 405 of
Regulation S–T.
170 See, e.g., letters from ABA, ACLI/AIA,
AllState, Astoria, FEI, FirstEnergy, IBM, Intel,
National City, and SCS.
171 See, e.g., letters from ABA, ACLI/AIA,
AllState, Astoria, CSG, FEI, FirstEnergy, IBM, Intel,
National City, Pfizer, and SCS.
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Several of these commenters argued that
detailed footnote tagging would require
significant effort from the issuer and
could be confusing because of the high
number of company-specific extensions
and the risk of inconsistency among
filers due to varying footnote formats.172
Other criticisms included assertions that
the effort required would be greater than
the Commission estimated,173 overly
burdensome 174 and duplicative,175
would result in so many extensions that
the information would not be
comparable among issuers,176 and
would produce information that users
inappropriately would take out of
context.177
Other commenters reacted more
favorably, with some suggesting
alternatives to the proposed rules. For
instance, a number of commenters
recommended that the detailed tagging
of footnotes be gradually phased in to
provide more time for issuers to get
acclimated to the process and for the
development of standard taxonomies.178
Other commenters suggested that the
required detail tagging of footnotes
should focus on the most useful and
used footnote data rather on a broad
array of data that would require issuers
to apply thousands of additional tags for
detailed financial and narrative
information.179 Similarly, another
commenter suggested that detail tagging
only be required as to the more
standardized types of footnotes.180
While we are adopting the proposed
requirement to tag separately each
amount within a footnote (i.e., monetary
value, percentage, and number), we will
permit, but not require, filers to tag, to
the extent they choose, each narrative
disclosure. We believe that adopting the
footnote tagging requirements
substantially as proposed strikes an
appropriate balance between satisfying
investors’ needs and not imposing
undue burden on issuers. We believe
the block-text tagging required under
levels (i) through (iii) will satisfy the
needs of those who desire information
within the context of an entire footnote
or an entire table. We also believe that
requiring the detail tagging of individual
amounts but permitting the detail
172 See, e.g., the letters from ACLI/AIA, FEI, IBM,
and Intel.
173 See, e.g., letter from SCS.
174 See, e.g., letter from Intel.
175 See, e.g., letter from FEI.
176 See, e.g., letter from ABA.
177 See, e.g., letter from CSG.
178 See, e.g., letters from Comcast, Constellation,
EEI, Ernst & Young LLP (E&Y), Morgan Stanley,
National Association of Real Estate Investment
Trusts (NAREIT), and Southern.
179 See, e.g., letters from Intel, Morgan Stanley,
and SCS.
180 See letter from USS.
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tagging of narrative disclosures within
the footnotes as provided under level
(iv) will satisfy the needs of those who
desire to analyze specific pieces of
information or data. Further, we believe
that by permitting filers to choose
whether and which elements to tag in
the narrative disclosures of the footnotes
and schedules, they are granted a degree
of flexibility and relieved of the
uncertainty as to which narrative
elements to tag, some of which are
placed into footnotes and schedules
voluntarily. We also believe that not
requiring detailed tagging of narratives
would not result in the loss of
information due to block text tagging.
Finally, we believe that taxonomy and
software advances, combined with the
rules’ grace period, will avoid placing
an undue burden on issuers. We will,
however, monitor the implementation of
these amendments and, if necessary,
consider making appropriate
adjustments to the requirements.
Apart from footnote disclosures, filers
may be required under existing financial
reporting requirements to include
certain supplementary financial
statement schedules with their financial
statements. The form and content of
these schedules are governed by Article
12 of Regulation S–X.181 The list of tags
for U.S. financial statement reporting
enables companies to tag individual
facts in these financial statement
schedules, or to block tag each entire
schedule.
Filers also will be required to include
with their interactive data any financial
statement schedules prescribed by
Article 12 of Regulation S–X. These
financial statement schedules will be
tagged using two different levels of
detail; only the first level will be
required in the first year. Both levels
will be required starting one year from
the filer’s initial required submission in
interactive data format. Similar in
concept to the tagging approach adopted
for the financial statement footnotes, the
required levels of detail will be: (i) Each
complete financial statement schedule
tagged as a block of text; and (ii) each
amount (i.e., monetary value,
percentage, and number) separately
tagged. However, we will permit but not
require each narrative disclosure in
such schedule to be separately tagged to
the extent desired by the filer.
A filer may restate its previously filed
financial statements for the correction of
an error and file an amendment to its
registration statement, periodic report or
transition report. Alternatively, a filer
may revise its previously filed financial
181 See Rules 5–04 and 7–05 of Regulation S–X
and Items 17 and 18 of Form 20–F.
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6789
statements to reflect the effects of
certain subsequent events, including a
discontinued operation, a change in
reportable segments, or a change in
accounting principle and file a Form 8–
K or 6–K or an amendment to a preeffective registration statement. The new
rules require a filer to provide revised
interactive data at the same time it files
the restated or revised traditional format
financial statements as an exhibit to the
registration statement or report
containing those financial statements.182
If a filer decides to change a tag it used
previously that was not inappropriate at
the time used, it would not be required
to disclose the change.
b. Reports Covered by the New Rules
We are adopting the proposed
requirement to submit interactive data
for the filer’s financial statements
contained in periodic reports on Forms
10–Q, 10–K and 20–F and, in addition,
extending the requirement to the Form
40–F annual report and to Forms 8–K
and 6–K that contain revised or updated
financial statements.183 Under the new
rules, filers also will be required to
provide interactive data for transition
reports on Forms 10–Q, 10–K, or 20–F.
We are extending the interactive data
requirements to Form 40–F when used
as an annual report because we believe
that the effort required to satisfy the
requirement and the benefits from doing
so would be comparable to the effort
and benefits associated with the other
periodic reports to which the
requirement will apply. In response to
our solicitation of comment on whether
to require interactive data in connection
with Forms 40–F, one commenter urged
us to at least permit filers to submit
interactive data in order to avoid
placing filers of that form at a
competitive disadvantage.184
As discussed above, we are extending
the interactive data requirements to
Forms 8–K and 6–K that contain
updated interim financial statements or
financial statements that have been
revised to reflect the effects of certain
subsequent events. These financial
statements typically are not filed as
amendments to forms for which we
proposed to require interactive data, but
182 Revised interactive data will be required so
that the financial information will be the same in
both the traditional format filing and the interactive
data file. If the financial statements are not revised
in connection with an amended registration
statement, periodic report, or transition report, the
exhibit index will indicate that the interactive data
file was already provided.
183 Form 40–F may be filed by a Canadian
company filing in accordance with the MJDS.
Similar to Form 20–F, it may be used as an annual
report or an Exchange Act registration statement.
184 See letter from CP.
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they provide timely financial
information comparable to that
contained in such forms and may be
incorporated by reference into
registration statements for which
interactive data requirements generally
apply.185 In this regard, several
commenters noted that registrants use
Form 8–K to file financial statements
that reflect changes for reasons other
than to correct accounting errors.186
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c. Registration Statements Under the
Securities Act Covered by the Rules
We are adopting substantially as
proposed a requirement that, subject to
the phase-in period described above,
registration statements filed under the
Securities Act,187 include interactive
data when financial statements are
included directly in the registration
statement, rather than being
incorporated by reference. This
requirement will apply to the issuer’s
financial statements for all periods
included in the registration statement as
required by Regulation S–X and our
other rules. As proposed, the rules
would apply from the first filing of a
registration statement. The rules as
adopted, however, require that
interactive data be submitted only after
a price or price range has been
determined and any time thereafter
when the financial statements are
changed. We believe analysts, investors,
the public, and others will benefit from
the enhanced ability of interactive data
to locate and compare financial data
included in registration statements.
Further, under the new rules, interactive
data will be required for the acquiring
company, the filer, but not for the
company being acquired, in the context
of a business combination.
Some commenters opposed requiring
the submission of interactive data with
registration statements for initial public
offerings under the Securities Act.188
Some of these objections included the
burdens for newly public companies.189
However, a number of commenters
185 Issuers would not be required or permitted to
submit an interactive data exhibit to a Form 8–K or
6–K under any circumstances other than those
specified. See note 74 above.
186 See, e.g., letters from Deloitte, E&Y, and KPMG
LLP (KPMG).
187 The requirement will apply to registration
statements under the Securities Act on Forms S–1,
S–3, S–4, F–9, F–10, S–11, F–1, F–3, and F–4. This
includes registration statements for annuity
contracts that are filed on Forms S–1 and S–3. As
proposed, however, the requirement that we are
adopting will not apply to registration statements
on Form N–3, N–4, or N–6, which are used to
register variable annuity contracts and variable life
insurance policies.
188 See, e.g., letters from ABC, National City,
NYCBA, and Gary Purnhagen (Purnhagen).
189 See, e.g., letter from ABC.
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favored requiring interactive data for
initial public offering registration
statements, other Securities Act
registration statements or both.190 Some
commenters recommended that
interactive data be required to be
submitted only after the registration
statement becomes effective, given the
effort in preparing an initial public
offering and the frequency with which
initial public offering efforts never come
to fruition.191
We believe that the interactive data
requirements for Securities Act
registration statements in general and,
in particular, as limited to filings only
after a price or price range has been
determined and any time thereafter
when the financial statements are
changed, strike an appropriate balance
between the alternatives of requiring
interactive data submissions with each
pre-effective amendment or waiting
until a registration statement has been
declared effective. In our experience,
most issues related to the staff’s review
of offerings typically are resolved or
near resolution by the time a price range
is determined, and, as a result, there
typically would be relatively few
changes to the financial statements
contained in additional amendments.
As a result, issuers would be required to
tag information that likely is in
substantially final form. Consequently,
the information would be useful to
investors and issuers would be unlikely
to need to revise the information
significantly in a way that would trigger
multiple submissions of interactive
data. As each submission would be
tagged to indicate that the information
in the submission has been revised, we
believe investors should be able to
monitor changes in the interactive data
efficiently. Further, the rules as adopted
provide that a company’s first filing to
be subject to the interactive data
requirement would be a quarterly report
or, for a foreign private issuer not
required to file quarterly reports, an
annual report. Accordingly, interactive
data exhibits will not be required for
initial public offerings.
d. Registration Statements Under the
Exchange Act Covered by the Rules
We are not adopting a requirement to
submit interactive data for the financial
statements contained in registration
statements under the Exchange Act on
Forms 10, 20–F and 40–F. Although we
only expressly proposed to require
interactive data in connection with
190 See, e.g., letters from AICPA, Grant Thornton,
PricewaterhouseCoopers LLP (PWC), CAQ,
CalPERS, CFA, UTC, Morgan Stanley, and E&Y.
191 See, e.g., letters from BDO, CAQ, and PWC.
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Securities Act registration statements,
the proposing release solicited comment
on whether to require interactive data
for the financial statements in Forms
40–F and in registration statements
under the Exchange Act on Forms 10
and 20–F.
One commenter suggested waiting in
order to evaluate experience with
interactive data submission before
requiring submission of Exchange Act
registration statements.192 Another
commenter stated that the interactive
data requirements should apply to
Canadian issuers that report in
accordance with U.S. GAAP and,
ultimately, IFRS as issued by the
IASB.193 The rules as adopted will not
require interactive data files to be
submitted as an exhibit to Forms 10, 20–
F or 40–F when used as Exchange Act
registration statements. However, a filer
is permitted to voluntarily submit an
interactive data exhibit with these
registration statements.
4. Initial Filing Grace Period
As noted above, interactive data will
be required at the same time as the rest
of the filing to which it relates.
However, each company’s initial
interactive data submission, regardless
of filing type, will have a 30 day grace
period, and therefore will be permitted
as an amendment to a:
• Periodic report on Form 10–K, 20–
F, 40–F or 10–Q within 30 days after the
earlier of the due date or filing date of
the related report;
• Securities Act registration statement
within 30 days after the filing date of
the price or price range as part of the
related registration statement; 194 or
• Report on Form 8–K or 6–K that
contains revised or updated financial
statements that have been revised to
reflect a subsequent event rather than
the correction of an error within 30 days
after the filing date of the related report.
In addition, as noted above, in year
two for the first filing that is required to
have footnotes and schedules tagged
using all levels of detail, the interactive
data exhibit will be required within 30
days after the due date or filing date of
the related registration statement or
periodic, current or transition report or
Form 6–K, as applicable.
In the voluntary program, filers were
permitted to provide the interactive data
at the time of filing or at any later time,
192 See
letter from UTC.
letter from EDGAROnline.
194 The 30 day grace period would begin for a
Securities Act registration statement once the price
or price range is filed as part of it because it is at
that time the interactive data filing requirement
becomes applicable.
193 See
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without a deadline.195 We believe that,
consistent with our view regarding the
potential value of widespread market
use of the interactive data, companies
should be required to provide the
interactive data at the time the
registration statement or report is filed
or required to be filed, whichever is
earlier. We do not believe this timing
requirement will place undue pressure
on filers as experience with tagging
financial statements grows and software
and taxonomies develop. We believe, for
example, based on our experience with
the voluntary program, that the time
period for the quarterly or annual report
is sufficient for filers to convert their
ASCII or HTML financial statements
into interactive data format and that the
initial grace periods help to alleviate
concerns over timing burdens.
Commenters overwhelmingly
supported a 30 day grace period for the
initial submission and initial detail
tagged footnote submission of
interactive data and many supported a
30 day grace period for additional
submissions during the phase-in and, in
some cases, beyond.196
Some commenters suggested that the
grace period apply either for all
interactive data submissions during the
first two years of the phase-in period,197
or for every submission made during the
entire phase-in period.198 These
commenters generally reasoned that
during the time specified, companies
and service providers still would be
familiarizing themselves and developing
expertise related to the tagging process
and, as a result, would need time to
complete the tagging process. Some of
those that supported additional grace
periods noted that the tagging process
will be an additional step to financial
statement preparation for years to come
and that it will take time to integrate the
interactive data process with the
financial statement preparation
process.199 One commenter noted that
the grace period following the filing of
a Form 10–K offers little relief for
195 The voluntary program permits filers to
provide financial information in interactive data
form as an exhibit to a report on Form 8–K or Form
6–K when the related traditional format financial
statements appear in a registration statement or
periodic report. The new rules, however, will
require that interactive data be provided as an
exhibit to the registration statement or periodic
report that contains the related traditional format
financial statements.
196 See, e.g., letters from ACLI/AIA, AICPA,
AllState, Astoria, CNW Group (CNW), Comcast,
Constellation, and EEI.
197 See, e.g., letters from Constellation, EEI, and
IBM.
198 See, e.g., letters from AllState, Astoria,
Comcast, Foley & Lardner (Foley), Pfizer, and
UBmatrix.
199 See, e.g., letters from FEI and SCS.
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smaller companies due to the number of
filings prepared shortly thereafter.
Specifically, this commenter noted that
at many smaller companies, the staff
responsible for the preparation of a
Form 10–K immediately turn their time
and attention to the preparation of the
company’s proxy statement after filing
the Form 10–K. The commenter stated
that a Form 10–Q is not followed by a
similar series of reporting obligations, so
a grace period following this report is
consequently more helpful in assisting
companies avoid excessive expense and
burden.200
A few commenters suggested a grace
period for submissions after the phasein period. Some stated that technical
difficulties and the limited availability
of support services would necessitate
the permanent or temporary extension
of a grace period and proposed, on an
on-going basis after the initial phase-in
period, that interactive data files be due
within 4 or more days after the related
official filing is filed. Further, these
commenters believed that this type of
extension would not ultimately impair
the usefulness of interactive data while
moving the tagging procedures out of
the financial reporting preparation
timeframe but still providing it to
investors in a timely fashion.201
However, other commenters were
concerned that a grace period beyond
the periods proposed would diminish
the usefulness of interactive data
submitted beyond the due date of the
related official filing.202
We acknowledge all of these concerns
and suggestions, and while we are
adopting the grace periods substantially
as proposed, we are deferring the start
of the phase-in which we believe may
help to alleviate potential burdens by
giving more time to prepare the initial
submission. We also believe that the
eventual dropping of the grace period
after the initial submissions will help to
make the interactive data files more
useful and relevant to investors by
requiring the submissions at the same
time as the related official filing.
Many commenters suggested that
grace period submissions be filed as
exhibits to Form 8–K or 6–K rather than
as exhibits to amendments to Exchange
Act periodic reports, so as to avoid
negative connotations associated with
the filing of an amendment.203 One
commenter even suggested the creation
200 See
letter from ABA.
201 See, e.g., letters from AllState, EEI, SCS, and
Southern.
202 See, e.g., letters from CFA and EDGAR Online.
203 See, e.g., letters from AICPA, Constellation,
Institute of Management Accountants (IMA),
NAREIT, Purnhagen, and Teva Pharmaceutical
Industries Limited (Teva).
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of new forms for these amendments to
distinguish them from substantive
amendments to periodic reports.204 We
acknowledge these concerns, but note
that grace period submissions filed with
amended periodic reports need contain
only the relevant interactive data as an
exhibit and therefore there should not
be any confusion that the amended
report is being filed for any other
reason. In this regard we note that Rule
12b–15 under the Exchange Act 205
generally provides that any amendment
to a filing that required a certification
must contain another certification;
however, we clarify that, consistent
with the exclusion of interactive data
from the disclosure certification
requirements discussed in part II.C.4
below, an amendment whose sole
purposes is to submit interactive data as
an exhibit is not subject to the
certification requirements of Rule 12b–
15 under the Exchange Act. We
therefore adopt the rules as proposed as
they relate to submitting interactive data
as part of an amendment to the form
containing the related traditional format
financial statements.
5. Web Site Posting of Interactive Data
We believe interactive data, consistent
with our new rules, should be easily
accessible for all investors and other
market participants. As such disclosure
becomes more widely available,
advances in interactive data software,
online viewers, search engines and
other Web tools may in turn facilitate
improved access to and usability of the
data, promoting its awareness and use.
Encouraging widespread accessibility to
filers’ financial information furthers our
mission to promote fair, orderly, and
efficient markets, and facilitate capital
formation. We believe Web site
availability of the interactive data will
encourage its widespread
dissemination, thereby contributing to
lower access costs for users. We
therefore are requiring, generally as
proposed, that each filer covered by the
new rules provide the same interactive
data that it will be required to provide
to the Commission on its corporate Web
site, if it has one, on the earlier of the
calendar day it filed or was required to
file the related registration statement or
report, as applicable.206 The interactive
204 See
letter from IBM.
CFR 240.12b–15.
206 New Rule 405 of Regulation S–T contains the
Web site posting requirement. We also are
providing, however, that Web site posting of the
interactive data will not be required until the end
of any applicable grace period that applies to the
submission of the interactive data to the
Commission. Similarly, we are providing that Web
205 17
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data should be accessible through the
issuer’s Web site address the issuer
normally uses to disseminate
information to investors.207 Finally, the
interactive data will be required to be
posted for at least 12 months, which is
consistent with issuers’ full one year
reporting cycle.
We believe that access to the
interactive data on corporate Web sites
will enable search engines and other
data aggregators to more quickly and
cheaply aggregate the data and make
them available to investors because the
data will be available directly from the
filer, instead of through third-party
sources that may charge a fee. It could
also transfer reliability costs of data
availability to the public sector by
reducing the likelihood that investors
cannot access the data through the
Commission’s Web site due to downtime for maintenance or to increased
network traffic. We also believe that
availability of interactive data on
corporate Web sites will make it easier
and faster for investors to collect
information on a particular filer if the
interactive data is on the filer’s Web site
already, rather than if investors would
be required to visit separately (for
example, by hyperlink) and search the
Commission’s Web site for information,
particularly if the investor is already
searching the issuer’s Web site. To help
further our goals of decreasing user cost
and increasing availability, we will not
allow companies to comply with the
Web posting requirement by including a
hyperlink to the Commission’s Web site.
We believe this requirement will be
consistent with the increasing role that
corporate Web sites perform in
supplementing the information filed
electronically with the Commission by
delivering financial and other disclosure
directly to investors. We also believe
that this requirement can provide an
incentive for corporations to add
site posting of the interactive data will not be
required before submission of the interactive data
when submission of the data is delayed in
accordance with and during the term of any
applicable hardship exemption provided under
Rule 201 or 202 as proposed to be revised.
Revisions to Rules 201 and 202 are more fully
discussed below in Part II.E.
207 If the issuer has a corporate Web site but does
not normally disseminate information to investors
through its Web site, it should provide access to the
interactive data through a location on its Web site
that it reasonably believes will facilitate user access
to the forms. We took a similar approach to Web
site posting location and 12 month time frame in
connection with requiring that issuers with
corporate Web sites post on their Web sites
beneficial ownership reports filed with respect to
their securities on Forms 3, 4 and 5 under Section
16(a) of the Exchange Act. See Section 16(a)(4)(C)
[15 U.S.C. 78p(a)(4)(C)], Rule 16a–3(k) [17 CFR
240.16a–3(k)] and Release No. 33–8230 (May 7,
2003) [68 FR 25788].
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content to or otherwise enhance their
Web sites, thereby improving investor
experience. For example, we note that
since 2003 issuers with corporate Web
sites have been required to post on their
Web sites, directly or by hyper linking
to a third-party Web site such as the
Commission’s Web site, beneficial
ownership reports filed with respect to
their securities on Forms 3, 4, and 5. We
also note that many companies provide
on their Web sites access to their
periodic reports, proxy statements, and
other Commission filings.208 The new
rules will expand such Web site posting
by requiring companies with Web sites
to post their interactive data as well.209
Commenters had mixed views on the
proposed Web site posting requirement.
Some commenters stated that it would
be appropriate for a company to post
interactive data on its Web site because,
for example, many users of financial
statements access such types of
information through corporate Web
sites.210 Other commenters objected to
the Web site posting requirement, citing
reasons including cost,211 lack of
investor benefit,212 and facilitating use
of information out of context.213 Finally,
some commenters addressed posting
details such as when the interactive data
must be posted and for how long it must
remain accessible.
We believe that issuers that already
have corporate Web sites can post
interactive data at a reasonable cost 214
and that such posting can benefit
investors by facilitating their access to
interactive data 215 and, as a result,
208 Companies filing registration statements and
accelerated filers and large accelerated filers in their
periodic reports are required to disclose whether or
not they make available free of charge on or through
their Web site, if they have one, their annual report
on Form 10–K, quarterly reports on Form 10–Q,
current reports on Form 8–K, and amendments to
those reports. Companies that do not make their
reports available in that manner also must disclose
the reasons they do not do so and whether they
voluntarily provide electronic or paper copies of
their filings free of charge upon request. See Item
101(e) of Regulation S–K.
209 As further discussed in Part II.E, under the
new rules a company that fails to post its interactive
data as required will be deemed ineligible to use
short form registration Forms S–3, S–8, and F–3 and
will be deemed not to have adequate public
information available for purposes of Rule 144(c)(1)
unless and until it posted.
210 See, e.g., letters from FEI, CFA and UTC.
211 See, e.g., letters from IBM and Starkman.
212 See, e.g., letters from Starkman and VEC.
213 See, e.g., letters from ABA and SCS.
214 See Part IV.
215 One commenter stated that an issuer should be
able to satisfy its posting requirement through a
hyperlink. See letter from IBM. Similarly, another
commenter suggested dropping the posting
requirement because the information would be
available on the Commission’s Web site and the
requirement would be difficult to monitor. See
letter from E&Y. We believe, however, that search
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facilitating their automated parsing and
analysis of financial information.
Investors and analysts routinely parse
information out of filed financial
statements, whether in paper or
electronic format. Interactive data
merely facilitates the parsing.216 In this
regard, an issuer that wishes to provide
access to context beyond the posted
interactive data would be free to
indicate on its Web site where a user
could access the Commission filing to
which the interactive data is an exhibit.
Similarly, an issuer could provide
access to the remainder of the filing
directly on its Web site or by hyperlink
to the Commission’s Web site.
Several commenters suggested that
issuers not be required to post
interactive data on corporate Web sites
on the same day they are submitted to
the Commission because that would be
too burdensome.217 Commenters
suggested grace periods to post such
data such as 24 hours 218 or, in the case
of foreign private issuers, two business
days 219 after the related form has been
filed with the Commission. As
proposed, issuers would have been
required to post the interactive data by
the end of the business day on the
earlier of the date the interactive data is
submitted or is required to be submitted
to the Commission. In order to make it
easier for issuers to satisfy the posting
requirement by providing several more
hours in which to comply but still have
the posted information available in a
timely manner, the new rules, as
adopted, will require posting by the end
of the calendar rather than business day
specified.
One commenter recommended that
the Commission clarify the length of
time that issuers would be required to
keep interactive data posted.220 As a
result, we are revising the proposed
rules to require that an issuer keep the
information posted for at least 12
months. As we stated in connection
with adopting a 12-month posting
period for Forms 3, 4 and 5,221 we
believe that such a period strikes an
appropriate balance between the issuer
effort needed to post and the investor
benefit from having access to the posted
material through the additional source
engines and other data aggregators might be better
able to access the posted information directly from
issuers’ Web sites.
216 We believe that parsing information in a filing
is useful but we continue to emphasize the need to
evaluate the entirety of a filing.
217 See, e.g., letters from Foley, Liberty Global,
Inc. (LGI), NYCBA, Southern, and Teva.
218 See, e.g., letter from LGI.
219 See, e.g., letter from Teva.
220 See letter from ABA.
221 Rule 16a–3(k) [17 CFR 240.16a–3(k)].
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of the issuer’s Web site. In this regard,
we note that the interactive data would
be available indefinitely on the
Commission’s Web site.222
C. Accuracy and Reliability of
Interactive Data
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1. Voluntary Program
Data must be accurate to be useful to
investors. To help assure the accuracy of
interactive data in the voluntary
program, the data, upon receipt by our
electronic filing system, undergoes a
validation separate from the normal
validation of the traditional format
filing.223 Potential liability also helps
ensure the accuracy and reliability of
the data. Although the voluntary
program has provided limited
protections from liability under the
federal securities laws 224 and excluded
interactive data from being subject to
officer certification requirements under
Exchange Act Rules 13(a)–14 and 15d–
14,225 interactive data in the voluntary
program are subject to the anti-fraud
provisions of the federal securities laws.
The voluntary program also encourages
participants’ efforts to create accurate
and reliable interactive data that is the
same as the corresponding disclosure in
the traditional electronic format filing
by providing that a participant is not
liable for information in its interactive
data that reflects the same information
that appears in the corresponding
portion of the traditional format filing,
to the extent that the information in the
corresponding portion of the traditional
format filing was not materially false or
misleading. To further encourage
reasonable efforts to provide accurate
interactive data, the voluntary program
treats interactive data that do not reflect
the same information as the official
version as reflecting the official version
if the volunteer meets several
conditions. The volunteer must have
made a good faith and reasonable
attempt to reflect the same information
as appears in the traditional format
filing and, as soon as reasonably
practicable after becoming aware of any
difference, the volunteer must amend
the interactive data to cause them to
reflect the same information.226
222 See Release No. 33–8230 (May 7, 2003) [68 FR
25788].
223 If the traditional format filing meets its
validation criteria, but any interactive data fail their
own validation criteria, all interactive data are
removed and the traditional format filing is
accepted and disseminated without the interactive
data file.
224 Rule 402 under Regulation S–T provides these
liability protections.
225 See Rules 13a–14(f) [17 CFR 240.13(a)–14(f)]
and 15d–14(f) [17 CFR 240.15d–14(f)].
226 17 CFR 232.402(b).
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2. Use of Technology To Detect Errors
Complete, accurate, and reliable
financial statements and other
disclosures are essential to investors
and the proper functioning of the
securities markets. Our new
requirement to submit interactive data
with registration statements and reports
is designed to provide investors with
new tools to obtain, review, and analyze
information from public filers more
efficiently and effectively. To satisfy
these goals, interactive data must meet
investor expectations of reliability and
accuracy. Many factors, including
companies’ policies and procedures as
buttressed by incentives provided by the
application of technology by the
Commission, market forces and the
liability provisions of the federal
securities laws, help further those goals.
Building on the validation criteria
referenced above for interactive data in
the voluntary program, we plan to use
validation software to check interactive
data for compliance with many of the
applicable technical requirements and
to help the Commission identify data
that may be problematic. For example,
we expect the Commission’s technology
to:
• Check if required conventions (such
as the use of angle brackets to separate
data) are applied properly for standard
and, in particular, non-standard special
labels and tags;
• Identify, count, and provide the
staff with easy access to non-standard
special labels and tags; 227
• Identify the use of practices,
including some the XBRL U.S. Preparers
Guide contains, that enhance
usability; 228
• Facilitate comparison of interactive
data with disclosure in the
corresponding traditional format filing;
• Check for mathematical errors; and
• Analyze the way that companies
explain how particular financial facts
relate to one another.229
227 For
example, if a company uses the word
‘‘liabilities’’ as the caption for a value data tagged
as ‘‘assets,’’ the software would flag the filing and
bring it to the staff’s attention. In contrast, if the
company used ‘‘Total Assets’’ or ‘‘Assets, Total,’’
the software would identify the use of these terms
as a low risk discrepancy.
228 The XBRL U.S. Preparers Guide, available
from the XBRL U.S. Web site, provides guidance to
facilitate preparing information in the interactive
data format.
229 The technology used to show these
relationships is known as a ‘‘linkbase.’’ Linkbases
are part of an XBRL taxonomy and serve one of two
primary purposes: (1) To define additional
information about a particular concept (for example
to express the definition for Inventory or to express
the authoritative references for Inventory); and (2)
to express relationships between different concepts
(for example Inventory adds up to Current Assets
or Inventory appears after Accounts Receivable on
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6793
The availability of interactive data to
the staff may also enhance its review of
company filings. After the FDIC
required submission of interactive data,
it reported that its analysts were able to
increase the number of banks they
reviewed by 10% to 33%, and that the
number of bank reports that failed to
fully meet filing requirements fell from
30% to 0%.230
We believe analysts, individual
investors and others outside the
Commission that use the interactive
data submitted to us also will make use
of software and other tools to evaluate
the interactive data and, as a result,
market forces will encourage companies
to provide interactive data that
accurately reflects the corresponding
traditional format data in the traditional
format filing. For example, the use of
non-standard special labels or tags
(extensions) could introduce errors, but
we expect the open source and public
nature of interactive data and the list of
tags for U.S. financial statement
reporting would enable software easily
to detect and identify any modifications
or additions to the approved list of tags.
Based on our knowledge of the existing
software market, we believe such
software and other technology will be
widely available for free or at reasonable
cost. Investors, analysts, and other users
therefore would be able to identify the
existence and evaluate the validity of
any such modifications or additions. We
also anticipate that companies preparing
their interactive data and investors,
analysts, and other users will use such
devices to search for and detect any
changes made to the standard list of
tags. The ability of analysts and other
users to discover mistakes or alterations
not consistent with the desired use of
interactive data may give filers an
additional incentive to prepare such
data with care and promptly to correct
any errors.
3. Application of Federal Securities
Laws
An interactive data file generally will
be subject to the federal securities laws
in a modified manner similar to that of
the voluntary program under new Rule
406T if the filer submits the interactive
data file within 24 months of the time
the filer first is required to submit
the balance sheet, but before Prepaid Expenses).
The Commission will seek to ensure that linkbases
not only comply with technical requirements but
also are not used to evade accounting standards.
230 These bank reports require information that is
more structured and less varied than the
information we will require. As a result, the FDIC’s
efficiency gains from the use of interactive data
likely would be greater than ours.
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interactive data files 231 but no later than
October 31, 2014.232 Rule 406T provides
that during the time a filer’s interactive
data files are treated in this modified
manner, they will be:
• Subject to specified anti-fraud
provisions 233 except in connection with
a failure to comply with the tagging
requirements that occurs despite a good
faith attempt to comply and is corrected
promptly after the filer becomes aware
of the failure;
• Deemed not filed or part of a
registration statement or prospectus for
purposes of Sections 11 or 12 of the
Securities Act and not otherwise subject
to liability under these sections;
• Deemed not filed for purposes of
Section 18 of the Exchange Act or
Section 34(b) of the Investment
Company Act and not otherwise subject
to liability under these sections; and
• Deemed filed for purposes of (and,
as a result, benefit from) Rule 103 under
Regulation S–T.234
In regard to correcting an interactive
data file, we are adding the term
‘‘promptly’’ to the list of defined terms
in Rule 11 under Regulation S–T. Rule
11 defines ‘‘promptly’’ as ‘‘as soon as
reasonably practicable under the facts
and circumstances at the time.’’ The
definition is followed by a nonexclusive safe harbor. The safe harbor
generally provides that a correction
made by the later of 24 hours or 9:30
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231 The 24-month period would be exclusive of a
grace period. For example, a large accelerated filer
first required to submit interactive data for financial
statements in a Form 10–Q for the fiscal period
ended June 30, 2009, would be required to submit
the interactive data by 30 days after the Form 10–
Q’s August 10, 2009 due date but its 24-month
period would end August 10, 2011.
232 In regard to liability and also similar to the
voluntary program, we are adopting as proposed an
exclusion for interactive data files from the officer
certification requirements of Rules 13a–14 and 15d–
14 of the Exchange Act. That exclusion is discussed
further below in Part II.C.4.
233 The specified anti-fraud provisions are Section
17(a)(1) of the Securities Act [15 U.S.C. 77q(a)(1)],
Section 10(b) [15 U.S.C. 78j(b)] of Rule 10b–5 [17
CFR 240.10b–5] under the Exchange Act and
Section 206(1) [15 U.S.C. 80b–6(1)] of the
Investment Advisers Act of 1940 [15 U.S.C. 80b–1
et seq.].
234 Interactive data files will be deemed filed for
purposes of Rule 103 under Regulation S–T [17 CFR
232.103] and, as a result, the issuer will not be
subject to liability for electronic transmission errors
beyond its control if the issuer corrects the problem
through an amendment as soon as reasonably
practicable after the issuer becomes aware of the
problem. Interactive data files will be deemed filed
for purposes of Rule 103 regardless of whether they
are eligible for the modified treatment provided by
Rule 406T at the time submitted. Rule 406T
expressly provides that interactive data files are
deemed filed for purposes of Rule 103 to remove
any negative inference that otherwise might be
drawn due to the fact that Rule 406T deems
interactive data files to be not filed for other
specified purposes.
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a.m. on the next business day after the
filer becomes aware of the need for the
correction is deemed promptly made. If
a filer fails to correct within the safe
harbor timeframe, the filer still may
have corrected promptly depending on
the applicable facts and circumstances.
Despite the modified treatment of
interactive data files under the federal
securities laws, a filer would be subject
to actions under circumstances where
the protections of new Rule 406T do not
apply. For example, the Commission
could bring an action against a filer
under Section 13(a) of the Exchange Act
if the filer submits an interactive data
file with a periodic report and the
interactive data file fails to comply with
the tagging requirements despite a good
faith attempt, where the filer fails to
correct the interactive data file promptly
after it discovers the failure. On the
other hand, the Commission would not
be able to bring an action against a filer
under Sections 17(a)(2) and (3) under
the Securities Act if the filer submits an
interactive data file with a Securities
Act registration statement if the
interactive data file fails to comply
despite a good faith effort but the filer
acted negligently.
New Rule 406T differs from proposed
Rule 406 primarily by omitting
reference to interactive data in viewable
form and applying only for a specified
time.
We believe that interactive data in
viewable form are best addressed in
relation to interactive data files and
traditional concepts of liability.
Interactive data in viewable form that
are displayed on the Commission’s Web
site will reflect the related interactive
data file and, as a result, such
interactive data in viewable form should
be treated in the same manner as the
related interactive data file in regard to
a filer’s failure to correctly tag an
interactive data file that results in a
failure of the interactive data in
viewable form to reflect the related
official filing. Interactive data in
viewable form that are displayed on
other Web sites would be subject to
general anti-fraud principles applicable
to republication of another person’s
statements.235 Consistent with
traditional concepts of liability, a filer
would incur no additional liability for a
failure that occurs in both an interactive
235 These general anti-fraud principles include
the concepts of aiding and abetting and control
person liability. In addition, liability for interactive
data in viewable form displayed by third parties
would depend in part on whether that information
is attributable to the filer. See, e.g., Release No. 34–
58288 (Aug. 7, 2008) at Section II.B.2.
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data file and the related interactive data
in viewable form.
We believe that limiting the modified
application of the federal securities laws
to a specified period improves the
balance between avoiding unnecessary
cost and expense and encouraging
accuracy in regard to interactive data
because it recognizes that issuers and
service providers likely will grow
increasingly skilled at and comfortable
with the tagging requirements.
In the proposing release, the
Commission sought comment on
modified treatment of interactive data
under the federal securities laws.
Commenters overwhelmingly supported
limiting liability,236 with a fair number
of commenters supporting the proposed
approach, and a fair number suggesting
that the proposed approach be made
less stringent. One expressed the
concern that the proposed approach
should be made more stringent.237 A
significant number stated that the
regulatory text was confusing or
unclear, especially as to viewable
interactive data. Finally, a few
commenters made other liability-related
suggestions, sought clarification of the
liability applicable to situations not
intended to be addressed expressly by
the proposed rules or expressed other
concerns.
Commenters supporting the proposed
approach generally supported having
interactive data files be deemed
furnished rather than filed.238 New Rule
406T is consistent with the proposals
and these comments because it deems
interactive data files not filed for
purposes of various provisions under
the federal securities laws.
Commenters suggesting that the
proposed approach be made less
stringent did so explicitly and
implicitly. For example, while the
proposals generally provided that an
interactive data file would be protected
from federal securities law liability if
the issuer made a good faith attempt to
prepare it correctly, one commenter
criticized the good faith requirement
explicitly 239 and others did so
implicitly by stating there should be no
liability where there is no affirmative
intent to mislead.240 The commenter
that criticized the good faith
requirement explicitly stated that it
would be problematic because there
would be litigation over its fulfillment.
Upon further reflection and in light of
236 See,
e.g., letters from ABA and IBM.
letter from CII.
238 See, e.g., letters from AICPA, Deloitte,
NYCBA, SavaNet LLC (SavaNet), and UTC.
239 See letter from S&C.
240 See, e.g., letters from Angel, Intel, LG, SCS,
Southern, and USS.
237 See
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these comments, new Rule 406T
requires a ‘‘good faith attempt’’ to
comply with the tagging requirements
rather than the proposed ‘‘good faith
and reasonable attempt.’’ We believe
that omission of the reference to
‘‘reasonable’’ should not result in a
lesser degree of effort by issuers but
should help to avoid litigation over
fulfillment of the requirement. As
discussed in detail above, under new
Rule 406T additional liability protection
occurs when a filer makes a good faith
attempt and corrects any failure to
comply with the tagging requirements
promptly after the filer becomes aware
of the failure. In this context, we
interpret ‘‘good faith’’ as not having the
scienter required for purposes of the
anti-fraud provisions.241 In a further
effort to help clarify what constitutes
adequate effort for purposes of receiving
additional liability protection and as
also discussed in detail above, we have
adopted a definition for the term
‘‘promptly’’ that includes a nonexclusive safe harbor.
Three commenters suggested that, at
least at the outset of the interactive data
submission requirement, there should
be essentially no liability based on
interactive data files or viewable
interactive data.242 Two of these
commenters stated that there should be
no liability because tagging would be a
‘‘new’’ process.243 The third commenter
stated that interactive data are merely a
repetition, in another format, of
information already required and there
would be little risk that issuers would
affirmatively try to introduce differences
between the formats because any such
differences would be transparent.
Similarly, one commenter stated there
should be no liability attributable to the
posting of an interactive data file
because the information would be out of
context.244 We acknowledge these
comments but, in general, believe the
measured level of liability that would
apply at the outset of the mandated
program is appropriate in light of the
current level of development in tagging
processes and the effect this level of
liability should have on helping to
assure that interactive data are
reliable.245
Some commenters that supported
limited liability at least at the outset of
the interactive data submission
requirement suggested that liability be
241 See Ernst & Ernst v. Hochfelder, 425 U.S. 185,
206 (1976).
242 See letters from NYCBA, Safeway, and S&C.
243 See letters from NYCBA and Safeway.
244 See letter from SCS.
245 See Part II.B.5 for a discussion of commenter
concerns regarding interactive data’s being out of
context.
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revisited 246 or increased 247 later.
Similarly, one commenter suggested
that the imposition of liability on
viewable interactive data be conditioned
on the maturity of the tagging and
rendering technology.248 In that regard,
three commenters suggested that the
good faith exception proposed for the
interactive data file in part could form
the basis for an exemption for viewable
interactive data.249 As discussed above,
we have decided to limit liability at the
outset of the mandated program but
phase out the limitation of liability over
time. We believe that treatment of
interactive data in viewable form that
appears on our Web site in a manner
analogous to the treatment of the related
interactive data file for liability
purposes is appropriate in light of the
maturity of tagging and rendering
technology. Similarly, we believe that
treatment of interactive data in viewable
form that appears on other Web sites
under general anti-fraud principles
applicable to republication of another
person’s statements also is appropriate
in light of the maturity of such
technology.
Commenters stated that the regulatory
text was confusing or unclear in various
ways, with a focus on viewable
interactive data. In terms of specific
items, commenters singled out, for
example, the proposed Rule 406(c)(3)(C)
provision attempting to draw a
distinction between substantive content
and compliance with the tagging
provisions of proposed Rule 405.250 In
terms of general items and viewable
interactive data, commenter concerns
often related to the fact that the
proposed rules expressly addressed
viewable interactive data only to the
extent, as converted by the
Commission’s viewer, it appeared
identical in all material respects to the
related official filing. As a result,
commenters indicated that it was
unclear what liability applied to
viewable interactive data as rendered by
the Commission’s viewer, not identical
in all material respects to the related
official filing; and as rendered by a nonCommission viewer.251 We believe that
new Rule 406T clarifies or omits the
provisions of proposed Rule 406 that
commenters found confusing. As to
viewable interactive data in particular,
we now omit reference in the rule to one
particular situation in favor of
246 See, e.g., letters from AICPA, E&Y, and Grant
Thornton.
247 See, e.g., letters from SavaNet and UTC.
248 See letter from ABA.
249 See, e.g., letters from ABA, E&Y, and IBM.
250 See letters from ABA, Intel, and SCS.
251 See, e.g., letters from ABA and S&C.
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6795
addressing viewable interactive data in
general under traditional legal and
liability concepts as discussed in detail
above.
We did not propose to permit or
require legends for interactive data files.
One commenter expressly approved the
absence of a legend requirement,252 but
four commenters suggested variously
that the Commission require a legend
that states people should not rely on the
interactive data,253 that they should not
rely on it because of limited liability,254
or that people should not use the
interactive data in isolation.255 We
believe that attempting to place in
interactive data legends of the type
suggested would be impracticable
because interactive data will often be
accessed in their machine-readable form
and, even if they were accessed in
viewable form, might not be accessed in
a place where the legend would appear.
As to a legend that states people should
not rely on the interactive data in
particular, such a legend would be
unnecessary because there is no reason
the data should not be reliable and,
were they not reliable, they would have
little value.
To assist filers in ensuring the
accuracy of their interactive data
submissions, we plan to make available
to filers the opportunity to make a test
submission with the Commission. The
test submission will enable the filer to
learn how the validation system would
respond if the test submission were a
live submission and then, if the filer
wishes, use the Commission’s previewer to see the viewable interactive
data that would be displayed on the
Commission Web site if the interactive
data were accepted and
disseminated.256 If the validation
system finds an error, it will advise the
filer of the nature of the error and as to
whether the error was major or minor.
As occurs in the voluntary program, a
major error in an interactive data exhibit
that was part of a live filing will cause
the exhibit to be held in suspense in the
electronic filing system. The rest of the
filing will be accepted and disseminated
if there are no major errors outside of
the interactive data exhibit. If that were
to happen, the filer will need to revise
the interactive data exhibit to eliminate
252 See letter from CFA. Under the current
voluntary program, the filing with which interactive
data are submitted must disclose that the purpose
of the interactive data is to test the related format
and technology and, as a result, investors should
not rely on the interactive data in making
investment decisions.
253 See, e.g., letters from AICPA, CAQ and PWC.
254 See letters from CAQ and PWC.
255 See letter from ABA.
256 The EDGAR Filer Manual addresses test
submissions primarily at Section 6.6.5 of Volume II.
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the major error and submit the exhibit
as an amendment to the filing to which
it is intended to appear as an exhibit. A
minor error in an interactive data
exhibit that is part of a live filing will
not prevent the interactive data exhibit
from being accepted and disseminated
together with the rest of the filing if
there are no major errors in the rest of
the filing. We believe it will be
appropriate to accept and disseminate a
filing without the interactive data
exhibit submitted with it if only the
exhibit has a major error, in order to
disseminate at least as much
information at least as timely as would
have been disseminated were there no
interactive data requirement.
Some commenters sought
clarifications on whether there might be
auditor liability on interactive data
files.257 There is no additional basis for
auditor liability based on data tagging.
Also, an auditor will not be required to
apply AU Sections 550, 711 or 722 to
interactive data provided in an exhibit
or to the related viewable interactive
data.258
In this regard, we also note that we
are not requiring that filers involve third
parties, such as auditors or consultants,
in the creation of their interactive data
filings. We are taking this approach after
considering various factors, including:
• Commenters’ views;
• The availability of a comprehensive
list of tags for U.S. financial statement
reporting from which appropriate tags
can be selected, thus reducing a filer’s
need to develop new elements; 259
• The availability of user-friendly
software with which to create the
interactive data file;
• The multi-year phase-in for each
filer, the first year of which entails the
relatively straightforward process of
tagging face financial statements, as was
done during the voluntary program, and
block tagging footnotes and financial
statement schedules;
• The availability of interactive data
technology specifications, and of other
XBRL U.S., XBRL International, and
Commission resources for preparers of
tagged data; 260
• The advances in rendering/
presentation software and validation
tools for use by preparers of tagged data
that can identify the existence of certain
tagging errors;
257 See
e.g., letter from E&Y.
Part II.C.4 below for a further discussion
of AU Sections 550, 711 and 722.
259 We expect the same will be true with respect
to the tags for reporting under IFRS as issued by the
IASB.
260 An example of Commission resources includes
the EDGAR Filer Manual.
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• The expectation that preparers of
tagged data will take the initiative to
develop practices to promote accurate
and consistent tagging; and
• The filer’s and preparer’s liability
for the accuracy of the traditional format
version of the financial statements.
Many commenters believed that
issuers should not be required to obtain
auditor assurance on their interactive
data submissions at least at the outset of
the interactive data submission
requirement,261 but a few commenters
favored requiring assurance to enhance
reliability.262 Some commenters
suggested monitoring interactive data
submissions and considering whether to
introduce an assurance requirement in
the future.263 We acknowledge the
concerns of the commenters that believe
we should require assurance on
interactive data. For the reasons
discussed above, however, we believe
an assurance requirement is not now
necessary.
A number of commenters, including
many representing the auditing
profession, recommended that the
Commission and the PCAOB provide
guidance to issuers and auditors for
situations where an issuer wanted to
voluntarily obtain some form of auditor
assurance on interactive data.264 We
note that issuers can obtain third-party
assurance under the PCAOB Interim
Attestation Standard—AT sec. 101,
Attest Engagements on interactive data,
and can start and stop obtaining
assurance whenever they choose.265 We
understand that the PCAOB is aware of
sentiment in favor of interactive dataspecific attestation standards.
Auditing firms generally did not
support requiring issuers to obtain
auditor assurance on data tagging, and
stated their concern that users of
interactive data financial statements
may incorrectly assume that auditor
assurance has been provided on the data
261 See, e.g., letters from AICPA, Deloitte, FEI,
Gen. Mills, IMA, Illinois Society of Certified Public
Accountants (ILSCPA), and Teva.
262 See, e.g., letters from CalPERS, CFA and CII.
In connection with stating their concerns about the
lack of auditor assurance, two of these commenters
also stated their concern about the absence of
management certification of interactive data under
the proposed exclusion of interactive data from the
officer certification requirements of Rules 13a–14
and 15d–14. See letters from CFA and CII.
263 See, e.g., letters from AICPA, CAQ, Deloitte,
E&Y, Grant Thornton, and KPMG.
264 These included tagging in general (see, e.g.,
letters from AICPA and UTC); extensions (see, e.g.,
letters from AICPA and UTC); and correct
associated data (see, e.g., letter from UTC).
265 If an issuer wishes to refer in a filing to third
party assurance voluntarily obtained from an
auditor or other party, the issuer must comply with
applicable consent requirements.
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tagging.266 These auditing firms
recommended:
• Requiring issuers’ filings to specify
clearly the extent of auditor
involvement with the interactive data
exhibit; 267
• Requiring the interactive data
submission to state that it is not subject
to assurance when no assurance has
been provided; 268
• Prohibiting tagging the auditor’s
report; 269 and
• Revising the standard audit report
to clarify the extent to which, if any, the
audit extends to interactive data.270
Some commenters suggested
monitoring the interactive data
submission program and considering
whether to introduce an assurance
requirement in the future.271 As stated
previously, the Commission does not
believe that auditor involvement is
necessary with respect to the interactive
data file. We also believe that the rules
as adopted address some of the
commenters’ concerns regarding the
perception of auditor involvement in
the creation of the interactive data
exhibit. Although Rule 405 as adopted
does not include a requirement that
auditors’ reports be tagged, the rules do
not prohibit issuers from indicating in
the financial statements (such as in a
footnote) the degree of auditor
involvement in the tagging process.
Accordingly, we believe that an issuer
can make clear the level of auditor
involvement or lack thereof in the
creation of the interactive data exhibit.
4. Officer Certifications and Integration
of Interactive Data and Business
Information Processing
Rules 13a–14 and 15d–14 generally
require officers to certify in periodic
reports to various matters relating to
internal control over financial
266 See, e.g., letters from CAQ, Deloitte, E&Y,
Grant Thornton, KPMG, and PWC.
267 See, e.g., letters from Deloitte, Grant Thornton,
and PWC.
268 See, e.g., letters from Deloitte, E&Y and Grant
Thornton.
269 See, e.g., letters from CAQ, Deloitte, E&Y,
Grant Thornton, and KPMG.
270 See, e.g., letter from Deloitte.
271 See letters from AICPA, CAQ, Deloitte, E&Y,
GT, and KPMG.
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reporting 272 and disclosure controls and
procedures.273
We are adopting amendments that
exclude interactive data from the officer
certification requirements of Rules 13a–
14 and 15d–14. We believe that
adopting these amendments is part of
striking an appropriate balance between
avoiding unnecessary cost and expense
and encouraging accuracy in regard to
interactive data. A number of
commenters stated that interactive data
submissions should not be included
within the scope of officer
certifications,274 but two commenters
expressed concern about the
exclusion 275 and one commenter
recommended that they be included
after the two-year phase-in period.276
The commenters supporting the
exclusion cited varying reasons
including, for example, that an officer
should not be required to certify to data
that is not human-readable 277 and that
inclusion would result in increased
expense and exposure without
commensurate investor benefit.278 The
commenters expressing concern cited
the exclusion together with the absence
of an auditor assurance requirement as
together resulting in less confidence in
the interactive data than in traditional
format information. As stated above in
regard to liability generally, we believe
that adopting the officer certification
exclusion is part of striking an
appropriate balance between avoiding
272 Exchange Act Rules 13a–15(f) [17 CFR
240.13a–15(f)] and 15d–15(f) [17 CFR 240.15d–
15(f)] define the term ‘‘internal control over
financial reporting,’’ in general, as a process
designed by or under the supervision of specified
persons and effected by the issuer’s board of
directors, management and other personnel ‘‘to
provide reasonable assurance regarding the
reliability of financial reporting and the preparation
of financial statements for external purposes in
accordance with [GAAP] and includes [specified]
policies and procedures.’’ Rules 13a–15 and 15d–
15 generally require specified issuers to maintain
internal control over financial reporting and require
the management of those issuers to evaluate the
effectiveness of the issuer’s internal control over
financial reporting. In addition, the certifications
specified by Item 601(b)(31) of Regulation S–K and
Instruction B(e) of Form 20–F that relate to these
specified issuers, generally must address the
establishment, maintenance, design, changes in and
deficiencies and material weaknesses related to the
issuer’s internal control over financial reporting.
273 Rules 13a–15(e) and 15d–15(e) define the term
‘‘disclosure controls and procedures’’ as ‘‘controls
and other procedures of an issuer that are designed
to ensure that information required to be disclosed
by the issuer in [its periodic] reports * * * is
recorded, processed, summarized and reported
within the time periods [required].’’
274 See, e.g., letters from FirstEnergy, LGI,
NYCBA, Safeway, Southern, Teva, USS, and
WellPoint.
275 See letters from CFA and CII.
276 See letter from AICPA.
277 See letter from Safeway.
278 See letter from NYCBA.
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unnecessary cost and expense and
encouraging accuracy. We intend to
monitor implementation and, if
necessary, make appropriate
adjustments in the future regarding
officer certifications.
As the technology associated with
interactive data improves, issuers may
integrate interactive data technology
into their business information
processing, and such integration may
have implications regarding internal
control over financial reporting no
different than any other controls or
procedures related to the preparation of
financial statements. If this integration
occurs, the preparation of financial
statements may become interdependent
with the interactive data tagging process
and an issuer and its auditor should
evaluate these changes in the context of
their reporting on internal control over
financial reporting. However, this
evaluation is separate from the
preparation and submission of the
interactive data file, and as such the
results of the evaluation would not
require management to assess or an
auditor to separately report on the
issuer’s interactive data file provided as
an exhibit to a filer’s reports or
registration statements.
Some commenters sought clarification
of whether the basis for the proposed
exclusion of interactive data from officer
certification is that interactive data are
not within the scope of disclosure
controls and procedures.279 In this
regard, one of the commenters noted
that the Commission did not propose
amendments related to Sarbanes-Oxley
requirements to Items 307 (disclosure
controls and procedures), 308 (internal
control over financial reporting) or 601
(exhibits) of Regulation S–K. As a result,
the commenter recommended that the
final rule explicitly address these areas
to avoid misunderstandings and
potential delays in implementation.280
As discussed above, we are excluding
interactive data from the officer
certification requirements as part of our
effort to strike an appropriate balance
between avoiding unnecessary cost and
expense and encouraging accuracy in
regard to interactive data. Interactive
data would fall within the definition of
‘‘disclosure controls and procedures’’
and, accordingly, we are not adopting
the exclusion on that basis.
SAS 8 (AU Section 550) was issued in
December 1975 to address an auditor’s
consideration of information in addition
to audited financial statements and the
independent auditor’s report on the
audited financial statements included in
279 See,
280 See
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6797
documents that are published by an
entity (e.g., an annual periodic report).
Similarly, paragraph 18(f) of SAS 100
(AU Section 722) addresses an auditor’s
consideration of other information that
accompanies interim financial
statements included in quarterly
periodic reports. With respect to
registration statements, SAS 37 (AU
Section 711) was issued in April 1981
to address the auditor’s responsibilities
in connection with filings under the
federal securities statutes.
As we stated in the proposing release
in regard to the proposed rules, with
respect to the adopted rules, an auditor
will not be required to apply AU
Sections 550, 722, or 711 to the
interactive data provided as an exhibit
in a company’s reports or registration
statements, or to the viewable
interactive data. Several commenters
agreed that an auditor would not be
required to apply AU Sections 550, 711
or 722 to the interactive data provided
as an exhibit or to the related viewable
interactive data but wanted the PCAOB
to formalize that view.281 We
understand that the PCAOB is aware of
this matter.
5. Continued Traditional Format
The new rules will not eliminate or
alter existing filing requirements that
financial statements and financial
statement schedules be filed in
traditional format. We believe investors
and analysts may wish to use the
traditional format to obtain an electronic
or printed copy of the entire registration
statement or report either in addition to
or instead of disclosure formatted using
interactive data.
The vast majority of commenters
stated that the Commission should
continue to require human-readable
financial statements in traditional
format even if it required interactive
data format as well.282 Most of these
commenters also stated that the
Commission should monitor the
development of technology that could
enable companies to file information in
a manner that provides the processing
benefits of interactive data and the
visual clarity of the traditional format.
These commenters reasoned that when
such technology is developed, it would
be appropriate to require only the single
resulting format.
281 See, e.g., letters from BDO, CAQ Deloitte, E&Y
and PWC.
282 See, e.g., letters from Southern, AICPA, IBM,
National City, NYSSCPA, and UTC.
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1. Data Tags
To comply with the proposed rules,
filers using U.S. GAAP will be required
to tag their financial statements using
the most recent list of tags for U.S.
financial statement reporting, as
released by XBRL U.S. and required by
the EDGAR Filer Manual.283 Each
company will be required to use one or
more of the five standard industryspecific lists identified in the EDGAR
Filer Manual, as is appropriate for its
business.284
Regular updates to the list of tags for
U.S. financial statement reporting will
likely be posted annually and be
available for downloading. In addition,
interim extensions may be made
available for download in order to
reflect changes in accounting and
reporting standards. To provide
companies sufficient time to become
familiar with any such updates, we
anticipate giving advance notice before
requiring use of an updated list of tags.
Based on experience to date with the
most recent update to the list of tags, we
believe that it is sufficiently developed
to support the interactive data
disclosure requirements in the new
rules.
Similarly, filers using IFRS as issued
by the IASB will be required to tag their
financial information using the most
recent list of tags for international
financial reporting, as released by the
IASCF and specified in the EDGAR Filer
Manual.285 Although IFRS tags are not
currently supported by EDGAR, the
Commission will give notice when filers
can voluntarily submit filings using the
IFRS taxonomy.
One of the principal benefits of
interactive data is its extensibility—that
is, the ability to add to the standard list
of tags in order to accommodate unique
circumstances in a filer’s particular
disclosures. The use of customized tags,
however, may also serve to reduce the
ability of users to compare similar
283 The latest list of data tags for U.S. financial
statement reporting was released on April 28, 2008
and is available at https://xbrl.us/pages/usgaap.aspx. See XBRL U.S. Press Release, XBRL U.S.
Finalizes U.S. GAAP Taxonomies and Preparers
Guide with Delivery to SEC (May 2, 2008).
284 We note that the vast majority of companies
will fall under the Commercial and Industrial
industry group. Additional guidance on the
industry-specific lists is expected to appear in the
EDGAR Filer Manual.
285 The International Accounting Standards
Committee Foundation has been developing the
IFRS financial reporting tag list since 2002. See
https://www.iasb.org/xbrl/. The 2008
version of the IFRS financial reporting tag list was,
as noted above, finalized in June 2008 and is
planned to be updated annually for changes in
accounting and reporting standards.
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information across companies. This was
the source of a significant amount of
comment. Some commenters were
concerned that currently available
standard taxonomies do not cover many
company specific extension needs and
any increase in customized taxonomy
extensions would directly interfere with
the comparability of inter-company
data.286 A number of commenters
suggested ways to facilitate interactive
data tagging, which included
monitoring,287 cataloging,288 and
discouraging 289 extension use as well as
revising the Preparers Guide to put it in
plain English.290
We acknowledge these concerns. In
order to promote comparability across
companies, the new rules, as proposed,
will limit the use of extensions to
circumstances where the appropriate
financial statement element does not
exist in the standard list of tags. The
new rules also require that wherever
possible and when a standard element
is appropriate, preparers change the
label for a financial statement element
that exists in the standard list of tags,
instead of creating a new customized
tag. For example, the standard list of
tags for U.S. GAAP includes the
financial statement element ‘‘gross
profit.’’ The list does not include ‘‘gross
margin,’’ because this is definitionally
the same as ‘‘gross profit’’—both are
generally used to mean ‘‘excess of
revenues over the cost of revenues.’’ A
filer using the label ‘‘gross margin’’ in
its income statement should use the tag
corresponding to the financial statement
element ‘‘gross profit.’’ It would then
change the label for this item on the
standard list to ‘‘gross margin.’’
Finally, under Item 401(c) of
Regulation S–T, voluntary filers’
interactive data elements must reflect
the same information as the
corresponding traditional format
elements. Further, no data element can
be ‘‘changed, deleted or summarized’’ in
the interactive data file.291 We are not
changing this equivalency standard for
financial statements provided in
interactive data format as required by
the new rules.
2. Regulation S–T and the EDGAR Filer
Manual
The new rules require that filers
provide interactive data in the form of
exhibits to related registration
286 See,
e.g., letter from EuropeanIssuers.
e.g., letter from CFA.
288 See, e.g., letter from ABA.
289 See, e.g., letters from Grant Thornton, CFA,
Morgan Stanley, and Rivet.
290 See, e.g., letter from Grant Thornton.
291 Item 401(c)(2) of Regulation S–T.
287 See,
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statements and reports.292 Interactive
data will be required to comply with our
Regulation S–T 293 and the EDGAR Filer
Manual. The EDGAR Filer Manual is
available on our Web site. It includes
technical information for making
electronic filings with the Commission.
Volume II of this manual includes
guidance on the preparation,
submission, and validation of
interactive data submitted under the
voluntary program.
In addition to both Regulation S–T,
which will include rules we are
adopting, and the instructions in our
EDGAR Filer Manual, filers may access
other sources for guidance in tagging
their financial information. These
include the XBRL U.S. Preparers Guide;
user guidance accompanying tagging
software; and financial printers and
other service providers. New software
and other forms of third-party support
for tagging financial statements using
interactive data are also becoming
widely available.
E. Consequences of Non-Compliance
and Hardship Exemption
The new rules provide, as proposed,
that if a filer does not make the required
interactive data submission, or post the
interactive data on the company Web
site, by the required due date, the filer
will be unable to use short form
registration statements on Forms S–3,
F–3, or S–8.294 This disqualification
will last until the interactive data are
provided. During the period of
disqualification, the filer also will be
deemed not to have available adequate
current public information for purposes
of the resale exemption safe harbor
292 The requirement to submit XBRL data as an
exhibit will appear in Item 601(b)(101) of
Regulation S–K, paragraph 101 of the Information
Not Required to be Delivered to Offerees or
Purchasers of both Form F–9 and F–10, Item 101
of the Instructions to Exhibits of Form 20–F,
paragraph B.7 of the General Instructions to Form
40–F and paragraph C.6 of the General Instructions
to Form 6–K.
293 Rule 405 of Regulation S–T directly sets forth
the basic tagging and posting requirements for the
XBRL data and requires compliance with the
EDGAR Filer Manual. Consistent with Rule 405, the
EDGAR Filer Manual will contain the detailed
tagging requirements.
294 Forms S–3, F–3, and S–8 are regarded as short
form registration statements because they enable
eligible issuers to register securities for offer and
sale under the Securities Act by providing
information in a more streamlined manner than
they otherwise could. In order to be eligible to use
these short forms, an issuer must meet specified
requirements, including being current in its filing
of Exchange Act reports. In general, an issuer is
current if it has filed all of its required Exchange
Act reports for the twelve months before filing the
registration statement. Filers that are unable to use
short form registration also are unable to
incorporate by reference certain information into
Forms S–4 and F–4. See Item 12 of Forms S–4 and
F–4.
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provided by Rule 144.295 Once a filer
complies with the interactive data
submission and posting requirements—
provided it previously filed its financial
statement information in traditional
format on a timely basis—it will be
deemed to be timely and current in its
periodic reports.
We believe that precluding the use of
short form registration statements
during any period of failure to comply
will appropriately direct attention to the
interactive data reporting requirement.
Allowing filers to reestablish their
current status by later complying with
the interactive data reporting
requirement will strike a reasonable
balance of negative consequences and
recognition that the company’s
traditional format reports will have been
filed.
Consistent with the treatment of other
applicable reporting obligations, we are
adopting hardship exemptions for the
inability to timely submit interactive
data. Rule 201 under Regulation S–T
provides for temporary hardship
exemptions. Rule 202 under Regulation
S–T provides for continuing hardship
exemptions.296
Rule 201 generally provides a
temporary hardship exemption from
electronic submission of information,
without staff or Commission action,
when a filer experiences unanticipated
technical difficulties that prevent timely
295 Rule 144 under the Securities Act creates a
safe harbor for the resale of securities under the
exemption from Securities Act registration set forth
in Section 4(1) of the Securities Act [15 U.S.C.
77d(1)]. In order for some resales of securities to
comply with Rule 144, the issuer of the securities
must be deemed to have adequate current public
information available as specified by Rule 144(c)(1)
[17 CFR 230.144(c)(1)]. Rule 144(c)(1) deems an
issuer required to file reports under the Exchange
Act to have adequate public information available
if it is current in its filing of Exchange Act periodic
reports. In general, an issuer would be deemed
current for this purpose if it has filed all of its
required Exchange Act periodic reports for the
twelve months before the sale of securities for
which the Rule 144 safe harbor is sought.
296 We have amended Rule 12b–25 [17 CFR
240.12b–25] under the Exchange Act, which, in
general, deals with notification of the inability to
timely file or submit all or part of specified forms
and deems such forms to be timely filed under
specified conditions. We added paragraph (h) to
state that the provisions of the rule do not apply
to interactive data files and that filers unable to
submit or post interactive data files when required
must comply with the hardship exemption
requirements of either Rule 201 or 202 of
Regulation S–T. New paragraph (h) will treat
interactive data files in a manner similar to that
which current Rule 12b–25(g) treats electronic
filings in general. When Rule 12b–25 provides that
the financial statements in traditional format are
deemed filed timely even though actually filed
later, the related interactive data exhibit must be
submitted and posted on the date the related
traditional format financial statements are actually
filed, not when they are deemed to be filed under
Rule 12b–25.
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preparation and submission of an
electronic filing. The temporary
hardship exemption permits the filer to
initially submit the information in paper
but requires the filer to submit a
confirming electronic copy of the
information within six business days of
filing the information in paper. Failure
to file the confirming electronic copy by
the end of that period results in short
form ineligibility.297
We recognize the inherently
electronic nature of interactive data. In
light of this and the consequences to an
issuer of not timely submitting
interactive data, we are revising Rule
201, as proposed, to provide a
temporary hardship exemption that
does not depend upon filing a paper
version. This exemption will apply
without staff or Commission action if a
filer experiences unanticipated
technical difficulties that prevent the
timely preparation and electronic
submission of interactive data. The
revised temporary hardship exemption
will cause the filer to be deemed current
for purposes of incorporation by
reference, short form registration, and
Rule 144 for a period of up to six
business days from the date the
interactive data were required to be
submitted.298 If the filer does not
electronically submit the interactive
data by the end of that period, from the
seventh business day forward the filer
will not be deemed current until it does
electronically submit the interactive
data. Similarly, we are revising Rule 201
to provide an essentially mirror-image
exemption from the new requirement
for an issuer that has a corporate Web
site to post the interactive data on its
Web site.
Rule 202 permits a filer to apply in
writing for a continuing hardship
exemption if information otherwise
required to be submitted in electronic
format cannot be so filed without undue
burden or expense. If the Commission or
the staff, through authority delegated
from the Commission, grants the
request, the filer must file the
information in paper by the applicable
due date and file a confirming electronic
copy if and when specified in the grant
of the request.
We are revising Rule 202, as
proposed, to provide that a grant of a
continuing hardship exemption for
interactive data will not require a paper
submission and that the filer will be
deemed current until the end of the
period for which the exemption is
297 Rule
201 of Regulation S–T.
information would not have to be filed in
paper first, as this would be meaningless in the case
of interactive data.
298 The
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granted. Rule 202 also provides that, if
the exemption was granted for only a
specified period rather than
indefinitely, the filer will be deemed
current up to the end of that period. If
the filer does not electronically submit
the interactive data by the end of that
period, from the next business day
forward the filer will not be deemed
current until it does electronically
submit the interactive data. Similarly,
we are revising Rule 202 to provide an
essentially mirror-image exemption
from the new requirement for an issuer
that has a corporate Web site to post the
interactive data on its Web site.
A few commenters generally
supported the proposed consequences
for late submissions and Web site
postings of interactive data files,299 but
several objected.300 Some commenters
objected to all of the proposed
consequences for late submissions and
postings as, for example, unduly harsh
in general 301 or inappropriate because
the same information would be on file
already in traditional format.302 One
commenter claimed that in analogous
situations the Commission decided not
to impose similar consequences. The
commenter noted that in Release No.
34–49424,303 the Commission decided
not to impose short form eligibility or
Rule 144 current public information loss
for failure to provide timely certain
disclosures required by Form 8–K.304
The disclosures involved, however,
were required by items that we stated
‘‘may require management to make
rapid materiality and other judgments
within the compressed Form 8–K filing
timeframe’’ and issuers would not have
been able to reestablish short form
eligibility upon compliance because
they would have been deemed not
timely rather than not current.
We acknowledge these concerns, but
in adopting the rules as proposed we
believe that the consequences imposed
will provide a useful compliance
incentive and that commenters’
concerns are mitigated somewhat by the
availability of the temporary and
continuing hardship exemptions and
the ability of filers to reestablish their
299 See, e.g., letters from CFA, E&Y, Grant
Thornton, LG, and UTC.
300 See, e.g., letters from ABA, CSG, LGI, NYCBA,
SCS, Southern, and USS.
301 See, e.g., letter from NYCBA.
302 See, e.g., letter from CSG.
303 Release No. 34–49424 (March 16, 2004) [69 FR
15594].
304 See letter from ABA. This commenter also
pointed out that in Release No. 34–46464 (Apr. 8,
2003) [67 FR 58480], Release No. 34–46464A (Sept.
5, 2003) [67 FR 17880] the Commission stated that
it considered making Web site posting of reports a
condition to short form eligibility but concluded
such an approach would be overly burdensome.
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current status upon complying with
their interactive data requirements.
III. Paperwork Reduction Act
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A. Background
The amendments contain ‘‘collection
of information’’ requirements within the
meaning of the Paperwork Reduction
Act of 1995, or PRA.305 The purpose of
the amendments is to make financial
information easier for investors to
analyze and to assist issuers in
automating regulatory filings and
business information processing. We
published a request for comment on the
collection of information requirements
in the proposing release, and submitted
a request to the Office of Management
and Budget (OMB), for review in
accordance with the PRA.306 OMB
responded that it will not act on the
request until the Commission
supplements the request at the adopting
stage with a discussion that includes the
Commission’s response to comments
received on the proposed rules. Our
new estimates that take into account
variations between what we proposed
and what we are adopting reflect a
burden that is not significantly different
than the estimates from the proposing
release. When we receive OMB
clearance, we will publish notice in the
Federal Register. An agency may not
conduct or sponsor, and a person is not
required to respond to, an information
collection unless it displays a currently
valid OMB control number.
The title for the new collection of
information the amendments will
establish is ‘‘Interactive Data’’ (OMB
Control No. 3235–0645). This collection
of information relates to already existing
regulations and forms adopted under
the Securities Act and the Exchange Act
that set forth financial disclosure
requirements for registration statements
as well as periodic, current and
transition reports and Forms 6–K. The
amendments will require issuers to
submit specified financial information
to the Commission and post it on their
corporate Web sites, if any, in
interactive data form. The specified
financial information already is and will
continue to be required to be submitted
to the Commission in traditional format
under existing registration statement as
well as periodic, current, and transition
report and Form 6–K requirements.
Compliance with the amendments will
be mandatory according to the phase-in
schedule previously described.307
Issuers not yet phased-in, however,
305 44
U.S.C. 3501 et seq.
U.S.C. 3507(d) and 5 CFR 1320.11.
307 See Part II.B.
306 44
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could comply voluntarily with the
amendments when the appropriate
taxonomies are supported by EDGAR.
The information required to be
submitted would not be kept
confidential by the Commission.
B. Reporting and Cost Burden Estimates
1. Registration Statement and Periodic
Reporting
Form S–1 (OMB Control No. 3235–
0065), Form S–3 (OMB Control No.
3235–0073), Form S–4 (OMB Control
No. 3235–0324), and Form S–11 (OMB
Control No. 3235–0067) prescribe
information that a filer must disclose to
register certain offers and sales of
securities under the Securities Act.
Form F–1 (OMB Control No. 3235–
0258), Form F–3 (OMB Control No.
3235–0256), Form F–4 (OMB Control
No. 3235–0325), Form F–9 (OMB
Control No 3235–0377), and F–10 (OMB
Control No. 3235–0380) prescribe
information that a foreign private issuer
must disclose to register certain offers
and sales of securities under the
Securities Act. Form 10–K (OMB
Control No. 3235–0063) prescribes
information that a filer must disclose
annually to the market about its
business. Form 10–Q (OMB Control No.
3235–0070) prescribes information that
a filer must disclose quarterly to the
market about its business. Form 10
(OMB No. 3235–0064) prescribes
information that a filer must disclose
when registering a class of securities
pursuant to the Exchange Act. Form
8–K (OMB No. 3235–0060) prescribes
information an issuer must disclose to
the market upon the occurrence of
certain specified events and enables an
issuer to disclose other information
voluntarily. Form 20–F (OMB Control
No. 3235–0288) and Form 40–F (OMB
No. 3235–0381) are used by a foreign
private issuer both to register a class of
securities under the Exchange Act as
well as to provide its annual report
required under the Exchange Act. Form
6–K (OMB No. 3235–0116) prescribes
information that a foreign private issuer
must disclose regarding certain
specified changes to its business and
securities pursuant to the Exchange Act
and enables an issuer to disclose other
information voluntarily.
As previously noted, we are adopting
the amendments substantially as
proposed. We expect the variations
between what we proposed and what
we adopted to lessen the collection of
information burden, even after
accounting for the amendments
requiring companies to submit
interactive data for financial statements
contained in additional forms—
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Securities Act registration statements on
Forms F–9 and F–10, periodic reports
on Forms 40–F and current reports on
Forms 8–K and reports on Forms 6–K
that contain updated financial
statements that have been revised to
reflect a subsequent event rather than
the correction of an error.
While we are adopting the proposed
requirement to tag separately each
amount within a footnote (i.e., monetary
value, percentage, and number), in
contrast to the proposals, we will
permit, but not require, filers to tag, to
the extent they choose, each narrative
disclosure. As a result, the cost
estimates for detailed tagging in the
adopting release are reduced by 30%, to
70 hours for the first filing, and 35 hours
for subsequent filings. Permitting rather
than requiring filers to tag each
narrative footnote disclosure contributes
significantly to lessening the estimated
collection of information burden.308
As noted above, in contrast to the
proposals, we are adopting amendments
requiring companies to submit
interactive data for financial statements
contained in additional forms—
Securities Act registration statements on
Forms F–9 and F–10, periodic reports
on Forms 40–F and current reports on
Forms 8–K and reports on Forms 6–K
that contain updated financial
statements that have been revised to
reflect a subsequent event rather than
the correction of an error. The
amendments expanding the forms
subject to the interactive data
requirements tend to increase the
estimated collection of information
burden but this increase is more than
offset by the factors that tend to
decrease the collection of information
burden.
We expect the following variations
from the proposal will not affect the
collection of information burden in
more than a negligible and nonquantifiable way.
• The amendments will require that
interactive data be submitted with a
Securities Act registration statement
filing only after a price or price-range
has been determined and any later time
when the financial statements are
changed rather than, as proposed,
requiring interactive data submissions
with each filing.
• The timing of the required Web site
posting has been eased. A filer must
308 The other factor that contributes significantly
to lessening the estimated collection of information
burden is the reduction in the estimated number of
filers subject to the interactive data requirements
due to the elimination of issuers of asset-backed
securities. Such issuers inadvertently were
included in the estimate made in connection with
the proposed rules.
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post the interactive data exhibit on its
corporate Web site not later than the
end of the calendar day it submitted or
was required to submit the interactive
data exhibit, whichever is earlier. As
proposed, Web site posting would have
been required by the end of the business
rather than calendar day.
• Interactive data will be required to
be posted for at least 12 months on an
issuer’s Web site. The proposing release
did not specify this, but commenters
requested clarification.
The information required by the new
collection of information we are
adopting will correspond to specified
financial information now required by
these forms and will be required to
appear in exhibits to these forms and on
filers’ corporate Web sites. The
compliance burden estimates for the
collection of information are based on
the phase-in, beginning with
approximately 500 large accelerated
filers subject to the rules in the first
year, followed by approximately 1,000
more filers in year two and
approximately 8,700 more filers in year
three. These numbers are estimated
using the public float measured on the
last day of the second quarter following
the company’s most recent fiscal year
end—the same date used to determine a
filer’s accelerated filer status. The
proposing release estimated a larger
number of filers being phased in,
including 1,300 in year two and 10,200
in year three. In those estimates, issuers
of asset-backed securities, who annually
file a Form 10–K, were included. Those
issuers, however, typically are not
required to and do not include their
financial statements in Forms 10–K,
and, as a result they would not be
required to provide interactive data files
under the proposed rules. Consequently,
they were removed from the updated
estimate reported here.
Based on estimates from the voluntary
filer participant questionnaire results,
we estimate that interactive data filers
would incur the following average:
• Internal burden hours to tag the face
financials:
Æ 125 hours for the first filing under
the requirements; and
Æ 17 hours for each subsequent filing.
• Out-of-pocket cost for software and
filing agent services: $6,140 for each
filing.
Based on qualitative assessments of
time and modifications to the proposed
level four detailed tagging requirements
that eliminate required tagging of the
narrative, we estimate that interactive
data filers would incur the following
average internal burden hours:
• Footnotes
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Æ 7 hours to block tag for each filing
made during the first year under the
requirements;
Æ 70 hours to detail tag for the first
filing made in the second year under the
requirements; and
Æ 35 hours to detail tag for each
subsequent filing.
• Schedules
Æ 1 hour to block tag for each filing
made during the first year under the
requirements;
Æ 7 hours to detail tag for the first
filing made in the second year under the
requirements; and
Æ 3.5 hours to detail tag for each
subsequent filing.
• Web site Posting: 4 hours to post all
interactive data submissions made
during each year.
In the proposing release, the number
of hours to detail tag the footnotes in the
second year of the requirements was
estimated at 100 hours for the first
filing, and 50 for subsequent filings.
Several commenters provided
alternative estimates. For example, one
commenter 309 suggested that detailed
tagging initially would require 80 hours
of time, while another commenter
indicated that 40 hours would be
required on an ongoing basis.310
Although both of these estimates are
below our estimate, other commenters
suggested that the time required for
detailed tagging of the footnotes would
be hundreds of hours,311 three to four
times higher than our estimate,312 and
an order of magnitude higher than our
estimate.313
One of the considerations responsible
for the wide variation in predicted time
for detailed tagging was the proposed
requirement to tag the narrative portion
of the footnote. Unlike the discrete
numerical values in the face financials
that are well-defined and easy to
quantify, the narrative portion of the
footnotes provides a higher degree of
variability in the number and structure
of reported items. While we are
adopting the proposed requirement to
tag separately each amount within a
footnote (i.e., monetary value,
percentage, and number), we will
permit, but not require, filers to tag, to
the extent they choose, each narrative
disclosure. As a result, the cost
estimates for detailed tagging in the
adopting release are reduced by 30%, to
70 hours for the first filing, and 35 hours
for subsequent filings. Nevertheless, it is
309 See letter from FirstEnergy. It is unclear
whether this commenter believed that detailed
tagging would require 80 hours on an ongoing basis.
310 See letter from National City.
311 See letter from Intel.
312 See letter from IBM.
313 See letter from Constellation Energy.
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reasonable to assume that many filers,
particularly the largest filers with the
most complex filings, may require more
than 70 hours to comply with the
detailed tagging requirement. It is also
reasonable to assume that many filers
will require significantly less time than
70 hours, and 70 hours seems to fall
within the range suggested by
commenters and what is anticipated by
Commission staff. We believe that the
proposed requirement to tag each
narrative disclosure within a footnote
that, as adopted, will be optional,
probably was a significant component of
the higher estimates provided by
commenters. As discussed in greater
detail above, a significant number of
commenters objected, in particular, to
the proposed detailed footnote tagging
requirement and several of those
commenters argued that detailed
footnote tagging would require
significant effort by the issuer.314
Based on the number of filers we
expect to be phased in each of the first
three years under the requirements, the
number of filings that we expect those
filers to make that would require
interactive data 315 and the internal
burden hour and out-of-pocket cost
estimates described, we estimate that
the average yearly burden of the
requirements over the first three years
would be 916,846 internal hours per
year and $110.6 million in out-of-pocket
expenses for software and filing agent
services per year and would be incurred
by an average of 4,055 filers for an
average yearly burden per filer of 226.1
internal hours and $27,300 in out-ofpocket expenses. This estimate reflects
a reduction in average yearly burden
compared to the proposing release,
where we estimated $1,164,690 internal
hours per year and $129 million out-ofpocket expenses per year. This
reduction is in part attributed to a
smaller number of filers due to the
elimination of issuers of asset-backed
securities that inadvertently were
included in the estimate made in
connection with the proposed rules, and
in part due to a lower estimate for
detailed tagging due to making optional
the proposed requirement to detail tag
the narrative disclosures in footnotes.
Together, these cost reductions
outweighed the increased cost of
requiring that interactive data be
314 See
Part II.B.3.a.
include in the number of filings that
would require interactive data both initial filings
and amended filings but we estimate that the
burden incurred in connection with an amended
filing would be one half the burden that would be
incurred if the amended filing were an initial filing.
315 We
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submitted for the financial statements in
additional forms.
By the fifth year under the
requirements, filers generally will have
been subject to the requirements for at
least two years. As a result, filers
generally would incur burdens
applicable to interactive data filings
made after the first filing in which the
filer detail tagged footnotes and
schedules. Consequently, we estimate
that in the fifth year under the
requirements, the burden on all filers
would be 2,571,167 internal hours and
$284 million in out-of-pocket expenses
and would be incurred by 10,229 filers
for an average burden per filer of 251
internal hours and $27,800 in out-ofpocket expenses.316 The higher average
burden reported for year five relative to
the average from years one through
three reflects the completed phase-in of
all filers and all requirements, including
detailed tagging, by that time.
2. Regulation S–K and Regulation S–T
Regulation S–K (OMB Control No.
3235–0071) specifies information that a
registrant must provide in filings under
both the Securities Act and the
Exchange Act. Regulation S–T (OMB
Control No. 3235–0424) specifies the
requirements that govern the electronic
submission of documents. The changes
to these items that we are adopting will
add and revise rules under Regulations
S–K and S–T. The additional collection
of information burden that will result
from these changes, however, are
included in the burden estimate for the
new collection of information
‘‘Interactive Data.’’ The rules in
Regulations S–K and S–T do not impose
any separate burden. We assign one
burden hour each to Regulations S–K
and S–T for administrative convenience
to reflect the fact that these regulations
do not impose any direct burden on
companies.
C. Comments on Collection of
Information Burden
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We solicited comments in the
proposing release on the PRA estimates
we provided there. One commenter
addressed the PRA directly, while
others commented generally on the time
and cost burden of the amendments.
The commenter that addressed the PRA
directly stated that our PRA cost
estimates appeared low and that our
estimates understated software and nonsoftware costs such as planning and
316 We provide an estimate of the burden in the
fifth year under the new requirements because we
believe the burden in the fifth year may help
indicate what the burden would be under the new
requirements on an ongoing basis.
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ongoing quality assurance.317 As
discussed in detail above, other
commenters provided their own
estimates of the amount of time it would
take to tag financial statements and
footnotes.318
Some commenters who opposed the
amendments generally asserted that
interactive data would not improve the
usefulness of financial information to
analysts or investors 319 or that the
Commission underestimated the
complexity or cost of compliance in
general 320 and implementing interactive
data would add significant costs to
purchase software, and pay for
assistance and annual maintenance fees
for that software and that the costs of
using interactive data outweighed the
benefits.321
In contrast, some commenters that
supported the required submission of
interactive data believed it would
improve the usefulness of financial
information to companies and investors,
and that mandated interactive data use
would provide the incentives to drive
sufficient investment in software to
enable widespread adoption of
interactive data.322 Also in contrast,
commenters that provide interactive
data services stated that issuers would
need to expend only modest cost and
effort to comply with the
requirements.323 One commenter stated
that it expected that costs would fall
quickly, especially for small companies,
as interactive data became part of
standard corporate accounting software
packages.324 Another commenter stated
that, based on its experience in the
voluntary program, costs would fall
significantly for subsequent
submissions.325
We acknowledge the concerns some
commenters hold regarding usefulness
and cost but believe that interactive data
have the potential to increase the speed,
accuracy and usability of financial
disclosure, and eventually reduce costs
and that the phase-in schedule and the
grace periods will provide issuers the
time to learn more cost-effective ways to
comply. We also believe that the third
year phase-in for smaller reporting
companies will permit them to learn
317 See
letter from Credit Suisse.
Part III.B.1.
319 See letters from EEC, EuropeanIssuers, and
FISD.
320 See, for example, letters from CAQ, E&Y, FPL,
Intel and SCS.
321 See letter from FPL.
322 See, e.g., letters from ABC, AICPA, National
City, NYSSCPA, and UTC.
323 See letters from ECI, EDGARFilings and
UBMatrix.
324 See letter from Angel.
325 See letter from Pepsico.
from the experience of the earlier filers.
Further, as noted previously, we will be
monitoring the experiences of issuers
during the phase-in periods to assess
commenters’ concerns.
IV. Cost-Benefit Analysis
A. Benefits
Requiring issuers to file their financial
statement information using the
interactive data format would enable
investors, analysts, and the Commission
staff to capture and analyze that
information more quickly and at a lower
cost than is possible using the same
financial information provided in a
static format.326 Even though the new
regime does not require any new
information to be disclosed or reported,
certain benefits may accrue when
issuers use an interactive data format to
provide their financial reports. These
include the following.
1. More Financial Information Available
to Investors
Interactive data reporting could
increase the amount of financial data
available to investors in at least three
ways. First, there is likely to be an
increase in coverage of smaller reporting
companies by commercially available
products that provide corporate
financial data. Second, the level of
financial data available in electronic
format by these and other services will
likely increase as a result of interactive
data tagging. Finally, there is likely to be
an increase in the number of suppliers
of financial services products because of
requiring companies to provide
interactive data. As a result, many
smaller filers will have greater investor
awareness because of interactive data
reporting, and investors will have more
financial data readily available in
machine-readable format to consider for
all filers.
At present, many small companies are
not included in commercially available
products that provide corporate
financial data, possibly due to high data
collection costs relative to the value of
providing coverage. For example, two
commonly used financial information
vendors cover approximately 70% of
Commission filers.327 For the large
number of firms whose financial
318 See
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326 See
Part I.
327 Compustat
and Thomson One Banker are two
widely used, fee-based vendors of corporate
financial data that is formatted for interactive data
use. This analysis was performed by matching the
unique Commission issued Central Index Key (CIK)
numbers from all Forms 10–K, 10–KSB, 20–F, and
40–F filed in calendar year 2007, but not including
issuers of asset backed securities within Standard
Industrial Classification (SIC) code 6189, to the
universe of companies covered by both Standard
and Poor’s Compustat and Thomson One Banker.
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statements are not currently reported in
these databases, their absence may
reduce the likelihood that they receive
coverage by financial analysts who use
commercially available products to
assess issuer performance.
Consequently, if interactive data
reporting increases coverage of smaller
companies by commercially available
financial information products, and this
increases their exposure to analysts and
investors, then lower search costs for
capital could result. In other words,
smaller companies could realize a lower
cost of capital, or less costly financing.
While an increase in coverage could
occur for some issuers, it is possible that
less than full coverage will remain in
more sophisticated products that
provide analysis or reporting items
beyond basic financial information. This
conclusion is based on an assumption
that many commercially available
product offerings provide information
beyond what is reported in basic
financial information, and the costs of
providing this additional information
for every company may make 100%
coverage prohibitive. In particular, the
smallest issuers may not offer sufficient
market capitalization to make
investment worthwhile to larger
investors, for whom these commercial
products are primarily designed.
It is also possible that information
quality in financial markets could be
higher if interactive data reporting were
required than if not, leading to more
efficient capital allocation. Since
financial tagging will include footnotes
and supplemental tables, as well as the
base financials reported in the standard
tables, it is likely that as a result of
interactive data tagging, there will be
more information available to investors
in a machine-readable format. That is,
information not currently collected on a
broad scale by data aggregators because
of the costs of manual key entry,
particularly data found in the footnotes
and supplemental tables, will be
available to investors in a tagged,
machine-readable format. With more
information readily available to
investors on all filers, they may be able
to better distinguish the merits of
various investment choices, thereby
facilitating capital flow into the favored
investment prospects. This outcome is
the main tenet of improved market
efficiency, whereby providing more
widespread access to information
concerning the value of a financial asset,
such as a company’s shares, results in
better market pricing. Consequently,
reducing the costs of accessing,
collecting and analyzing information
about the value of a financial asset
facilitates this end.
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Finally, it is possible that requiring
companies to provide interactive data
could improve the quality of financial
information available to end users, and
help spur interactive data-related
innovation in the supply of financial
services products, resulting from a
potential increased competition among
suppliers of such products due to lower
entry barriers as a result of lower data
collection costs.
2. Less Costly and More Timely
Financial Information
It is likely that the new interactive
data requirements will lower the cost of
collecting corporate financial data in a
machine-readable format and allow it to
be analyzed by investors and other endusers more quickly than without
interactive data. At present, financial
information is made available to
investors in text formatted documents
that require manual key-entry of the
data into a format that allows statistical
analysis and aggregation. Investors
seeking broad financial coverage of
companies must either spend
considerable time manually collecting
the data, or subscribe to a financial
service provider that specializes in this
data aggregation process, but passes on
the expense of the data collection effort.
Requiring companies to report
interactive data should lower both the
time and expense for investors to access
this data. Since company financial data
will be tagged and immediately
downloadable into a larger, more
comprehensive database that includes
other filers, there will be no need for
manual key entry of the data,
eliminating this expense. Moreover,
with this manual key entry effort no
longer necessary, the delay between
when the financial data are first filed
and when the data is available in
machine-readable format will reduce
substantially. For instance, one
unpublished study reports that as
recently as 2004, the average time
required for one large data aggregator to
make financial data available to
investors was 10.8 days.328 With
interactive data reporting, company
financials can be integrated into
subscriber databases within a matter of
hours or minutes. As a result of having
data made available more quickly to
investors and other end-users, newly
revealed information can be more
quickly priced into the market by a
328 Julia D’Souza, K. Ramesh, and M. Shen, ‘‘The
interdependence between institutional investor
stock ownership and information dissemination by
capital market data aggregators,’’ Michigan State
University working paper, available at: https://
papers.ssrn.com/sol3/
papers.cfm?abstract_id=1010834.
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larger number of investors, consistent
with tenets of improved market
efficiency.
If interactive data serves to lower the
data aggregation costs as expected, then
it is further expected that smaller
investors will have greater access to
financial data than before. In particular,
many investors that had neither the time
nor financial resources to procure
broadly aggregated financial data prior
to interactive data will have lower cost
access than before interactive data.
Lower data aggregation costs will allow
investors to either aggregate the data on
their own, or purchase it at a lower cost
than what would be required prior to
interactive data. Hence, smaller
investors will have fewer informational
barriers that separate them from larger
investors with greater financial
resources.
It is also likely that a filer that uses
a standardized interactive data format at
earlier stages of its reporting cycle also
may increase the usability of its internal
financial information. For example,
filers that use interactive data may be
able to consolidate enterprise financial
information more quickly and
potentially more reliably across
operating units with different
accounting systems.329 There has been a
growing development of software
products to assist filers to tag their
financial statements using interactive
data helping make interactive data
increasingly useful.330
Interactive data also could provide a
significant opportunity for issuers to
automate their regulatory filings and
business information processing, with
the potential to increase the speed,
accuracy, and usability of financial
disclosure. This reporting regime may in
turn reduce filing and processing costs.
3. Fewer Errors
Because a substantial portion of each
financial report makes use of the same
information, a filer that uses a
standardized interactive data format at
earlier stages of its reporting cycle may
also increase the accuracy of its
financial disclosure by reducing the
need for repetitive data entry that could
contribute human error and enhancing
the ability of a filer’s in-house financial
professionals to identify and correct
errors in the issuer’s registration
statements and periodic reports filed in
traditional electronic format. It is also
possible that there will be fewer errors
in the aggregated financial data used by
329 However, we recognize that at the outset, filers
would most likely prepare their interactive data as
an additional step after their financial statements
have been prepared.
330 Press Release No. 2007–253 (Dec. 5, 2007).
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investors since manual key entry of data
will no longer be required by either the
investor or a data aggregating service.
4. Increased Comparability and
Interpretation of Financial Data
Another potential information
consequence of the new requirements
may be changes to the precision and
comparability of the information
disseminated by data service providers
since the interactive data requirements
would shift the source of data
formatting that allows aggregation and
facilitates comparison and analysis from
end-users to issuers submitting
interactive data. At present, data service
providers manually key financial
information into a format that allows
aggregation. As a result, the data service
provider makes interpretive decisions
on how to aggregate reported financial
items so that they can be compared
across all companies. Consequently,
when a subscriber of the commercial
product offered by a data service
provider uses this aggregated data, it can
expect consistent interpretation of the
reported financial items. In contrast, a
requirement for issuers to submit
interactive data information would
require the issuers to independently
decide within the confines of applicable
requirements which financial ‘‘tag’’ best
describes each financial item—lessening
the amount of interpretation required by
data service providers or end-users of
the data. Once a standard tag is chosen,
comparison to other companies is
straightforward. However, since
companies have some discretion in how
to select tags, and can extend the
taxonomy (create new tags) when an
appropriate tag does not exist, unique
interpretations by each company could
result in reporting differences from what
current data service providers and other
end-users would have chosen. This
view suggests that the issuer-submitted
information disseminated by data
service providers may be, on the one
hand, less comparable because they
have not normalized it across issuers
but, on the other hand, more accurate
because the risk of human error in the
manual keying and interpretation of
filed information would be eliminated
and more precise because it will reflect
decisions by the issuers themselves.
Replicating prior methods would still be
possible, however, because issuers
would continue to be required to file
financial information in traditional
format. As a result, nothing would
prohibit data service providers from
continuing to provide data in the same
manner that they did before.
Nonetheless, interactive data benefits
could diminish if other reporting
formats are required for clarification in
data aggregation.
B. Costs
The primary cost of the rulemaking is
the cost of filers’ implementation of the
rule, which includes the costs of
submitting and posting interactive data.
We discuss this cost element
extensively below. In addition, because
the rule allows an increase in the flow
of financial information being reported
directly to analysts and investors, there
will be a cost of learning on the part of
the investors in using and analyzing
financial information at the interactive
data level. Finally, because interactive
data provides a standardized reporting
format—a set of common tags from
which filers can select—this might
affect a company’s ability to
communicate its unique financial
attributes to investors.
As for the cost of implementation of
the rule, based on currently available
data, we estimate the average direct
costs of submitting and posting
interactive data-formatted financial
statements and other information for all
issuers under the proposed rules would,
based on certain assumptions, be as
follows:
TABLE 1—ESTIMATED DIRECT COSTS OF SUBMITTING INTERACTIVE DATA-FORMATTED FINANCIAL STATEMENTS AND
OTHER INFORMATION
First
submission
with block-text
footnotes &
schedules
Preparation face financials 331 .................................................
Preparation footnotes 332 .........................................................
Preparation schedules—Software and filing agent services 333 ..................................................................................
Subsequent
submission
with block-text
footnotes &
schedules
First
submission
with detailed
footnotes &
schedules
Subsequent
submission
with detailed
footnotes &
schedules
$31,370
1,750
$4,310
1,750
$4,310
17,500
$4,310
8,750
Web site posting 334 .................................................................
250
6,140
1,000
250
6,140
1,000
1,750
6,140
1,000
875
6,140
1,000
Total cost ..........................................................................
Upper bound .....................................................................
40,510
82,220
13,450
21,340
30,700
60,150
21,075
37,940
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The above estimates are based in part
on questionnaire responses from 22
331 Estimates based on voluntary filer program
questionnaire responses, excluding participants
with an interactive data-related business interest.
These data suggest that the time required for tagging
the face financials decreases by approximately 85%
between the first and second submissions, from
125.47 hours to 17.25 hours, numbers which are
rounded to 125 and 17 for PRA calculations. A $250
wage rate is assumed for all preparation cost
estimates.
332 The costs associated with block-tagging of
footnotes and schedules are assumed to remain
constant in subsequent filings. In contrast,
anticipated learning benefits from more
complicated detailed tagging of footnotes and
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issuers that have participated in the
voluntary program. Thirty-five
participants were sent questionnaires,
corresponding to a response rate of
63%. These responses provided detail
on the projected costs of preparing the
face financials and for purchasing
schedules are assumed to result in a 50% reduction
in cost for subsequent filings.
333 Software licensing and the use of a print agent
can be substitutionary—companies can choose to
do one or other, or do both—and are thus
aggregated.
334 This is an annual cost, and as such, will not
be incurred for subsequent filings within the same
year.
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software or related filing agent services.
The estimated total cost reported in
Table 1 reflects expenditures on
335
335 Voluntary program participants were not
required to tag financial statement footnotes or
schedules related to the financial statements except
that registered management investment company
participants were required to tag one specified
schedule. Similarly, voluntary program participants
were not required to post on their corporate Web
sites, if any, the interactive data information they
submitted. Consequently, the costs of requirements
to tag financial statement footnotes and schedules
related to financial statements and post interactive
data information are not derived from the voluntary
program participant questionnaire responses or
discussed in our analysis of those responses.
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interactive data-related software,
consulting or filing agent services used,
and the market rate for all internal labor
hours spent (including training) to
prepare, review and submit the first
interactive data format information face
financial statements. The major
assumptions used for this analysis are as
follows.
• Labor cost is estimated at $250 per
hour, commensurate with the wage rate
of an external accountant; 336
• Voluntary program participants
reported a 85% average reduction in
time required to prepare face financials
from the first to second filing;
• Block tagging of footnotes is
estimated at 7 hours for the first filing,
with a 50% reduction in time for
subsequent filings; and
• Detailed tagging of footnotes is
estimated at 70 hours for the first filing,
with a 50% reduction in time for the
subsequent filings.
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1. Potential Variability in the Cost
Estimate
We report an upper bound for the
estimated total cost based on (1) the
variation in responses from the
voluntary program participants and the
likelihood of sampling error—
respondents represent approximately
0.21% of all issuers that ultimately
would be required to submit interactive
data 337—and (2) the likelihood of
sample selection bias due to non
random participation by filers in the
voluntary filing program. In particular,
we estimate that:
• Average cost estimates increase by
20% after removing voluntary program
participants in an interactive datarelated business.
• Due to sampling error,338 there is a
1% chance that the true costs are
underestimated by up to 80%.
The upper bound reported in Table 1
is $82,220 for the first filing compared
to the average of $40,510. This upper
336 These estimates are from the Securities
Industry and Financial Markets Association’s
Management and Professional Earnings in the
Securities Industry 2007, modified to account for an
1,800-hour work-year and multiplied by 5.35 to
account for bonuses, firm size, employee benefits
and overhead.
337 This is based on 10,672 domestic and foreign
issuers that filed an annual report in calendar year
2007. Under our proposed rules, not all foreign
private issuers would be required to submit
interactive data; only those foreign private issuers
that prepare their financial statements in
accordance with U.S. GAAP or IFRS as issued by
the IASB would be required to submit interactive
data. Foreign private issuers that report in
accordance with other structures and reconcile to
U.S. GAAP would not be required to submit
interactive data.
338 In general, sampling error is the error that
arises as a function of sampling in general and the
sample chosen in particular.
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bound is calculated based on the 1%
likelihood that costs are underestimated
by 80%, and after removing responses
from five participants in an interactive
data-related business. These voluntary
filer program participants, including
filing agents, financial services
providers, and other consulting agents,
may have incentives and skill sets
unrepresentative of the average issuer
that may cause their costs to depart from
the likely submission cost of the average
issuer when interactive data is required.
The costs in Table 1 do not reflect the
following factors that could also affect
the total cost of compliance.
• Smaller financial issuers appear to
have less complex financials and labor
costs that tend to be 20–30% lower than
for other issuers to submit interactive
data information.
• There also is some evidence to
suggest that the smallest (nonaccelerated) issuers might have
submission costs or compliance
difficulties in excess of other issuers.
• The lists of tags used to prepare the
face financial statements by those
issuers that responded to the
questionnaire for the voluntary program
have been updated for the required
program.339
The voluntary program questionnaire
evidence is based on responses of
predominantly large issuers, and their
cost experience may not be
representative of the smaller issuers or
non-participating larger issuers. In
particular, voluntary program
participants that responded to the
questionnaire are found among the
largest of all issuers, with more than
88% considered large accelerated filers
(measured as greater than $700 million
in public float). In contrast, only 1,529
of 10,229 filers (15%) expected to be
subject to the rule were considered large
accelerated filers in their fiscal year-end
2007.
A size bias is plausible, since there
are reasons to believe that the reported
submission costs vary with the size of
the issuer. For instance, larger issuers
might have lower interactive data
submission costs than smaller issuers,
since they have a larger pool of internal
resources to draw from, allowing them
to more efficiently allocate available
skill sets from their labor pools to
implement interactive data reporting
339 For example, the related list of tags would
differ between the voluntary and proposed required
program. When we adopted the voluntary program,
the list of tags for U.S. GAAP financial statement
reporting contained approximately 4,000 data
elements. The list of tags released on April 28, 2008
contains approximately 13,000 data elements, with
the most significant additions relating to the
development of elements for standard U.S. GAAP
footnote disclosure.
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technology. Moreover, larger
organizations might have greater excess
capacity in their internal labor pool
such that they are better able to absorb
the short-term labor needs of ‘‘learning’’
interactive data. If so, the effect of
sample selection in this instance may be
to underreport the interactive data
submission costs for smaller issuers.
Alternatively, smaller issuers could
have lower submission costs than larger
issuers if their operations are less
complex. This reasoning suggests that
simpler business operations lead to
simpler financial statements, requiring
less effort to tag and submit using
interactive data. Hence, any reduction
in available resources to allocate to
interactive data submission may be
offset by lesser demand for resources.
This view suggests a trade-off in
submission costs as issuers become
smaller, and as a typical result, less
complex.
The balance of evidence suggests that
smaller filers will have, on average,
lower submission costs than larger
filers. Although the U.S. voluntary filer
program contains data predominantly
on larger filers, and as a result cannot
directly address this issue, evidence
from the Japanese interactive data pilot
program reveals a 20 to 30% reduction
in the time required to comply with
their first interactive data filing for the
smaller filers relative to the largest
filers.340 This percent reduction is
consistent with the percent reduction in
U.S. filing complexity across filer size.
In particular, we find that the number
of financial statement items reported in
periodic reports falls by 15 to 20% for
the smallest filers compared to largest
filers. Hence, the reduction in time
required in the Japanese study is
broadly consistent with the filing
complexity—measured by the number
of filing elements—among U.S. filers.
Nevertheless, there remain concerns
for the smallest filers. The Japanese
study reveals that compliance costs
begin to increase as filer size goes from
smaller to smallest, although the costs
are not more than those of the largest
filers—costs for the smallest Japanese
filers are roughly 15% lower than the
largest filers, but about 25% higher than
the lowest cost smaller filers. Moreover,
the smallest Japanese filers had the
highest likelihood of delayed filing in
340 Starting in April 2008, Japanese filers were
required to report financial statements with their
Financial Services Agency (JFSA) using interactive
data technology. Before this requirement, 1,233
Japanese companies participated in a pilot program;
768 participants described their interactive data
submission experience through a JFSA survey. For
our previous fuller discussion of the JFSA survey,
see the proposing release.
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their first submission: 25% did not file
by the mandated date compared to 5%
for the largest filers. These risk factors
motivate a phase-in schedule that
allows smaller filers to lag larger filers
in mandated reporting compliance.
2. Cost Estimates for Footnote Tagging
and for Software
While the required time to prepare
face financials is estimated based on
responses from the voluntary filer
participants, the same is not true for
tagging of footnotes. At the time of the
questionnaire, footnote tagging was not
prevalent among voluntary filers and a
cost estimate from their experience
could not be obtained. In the proposing
release, block tagging was estimated at
seven hours for the first filing, and
detailed tagging estimated at 100 hours.
In both cases, a 50% reduction in
preparation time was assumed between
the first and subsequent filings, which
is a more conservative learning rate than
what was observed for tagging of face
financial (85% reduction). In the
adopting release, detailed tagging of the
narrative is no longer required, and as
a result, the cost estimates for detailed
tagging in the adopting release are
reduced by 30%, to 70 hours for the first
filing, and 35 hours for subsequent
filings. Nevertheless, it is reasonable to
assume that many filers, particularly the
largest filers with the most complex
filings, may require more than 70 hours
to comply with the detailed tagging
requirement. It is also reasonable to
assume that many filers will require
significantly less time than 70 hours,
and 70 hours seems to fall within the
range suggested by commenters and
what is anticipated by Commission staff.
As discussed in more detail above, we
believe that the proposed requirement to
tag each narrative disclosure within a
footnote that, as adopted, will be
optional, probably was a significant
component of the higher estimates
provided by commenters.341
The software costs assumed in the
cost estimate also include anticipated
print agent and filing service fees. The
experience of voluntary filer
participants suggests that many filers
have not yet determined the optimal
compliance method, and several
pursued simultaneous approaches. So
while some participants prepared and
filed their documents on their own, and
others contracted the entire experience
to a print agent, many pursued some
combination of the two. As a result of
the complexity with which filers
reported their experience, we aggregated
all of their software and print agent
costs into one category. We estimate the
total cost for software and filing agent
services at $6,140 per filing.
It is possible that filers will
experience a lower cost than $6,140. For
instance, one service provider 342
charges a flat fee of $1,995 for both
Form 10–K and Form 10–Q periodic
reports. Nevertheless, some commenters
were concerned about the availability
and rising cost of software. For instance,
one commenter reported a 65% increase
in software costs from one vendor after
the Commission released its interactive
data proposal in May of 2008.343
Another commenter worried that third
party vendors will not be ready in time
for the proposed phase-in of the rule.344
Until the rule is phased in on a broad
scale, it is hard to predict what
equilibrium price of software,
consulting, and filing agent services will
prevail. The roles of each potential kind
of service provider within the
interactive data market are likely to
develop further and are not yet clear,
and there are many potential
participants to consider, including the
software vendors, financial reporting
system providers (i.e., providers of
widely used financial products), print/
filing agents, and other consultants.
Until the market of issuers that submit
interactive data information grows
substantially larger (either by
requirement or by expansion of the
number of volunteers), many different
potential solutions are possible. For
example, issuers may adopt solutions
that create interactive data submissions
using third party software, a so-called
‘‘bolt-on’’ approach, or may seek
integrated solutions that enable issuers
to prepare interactive data submissions
from their existing financial services
software. Moreover, filing agents may
maintain their role as an intermediary
by offering interactive data technology
or other service providers may cause
that role to change. Others with
financial and technical expertise may
participate in the technology that may
yield different results.
Combining the uncertainty over the
source of future interactive data services
with increased demand for these
services could result in a new market
price that is different from what is
currently reported by voluntary program
participants. This price could be higher
if the demand for interactive data
services increases (from 76 voluntary
program participants at the time of the
cost analysis to more than 10,000 total
participants) at a faster rate than the
342 See
letter from Rivet.
letter from FPL.
344 See letter from Comcast.
343 See
341 See
Part III.B.1.
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supply for these same services. More
broadly, if an interactive data
requirement resulted in clients
subscribing for interactive data services
faster than the rate at which these
services can be supplied, then prices
could increase. A phase-in schedule that
limits the number of participants in the
first year is likely to mitigate this
concern to the extent that the rate of
phase-in allows interactive data service
suppliers to keep pace with demand.
3. Interpretability of Standardized
Tagging
Since interactive data formatting
provides a standard set of tags from
which companies select when they
report their financial data, one potential
consequence of the proposed
requirements is that companies will be
less able to communicate their unique
financial attributes to investors. A
standard set of tags helps facilitate
easier comparability between
companies, but this benefit might come
at a cost of less precise information
about a company if the selected tag is
different from what the company would
have labeled the information without
interactive data reporting. While it is
possible for a company to create an
extension (a new tag) to reflect unique
financial information when it is not
otherwise described by a standard tag,
this information will no longer be easily
aggregated across other companies.
Nevertheless, the risk of
interpretability of reported financial
data already exists in the current data
aggregation process. According to
current practices, financial data service
providers manually key financial
information into a format that allows
aggregation so that they can resell it to
investors. As a result, the data service
provider makes interpretive decisions
on how to aggregate reported financial
items so that they can be compared
across all companies. This is done so
that a subscriber of the commercial
product offered by a data service
provider can expect consistent
interpretation of the reported financial
items, allowing comparability in the
same way that it is intended with
interactive data. Hence, from one
perspective, adoption of interactive data
will shift the burden of making the
interpretive decision on how to label a
financial item from financial service
providers to the companies making the
filings. To the extent that the company
is better able to classify financial data
for comparability to other companies
through interactive data tagging than a
financial data service provider who
manually keys and classifies financial
data from standard paper based filings,
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assembling aggregated financial data.
The investor can obtain the data from
separate visits to each corporate Web
site of interest, or the investor can visit
4. Corporate Web Site Posting
a third party Web site—such as EDGAR
Filers must also post their interactive
or commercial sources—and obtain the
data files to their corporate Web site if
necessary data from a single source. The
they have one. The direct cost estimate
latter option is far more efficient, not
of doing so is four hours of time, or
only because of time savings, but also
$1,000. In relation to the other costs of
because central depositories of financial
interactive data adoption, this cost is
information provide access to
low. Although the estimated cost of
companies for which an investor might
mandatory posting is low compared to
not otherwise know to look. In other
other costs of interactive data
words, a filer may only know to
compliance and it is possible that many investigate a company by having it
companies would post this data even if
reside in a location adjacent to where
it were not mandatory, it is difficult to
the investor is already searching. For
quantify specific benefits of mandatory
instance, a feature of many third party
posting beyond the benefit of having
information forums is to provide,
this same document posted on the
without prompting, a set of comparable
Commission’s Web site. Nevertheless,
firms to the firm that an investor is
potential benefits of required corporate
currently researching using the
Web site posting include the following:
provider’s tools. There is no duty for a
• Encouraging widespread
company to provide on its Web site a
accessibility and dissemination of
similar set of comparables for a visiting
interactive data, promoting its
investor.
awareness and use;
As a result, it is likely that individual
• Making it easier and faster for
corporate Web site posting of data could
investors to collect information on a
potentially offer a faster source of
particular filer required to post,
financial data to an investor only if the
particularly if the investor is already
investor is not interested in broad data
searching the Web site;
aggregation. If an investor is interested
• Transferring reliability costs of data in interactive data for several
availability to the public companies by
companies, then identifying the unique
reducing the likelihood that investors
Web address for each company, and
cannot access the data through the
locating where on the Web site the
Commission’s Web site, due to downinteractive data resides, will consume
time for maintenance or due to
far more of an investor’s time than going
increased network traffic;
to a central location with only a single
• Enhancing access to corporate
Web address and a single Web site
financial data by Web crawlers
design to navigate. If, on the other hand,
searching for such information that face an investor is interested only in the
access restrictions on EDGAR; and
information from a specific company,
• Providing incentive for corporations then interactive data offer fewer benefits
to add content or enhance their Web site to the investor relative to other file
improving the investor experience.
formats, such as HTML, that offer data
Although there is potential to realize
in a visually organized manner.
each of these stated benefits, there are
Similarly, data aggregators and Web
also reasons why they may not manifest. crawling tools that search for corporate
The most likely reason that benefits will financial data will not necessarily
not accrue to investors from mandatory
benefit from mandatory corporate Web
Web site posting is that a key feature of
site posting of interactive data. For the
interactive data that makes them
same reason that an individual investor
valuable to investors is the ability to
will find it easier to visit a central
aggregate financial data across
information depository for information
companies. Since filers will use
rather than each individual corporate
common tags that allow aggregation of
Web site, so will data aggregators and
firm financials, company performance
Web crawlers. Programming a Web
can be compared in ways that are far
crawling tool to search thousands of
less costly and time consuming than
Web sites whose addresses and layouts
doing so without interactive data.
are continually changing is more
Facilitating this comparison, however,
complex than doing the same for a
is expected to be less likely to occur at
single Web site. Moreover, investors
a specific corporate Web site than it is
face similar risks at corporate Web sites
at a third party Web site that provides
of restricted Web crawler activity, the
a wide range of companies to analyze.
Web site going down for maintenance,
and slow connections due to high
Since companies are not required to
post interactive data for other filers, this network traffic as they would at a
central information depository such as
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financial data should not worsen with
adoption of interactive data reporting.
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EDGAR. This is particularly true to the
extent that smaller corporate filers have
fewer resources to maintain their Web
site than the Commission or other third
party sources of financial information.
V. Consideration of Burden on
Competition and Promotion of
Efficiency, Competition, and Capital
Formation
Section 23(a)(2) of the Exchange
Act 345 requires us, when adopting rules
under the Exchange Act, to consider the
impact that any new rule would have on
competition. In addition, Section
23(a)(2) prohibits us from adopting any
rule that would impose a burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Exchange Act.
Furthermore, Section 2(b) 346 of the
Securities Act, Section 3(f) 347 of the
Exchange Act, and Section 2(c) 348 of the
Investment Company Act require us,
when engaging in rulemaking where we
are required to consider or determine
whether an action is necessary or
appropriate in the public interest, to
consider, in addition to the protection of
investors, whether the action will
promote efficiency, competition, and
capital formation.
The amendments requiring issuers to
submit interactive data to the
Commission and post it on their
corporate Web sites are intended to
make financial information easier for
investors to analyze. In particular, we
believe that the amendments will enable
investors and others to search and
analyze the financial information
dynamically; facilitate comparison of
financial and business performance
across issuers, reporting periods and
industries; and, possibly, 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. Further, we believe that the
amendments may lead to more efficient
capital formation and allocation. As
discussed in detail above, we suggest
that smaller public companies could
benefit from increased analyst and
investor coverage if interactive data
increases the availability, or reduces the
cost of collecting and analyzing,
corporate financial data. As a result,
interactive data may reduce some of the
information barriers that make it costly
for companies to find appropriate
sources of external finance, thus
345 15
U.S.C. 78w(a)(2).
U.S.C. 77b(b).
347 15 U.S.C. 78c(f).
348 15 U.S.C. 80a–2(c).
346 15
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lowering their cost of capital and
increasing the efficiency of capital
formation.
We understand that private sector
businesses such as those that access
financial information and aggregate,
analyze, compare or convert it into
interactive format have business models
and, as a result, competitive strategies
that the new interactive data
requirements might affect. Since
interactive data technology is designed
to remove an informational barrier,
business models within the financial
services industry that are currently
adapted to traditional format document
reporting may change, with possible
consequences for the revenue stream of
current product offerings due to the
competitive effects of such a change.
The competitive effects may relate to
changes in the accessibility of financial
information to investors, the nature of
the information that investors receive,
and the potential from new entry or
innovation in the markets through
which financial reports are transmitted
from filers to investors. For example,
lower entry barriers that result from
lower data collection costs may increase
competition among suppliers of
financial services products and help
spur interactive data-related innovation.
It is also possible, however, that,
increased competition from new market
entrants could reduce industry profit
margins, and, as a result, the quality of
financial services may suffer. For
example—and illustration purposes
only—assume that an Internet service
company develops an interactive databased tool that easily provides company
base financial data for free to all
subscribers, and it uses this product as
a loss leader to increase viewership and
advertising revenue. If the data provided
is of the same quality as data provided
through subscription to other available
commercial products, then there should
be no informational efficiency loss and
the quality of financial data services
should not be impaired. However, if the
incumbent financial service providers
provide a higher quality of information
that improves investor interpretation
beyond base financials, but they find
that it is no longer profitable to produce
this information as a result of
subsidized products from inferior
providers, then these financial data
service providers may reduce the supply
of higher quality information to
investors.
We requested comment on whether
the amendments would promote
efficiency, competition, and capital
formation or have an impact or burden
on competition.
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A few commenters expressly
addressed the amendments’ competitive
effects. One commenter argued that the
amendments would harm competition
and innovation in computer operating
systems because interactive data are
restricted on non-Windows operating
systems.349 This commenter stated that
interactive data source code was not
available to the public and that there
were no interactive data viewers that
worked under Macintosh or Linux
platforms. We have considered the
commenter’s views. In this regard, we
note that the XBRL form of interactive
data that the rules require, with
appropriate software, could be used on
non-Windows operating systems and
seen in human-readable form through
viewers that worked under Macintosh or
Linux platforms. We also note that
XBRL is an ‘‘open standard’’ format and
its technological specifications are
widely available to the public royaltyfree at no cost.
Several commenters questioned the
efficiency of interactive data. In this
regard, commenters addressed the
comparability of interactive data and the
corporate Web site posting requirement.
Some commenters stated that
interactive data would be hard for
investors to use in the manner it was
intended to be made part of the
interactive data requirements because
there would be a lack of comparability
due to the Commission’s permitting
issuers to use taxonomies with
thousands of standard elements and
additional extensions.350 We believe
that the combination of a robust list of
standard elements and the ability to add
extensions where necessary, strikes an
appropriate balance between
comparability and specificity. We also
believe that if certain extensions become
common, new standard elements can be
added to eliminate the need to use these
extensions and, thereby, enhance
comparability.
A commenter questioning the
efficiency of the Web site posting
requirement expressed concern about
the risk of hosting delays, and the
potential for errors and duplication of
effort. This commenter suggested that a
hyperlink to the interactive data on the
Commission’s Web site would be more
effective and would be consistent with
the current practice of some companies
linking to their periodic reports on the
Commission’s site.351 As noted above,
we believe that corporate Web site
availability of interactive data will
encourage its widespread
letter from Jay Starkman.
letters from Haynsworth and SavaNet.
351 See letter from IBM.
dissemination, thereby contributing to
lower access costs for users. Users that
prefer to access the interactive data
through another source such as the
Commission’s Web site would be free to
do so.
Commenters addressed competition
in terms of the opportunity to
participate in submitting interactive
data and the costs imposed by the
requirement to submit interactive data.
A commenter argued for the expansion
of interactive data’s use in order to
promote competition. Specifically, this
commenter suggested that issuers be
permitted to submit interactive data
with MJDS forms to enable MJDS issuers
to avoid a competitive disadvantage that
would result from the inability to
submit interactive data.352 As discussed
above, the new rules generally will
require issuers to submit interactive
data for their MJDS forms. One
commenter stated that the additional
costs of the interactive data
requirements would make the U.S.
market less attractive to foreign
issuers.353 Another commenter
recommended that foreign private
issuers be excluded from the phase-in
period, asserting that foreign issuers
would face more difficulty due to
factors such as language differences and
less access to service suppliers.354 We
acknowledge these concerns about cost
and effort but believe that the adopted
requirements are appropriate in light of
the potential interactive data have to
increase the speed, accuracy and
usability of financial disclosure, and
eventually reduce costs.
VI. Final Regulatory Flexibility Act
Analysis
This Final Regulatory Flexibility
Analysis has been prepared in
accordance with 5 U.S.C. 603. It relates
to amendments that will require issuers
to provide their financial statements to
the Commission and on their corporate
Web sites in interactive data format.
A. Reasons for, and Objectives of, the
Adopted Amendments
The main purpose of the amendments
is to make financial information easier
for investors to analyze while assisting
in automating regulatory filings and
business information processing.
Currently, issuers are required to file the
financial statements in their registration
statements, quarterly and annual
reports, and transitional reports and
revised or updated financial statements
in their current reports on Form 8–K
349 See
352 See
350 See
353 See
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letter from CP.
letter from EuropeanIssuers.
354 See letter from CSG.
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and reports on Form 6–K in a traditional
format that provides static text-based
information. We believe that providing
these financial statements in interactive
data format will:
• Enable investors and others to
search and analyze the information
dynamically;
• Facilitate comparison of financial
and business performance across
issuers, reporting periods and
industries; and
• Provide an opportunity to automate
regulatory filings and business
information processing with the
potential to increase the speed,
accuracy, and usability of financial
disclosure.
B. Significant Issues Raised by Public
Comment
The Initial Regulatory Flexibility Act
Analysis appeared in the proposing
release (IRFA). We requested comment
on any aspect of the IRFA, including the
number of small entities that may be
affected by the amendments, the nature
of the potential impact of the
amendments on small entities, and how
to quantify the impact of the
amendments. We asked those
submitting comments to provide
empirical data supporting the extent of
the impact.
One commenter, while
acknowledging that the largest filers
included in the first phase should be
able to effectively deal with the
amendments’ requirements, expressed
concern about the capacity of smaller
filers to do so.355 This filer suggested
that the Commission thoroughly study
the initial phase-in period to determine
whether smaller filers will have the
resources and staff to be able to comply
with the requirements of the rule in the
time period proposed. This filer also
believed that smaller issuers with less
than $50 million of public float should
be able to opt out of the requirements
of the amendments but voluntarily
comply if they so choose. One
commenter noted that the grace period
following the filing of a Form 10–K
offers little relief for smaller companies
due to the number of filings prepared
shortly thereafter. Specifically, this
commenter noted that at many smaller
companies, the staff responsible for the
preparation of a Form 10–K
immediately turn their time and
attention to the preparation of the
company’s proxy statement after filing
the Form 10–K. The commenter stated
that a Form 10–Q is not followed by a
similar series of reporting obligations, so
a grace period following this report is
355 See
letter from NYSSCPA.
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15:23 Feb 09, 2009
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consequently more helpful in assisting
companies avoid excessive expense and
burden.356
We also note that commenters that
provide interactive data services stated
that issuers would need to expend only
modest cost and effort to comply with
the proposed requirements.357 One
commenter stated that it expected that
costs would fall quickly, especially for
small companies, as interactive data
became part of standard corporate
accounting software packages.358 As
noted throughout the release, we are
sensitive to the impact of the
amendments on small companies and
while we recognize that requiring
interactive data financial reporting will
likely result in start-up expenses for
such companies, these expenses may be
substantially lower than those of larger
filers, given that smaller filers tend to
have simpler financial statements than
larger companies, with fewer elements
and disclosures to tag. We expect that
the phase-in will foster the
improvement and availability of
inexpensive software. We also believe
that the third year phase-in for smaller
reporting companies will permit them to
learn from the experience of the earlier
filers and give them a longer period of
time across which to spread first-year
data tagging costs.
C. Small Entities Subject to the
Amendments
The amendments will affect issuers
that are small entities. Exchange Act
Rule 0–10(a) 359 defines an issuer, other
than an investment company, to be a
‘‘small business’’ or ‘‘small
organization’’ for purposes of the
Regulatory Flexibility Act if it had total
assets of $5 million or less on the last
day of its most recent fiscal year.360 We
estimate that there are approximately
1,100 issuers that file reports under the
Exchange Act and may be considered
356 See
letter from ABA.
letters from ECI, EDGARFilings and
UBMatrix.
358 See letter from James J. Angel.
359 17 CFR 240.0–10(a).
360 Securities Act Rule 157(a) [17 CFR 230.157(a)]
generally defines an issuer, other than an
investment company, to be a ‘‘small business’’ or
‘‘small entity’’ for purposes of the Regulatory
Flexibility Act if it had total assets of $5 million or
less on the last day of its most recent fiscal year and
it is conducting or proposing to conduct a securities
offering of $5 million or less. For purposes of our
analysis of issuers other than investment companies
in this Part VI of the release, however, we use the
Exchange Act definition of ‘‘small business’’ or
‘‘small entity’’ because that definition includes
more issuers than does the Securities Act definition
and, as a result, assures that the definition we use
would not itself lead to an understatement of the
impact of the amendments on small entities.
357 See
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small entities.361 All of these issuers
would become subject to the
amendments in year three of the phasein.
D. Reporting, Recordkeeping and Other
Compliance Requirements
All issuers subject to the amendments
will be required to submit financial
information to the Commission in
interactive data format and, if they have
a corporate Web site, post the
interactive data on their Web site. We
believe that, in order to submit financial
information in interactive data format,
issuers in general and small entities in
particular likely will need to prepare
and then submit the interactive data by
expending internal labor hours in
connection with either or both of;
• Purchasing, learning, and using
software packages designed to prepare
financial information in interactive
format; and
• Hiring and working with a
consultant or filing agent.362
We believe that issuers will incur
relatively little cost in connection with
the requirement to post the interactive
data on the issuer’s corporate Web site
because the requirement applies only to
issuers that already have a corporate
Web site.363
E. Agency Action To Minimize the Effect
on Small Entities
The Regulatory Flexibility Act directs
us to consider significant alternatives
that would accomplish the stated
objective, while minimizing any
significant adverse impact on small
entities. In connection with the
amendments, we considered several
alternatives, including the following:
• Establishing different compliance or
reporting requirements or timetables
that take into account the resources
available to small entities;
• Further clarifying, consolidating or
simplifying the requirements;
• Using performance rather than
design standards; and
361 The estimated number of small entities that
report under the Exchange Act is based on 2007
data including the Commission’s internal
computerized filing system and Thompson
Financial’s Worldscope database.
362 Some issuers such as those that have
participated in the voluntary program may already
prepare financial information in interactive data
format or already have the expertise and software
to prepare financial information in interactive data
format. Those issuers would incur fewer costs as a
result of the new requirements. Based on our
experience with the voluntary program, however,
we believe that it would be unlikely that those
issuers would include many small entities.
363 The internal labor and external costs required
to comply with the new rules are discussed more
fully in Parts III and IV above.
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• Providing an exemption from the
requirements, or any part of them, for
small entities.
We believe that, as to small entities,
differing compliance, reporting or nonphase-in timetable requirements, a
partial or complete exemption from the
amendments or the use of performance
rather than design standards would be
inappropriate because these approaches
would detract from the long-term
completeness and uniformity of the
interactive data format financial
information database. Less long-term
completeness and uniformity would
reduce the extent to which the
amendments would enable investors
and others to search and analyze the
information dynamically; facilitate
comparison of financial and business
performance across issuers, reporting
periods and industries; and, possibly,
provide an opportunity to automate
regulatory filings and business
information processing with the
potential to increase the speed,
accuracy, and usability of financial
disclosure. We note, however, that small
entities will not be subject to the
amendments until year three of the
phase-in and, as all other issuers, will
not be required to tag in detail the
footnotes and schedules to their
financial statements until their second
year subject to the requirements.364 We
solicited comment on whether differing
compliance, reporting or timetable
requirements, a partial or complete
exemption, or the use of performance
rather than design standards would be
consistent with our described main goal
of making financial information easier
for investors to analyze while assisting
in automating regulatory filings and
business information processing. One
commenter stated that at some future
point, all filers should be required to
submit their financial statements in
interactive data.365 This commenter also
stated, however, that smaller filers
should, for now, be able to opt out of
the requirement to submit interactive
data. In this regard, the commenter
stated that it did not believe there
would be sufficient analyst interest in
these filers to justify the costs the filers
would incur. We acknowledge the
commenter’s views. We note, however,
that even if there were relatively little
analyst interest in smaller filers, the
interactive data requirements are
intended not only to facilitate access to
and use of information by analysts but
by others as well. In addition, we note
that the interactive data requirements
also are intended to provide an
opportunity to automate regulatory
filings and business information
processing, with the potential to
increase the speed, accuracy and
usability of financial disclosure.
Based in part on our experience with
the voluntary program, we believe that
the amendments are sufficiently clear
and straightforward.
VII. Statutory Authority and Text of
Amendments
We are adopting the amendments
outlined above under Sections 7, 10,
19(a) and 28 of the Securities Act,366
Sections 3, 12, 13, 14, 15(d), 23(a), 35A,
and 36 of the Exchange Act,367 Sections
314 and 319 of the Trust Indenture
Act 368 and Sections 6(c), 8, 24, 30, and
38 of the Investment Company Act 369
and Section 3(a) of the Sarbanes-Oxley
Act.370
List of Subjects
17 CFR Parts 229, 230, 232, 239, 240
and 249
Reporting and recordkeeping
requirements, Securities.
For the reasons set out in the
preamble, we amend Title 17, Chapter II
of the Code of Federal Regulations as
follows:
■
PART 229—STANDARD
INSTRUCTIONS FOR FILING FORMS
UNDER SECURITIES ACT OF 1933,
SECURITIES EXCHANGE ACT OF 1934
AND ENERGY POLICY AND
CONSERVATION ACT OF 1975—
REGULATION S–K
1. The authority citation for Part 229
continues to read in part as follows:
■
Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j,
77k, 77s, 77z–2, 77z–3, 77aa(25), 77aa(26),
77ddd, 77eee, 77ggg, 77hhh, 777iii, 77jjj,
77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n,
78o, 78u–5, 78w, 78ll, 78mm, 80a–8, 80a–9,
80a–20, 80a–29, 80a–30, 80a–31(c), 80a–37,
80a–38(a), 80a–39, 80b–11, and 7201 et seq.;
and 18 U.S.C. 1350, unless otherwise noted.
*
*
*
*
*
2. Amend § 229.601 by revising the
exhibit table in paragraph (a) and by
revising paragraph (b)(100) and adding
paragraph (b)(101) to read as follows:
■
§ 229.601
(Item 601) Exhibits.
(a) * * *
Exhibit Table
*
*
*
*
*
EXHIBIT TABLE
Securities Act forms
Exchange Act forms
S–1
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(1) Underwriting agreement .......
(2) Plan of acquisition, reorganization, arrangement, liquidation or succession ...................
(3)(i) Articles of incorporation .....
(ii) Bylaws ...................................
(4) Instruments defining the
rights of security holders, including indentures ..................
(5) Opinion re legality .................
(6) [Reserved] ............................
S–3
S–4 1
X
X
X
..........
X
X
X
X
..........
X
..........
..........
..........
X
X
X
X
..........
..........
X
X
X
..........
..........
..........
X
X
X
X
X
X
X
..........
..........
X
X
X
X
X
X
X
X
X
..........
X
X
X
X
X
X
X
X
X
X
N/A
X
X
N/A
X
X
N/A
X
X
N/A
X
X
N/A
X
X
N/A
X
X
N/A
X
X
N/A
X
..........
N/A
X
..........
N/A
X
..........
N/A
X
..........
N/A
X
..........
N/A
364 In this regard, in Part II.B.2 of this release we
note that the additional phase-in time for
companies not required to submit interactive data
in year one of the phase-in period is intended to
permit them to plan for and implement the
interactive data reporting process after having the
opportunity to learn from the experience of year
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S–8
S–11
F–1
F–3
F–4 1
10
8–K 2
10–D
10–Q
10–K
one filers. We also there note that the additional
phase-in time also is intended to enable us to
monitor implementation and, if necessary, make
appropriate adjustments to the phase-in period.
365 See letter from NYSSCPA.
366 15 U.S.C. 77g, 77j, 77s(a) and 77z–3.
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367 15 U.S.C. 78c, 78l, 78m, 78n, 78o(d), 78w(a),
78ll, and 78mm.
368 15 U.S.C. 77nnn and 77sss.
369 15 U.S.C. 80a–6(c), 80a–8, 80a–24, 80a–29,
and 80a–37.
370 Public Law No. 107–204, 116 Stat. 745.
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Federal Register / Vol. 74, No. 26 / Tuesday, February 10, 2009 / Rules and Regulations
EXHIBIT TABLE—Continued
Securities Act forms
Exchange Act forms
S–1
(7) Correspondence from an
independent accountant regarding non-reliance on a previously issued audit report or
completed interim review ........
(8) Opinion re tax matters ..........
(9) Voting trust agreement .........
(10) Material contracts ...............
(11) Statement re computation
of per share earnings .............
(12) Statements re computation
of ratios ...................................
(13) Annual report to security
holders, Form 10–Q or quarterly report to security holders 3 .........................................
(14) Code of Ethics ....................
(15) Letter re unaudited interim
financial information ................
(16) Letter re change in certifying accountant 4 ...................
(17) Correspondence on departure of director ........................
(18) Letter re change in accounting principles ..................
(19) Report furnished to security
holders ....................................
(20) Other documents or statements to security holders .......
(21) Subsidiaries of the registrant ......................................
(22) Published report regarding
matters submitted to vote of
security holders ......................
(23) Consents of experts and
counsel ...................................
(24) Power of attorney ...............
(25) Statement of eligibility of
trustee .....................................
(26) Invitation for competitive
bids .........................................
(27) through (30) [Reserved] .....
(31) (i) Rule 13a–14(a)/15d–
14(a) .......................................
Certifications (ii) Rule 13a–14/
15d–14 Certifications ..............
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(32) Section 1350 Certifications 6
(33) Report on assessment of
compliance with servicing criteria for asset-backed issuers
(34) Attestation report on assessment of compliance with
servicing criteria for assetbacked securities ....................
(35) Servicer compliance statement ........................................
(36) through (98) [Reserved] .....
(99) Additional exhibits ...............
(100) XBRL-Related Documents
(101) Interactive Data File .........
S–3
S–4 1
S–8
S–11
F–1
F–3
F–4 1
10
8–K 2
10–D
10–Q
10–K
..........
X
X
X
..........
X
..........
..........
..........
X
X
X
..........
..........
..........
..........
..........
X
X
X
..........
X
X
X
..........
X
..........
..........
..........
X
X
X
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X
X
X
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X
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X
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X
X
X
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X
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X
X
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X
X
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X
X
X
X
X
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X
X
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X
X
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X
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X
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X
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X
X
X
X
X
X
X
X
X
X
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X
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X
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X
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X
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X
X
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X
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X
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X
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X
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X
X
X
X
X
X
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X
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X
X
X
X
X
X
X
X
X
X
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X
X5
X
X5
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X5
X
X5
X
X
X
X
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X
X
X
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X
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X
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X
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X
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X
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X
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X
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X
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N/A
X
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X
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N/A
X
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X
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N/A
X
X
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N/A
X
X
X
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N/A
X
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N/A
X
X
X
X
N/A
X
X
X
1 An exhibit need not be provided about a company if: (1) With respect to such company an election has been made under Form S–4 or F–4
to provide information about such company at a level prescribed by Form S–3 or F–3; and (2) the form, the level of which has been elected
under Form S–4 or F–4, would not require such company to provide such exhibit if it were registering a primary offering.
2 A Form 8–K exhibit is required only if relevant to the subject matter reported on the Form 8–K report. For example, if the Form 8–K pertains
to the departure of a director, only the exhibit described in paragraph (b)(17) of this section need be filed. A required exhibit may be incorporated
by reference from a previous filing.
3 Where incorporated by reference into the text of the prospectus and delivered to security holders along with the prospectus as permitted by
the registration statement; or, in the case of the Form 10–K, where the annual report to security holders is incorporated by reference into the text
of the Form 10–K.
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4 If
Federal Register / Vol. 74, No. 26 / Tuesday, February 10, 2009 / Rules and Regulations
required pursuant to Item 304 of Regulation S–K.
the opinion of the expert or counsel has been incorporated by reference into a previously filed Securities Act registration statement.
to §§ 240.13a–13(b)(3) and 240.15d–13(b)(3) of this chapter, asset-backed issuers are not required to file reports on Form 10–Q.
5 Where
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6 Pursuant
(b) * * *
(100) XBRL-Related Documents. Only
an electronic filer that prepares its
financial statements in accordance with
Article 6 of Regulation S–X (17 CFR
210.6–01 et seq.) is permitted to
participate in the voluntary XBRL
(eXtensible Business Reporting
Language) program and, as a result, may
submit XBRL–Related Documents
(§ 232.11 of this chapter) in electronic
format as an exhibit to: the filing to
which they relate; an amendment to
such filing; or a Form 8–K (§ 249.308 of
this chapter) that references such filing,
if the Form 8–K is submitted no earlier
than the date of filing. Rule 401 of
Regulation S–T (§ 232.401 of this
chapter) sets forth further details
regarding eligibility to participate in the
voluntary XBRL program.
(101) Interactive Data File. An
Interactive Data File (§ 232.11 of this
chapter) is:
(i) Required to be submitted and
posted. Required to be submitted to the
Commission and posted on the
registrant’s corporate Web site, if any, in
the manner provided by Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) if the registrant does not
prepare its financial statements in
accordance with Article 6 of Regulation
S–X (17 CFR 210.6–01 et seq.) and is
described in paragraph (b)(101)(i)(A),
(B) or (C) of this Item, except that an
Interactive Data File: first is required for
a periodic report on Form 10–Q
(§ 249.308a of this chapter), Form 20–F
(§ 249.220f of this chapter) or Form 40–
F (§ 249.240f of this chapter), as
applicable; is required for a registration
statement under the Securities Act only
if the registration statement contains a
price or price range; and is required for
a Form 8–K (§ 249.308 of this chapter)
only when the Form 8–K contains
audited annual financial statements that
are a revised version of financial
statements that previously were filed
with the Commission that have been
revised pursuant to applicable
accounting standards to reflect the
effects of certain subsequent events,
including a discontinued operation, a
change in reportable segments or a
change in accounting principle, and, in
such case, the Interactive Data File
would be required only as to such
revised financial statements regardless
whether the Form 8–K contains other
financial statements:
(A) A large accelerated filer
(§ 240.12b–2 of this chapter) that had an
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15:23 Feb 09, 2009
Jkt 217001
aggregate worldwide market value of the
voting and non-voting common equity
held by non-affiliates of more than $5
billion as of the last business day of the
second fiscal quarter of its most recently
completed fiscal year that prepares its
financial statements in accordance with
generally accepted accounting
principles as used in the United States
and the filing contains financial
statements of the registrant for a fiscal
period that ends on or after June 15,
2009;
(B) A large accelerated filer not
specified in paragraph (b)(101)(i)(A) of
this Item that prepares its financial
statements in accordance with generally
accepted accounting principles as used
in the United States and the filing
contains financial statements of the
registrant for a fiscal period that ends on
or after June 15, 2010; or
(C) A filer not specified in paragraph
(b)(101)(i)(A) or (B) of this Item that
prepares its financial statements in
accordance with either generally
accepted accounting principles as used
in the United States or International
Financial Reporting Standards as issued
by the International Accounting
Standards Board, and the filing contains
financial statements of the registrant for
a fiscal period that ends on or after June
15, 2011.
(ii) Permitted to be submitted.
Permitted to be submitted to the
Commission in the manner provided by
Rule 405 of Regulation S–T (§ 232.405 of
this chapter) if the:
(A) Registrant prepares its financial
statements:
(1) In accordance with either:
(i) Generally accepted accounting
principles as used in the United States;
or
(ii) International Financial Reporting
Standards as issued by the International
Accounting Standards Board; and
(2) Not in accordance with Article 6
of Regulation S–X (17 CFR 210.6–01 et
seq.); and
(B) Interactive Data File is not
required to be submitted to the
Commission under paragraph (b)(101)(i)
of this Item.
(iii) Not permitted to be submitted.
Not permitted to be submitted to the
Commission if the registrant prepares its
financial statements in accordance with
Article 6 of Regulation S–X (17 CFR
210.6–01 et seq.).
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PART 230—GENERAL RULES AND
REGULATIONS, SECURITIES ACT OF
1933
3. The authority citation for Part 230
continues to read in part as follows:
■
Authority: 15 U.S.C. 77b, 77c, 77d, 77f,
77g, 77h, 77j, 77r, 77s, 77z–3, 77sss, 78c, 78d,
78j, 78l, 78m, 78n, 78o, 78t, 78w, 78ll(d),
78mm, 80a–8, 80a–24, 80a–28, 80a–29, 80a–
30, and 80a–37, unless otherwise noted.
*
*
*
*
*
4. Amend § 230.144 by revising
paragraph (c)(1) and the Note to
§ 230.144(c) to read as follows:
■
§ 230.144 Persons deemed not to be
engaged in a distribution and therefore not
underwriters.
*
*
*
*
*
(c) * * *
(1) Reporting issuers. The issuer is,
and has been for a period of at least 90
days immediately before the sale,
subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act
and has:
(i) Filed all required reports under
section 13 or 15(d) of the Exchange Act,
as applicable, during the 12 months
preceding such sale (or for such shorter
period that the issuer was required to
file such reports), other than Form 8–K
reports (§ 249.308 of this chapter); and
(ii) Submitted electronically and
posted on its corporate Web site, if any,
every Interactive Data File (§ 232.11 of
this chapter) required to be submitted
and posted pursuant to Rule 405 of
Regulation S–T (§ 232.405 of this
chapter), during the 12 months
preceding such sale (or for such shorter
period that the issuer was required to
submit and post such files); or
*
*
*
*
*
Note to § 230.144(c). With respect to
paragraph (c)(1), the person can rely upon:
1. A statement in whichever is the most
recent report, quarterly or annual, required to
be filed and filed by the issuer that such
issuer has:
a. Filed all reports required under section
13 or 15(d) of the Exchange Act, as
applicable, during the preceding 12 months
(or for such shorter period that the issuer was
required to file such reports), other than
Form 8–K reports (§ 249.308 of this chapter),
and has been subject to such filing
requirements for the past 90 days; and
b. Submitted electronically and posted on
its corporate Web site, if any, every
Interactive Data File (§ 232.11 of this chapter)
required to be submitted and posted pursuant
to Rule 405 of Regulation S–T (§ 232.405 of
this chapter), during the preceding 12
months (or for such shorter period that the
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Federal Register / Vol. 74, No. 26 / Tuesday, February 10, 2009 / Rules and Regulations
issuer was required to submit and post such
files); or
2. A written statement from the issuer that
it has complied with such reporting,
submission or posting requirements.
3. Neither type of statement may be relied
upon, however, if the person knows or has
reason to believe that the issuer has not
complied with such requirements.
*
*
*
*
*
PART 232—REGULATION S–T—
GENERAL RULES AND REGULATIONS
FOR ELECTRONIC FILINGS
5. The authority citation for Part 232
continues to read in part as follows:
■
Authority: 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a), 77z–3, 77sss(a), 78c(b), 78l, 78m, 78n,
78o(d), 78w(a), 78ll, 80a–6(c), 80a–8, 80a–29,
80a–30, 80a–37, and 7201 et seq.; and 18
U.S.C. 1350.
*
*
*
*
*
6. Amend § 232.11 by adding
definitions for ‘‘Interactive Data File,’’
‘‘Promptly,’’ and ‘‘Related Official
Filing’’ in alphabetical order to read as
follows:
■
§ 232.11
232.
Definition of terms used in part
*
*
*
*
*
Interactive Data File. The term
Interactive Data File means the
machine-readable computer code that
presents information in eXtensible
Business Reporting Language (XBRL)
electronic format pursuant to § 232.405.
*
*
*
*
*
Promptly. The term Promptly means
as soon as reasonably practicable under
the facts and circumstances at the time.
An amendment to the Interactive Data
File made by the later of 24 hours or
9:30 a.m. Eastern Standard Time or
Eastern Daylight Saving Time,
whichever is currently in effect, on the
next business day after the electronic
filer becomes aware of the need for such
amendment shall be deemed to be
‘‘promptly’’ made.
*
*
*
*
*
Related Official Filing. The term
Related Official Filing means the ASCII
or HTML format part of the official
filing with which an Interactive Data
File appears as an exhibit.
*
*
*
*
*
7. Amend § 232.201 by:
a. Revising paragraph (a) introductory
text;
■ b. Amending paragraph (b) by revising
the headings to Notes 1 and 2; and
■ c. Adding paragraph (c).
The revisions and addition read as
follows:
■
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■
VerDate Nov<24>2008
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§ 232.201
Temporary hardship exemption.
(a) If an electronic filer experiences
unanticipated technical difficulties
preventing the timely preparation and
submission of an electronic filing, other
than a Form 3 (§ 249.103 of this
chapter), a Form 4 (§ 249.104 of this
chapter), a Form 5 (§ 249.105 of this
chapter), a Form ID (§§ 239.63, 249.446,
269.7 and 274.402 of this chapter), a
Form TA–1 (§ 249.100 of this chapter),
a Form TA–2 (§ 249.102 of this chapter),
a Form TA–W (§ 249.101 of this
chapter), a Form D (§ 239.500 of this
chapter) or an Interactive Data File
(§ 232.11 of this chapter), the electronic
filer may file the subject filing, under
cover of Form TH (§§ 239.65, 249.447,
269.10 and 274.404 of this chapter), in
paper format no later than one business
day after the date on which the filing
was to be made.
*
*
*
*
*
(b) * * *
Note 1 to paragraph (b): * * *
Note 2 to paragraph (b): * * *
(c) If an electronic filer experiences
unanticipated technical difficulties
preventing the timely preparation and—
(1) Submission of an Interactive Data
File (§ 232.11) as an exhibit as required
pursuant to Rule 405 of Regulation S–
T (§ 232.405), the electronic filer still
can timely satisfy the requirement to
submit the Interactive Data File in the
following manner:
(i) Substitute for the Interactive Data
File in the required exhibit a document
that sets forth the following legend:
IN ACCORDANCE WITH THE
TEMPORARY HARDSHIP EXEMPTION
PROVIDED BY RULE 201 OF
REGULATION S–T, THE DATE BY
WHICH THE INTERACTIVE DATA FILE
IS REQUIRED TO BE SUBMITTED HAS
BEEN EXTENDED BY SIX BUSINESS
DAYS; and
(ii) Submit the required Interactive
Data File no later than six business days
after the Interactive Data File originally
was required to be submitted.
(2) Posting on its corporate Web site
of an Interactive Data File as required
pursuant to Rule 405 of Regulation S–
T, the electronic filer still can timely
satisfy the requirement to post the
Interactive Data File by so posting the
Interactive Data File within six business
days after the Interactive Data File was
required to be submitted to the
Commission.
Note to paragraph (c): Electronic filers
unable to submit or post, as applicable, the
Interactive Data File under the circumstances
specified by paragraph (c), must comply with
the provisions of this section and cannot use
Form 12b–25 (§ 249.322 of this chapter) as a
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6813
notification of late filing. Failure to submit or
post, as applicable, the Interactive Data File
as required by the end of the six-business-day
period specified by paragraph (c) of this
section will result in ineligibility to use
Forms S–3, S–8 and F–3 (§§ 239.13, 239.16b,
and 239.33 of this chapter) and constitute a
failure to have filed all required reports for
purposes of the current public information
requirements of Rule 144(c)(1)
(§ 230.144(c)(1) of this chapter).
8. Amend § 232.202 by:
a. Revising paragraphs (a)
introductory text, (a)(2), (b)(2), and
(b)(3);
■ b. Revising paragraph (c);
■ c. Revising paragraph (d);
■ d. Revising the headings to Notes 1, 2,
and 3 to the section; and
■ e. Adding Note 4 to the section.
The revisions and addition read as
follows:
■
■
§ 232.202
Continuing hardship exemption.
(a) An electronic filer may apply in
writing for a continuing hardship
exemption if all or part of a filing, group
of filings or submission, other than a
Form ID (§§ 239.63, 249.446, 269.7, and
274.402 of this chapter) or a Form D
(§ 239.500 of this chapter), otherwise to
be filed or submitted in electronic
format or, in the case of an Interactive
Data File (§ 232.11), to be posted on the
electronic filer’s corporate Web site,
cannot be so filed, submitted or posted,
as applicable, without undue burden or
expense. Such written application shall
be made at least ten business days
before the required due date of the
filing(s), submission(s) or posting of the
proposed filing, submission, or posting
date, as appropriate, or within such
shorter period as may be permitted. The
written application shall contain the
information set forth in paragraph (b) of
this section.
*
*
*
*
*
(2) If the Commission, or the staff
acting pursuant to delegated authority,
denies the application for a continuing
hardship exemption, the electronic filer
shall file or submit the required
document or Interactive Data File in
electronic format or post the Interactive
Data File on its corporate Web site, as
applicable, on the required due date or
the proposed filing or submission date,
or such other date as may be permitted.
*
*
*
*
*
(b) * * *
(2) The burden and expense to
employ alternative means to make the
electronic submission or posting, as
applicable; and/or
(3) The reasons for not submitting
electronically the document, group of
documents or Interactive Data File or
not posting the Interactive Data File, as
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well as the justification for the
requested time period.
(c) If the request is granted with
respect to:
(1) Electronic filing of a document or
group of documents, not electronic
submission or posting of an Interactive
Data File, then the electronic filer shall
submit the document or group of
documents for which the continuing
hardship exemption is granted in paper
format on the required due date
specified in the applicable form, rule or
regulation, or the proposed filing date,
as appropriate and the following legend
shall be placed in capital letters at the
top of the cover page of the paper format
document(s):
IN ACCORDANCE WITH RULE 202
OF REGULATION S–T, THIS (specify
document) IS BEING FILED IN PAPER
PURSUANT TO A CONTINUING
HARDSHIP EXEMPTION.
(2) Electronic submission of an
Interactive Data File, then the electronic
filer shall substitute for the Interactive
Data File in the exhibit in which it was
required a document that sets forth one
of the following legends, as appropriate:
IN ACCORDANCE WITH A
CONTINUING HARDSHIP EXEMPTION
OBTAINED UNDER RULE 202 OF
REGULATION S–T, THE DATE BY
WHICH THE INTERACTIVE DATA FILE
IS REQUIRED TO BE SUBMITTED HAS
BEEN EXTENDED TO (specify date); or
IN ACCORDANCE WITH A
CONTINUING HARDSHIP EXEMPTION
OBTAINED UNDER RULE 202 OF
REGULATION S–T, THE INTERACTIVE
DATA FILE IS NOT REQUIRED TO BE
SUBMITTED.
(3) Web site posting by an electronic
filer of its Interactive Data File, the
electronic filer need not post on its Web
site any statement with regard to the
grant of the request.
(d) If a continuing hardship
exemption is granted for a limited
period of time for:
(1) Electronic filing of a document or
group of documents, not electronic
submission or posting of an Interactive
Data File, then the grant may be
conditioned upon the filing of the
document or group of documents that is
the subject of the exemption in
electronic format upon the expiration of
the period for which the exemption is
granted. The electronic format version
shall contain the following statement in
capital letters at the top of the first page
of the document:
This document is a copy of the
(specify document) filed on (date)
pursuant to a Rule 202(d) continuing
hardship exemption.
(2) Electronic submission or posting
of an Interactive Data File, then the
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15:23 Feb 09, 2009
Jkt 217001
grant may be conditioned upon the
electronic submission and posting, as
applicable, of the Interactive Data File
that is the subject of the exemption
upon the expiration of the period for
which the exemption is granted.
Note 1 to § 232.202: * * *
Note 2 to § 232.202: * * *
Note 3 to § 232.202: * * *
Note 4 to § 232.202: Failure to submit or
post, as applicable, the Interactive Data File
as required by Rule 405 by the end of the
continuing hardship exemption if granted for
a limited period of time, will result in
ineligibility to use Forms S–3, S–8, and F–
3 (§§ 239.13, 239.16b and 239.33 of this
chapter) and constitute a failure to have filed
all required reports for purposes of the
current public information requirements of
Rule 144(c)(1) (§ 230.144(c)(1) of this
chapter).
9. Amend § 232.305 by revising
paragraph (b) to read as follows:
■
§ 232.305 Number of characters per line;
tabular and columnar information.
*
*
*
*
*
(b) Paragraph (a) of this section does
not apply to HTML documents,
Interactive Data Files (§ 232.11) or
XBRL-Related Documents (§ 232.11).
■ 10. Amend § 232.401, paragraph (a),
by adding a new first sentence to read
as follows:
§ 232.401 XBRL-Related Document
submissions.
(a) Only an electronic filer that is an
investment company registered under
the Investment Company Act of 1940
(15 U.S.C. 80a–1 et seq.), a ‘‘business
development company’’ as defined in
section 2(a)(48) of that Act, or an 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.) is
permitted to participate in the voluntary
XBRL (eXtensible Business Reporting
Language) program. * * *
*
*
*
*
*
■ 11. Amend § 232.402 by removing the
phrase ‘‘Public Utility Act,’’ from the
first sentence of paragraph (b).
§§ 232.403 and § 232.404
[Reserved].
12. Reserve § 232.403 and § 232.404.
13. Add § 232.405 and § 232.406T to
read as follows:
■
■
§ 232.405 Interactive Data File
submissions and postings.
Preliminary Note 1. Sections 405 and
406T of Regulation S–T (§§ 232.405 and
232.406T) apply to electronic filers that
submit or post Interactive Data Files.
Item 601(b)(101) of Regulation S–K
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(§ 229.601(b)(101) of this chapter),
paragraph 101 of the Information Not
Required to be Delivered to Offerees or
Purchasers of both Form F–9 (§ 239.39
of this chapter)and Form F–10 (§ 239.40
of this chapter), Item 101 of the
Instructions as to Exhibits of Form 20–
F (§ 249.220f of this chapter), paragraph
B.7 of the General Instructions to Form
40–F (§ 249.240f of this chapter) and
paragraph C.6 of the General
Instructions to Form 6–K (§ 249.306 of
this chapter) specify when electronic
filers are required or permitted to
submit or post an Interactive Data File
(§ 232.11), as further described in the
Note to § 232.405.
Preliminary Note 2. Section 405
imposes content, format, submission
and Web site posting requirements for
an Interactive Data File, but does not
change the substantive content
requirements for the financial and other
disclosures in the Related Official Filing
(§ 232.11).
Preliminary Note 3. Section 406T
addresses liability related to Interactive
Data Files.
(a) Content, format, submission and
posting requirements—General. An
Interactive Data File must:
(1) Comply with the content, format,
submission and Web site posting
requirements of this section;
(2) Be submitted only by an electronic
filer either required or permitted to
submit an Interactive Data File as
specified by Item 601(b)(101) of
Regulation S–K, paragraph 101 of the
Information Not Required to be
Delivered to Offerees or Purchasers of
either Form F–9 or Form F–10, Item 101
of the Instructions as to Exhibits of
Form 20–F, paragraph B.7 of the General
Instructions to Form 40–F or paragraph
C.6 of the General Instructions to Form
6–K, as applicable, as an exhibit to:
(i) A form that contains the disclosure
required by this section or
(ii) An amendment to a form that
contains the disclosure required by this
section if the amendment is filed no
more than 30 days after the earlier of the
due date or filing date of the form and
the Interactive Data File is the first
Interactive Data File the electronic filer
submits or the first Interactive Data File
the electronic filer submits that
complies or is required to comply,
whichever occurs first, with paragraphs
(d)(1) through (d)(4), (e)(1) and (e)(2) of
this section;
(3) Be submitted in accordance with
the EDGAR Filer Manual and, as
applicable, either Item 601(b)(101) of
Regulation S–K, paragraph 101 of the
Information Not Required to be
Delivered to Offerees or Purchasers of
either Form F–9 or Form F–10, Item 101
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of the Instructions as to Exhibits of
Form 20–F, paragraph B.7 of the General
Instructions to Form 40–F or paragraph
C.6 of the General Instructions to Form
6–K; and
(4) Be posted on the electronic filer’s
corporate Web site, if any, in accordance
with, as applicable, either Item
601(b)(101) of Regulation S–K,
paragraph 101 of the Information Not
Required to be Delivered to Offerees or
Purchasers of either Form F–9 or Form
F–10, Item 101 of the Instructions as to
Exhibits of Form 20–F, paragraph B.7 of
the General Instructions to Form 40–F
or paragraph C.6 of the General
Instructions to Form 6–K.
(b) Content—Categories of
information presented. An Interactive
Data File must consist of only a
complete set of information for all
periods required to be presented in the
corresponding data in the Related
Official Filing, no more and no less,
from all of the following categories:
(1) The complete set of the electronic
filer’s financial statements (which
includes the face of the financial
statements and all footnotes); and
(2) All schedules set forth in Article
12 of Regulation S–X (§§ 210.12–01—
210.12–29) related to the electronic
filer’s financial statements.
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Note to paragraph (b): It is not permissible
for the Interactive Data File to present only
partial face financial statements, such as by
excluding comparative financial information
for prior periods.
(c) Format—Generally. An Interactive
Data File must comply with the
following requirements, except as
modified by paragraph (d) or (e) of this
section, as applicable, with respect to
the corresponding data in the Related
Official Filing consisting of footnotes to
financial statements or financial
statement schedules as set forth in
Article 12 of Regulation S–X:
(1) Data elements and labels.
(i) Element accuracy. Each data
element (i.e., all text, line item names,
monetary values, percentages, numbers,
dates and other labels) contained in the
Interactive Data File reflects the same
information in the corresponding data
in the Related Official Filing;
(ii) Element specificity. No data
element contained in the corresponding
data in the Related Official Filing is
changed, deleted, or summarized in the
Interactive Data File;
(iii) Standard and special labels and
elements. Each data element contained
in the Interactive Data File is matched
with an appropriate tag from the most
recent version of the standard list of tags
specified by the EDGAR Filer Manual. A
tag is appropriate only when its
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standard definition, standard label and
other attributes as and to the extent
identified in the list of tags match the
information to be tagged, except that:
(A) Labels. An electronic filer must
create and use a new special label to
modify a tag’s existing standard label
when that tag is an appropriate tag in all
other respects (i.e., in order to use a tag
from the standard list of tags only its
label needs to be changed); and
(B) Elements. An electronic filer must
create and use a new special element if
and only if an appropriate tag does not
exist in the standard list of tags for
reasons other than or in addition to an
inappropriate standard label; and
(2) Additional mark-up related
content. The Interactive Data File
contains any additional mark-up related
content (e.g., the eXtensible Business
Reporting Language tags themselves,
identification of the core XML
documents used and other technology
related content) not found in the
corresponding data in the Related
Official Filing that is necessary to
comply with the EDGAR Filer Manual
requirements.
(d) Format—Footnotes—Generally.
The part of the Interactive Data File for
which the corresponding data in the
Related Official Filing consists of
footnotes to financial statements must
comply with the requirements of
paragraphs (c)(1) and (c)(2) of this
section, as modified by this paragraph
(d), unless the electronic filer is within
one of the categories specified in
paragraph (f) of this section. Footnotes
to financial statements must be tagged
as follows:
(1) Each complete footnote must be
block-text tagged;
(2) Each significant accounting policy
within the significant accounting
policies footnote must be block-text
tagged;
(3) Each table within each footnote
must be block-text tagged; and
(4) Within each footnote,
(i) Each amount (i.e., monetary value,
percentage, and number) must be tagged
separately; and
(ii) Each narrative disclosure may be
tagged separately to the extent the
electronic filer chooses.
(e) Format—Schedules—Generally.
The part of the Interactive Data File for
which the corresponding data in the
Related Official Filing consists of
financial statement schedules as set
forth in Article 12 of Regulation S–X
must comply with the requirements of
paragraphs (c)(1) and (c)(2) of this
section, as modified by this paragraph
(e), unless the electronic filer is within
one of the categories specified in
paragraph (f) of this section. Financial
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statement schedules as set forth in
Article 12 of Regulation S–X must be
tagged as follows:
(1) Each complete financial statement
schedule must be block-text tagged; and
(2) Within each financial statement
schedule,
(i) Each amount (i.e., monetary value,
percentage and number) must be tagged
separately; and
(ii) Each narrative disclosure may be
tagged separately to the extent the
electronic filer chooses.
(f) Format—Footnotes and Schedules
Eligible for Phased-In Detail. The
following electronic filers must comply
with paragraphs (c)(1) and (c)(2) of this
section as modified by paragraphs (d)
and (e) of this section, except that they
may choose to comply with paragraph
(d)(1) of this section rather than
paragraphs (d)(1) through (d)(4) of this
section and may choose to comply with
paragraph (e)(1) of this section rather
than paragraphs (e)(1) and (e)(2) of this
section:
(1) Any large accelerated filer
(§ 240.12b–2 of this chapter) that had an
aggregate worldwide market value of the
voting and non-voting common equity
held by non-affiliates of more than $5
billion as of the last business day of the
second fiscal quarter of its most recently
completed fiscal year that prepares its
financial statements in accordance with
generally accepted accounting
principles as used in the United States,
if none of the financial statements for
which an Interactive Data File is
required is for a fiscal period that ends
on or after June 15, 2010;
(2) Any large accelerated filer not
specified in paragraph (f)(1) of this
section that prepares its financial
statements in accordance with generally
accepted accounting principles as used
in the United States, if none of the
financial statements for which an
Interactive Data File is required is for a
fiscal period that ends on or after June
15, 2011; and
(3) Any filer not specified in
paragraph (f)(1) or (f)(2) of this section
that prepares its financial statements in
accordance with either generally
accepted accounting principles as used
in the United States or International
Financial Reporting Standards as issued
by the International Accounting
Standards Board, if none of the financial
statements for which an Interactive Data
File is required is for a fiscal period that
ends on or after June 15, 2012.
(g) Posting. Any electronic filer that
maintains a corporate Web site and is
required to submit an Interactive Data
File must post that Interactive Data File
on that Web site by the end of the
calendar day on the earlier of the date
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the Interactive Data File is submitted or
is required to be submitted and the
Interactive Data File must remain
accessible on that Web site for at least
a 12-month period.
Note to § 232.405: Item 601(b)(101) of
Regulation S–K specifies the circumstances
under which an Interactive Data File must be
submitted as an exhibit and be posted to the
issuer’s corporate Web site, if any, and the
circumstances under which it is permitted to
be submitted as an exhibit, with respect to
Forms S–1 (§ 239.11 of this chapter), S–3
(§ 239.13 of this chapter), S–4 (§ 239.25 of
this chapter), S–11 (§ 239.18 of this chapter),
F–1 (§ 239.31 of this chapter), F–3 (§ 239.33
of this chapter), F–4 (§ 239.34 of this
chapter), 10–K (§ 249.310 of this chapter),
10–Q (§ 249.308a of this chapter) and 8–K
(§ 249.308 of this chapter). Paragraph 101 of
the Information Not Required to be Delivered
to Offerees or Purchasers of both Form F–9
and Form F–10 specifies the circumstances
under which an Interactive Data File must be
submitted as an exhibit and be posted to the
issuer’s corporate Web site, if any, and the
circumstances under which it is permitted to
be submitted as an exhibit, with respect to
Form F–9 and Form F–10, respectively. Item
101 of the Instructions as to Exhibits of Form
20–F specifies the circumstances under
which an Interactive Data File must be
submitted as an exhibit and be posted to the
issuer’s corporate Web site, if any, and the
circumstances under which it is permitted to
be submitted as an exhibit, with respect to
Form 20–F. Paragraph B.7 of the General
Instructions to Form 40–F and Paragraph C.6
of the General Instructions to Form 6–K
specify the circumstances under which an
Interactive Data File must be submitted as an
exhibit and be posted to the issuer’s
corporate Web site, if any, and the
circumstances under which it is permitted to
be submitted as an exhibit, with respect to
Form 40–F and Form 6–K, respectively. Item
601(b)(101) of Regulation S–K, paragraph 101
of the Information Not Required to be
Delivered to Offerees or Purchasers of both
Form F–9 and Form F–10, Item 101 of the
Instructions as to Exhibits of Form 20–F,
paragraph B.7 of the General Instructions to
Form 40–F and paragraph C.6 of the General
Instructions to Form 6–K all prohibit
submission of an Interactive Data File by an
issuer that prepares its financial statements
in accordance with Article 6 of Regulation S–
X (17 CFR 210.6–01 et seq.).
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§ 232.406T Temporary rule related to
Interactive Data Files.
(a) Scope. Section 232.406T addresses
the liability for the Interactive Data File.
An Interactive Data File is subject to the
same liability provisions as the Related
Official Filing except as provided in
paragraphs (b) and (c) of this section.
(b) In general. The Interactive Data
File, regardless of whether it is an
exhibit to a document incorporated by
reference into filings:
(1) Is subject to the anti-fraud
provisions of section 17(a)(1) of the
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Securities Act, section 10(b) of the
Exchange Act, § 240.10b–5 of this
chapter, and section 206(1) of the
Investment Advisers Act except as
provided in paragraph (c) of this
section;
(2) Is deemed not filed or part of a
registration statement or prospectus for
purposes of sections 11 or 12 of the
Securities Act, is deemed not filed for
purposes of section 18 of the Exchange
Act or section 34(b) of the Investment
Company Act, and otherwise is not
subject to liability under these sections;
and
(3) Is deemed filed for purposes of
§ 232.103.
(c) Good faith attempts and prompt
correction. Subject to paragraph (b) of
this section, the Interactive Data File
shall be subject to liability for a failure
to comply with § 232.405, but shall be
deemed to have complied with
§ 232.405 and would not be subject to
liability under the anti-fraud provisions
set forth in paragraph (b)(1) of this
section or under any other liability
provision if the electronic filer:
(1) Makes a good faith attempt to
comply with § 232.405; and
(2) After the electronic filer becomes
aware that the Interactive Data File fails
to comply with § 232.405, promptly
amends the Interactive Data File to
comply with § 232.405.
(d) Temporary section. Section
232.406T is a temporary section that
applies to an Interactive Data File
submitted to the Commission less than
24 months after the electronic filer first
was required to submit an Interactive
Data File to the Commission pursuant to
§ 232.405, not taking into account any
grace period, but no later than October
31, 2014. After these dates, an
Interactive Data File is subject to the
same liability provisions as the Related
Official Filing. This temporary section
will expire on October 31, 2014.
PART 239—FORMS PRESCRIBED
UNDER THE SECURITIES ACT OF 1933
14. The authority citation for Part 239
continues to read in part as follows:
■
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s,
77z–2, 77z–3, 77sss, 78c, 78l, 78m, 78n,
78o(d), 78u–5, 78w(a), 78ll, 78mm, 80a–2(a),
80a–3, 80a–8, 80a–9, 80a–10, 80a–13, 80a–
24, 80a–26, 80a–29, 80a–30, and 80a–37,
unless otherwise noted.
*
*
*
*
*
15. Amend § 239.13 by revising
paragraph (a)(8) to read as follows:
■
§ 239.13 Form S–3, for registration under
the Securities Act of 1933 of securities of
certain issuers offered pursuant to certain
types of transactions.
*
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*
*
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*
Fmt 4701
*
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(a) * * *
(8) Electronic filings. In addition to
satisfying the foregoing conditions, a
registrant subject to the electronic filing
requirements of Rule 101 of Regulation
S–T (§ 232.101 of this chapter) shall
have:
(i) Filed with the Commission all
required electronic filings, including
electronic copies of documents
submitted in paper pursuant to a
hardship exemption as provided by
Rule 201 or Rule 202(d) of Regulation
S–T (§ 232.201 or § 232.202(d) of this
chapter); and
(ii) Submitted electronically to the
Commission and posted on its corporate
Web site, if any, all Interactive Data
Files required to be submitted and
posted pursuant to Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) during the twelve calendar
months and any portion of a month
immediately preceding the filing of the
registration statement on this Form (or
for such shorter period of time that the
registrant was required to submit and
post such files).
■ 16. Amend Form S–3 (referenced in
§ 239.13) by revising paragraph I.A.8 of
the General Instructions to read as
follows:
Note: The text of Form S–3 does not and
this amendment will not appear in the Code
of Federal Regulations.
Form S–3
*
*
*
*
*
General Instructions
I. * * *
A. * * *
8. Electronic filings. In addition to
satisfying the foregoing conditions, a
registrant subject to the electronic filing
requirements of Rule 101 of Regulation
S–T (§ 232.101 of this chapter) shall
have:
(a) Filed with the Commission all
required electronic filings, including
electronic copies of documents
submitted in paper pursuant to a
hardship exemption as provided by
Rule 201 or Rule 202(d) of Regulation
S–T (§ 232.201 or § 232.202(d) of this
chapter); and
(b) Submitted electronically to the
Commission and posted on its corporate
Web site, if any, all Interactive Data
Files required to be submitted and
posted pursuant to Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) during the twelve calendar
months and any portion of a month
immediately preceding the filing of the
registration statement on this Form (or
for such shorter period of time that the
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registrant was required to submit and
post such files).
*
*
*
*
*
■ 17. Amend § 239.16b by revising
paragraph (b) to read as follows:
§ 239.16b Form S–8, for registration under
the Securities Act of 1933 of securities to
be offered to employees pursuant to
employee benefit plans.
*
*
*
*
*
(b) Electronic filings. In addition to
satisfying the foregoing conditions, a
registrant subject to the electronic filing
requirements of Rule 101 of Regulation
S–T (§ 232.101 of this chapter) shall
have:
(1) Filed with the Commission all
required electronic filings, including
electronic copies of documents
submitted in paper pursuant to a
hardship exemption as provided by
Rule 201 or Rule 202(d) of Regulation
S–T (§ 232.201 or § 232.202(d) of this
chapter); and
(2) Submitted electronically to the
Commission and posted on its corporate
Web site, if any, all Interactive Data
Files required to be submitted and
posted pursuant to Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) during the twelve calendar
months and any portion of a month
immediately preceding the filing of the
registration statement on this Form (or
for such shorter period of time that the
registrant was required to submit and
post such files).
■ 18. Amend Form S–8 (referenced in
§ 239.16b) by revising paragraph A.3 of
the General Instructions to read as
follows:
Note: The text of Form S–8 does not and
this amendment will not appear in the Code
of Federal Regulations.
Form S–8
*
*
*
*
*
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General Instructions
A. * * *
3. Electronic filings. In addition to
satisfying the foregoing conditions, a
registrant subject to the electronic filing
requirements of Rule 101 of Regulation
S–T (§ 232.101 of this chapter) shall
have:
(a) Filed with the Commission all
required electronic filings, including
electronic copies of documents
submitted in paper pursuant to a
hardship exemption as provided by
Rule 201 or Rule 202(d) of Regulation
S–T (§ 232.201 or § 232.202(d) of this
chapter); and
(b) Submitted electronically to the
Commission and posted on its corporate
Web site, if any, all Interactive Data
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Files required to be submitted and
posted pursuant to Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) during the twelve calendar
months and any portion of a month
immediately preceding the filing of the
registration statement on this Form (or
for such shorter period of time that the
registrant was required to submit and
post such files).
*
*
*
*
*
■ 19. Amend § 239.33 by revising
paragraph (a)(6) to read as follows:
§ 239.33 Form F–3, for registration under
the Securities Act of 1933 of securities of
certain foreign private issuers offered
pursuant to certain types of transactions.
*
*
*
*
*
(a) * * *
(6) Electronic filings. In addition to
satisfying the foregoing conditions, a
registrant subject to the electronic filing
requirements of Rule 101 of Regulation
S–T (§ 232.101 of this chapter) shall
have:
(i) Filed with the Commission all
required electronic filings, including
electronic copies of documents
submitted in paper pursuant to a
hardship exemption as provided by
Rule 201 or Rule 202(d) of Regulation
S–T (§ 232.201 or § 232.202(d) of this
chapter); and
(ii) Submitted electronically to the
Commission and posted on its corporate
Web site, if any, all Interactive Data
Files required to be submitted and
posted pursuant to Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) during the twelve calendar
months and any portion of a month
immediately preceding the filing of the
registration statement on this Form (or
for such shorter period of time that the
registrant was required to submit and
post such files).
*
*
*
*
*
■ 20. Amend Form F–3 (referenced in
§ 239.33) by revising paragraph I.A.6 of
the General Instructions to read as
follows:
Note: The text of Form F–3 does not and
this amendment will not appear in the Code
of Federal Regulations.
Form F–3
*
*
*
*
*
General Instructions
I. * * *
A. * * *
6. Electronic filings. In addition to
satisfying the foregoing conditions, a
registrant subject to the electronic filing
requirements of Rule 101 of Regulation
S–T (§ 232.101 of this chapter) shall
have:
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6817
(i) Filed with the Commission all
required electronic filings, including
electronic copies of documents
submitted in paper pursuant to a
hardship exemption as provided by
Rule 201 or Rule 202(d) of Regulation
S–T (§ 232.201 or § 232.202(d) of this
chapter); and
(ii) Submitted electronically to the
Commission and posted on its corporate
Web site, if any, all Interactive Data
Files required to be submitted and
posted pursuant to Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) during the twelve calendar
months and any portion of a month
immediately preceding the filing of the
registration statement on this Form (or
for such shorter period of time that the
registrant was required to submit and
post such files).
*
*
*
*
*
■ 21. Amend Form F–9 (referenced in
§ 239.39) by reserving paragraphs (8)
through (100) and adding paragraph 101
at the end of ‘‘Part II—Information Not
Required To Be Delivered to Offerees or
Purchasers’’ to read as follows:
Note: The text of Form F–9 does not and
this amendment will not appear in the Code
of Federal Regulations.
Form F–9
*
*
*
*
*
PART II—Information Not Required To
Be Delivered to Offerees or Purchasers
*
*
*
*
*
(8) through (100) [Reserved]
(101) An Interactive Data File
(§ 232.11 of this chapter) is:
(a) Required to be submitted and
posted. Required to be submitted to the
Commission and posted on the
registrant’s corporate Web site, if any, in
the manner provided by Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) if the Registrant does not
prepare its financial statements in
accordance with Article 6 of Regulation
S–X (17 CFR 210.6–01 et seq.) and is
described in paragraph (a)(i),(ii), (iii) of
this Instruction 101, except that an
Interactive Data File: First is required
for a periodic report on Form 10–Q
(§ 249.308a of this chapter), Form 20–F
(§ 249.220f of this chapter) or Form 40–
F (§ 249.240f of this chapter), as
applicable; and is required for a
registration statement under the
Securities Act only if the registration
statement contains a price or price
range:
(i) A large accelerated filer (§ 240.12b–
2 of this chapter) that had an aggregate
worldwide market value of the voting
and non-voting common equity held by
non-affiliates of more than $5 billion as
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of the last business day of the second
fiscal quarter of its most recently
completed fiscal year that prepares its
financial statements in accordance with
generally accepted accounting
principles as used in the United States
and the filing contains financial
statements of the registrant for a fiscal
period that ends on or after June 15,
2009;
(ii) A large accelerated filer not
specified in paragraph (a)(i) of this
Instruction (101) that prepares its
financial statements in accordance with
generally accepted accounting
principles as used in the United States
and the filing contains financial
statements of the registrant for a fiscal
period that ends on or after June 15,
2010; or
(iii) A filer not specified in paragraph
(a)(i) or (a)(ii) of this Instruction (101)
that prepares its financial statements in
accordance with either generally
accepted accounting principles as used
in the United States or International
Financial Reporting Standards as issued
by the International Accounting
Standards Board, and the filing contains
financial statements of the registrant for
a fiscal period that ends on or after June
15, 2011.
(b) Permitted to be submitted.
Permitted to be submitted to the
Commission in the manner provided by
Rule 405 of Regulation S–T (§ 232.405 of
this chapter) if the:
(i) Registrant prepares its financial
statements:
(A) In accordance with either:
(1) Generally accepted accounting
principles as used in the United States;
or
(2) International Financial Reporting
Standards as issued by the International
Accounting Standards Board; and
(B) Not in accordance with Article 6
of Regulation S–X (17 CFR 210.6–01 et
seq.); and
(ii) Interactive Data File is not
required to be submitted to the
Commission under paragraph (a) of this
Instruction 101.
(c) Not permitted to be submitted. Not
permitted to be submitted to the
Commission if the registrant prepares its
financial statements in accordance with
Article 6 of Regulation S–X (17 CFR
210.6–01 et seq.).
*
*
*
*
*
■ 22. Amend Form F–10 (referenced in
§ 239.40) by reserving paragraphs (8)
through (100) and adding paragraph 101
at the end of ‘‘Part II—Information Not
Required To Be Delivered to Offerees or
Purchasers’’ to read as follows:
Note: The text of Form F–10 does not and
this amendment will not appear in the Code
of Federal Regulations.
VerDate Nov<24>2008
15:23 Feb 09, 2009
Jkt 217001
Form F–10
*
*
*
*
*
PART II—Information Not Required To
Be Delivered to Offerees or Purchasers
*
*
*
*
*
(8) through (100) [Reserved]
(101) An Interactive Data File
(§ 232.11 of this chapter) is:
(a) Required to be submitted and
posted. Required to be submitted to the
Commission and posted on the
registrant’s corporate Web site, if any, in
the manner provided by Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) if the Registrant does not
prepare its financial statements in
accordance with Article 6 of Regulation
S–X (17 CFR 210.6–01 et seq.) and is
described in paragraph (a)(i),(ii), (iii) of
this Instruction 101, except that an
Interactive Data File: first is required for
a periodic report on Form 10–Q
(§ 249.308a of this chapter), Form 20–F
(§ 249.220f of this chapter) or Form 40–
F (§ 249.240f of this chapter), as
applicable; and is required for a
registration statement under the
Securities Act only if the registration
statement contains a price or price
range:
(i) A large accelerated filer (§ 240.12b–
2 of this chapter) that had an aggregate
worldwide market value of the voting
and non-voting common equity held by
non-affiliates of more than $5 billion as
of the last business day of the second
fiscal quarter of its most recently
completed fiscal year that prepares its
financial statements in accordance with
generally accepted accounting
principles as used in the United States
and the filing contains financial
statements of the registrant for a fiscal
period that ends on or after June 15,
2009;
(ii) A large accelerated filer not
specified in paragraph (a)(i) of this
Instruction 101 that prepares its
financial statements in accordance with
generally accepted accounting
principles as used in the United States
and the filing contains financial
statements of the registrant for a fiscal
period that ends on or after June 15,
2010; or
(iii) A filer not specified in paragraph
(a)(i) or (a)(ii) of this Instruction 101 that
prepares its financial statements in
accordance with either generally
accepted accounting principles as used
in the United States or International
Financial Reporting Standards as issued
by the International Accounting
Standards Board, and the filing contains
financial statements of the registrant for
a fiscal period that ends on or after June
15, 2011.
PO 00000
Frm 00044
Fmt 4701
Sfmt 4700
(b) Permitted to be submitted.
Permitted to be submitted to the
Commission in the manner provided by
Rule 405 of Regulation S–T (§ 232.405 of
this chapter) if the:
(i) Registrant prepares its financial
statements:
(A) In accordance with either:
(1) Generally accepted accounting
principles as used in the United States;
or
(2) International Financial Reporting
Standards as issued by the International
Accounting Standards Board; and
(B) Not in accordance with Article 6
of Regulation S–X (17 CFR 210.6–01 et
seq.); and
(ii) Interactive Data File is not
required to be submitted to the
Commission under paragraph (a) of this
Instruction (101).
(c) Not permitted to be submitted. Not
permitted to be submitted to the
Commission if the registrant prepares its
financial statements in accordance with
Article 6 of Regulation S–X (17 CFR
210.6–01 et seq.).
*
*
*
*
*
PART 240—GENERAL RULES AND
REGULATIONS, SECURITIES
EXCHANGE ACT OF 1934
23. The authority citation for Part 240
continues to read in part as follows:
■
Authority: 15 U.S.C. 77c, 77d, 77g, 77j,
77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn,
77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j,
78j–1, 78k, 78k–1, 78l, 78m, 78n, 78o, 78p,
78q, 78s, 78u–5, 78w, 78x, 78ll, 78mm, 80a–
20, 80a–23, 80a–29, 80a–37, 80b–3, 80b–4,
80b–11, and 7201 et seq.; and 18 U.S.C. 1350,
unless otherwise noted.
*
*
*
*
*
24. Amend § 240.12b–25 by adding
paragraph (h) to read as follows:
■
§ 240.12b–25 Notification of inability to
timely file all or any required portion of a
Form 10–K, 20–F, 11–K, N–SAR, N–CSR,
10–Q, or 10–D.
*
*
*
*
*
(h) Interactive data submissions. The
provisions of this section shall not
apply to the submission or posting of an
Interactive Data File (§ 232.11 of this
chapter). Filers unable to submit or post
an Interactive Data File within the time
period prescribed should comply with
either Rule 201 or 202 of Regulation S–
T (§ 232.201 and § 232.202 of this
chapter).
■ 25. Amend § 240.13a–14 by revising
paragraph (f) to read as follows:
§ 240.13a–14 Certification of disclosure in
annual and quarterly reports.
*
*
*
*
*
(f) The certification requirements of
this section do not apply to:
E:\FR\FM\10FER3.SGM
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Note: The text of Form 10–K does not, and
this amendment will not, appear in the Code
of Federal Regulations.
(1) An Interactive Data File, as
defined in Rule 11 of Regulation S–T
(§ 232.11 of this chapter); or
(2) XBRL-Related Documents, as
defined in Rule 11 of Regulation S–T.
■ 26. Amend § 240.15d–14 by revising
paragraph (f) to read as follows:
§ 240.15d–14 Certification of disclosure in
annual and quarterly reports.
*
*
*
*
*
(f) The certification requirements of
this section do not apply to:
(1) An Interactive Data File, as
defined in Rule 11 of Regulation S–T
(§ 232.11 of this chapter); or
(2) XBRL-Related Documents, as
defined in Rule 11 of Regulation S–T.
PART 249—FORMS, SECURITIES
EXCHANGE ACT OF 1934
27. The authority citation for Part 249
continues to read in part as follows:
■
Authority: 15 U.S.C. 78a et seq. and 7201
et seq.; and 18 U.S.C. 1350, unless otherwise
noted.
*
*
*
*
*
■ 28. Amend Form 10–Q (referenced in
§ 249.308a) by adding a paragraph with
two check boxes to the cover page after
the paragraph with two check boxes that
starts ‘‘Indicate by check mark whether
the registrant (1) has filed all reports
required to be filed by Section 13 or
15(d) of the Securities Exchange Act of
1934 during the preceding 12 months
* * * ’’ to read as follows:
Note: The text of Form 10–Q does not, and
this amendment will not, appear in the Code
of Federal Regulations.
erowe on PROD1PC64 with RULES3
Form 10–Q
*
*
*
*
*
Indicate by check mark whether the
registrant has submitted electronically
and posted on its corporate Web site, if
any, every Interactive Data File required
to be submitted and posted pursuant to
Rule 405 of Regulation S–T (§ 232.405 of
this chapter) during the preceding 12
months (or for such shorter period that
the registrant was required to submit
and post such files).
Yes b
No b
*
*
*
*
*
■ 29. Amend Form 10–K (referenced in
§ 249.310) by adding a paragraph with
two check boxes to the cover page after
the paragraph with two check boxes that
starts ‘‘Indicate by check mark whether
the registrant (1) has filed all reports
required to be filed by Section 13 or
15(d) of the Securities Exchange Act of
1934 during the preceding 12 months
* * * ’’ to read as follows:
VerDate Nov<24>2008
15:23 Feb 09, 2009
Jkt 217001
6819
101. Interactive Data File. An
Interactive Data File (§ 232.11 of this
chapter) is:
(a) Required to be submitted and
Form 10–K
posted. Required to be submitted to the
*
*
*
*
*
Commission and posted on the
Indicate by check mark whether the
registrant’s corporate Web site, if any, in
registrant has submitted electronically
the manner provided by Rule 405 of
and posted on its corporate Web site, if
Regulation S–T (§ 232.405 of this
any, every Interactive Data File required chapter) if the Form 20–F is an annual
to be submitted and posted pursuant to
report and the registrant does not
Rule 405 of Regulation S–T (§ 232.405 of prepare its financial statements in
this chapter) during the preceding 12
accordance with Article 6 of Regulation
months (or for such shorter period that
S–X (17 CFR 210.6–01 et seq.) and is:
the registrant was required to submit
(i) A large accelerated filer (§ 240.12b–
and post such files).
2 of this chapter) that had an aggregate
Yes b
No b
worldwide market value of the voting
and non-voting common equity held by
*
*
*
*
*
non-affiliates of more than $5 billion as
■ 30. Amend Form 20–F (referenced in
of the last business day of the second
§ 249.220f) by:
fiscal quarter of its most recently
■ a. Adding a paragraph with two check
completed fiscal year that prepares its
boxes to the cover page after the
financial statements in accordance with
paragraph with two check boxes that
generally accepted accounting
starts ‘‘Indicate by check mark whether
principles as used in the United States
the registrant (1) has filed all reports
and the filing contains financial
required to be filed by Section 13 or
statements of the registrant for a fiscal
15(d) of the Securities Exchange Act of
period that ends on or after June 15,
1934 during the preceding 12 months
2009;
* * * ;’’ and
■ b. Revise paragraph 100 and add
(ii) A large accelerated filer not
paragraph 101 at the end of
specified in paragraph (a)(i) of this
‘‘Instructions as to Exhibits.’’
Instruction 101 that prepares its
The additions and revisions read as
financial statements in accordance with
follows:
generally accepted accounting
principles as used in the United States
Note: The text of Form 20–F does not, and
and the filing contains financial
this amendment will not, appear in the Code
of Federal Regulations.
statements of the registrant for a fiscal
period that ends on or after June 15,
Form 20–F
2010; or
(iii) A filer not specified in paragraph
*
*
*
*
*
(a)(i) or (a)(ii) of this Instruction 101 that
Indicate by check mark whether the
prepares its financial statements in
registrant has submitted electronically
accordance with either generally
and posted on its corporate Web site, if
any, every Interactive Data File required accepted accounting principles as used
in the United States or International
to be submitted and posted pursuant to
Rule 405 of Regulation S–T (§ 232.405 of Financial Reporting Standards as issued
by the International Accounting
this chapter) during the preceding 12
Standards Board, and the filing contains
months (or for such shorter period that
financial statements of the registrant for
the registrant was required to submit
a fiscal period that ends on or after June
and post such files).
15, 2011.
Yes b
No b
(b) Permitted to be submitted.
*
*
*
*
*
Permitted to be submitted to the
Instructions as to Exhibits
Commission in the manner provided by
Rule 405 of Regulation S–T (§ 232.405 of
*
*
*
*
*
100. XBRL-Related Documents. Only a this chapter) if the:
(i) Registrant prepares its financial
registrant that prepares its financial
statements in accordance with Article 6 statements:
(A) In accordance with either:
of Regulation S–X (17 CFR 210.6–01 et
(1) Generally accepted accounting
seq.) is permitted to participate in the
principles as used in the United States;
voluntary XBRL (eXtensible Business
or
Reporting Language) program and, as a
(2) International Financial Reporting
result, may submit XBRL-Related
Standards as issued by the International
Documents (§ 232.11 of this chapter).
Rule 401 of Regulation S–T (§ 232.401 of Accounting Standards Board; and
(B) Not in accordance with Article 6
this chapter) sets forth further details
regarding eligibility to participate in the of Regulation S–X (17 CFR 210.6–01 et
seq.); and
voluntary XBRL program.
PO 00000
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Federal Register / Vol. 74, No. 26 / Tuesday, February 10, 2009 / Rules and Regulations
(ii) Interactive Data File is not
required to be submitted to the
Commission under paragraph (a) of this
Instruction 101.
(c) Not permitted to be submitted. Not
permitted to be submitted to the
Commission if the registrant prepares its
financial statements in accordance with
Article 6 of Regulation S–X (17 CFR
210.6–01 et seq.).
*
*
*
*
*
■ 31. Amend Form 40–F (referenced in
§ 249.240f) by:
■ a. Adding a paragraph with two check
boxes to the cover page after the
paragraph with two check boxes that
starts ‘‘Indicate by check mark whether
the Registrant (1) has filed all reports
required to be filed by Section 13 or
15(d) of the Securities Exchange Act of
1934 during the preceding 12 months
* * *; ’’ and
■ b. Add paragraph B.(7) to the General
Instructions.
The additions read as follows:
Note: The text of Form 40–F does not, and
this amendment will not, appear in the Code
of Federal Regulations.
Form 40–F
*
*
*
*
*
Indicate by check mark whether the
registrant has submitted electronically
and posted on its corporate Web site, if
any, every Interactive Data File required
to be submitted and posted pursuant to
Rule 405 of Regulation S–T (§ 232.405 of
this chapter) during the preceding 12
months (or for such shorter period that
the Registrant was required to submit
and post such files).
Yes b No b
*
*
*
*
*
General Instructions
erowe on PROD1PC64 with RULES3
*
*
*
*
*
B. * * *
(7) An Interactive Data File (§ 232.11
of this chapter) is:
(a) Required to be submitted and
posted. Required to be submitted to the
Commission and posted on the
registrant’s corporate Web site, if any, in
the manner provided by Rule 405 of
Regulation S–T (§ 232.405 of this
chapter), and, as submitted, listed as
exhibit 101, if the Form 40–F is an
annual report and the registrant is does
not prepare its financial statements in
accordance with Article 6 of Regulation
S–X (17 CFR 210.6–01 et seq.) and is:
(i) A large accelerated filer (§ 240.12b–
2 of this chapter) that had an aggregate
worldwide market value of the voting
and non-voting common equity held by
non-affiliates of more than $5 billion as
of the last business day of the second
fiscal quarter of its most recently
VerDate Nov<24>2008
15:23 Feb 09, 2009
Jkt 217001
completed fiscal year that prepares its
financial statements in accordance with
generally accepted accounting
principles as used in the United States
and the filing contains financial
statements of the registrant for a fiscal
period that ends on or after June 15,
2009;
(ii) A large accelerated filer not
specified in paragraph (a)(i) of this
Instruction 7 that prepares its financial
statements in accordance with generally
accepted accounting principles as used
in the United States and the filing
contains financial statements of the
registrant for a fiscal period that ends on
or after June 15, 2010; or
(iii) A filer not specified in paragraph
(a)(i) or (a)(ii) of this Instruction 7 that
prepares its financial statements in
accordance with either generally
accepted accounting principles as used
in the United States or International
Financial Reporting Standards as issued
by the International Accounting
Standards Board, and the filing contains
financial statements of the registrant for
a fiscal period that ends on or after June
15, 2011.
(b) Permitted to be submitted.
Permitted to be submitted to the
Commission in the manner provided by
Rule 405 of Regulation S–T (§ 232.405 of
this chapter) if the registrant lists it as
exhibit 101 and the:
(i) Registrant prepares its financial
statements:
(A) In accordance with either:
(1) Generally accepted accounting
principles as used in the United States;
or
(2) International Financial Reporting
Standards as issued by the International
Accounting Standards Board; and
(B) Not in accordance with Article 6
of Regulation S–X (17 CFR 210.6–01 et
seq.); and
(ii) Interactive Data File is not
required to be submitted to the
Commission under paragraph (a) of this
Instruction 7.
(c) Not permitted to be submitted. Not
permitted to be submitted to the
Commission if the registrant prepares its
financial statements in accordance with
Article 6 of Regulation S–X (17 CFR
210.6–01 et seq.).
*
*
*
*
*
■ 32. Amend Form 6–K (referenced in
§ 249.306) by revising paragraph (5) and
paragraph (6) to General Instruction C to
read as follows:
Note: The text of Form 6–K does not, and
this amendment will not, appear in the Code
of Federal Regulations.
Form 6–K
*
PO 00000
*
*
Frm 00046
*
Fmt 4701
*
Sfmt 4700
General Instructions
*
*
*
*
*
C. * * *
(5) XBRL-Related Documents. Only a
registrant that prepares its financial
statements in accordance with Article 6
of Regulation S–X (17 CFR 210.6–01 et
seq.) is permitted to participate in the
voluntary XBRL (eXtensible Business
Reporting Language) program and, as a
result, may submit XBRL-Related
Documents (§ 232.11 of this chapter).
XBRL-Related Documents submitted as
an exhibit to a Form 6–K must be listed
as exhibit 100. Rule 401 of Regulation
S–T (§ 232.401 of this chapter) sets forth
further details regarding eligibility to
participate in the voluntary XBRL
program.
(6) Interactive Data File. An
Interactive Data File (§ 232.11 of this
chapter) is:
(a) Required to be submitted and
posted. Required to be submitted to the
Commission and posted on the
registrant’s corporate Web site, if any, in
the manner provided by Rule 405 of
Regulation S–T (§ 232.405 of this
chapter) and, as submitted, listed as
exhibit 101, if the registrant does not
prepare its financial statements in
accordance with Article 6 of Regulation
S–X (17 CFR 210.6–01 et seq.) and is
described in paragraph (a)(i), (ii) or (iii)
of this Instruction (6), except that an
Interactive Data File: first is required for
a periodic report on Form 10–Q
(§ 249.308a of this chapter), Form 20–F
(§ 249.220f of this chapter) or Form 40–
F (§ 249.240f of this chapter), as
applicable; and is required for a Form
6–K (§ 249.306 of this chapter) only
when the Form 6–K contains either of
the following: audited annual financial
statements that are a revised version of
financial statements that previously
were filed with the Commission that
have been revised pursuant to
applicable accounting standards to
reflect the effects of certain subsequent
events, including a discontinued
operation, a change in reportable
segments or a change in accounting
principle; or current interim financial
statements included pursuant to the
nine-month updating requirement of
Item 8.A.5 of Form 20–F, and, in either
such case, the Interactive Data File
would be required only as to such
revised financial statements current
interim financial statements regardless
whether the Form 6–K contains other
financial statements:
(i) A large accelerated filer (§ 240.12b–
2 of this chapter) that had an aggregate
worldwide market value of the voting
and non-voting common equity held by
non-affiliates of more than $5 billion as
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of the last business day of the second
fiscal quarter of its most recently
completed fiscal year that prepares its
financial statements in accordance with
generally accepted accounting
principles as used in the United States
and the filing contains financial
statements of the registrant for a fiscal
period that ends on or after June 15,
2009;
(ii) A large accelerated filer not
specified in paragraph (a)(i) of this
Instruction (6) that prepares its financial
statements in accordance with generally
accepted accounting principles as used
in the United States and the filing
contains financial statements of the
registrant for a fiscal period that ends on
or after June 15, 2010; or
(iii) A filer not specified in paragraph
(a)(i) or (ii) of this Instruction (6) that
prepares its financial statements in
accordance with either generally
accepted accounting principles as used
in the United States or International
Financial Reporting Standards as issued
by the International Accounting
Standards Board, and the filing contains
financial statements of the registrant for
a fiscal period that ends on or after June
15, 2011.
(b) Permitted to be submitted.
Permitted to be submitted to the
Commission in the manner provided by
Rule 405 of Regulation S–T (§ 232.405 of
this chapter) if the:
VerDate Nov<24>2008
15:23 Feb 09, 2009
Jkt 217001
(i) Registrant prepares its financial
statements:
(A) In accordance with either:
(1) Generally accepted accounting
principles as used in the United States;
or
(2) International Financial Reporting
Standards as issued by the International
Accounting Standards Board; and
(B) Not in accordance with Article 6
of Regulation S–X (17 CFR 210.6–01 et
seq.); and
(ii) Interactive Data File is not
required to be submitted to the
Commission under paragraph (a)(i) of
this Instruction (6).
(iii) Not permitted to be submitted.
Not permitted to be submitted to the
Commission if the registrant prepares its
financial statements in accordance with
Article 6 of Regulation S–X (17 CFR
210.6–01 et seq.).
*
*
*
*
*
■ 33. Amend § 249.322 by adding
paragraph (c) to read as follows:
§ 249.322
filing.
Form 12b–25–Notification of late
*
*
*
*
*
(c) Interactive data submissions. This
form shall not be used by electronic
filers with respect to the submission or
posting of an Interactive Data File
(§ 232.11 of this chapter). Electronic
filers unable to submit or post an
Interactive Data File within the time
period prescribed should comply with
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Fmt 4701
Sfmt 4700
6821
either Rule 201 or 202 of Regulation
S–T (§ 232.201 and § 232.202 of this
chapter).
34. Amend Form 12b–25 (referenced
in § 249.322) by adding paragraph 6 to
the General Instructions to read as
follows:
■
Note: The text of Form 12b–25 does not
and this amendment will not appear in the
Code of Federal Regulations.
Form 12b–25
*
*
*
*
*
General Instructions
*
*
*
*
*
6. Interactive data submissions. This
form shall not be used by electronic
filers with respect to the submission or
posting of an Interactive Data File
(§ 232.11 of this chapter). Electronic
filers unable to submit or post an
Interactive Data File within the time
period prescribed should comply with
either Rule 201 or 202 of Regulation
S–T (§ 232.201 and § 232.202 of this
chapter).
*
*
*
*
*
By the Commission.
Dated: January 30, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–2334 Filed 2–9–09; 8:45 am]
BILLING CODE 8011–01–P
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]]>Agencies
[Federal Register Volume 74, Number 26 (Tuesday, February 10, 2009)]
[Rules and Regulations]
[Pages 6776-6821]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-2334]
[[Page 6775]]
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Part III
Securities and Exchange Commission
-----------------------------------------------------------------------
17 CFR Parts 229, 230, et al.
Interactive Data To Improve Financial Reporting; Final Rule
Federal Register / Vol. 74, No. 26 / Tuesday, February 10, 2009 /
Rules and Regulations
[[Page 6776]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 229, 230, 232, 239, 240, and 249
[Release Nos. 33-9002; 34-59324; 39-2461; IC-28609; File No. S7-11-08]
RIN 3235-AJ71
Interactive Data To Improve Financial Reporting
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
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.
DATES: Effective Date: April 13, 2009 except Sec. 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.
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\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.
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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.
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\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 https://www.sec.gov/comments/s7-11-08/s71108.shtml or
from our Public Reference Room at 100 F Street, NE., Washington, DC
20549.
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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.
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\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].
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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
[[Page 6777]]
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.
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\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].
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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\
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\35\ Press Release No. 2008-179 (Aug. 19, 2008).
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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.
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\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].
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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.
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\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.
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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.
[[Page 6778]]
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\
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\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).
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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.
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\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.
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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\
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\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 ``interactive data
file,'' which will be required with every interactive data
submission. See Sec. 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.
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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.
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\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.
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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
[[Page 6779]]
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.
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\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
https://www.iasb.org/xbrl/. 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.
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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\
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\56\ Press Release No. 2004-97 (July 22, 2004).
\57\ A viewer for the voluntary program is available at https://
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.
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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\
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\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 https://www.xbrl.org/us/us/
FFIEC%20White%20Paper%2002Feb2006.pdf.
\61\ See XBRL International Progress Report (November 2007),
available at https://www.xbrl.org/ProgressReports/2007_11_XBRL_
Progress_Report.pdf.
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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.
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\62\ See materials available at https://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 https://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 https://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 https://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
https://sec.gov/comments/265-24/265-24.shtml.
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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
[[Page 6780]]
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.
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\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.
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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 to consolidate enterprise
financial information more quickly and potentially more reliably across
operating units with different accounting systems. However, we
recognize that at the outset, filers will most likely prepare their
interactive data as an additional step after their financial statements
have been prepared.
D. Summary of Adopted Amendments
The principal elements of the new rules are as follows:
Domestic and foreign large accelerated filers \70\ that
use U.S. GAAP and have a worldwide public common equity float above $5
billion \71\ as of the end of the second fiscal quarter of their most
recently completed fiscal year \72\ will provide to the Commission a
new exhibit.\73\ The exhibit will be required with such filers'
Securities Act registration statements, quarterly, if applicable, and
annual reports, and transition reports, as well as reports on Form 8-K
or Form 6-K that contain revised or updated financial statements.\74\
The exhibit will contain the financial statements \75\ and any
applicable financial statement schedules in interactive data format.
The requirement will apply beginning with a periodic report on Form 10-
Q, Form 20-F or Form 40-F containing financial statements for a fiscal
period ending on or after June 15, 2009.
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\70\ Exchange Act Rule 12b-2 [17 CFR 240.12b-2] generally
defines ``large accelerated filer'' as an issuer that has common
equity held by unaffiliated persons with a value of at least $700
million, has been subject to the Exchange Act's periodic reporting
requirements for at least 12 months, has filed at least one annual
report, and is not eligible to use the disclosure requirements
available to smaller reporting companies for its periodic reports.
\71\ The $5 billion cutoff will establish a category of
approximately 500 filers that will be subject to the interactive
data requirements in the first year.
\72\ The proposing release at n. 89 stated our intention that
the float measurement date be consistent with the measurement date
for determining large accelerated filer status. Throughout the
proposing release, however, we inadvertently characterized the
measurement date as the end of the most recently completed second
fiscal quarter rather than the end of the second fiscal quarter of
the most recently completed fiscal year. We now characterize the
measurement date in the latter manner to conform it to our stated
intention.
\73\ Interactive data will be required as an exhibit to a
Securities Act registration statement that contains financial
statements, such as a Form S-1 [17 CFR 239.11], but not required in
connection with an initial public offering. Interactive data will
not be required as an exhibit to a Securities Act registration
statement that does not contain financial statements, such as a Form
S-3 or other form filed by an issuer that is eligible to and does
incorporate by reference all required financial statements from its
periodic reports. Also, interactive data will not be required as an
exhibit to an Exchange Act registration statement.
\74\ In connection with registration statements where historical
financial statements are incorporated by reference, issuers often
file under cover of Form 8-K or 6-K their revised audited annual
financial statements when their previously filed annual financial
statements are required to be revised, pursuant to applicable
accounting standards, to reflect the effects of certain subsequent
events, including a discontinued operation, a change in reportable
segments, or a change in accounting principle. Also, foreign private
issuers occasionally may file current interim financial statements
pursuant to the nine-month updating requirement of Item 8.A.5 of
Form 20-F under cover of Form 6-K which are incorporated by
reference into a registration statement. In these circumstances, the
interactive data exhibit will be required to be included in the Form
8-K or 6-K to accompany the traditional format financial statements
to which they relate. Interactive data exhibits related to financial
statements that have been restated to correct an accounting error
will be required to be included in any amended registration
statement or periodic report or transition report that contains the
restated traditional format financial statements. The requirement to
submit restated financial statements in interactive data format in
such an instance would depend on whether the original filing
contained financial statements for fiscal periods regarding which
the filer was subject to the interactive data requirements. For
instance, for those filers in the first phase-in period, the
financial statements being restated would only have to be submitted
in interactive data format if they were originally for fiscal
periods ending on or after June 15, 2009.
\75\ When we refer to financial statements, we mean the face of
the financial statements and accompanying footnotes. The face of the
financial statements refers to the statement of financial position
(balance sheet), income statement, statement of comprehensive
income, statement of cash flows, and statement of owners' equity, as
required by Commission regulations. References to the financial
statements as required for interactive data reporting include any
required schedules to the financial statements, unless we expressly
state otherwise.
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All other domestic and foreign large accelerated filers
using U.S. GAAP will be subject to the same interactive data reporting
requirements the following year, beginning with a periodic report on
Form 10-Q, Form 20-F or Form 40-F containing financial statements for a
fiscal period ending on or after June 15, 2010.
All remaining filers using U.S. GAAP, including smaller
reporting companies,\76\ and all foreign private issuers that prepare
their financial statements in accordance with IFRS as issued by the
IASB,\77\ will be subject to the same interactive data reporting
requirements beginning with a periodic report on Form 10-Q, Form 20-F
or Form 40-F containing financial statements for a fiscal period ending
on or after June 15, 2011.
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\76\ Item 10(f)(1) of Regulation S-K [17 CFR 229.10(f)(1)], Rule
405 under the Securities Act [17 CFR 230.405] and Rule 12b-2 under
the Exchange Act [17 CFR 240.12b-2] define the term ``smaller
reporting company,'' in general, as a company that has common equity
securities held by non-affiliates with a market value of less than
$75 million or, if that value cannot be calculated, had less than
$50 million in revenue in the prior fiscal year.
\77\ The amendments will not require or permit foreign private
issuers that prepare their financial statements in accordance with a
variation of IFRS as issued by the IASB to provide interactive data.
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Filers that first become subject to the requirement to
submit interactive data after year three (i.e., companies that become
subject to our reporting requirements after the phase-in is complete),
will first be required to
[[Page 6781]]
submit an interactive data file for their first periodic report on Form
10-Q or first annual report on Form 20-F or Form 40-F, as applicable.
The amendments will not alter the requirements to provide
financial statements and any required financial statement schedules
with the traditional format filings.
Financial statements in interactive data format will be
provided as exhibits identified in Item 601(b) of Regulation S-K and
Forms F-9, F-10, 20-F, 6-K and 40-F.\78\
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\78\ The adopted interactive data requirements would not apply
to asset-backed filings because issuer financial statements are
generally not required or provided in filings made pursuant to
Regulation AB (17 CFR 229.1100 et seq.).
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Financial statement footnotes and financial statement
schedules initially will be tagged individually as a block of text.
After a year of such tagging, a filer also will be required to tag the
detailed quantitative disclosures within the footnotes and schedules
and will be permitted, but not required, to the extent they choose, to
tag each narrative disclosure.
The amendments will require the financial information and
document and entity identifier elements, such as the form type, company
name, and public float, to be tagged according to Regulation S-T and
the EDGAR Filer Manual.\79\
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\79\ New Rule 405 of Regulation S-T will directly set forth the
basic tagging requirements and indirectly set forth the rest of the
tagging requirements through the requirement to comply with the
EDGAR Filer Manual. Consistent with new Rule 405, the Filer Manual
will contain the technical tagging requirements.
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Interactive data exhibits will be required at the same
time as the rest of the related report or Securities Act registration
statement, except for the following two circumstances. The initial
interactive data exhibit of a filer will be required within 30 days
after the earlier of the due date or filing date of the related report
or registration statement, as applicable. In year two, a filer will
have a similar 30 day grace period for its first interactive data
exhibit that includes detailed tagging of its footnotes and schedules.
A filer required to provide financial statements in
interactive data format to the Commission also will be required to post
those financial statements in interactive data format on its corporate
Web site not later than the end of the calendar day it filed or was
required to file the related registration statement or report with the
Commission, whichever is earlier.\80\
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\80\ The day the registration statement or report is submitted
electronically to the Commission may not be the business day on
which it was deemed officially filed. For example, a filing
submitted after 5:30 p.m. generally is not deemed officially filed
until the following business day. Under the new rules, the Web
posting will be required at any time on the same calendar day that
the related registration statement or report is deemed officially
filed or required to be filed, whichever is earlier.
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Filers that do not provide or post required interactive
data on the date required will be deemed not current with their
Exchange Act reports and, as a result, will not be eligible to use the
short Form S-3, F-3, or S-8, or elect under Form S-4 or F-4 to provide
information at a level prescribed by Form S-3 or F-3. Similarly, such
filers will not be deemed to have available adequate current public
information for purposes of the resale exemption safe harbor provided
by Rule 144.\81\ A filer that is deemed not current solely as a result
of not providing or posting an interactive data exhibit when required
will be deemed current upon providing or posting the interactive data.
Therefore it will regain current status for purposes of short form
registration statement eligibility, and determining adequate current
public information under Rule 144. As such, it will not lose its status
as having ``timely'' filed its Exchange Act reports solely as a result
of the delay in providing interactive data.\82\
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\81\ 17 CFR 230.144.
\82\ Filers that do not provide or post required interactive
data on the date required with respect to a Securities Act filing
will be deemed not current with their Exchange Act reports.
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Companies that are not required to provide interactive
data until a later time will have the option to do so earlier and may
provide interactive data at their discretion until required by the
amendments. Such a company may also tag footnotes individually as a
block of text until required to tag the detailed quantitative
disclosures within the footnotes and schedules, but otherwise must
follow the same requirements as those mandated and can only use a grace
period for its initial submission and the initial detail-tagged-
footnote submission, whether submitted voluntarily or as required by
the amendments.
Companies may cease voluntary submissions at any time and
need not tag their financial data at a pace other than at which the
rules otherwise would require.
The voluntary program rules will be modified to permit
investment companies to participate, but to exclude non-investment
company participation. As a result, the voluntary program will continue
for the financial statements of investment companies that are
registered under the Investment Company Act, and business development
companies and other entities that report under the Exchange Act and
prepare their financial statements in accordance with Article 6 of
Regulation S-X.\83\
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\83\ On December 17, 2008, the Commission voted to adopt rules
requiring interactive data for the risk/return summary section of
mutual fund prospectuses. See Press Release No. 2008-300 (December
18, 2008). See also Release No. 33-8929 (June 10, 2008) [73 FR
35442] (mutual fund proposing release).
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An interactive data file generally will be subject to the
federal securities laws in a modified manner similar to that of the
voluntary program if the filer submits the interactive data file within
24 months of the time the filer first is required to submit interactive
data files but no later than October 31, 2014. During the time a
filer's interactive data files are treated in this modified manner,
they will be
[cir] Deemed not filed for purposes of specified liability
provisions; and
[cir] Protected from liability for failure to comply with the
tagging requirements if the interactive data file failed to meet those
requirements but the failure occurred despite the filer's good faith
effort and the filer corrected the failure promptly after becoming
aware of it.\84\
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\84\ Although the interactive data formatted version of the
financial statements will be provided in a separate exhibit and
subject to modified liability during the specified period, the
financial statements themselves will, of course, continue to be part
of the registration statement or report and therefore subject to the
full panoply of the federal securities laws, including, without
limitation, Sections 11, 12(a)(2) and 17 of the Securities Act and
Sections 10(b), 13 and 18 of the Exchange Act.
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Also similar to the voluntary program, interactive data
files will be excluded from the officer certification requirements
under Rules 13a-14 and 15d-14 of the Exchange Act.
The principal changes from the proposing release include:
Modified treatment of liability for the interactive data
files under the federal securities laws only will be available for
interactive data files that a filer submits within 24 months of the
time the filer first is required to submit interactive data files and
no later than October 31, 2014.
The phase-in schedule has been changed from the proposal.
The filers that will be phased in during year one will first be
required to submit an interactive data file for a periodic report on
Form 10-Q, Form 20-F or Form 40-F containing financial statements for a
fiscal period ended on or after June 15, 2009. Filers that are phased
in during years two and three will be treated in a similar manner.
Filers that first become subject to the requirement to submit
interactive data after year three will first be required to submit an
interactive data
[[Page 6782]]
file for a quarterly report on Form 10-Q or annual report on Form 20-F
or Form 40-F, as applicable.
The amendments will require that interactive data be
submitted with a Securities Act registration statement filing only
after a price or price range has been determined and any later time
when the financial statements are changed, rather than requiring
interactive data submissions with each filing.
The amendments will require companies to submit
interactive data for financial statements contained in additional
forms--Securities Act registration statements on Forms F-9 and F-10 and
periodic reports on Forms 40-F \85\ as well as reports on Forms 8-K and
Form 6-K that contain revised or updated financial statements.\86\
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\85\ Similar to Form 20-F, Form 40-F may be used either as a
periodic report or a registration statement under the Exchange Act.
As adopted, the amendments will require interactive data for Form
40-F only when used as a periodic report.
\86\ See note 74 above.
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The timing of the required Web site posting has been
eased. A filer must post the interactive data exhibit on its corporate
Web site not later than the end of the calendar day it submitted or was
required to submit the interactive data exhibit, whichever is earlier.
As proposed, Web site posting would have been required by the end of
the business rather than calendar day.
Interactive data will be required to be posted for at
least 12 months on an issuer's Web site. The proposing release did not
specify this, but commenters requested clarification.
While the amendments will require filers to tag separately
each amount within a footnote or schedule (i.e., monetary value,
percentage, and number), the rules will permit, but not require, filers
to tag, to the extent they choose, each narrative disclosure.
We intend to monitor implementation and, if necessary, make
appropriate adjustments to the adopted amendments.
II. Discussion of Amendments
A. Submission of Financial Information Using Interactive Data
For several years XBRL U.S. and its related entities, in
consultation with the Commission staff and FASB staff, have developed
and refined the list of tags to classify and define financial
information in accordance with U.S. financial reporting practices and
Commission regulations.\87\ Many investors, accountants, and others,
including companies that have been providing interactive data
disclosure in the voluntary program, have helped in this process.
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\87\ Press Release No. 2006-158 (Sept. 25, 2006).
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Interactive data financial statements using the list of tags for
U.S. financial statement reporting have been submitted voluntarily to
us by over 100 companies, some of which have done so since the start of
the voluntary program. The list of tags for U.S. financial statement
reporting has expanded significantly since the original version
available for the voluntary program.\88\ During this period, there has
been a continuous increase in both the number and capabilities of
software products and applications for users of interactive data, as
well as of the services to assist companies to tag their financial
statements using interactive data.\89\ The growing number of software
applications available to preparers and consumers is helping make
interactive data increasingly useful to both institutional and retail
investors, as well as to other participants in the U.S. and global
capital markets. On this basis, we believe interactive data, and in
particular the XBRL standard, is growing and that the updated list of
tags for U.S. financial statement reporting is now sufficiently
comprehensive to require that U.S. GAAP-reporting companies provide
their financial statements in interactive data format using XBRL.\90\
We anticipate that there will be a further update of this list of tags
in February 2009 but that the newer tags will not differ significantly
from the old list and that any update would not pose an additional
burden to the tagging process.
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\88\ When we adopted the voluntary program, the list of tags for
U.S. GAAP financial statement reporting contained approximately
4,000 data elements. The list of tags released on April 28, 2008
contains approximately 13,000 data elements, with the most
significant additions relating to the development of elements for
standard U.S. GAAP footnote disclosure.
\89\ Press Release No. 2007-253 (Dec. 5, 2007).
\90\ As previously noted, however, the new rules will not apply
to investment companies registered under the Investment Company Act
and other entities.
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With respect to the list of tags for IFRS financial reporting, the
IASCF has, over several years, developed a list of tags designed to
classify and define financial information in accordance with
international accounting standards as issued by the IASB. Over the
course of the past year, the IASCF has worked to strengthen the
development of its list of tags by forming an XBRL Advisory Committee
and an XBRL Quality Reporting Team, both consisting of international
representatives from investors, auditors, accountants, regulators and
others. On March 31, 2008, the IASCF published a near final version of
the list of tags for IFRS financial reporting,\91\ which was subject to
public comment through May 30, 2008.\92\ On June 24, 2008, the IASCF
published the final version.\93\ In addition, the IASCF is
collaborating with XBRL U.S., other foreign regulators, accounting
industry members, analyst/investor groups, XBRL technology/software
service providers, and others to align practices designed to improve
and broaden the IFRS list of tags. This collaboration involves the
development of the appropriate scope for the IFRS list of tags' content
and technology architecture. On this basis, we believe that the updated
IFRS list of tags will be sufficiently advanced to require that foreign
private issuers that prepare their financial statements in accordance
with IFRS as issued by the IASB provide their financial statements in
interactive data format under the phase-in schedule we are adopting.
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\91\ Unless stated otherwise, when we refer to the ``list of
tags for IFRS financial reporting'' we mean the interactive data
taxonomy that is based on IFRS as issued by the IASB.
\92\ See Press Release, The IASC Foundation publishes IFRS
Taxonomy 2008 (March 31, 2008), available at https://www.iasb.org/
News/Press+Releases/
The+IASC+Foundation+publishes+IFRS+Taxonomy+2008.htm.
\93\ See Press Release, The IASC Foundation publishes IFRS
Taxonomy 2008 (June 24, 2008), available at https://www.iasb.org/
News/Press+Releases/
IASC+Foundation+publishes+IFRS+Taxonomy+2008.htm.
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As discussed in more detail below, the new rules set forth a phase-
in period that begins with domestic and foreign large accelerated U.S.
GAAP filers with a worldwide public common equity float above $5
billion as of the end of the second fiscal quarter of their most
recently completed fiscal year. These large accelerated filers will be
subject to the new rules beginning with their first quarterly report on
Form 10-Q, or annual report on Form 20-F or Form 40-F, that contains
financial statements for fiscal periods ending on or after June 15,
2009. Although it will not be required, we encourage other U.S. GAAP
filers to provide financial information in interactive data format
during the phase-in period. In such an instance, these filers'
voluntary interactive data submissions will be under the rules as
adopted instead of the existing rules of the voluntary program. We also
encourage foreign private issuers that prepare their financial
statements in accordance with IFRS as issued by the IASB to provide
financial information in interactive data format once EDGAR will accept
such
[[Page 6783]]
filings.\94\ Prior to this time, such foreign private issuers will be
unable to submit financial information in interactive data format.
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\94\ Pursuant to the EDGAR Filer Manual, we will notify filers
of the ability to file in IFRS on our Web site.
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The new rules will require filers to provide the sam
