The Securities and Exchange Commission today voted unanimously to formally propose using new technology to get important information to investors faster, more reliably, and at a lower cost.
At the center of the SEC proposal is “interactive data” – computer “tags” similar in function to bar codes used to identify groceries and shipped packages. The interactive data tags uniquely identify individual items in a company’s financial statement so they can be easily searched on the Internet, downloaded into spreadsheets, reorganized in databases, and put to any number of other comparative and analytical uses by investors, analysts, and journalists.
The proposed rule would require all US companies to provide financial information using interactive data beginning next year for the largest companies, and within three years for all public companies.
“This is all about bringing investors better, faster, more meaningful information about the companies they own,” says SEC Chairman Christopher Cox. “It would transform financial disclosure from a 1930s form-based system to a truly 21st century model that taps the power of technology for the benefit of investors.”
John White, Director of the SEC’s Division of Corporation Finance, says, “These steps will represent real progress, both for SEC filers and investors. All of the technology is coming together to make electronic filing a true analytical tool. The staff has gathered valuable experience during the almost three years that public companies have been submitting interactive data in our voluntary filer program. This helps give us a strong foundation for moving forward.”