SEC to Spend $54 Million to Revamp EDGAR

The EDGAR system is about to get a makeover. 

Securities and Exchange Commission  Chairman Christopher Cox announced a $54 million initiative to take the 1980's-era system into the interactive age. The SEC has contracted with three companies, each to undertake a different segment of the overhaul.

To date, the SEC has not required companies to file reports tagged and ready for Extensible Business Reporting Language (XBRL), although Cox emphasized the agency's commitment to that goal for the future. 

"The new system will make it easier both to file information with the Commission, and to use it," Cox said. "For investors and analysts, it will represent a quantum leap over existing disclosure technologies. For companies it will mean easier and less costly compliance with SEC requirements.

Already 8,200 financial institutions have used XBRL to submit reports to U.S. banking regulators, according to the SEC.  The FDIC, Federal Reserve and Comptroller of the Currency already require it.

Cox has said that he wants the mutual fund industry to help serve as the program's pioneers, providing access to historical performance, fees and expenses and risks with a single click.

"These steps represent significant progress toward harnessing the potential of the Internet for the benefit of all," said Paul Schott Stevens, president of the Investment Company Institute in Washington, D.C.

The three contracts award include a $48 million agreement with Keane Federal Systems in McLean, Va., which calls for the company to develop software and forms appropriate for a more modern EDGAR system. The three-year contract, which can be extended for an additional three years, calls for Keane to maintain continuity with the existing system.

The second contract, worth $5.5 million, dedicated to developing universal taxonomies for financial companies to use when filing has been awarded to XBRL US. The long awaited labels are to be completed in one year.

The final, $500,000 portion of  the money will go toward separate contracts with Rivet Software and Wall Street on Demand, who will develop investor tools to be included on the SEC website, and streamline searches for investors.

"Like Chairman Cox, we believe the Internet can empower investors by providing disclosure that is as useful as it is complete," Stevens said.

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