Update: I’m convinced the FT is wrong on this story. The lack of any corroborating coverage from other media and an email exchange with someone who would know if it was true, confirm my suspicions on this. It will happen one day, just not as soon as the FT thinks.
THE Financial Times is reporting that U.S. Securities and Exchange Commission (SEC) Chairman Christopher Cox said Thursday that the agency is drafting a new rule that will require all companies to use extensible business reporting language (XBRL) in their filings.
If this is accurate, it marks a major departure from what the SEC has been saying to date, which is that they want to test XBRL first and have no plans to make it mandatory in the near future.
Cox spoke yesterday at the the Investment Company Institute’s annual conference in Washington, DC, after which he held a media conference. None of the other media covering the event mentioned the coming rule, but then most of them were focused on mutual fund issues rather than corporate matters.
The FT’s report is emphatic:
The US Securities and Exchange Commission is to formalise a new rule that aims to improve and simplify the way investors receive financial information on stocks, bonds and mutual funds.
Christopher Cox, SEC chairman, said on Thursday the rule would require all companies to report financial information in XBRL, or “extensible business reporting language”.
That’s about as clear as you can get. No timing for when to expect this new rule is mentioned in the article.
If true, this development is great news for investors, but something of a shock for public companies. Most haven’t been paying much attention to technology developments in securities disclosure. Currently, just over 30 companies are participating in the SEC’s XBRL pilot program, an indication of the lack of interest in the technology from the corporate community.