In a final year-end push, the Securities and Exchange Commission voted 4-1 Wednesday to require mutual funds and the top 500 largest public companies to begin filing financial reports using eXtensible Business Reporting Language (XBRL).
Funds will be required to file risk and return information using XBRL by Jan. 1, 2011, giving funds plenty of time to prepare for the transition, and top companies will be required to use XBRL by mid-2009.
Todays rules represent a giant step in the SECs achieving its full disclosure mission, said SEC Chairman Christopher Cox. Nothing could serve the SECs mandate better than to provide investors with the information they need rather than just the forms on which to try to find it.
Cox said XBRL will replace todays time-consuming and error-prone work, freeing investors from the drudgery of manually manipulating the data to allow more time to make more thoughtful investment decisions.
Commissioner Luis Aguilar voted against both data-tagging rules because companies wont be liable for errors in data-tagged information during the phase-in of the program; they will only be liable for fraudulent information.
Putting the burden on the investor for an issuers negligence is unacceptable, Aguilar said. In these times of market turmoil, investors need to know that the SEC is looking out for them.