Overview
Title
Proposed Collection; Comment Request; Extension: Interactive Data
Agencies
ELI5 AI
The Securities and Exchange Commission (SEC) wants to hear what people think about a rule where companies have to share their money information in a special computer language called XBRL so that everyone can easily understand it; they expect to hear from lots of companies by May 27, 2025.
Summary AI
The Securities and Exchange Commission (SEC) is asking for public comments on an information collection regarding "Interactive Data" under both the Securities Act of 1933 and the Securities Exchange Act of 1934. This data collection requires companies to submit financial data in the XBRL format to make it easier for investors to analyze the information. The SEC estimates that around 8,218 companies will submit an average of 4.5 responses each year, totaling approximately 36,981 submissions annually. Public comments on this initiative are welcome until May 27, 2025.
Keywords AI
Sources
AnalysisAI
The document in question is a public notice issued by the Securities and Exchange Commission (SEC) regarding their request for comments on the extension of an existing information collection — known as "Interactive Data" — under the Securities Act of 1933 and the Securities Exchange Act of 1934. This collection involves companies submitting financial data in the XBRL format, designed to facilitate easier analysis by investors and help companies with regulatory filings.
General Summary
The SEC is soliciting public input on whether the Interactive Data collection continues to be necessary for the agency's work and how the process can be improved. The collection requires that financial information of companies, primarily those filing under the Securities and Exchange Acts, be submitted in an interactive data format. This aims to enhance the ability of investors to analyze financial data. The SEC expects 8,218 companies to make around 36,981 cumulative submissions each year. Public feedback on the usefulness and impact of this data collection is invited until May 27, 2025.
Significant Issues and Concerns
There are several key issues noteworthy in this document:
Clarity and Accessibility: The use of technical terms such as "eXtensible Business Reporting Language (XBRL)" and "Regulation S-T" without lay explanations could confuse those not familiar with financial or legal jargon. Simplifying or briefly explaining such terms could make the document more accessible to a wider audience.
Precision in Time Estimates: The estimation of an internal burden of 53.11111 hours per response appears overly precise, which could be seen as implausible by stakeholders. A more rounded estimate might provide a clearer picture to the public.
Objectives and Outcomes: The notice does not provide information on previous feedback or improvements made as a result of past comments on this process. Stakeholders might find it beneficial to learn how public input has shaped the process over time.
Lack of Summary: A succinct abstract or summary might help readers quickly grasp the purpose and key points of the notice.
Guidance on Comments: The section inviting comments could be more detailed in guiding how individuals can assess issues like 'practical utility' or 'clarity enhancement'. Providing examples would make it easier for stakeholders to engage meaningfully.
Impact on the Public
Broadly, this document impacts the public by aiming to facilitate better investor access to financial information. The push for interactive data is intended to make it easier for investors, including individual ones, to analyze complex financial reports using readily available software tools. This could empower investors to make more informed decisions.
Impact on Specific Stakeholders
Companies and Issuers: Companies obliged to submit data in XBRL format may benefit from automation in regulatory processes, potentially reducing manual labor and errors in financial reporting. However, navigating these requirements could also incur additional costs or necessitate technical expertise.
Investors and Analysts: These groups stand to gain significantly as interactive data makes it simpler to manipulate and understand financial disclosures. This transparency could lead to more informed investment decisions and a more level playing field among different kinds of investors.
Regulatory Bodies: For the SEC, receiving data in a standardized, interactive format may streamline their data handling processes and oversight activities. However, ensuring data quality across numerous submissions could be challenging.
In conclusion, while the initiative reflects a broader trend towards digital transformation and data automation in financial reporting, the document could benefit from enhanced accessibility and transparency to foster greater understanding and participation from the public.
Issues
• The notice does not provide a clear indication of whether there was previous feedback or outcomes from prior comments on the collection of information which could inform stakeholders about the progress or changes made.
• The estimation of an internal burden of 53.11111 hours per response seems excessively precise, which may appear implausible and could potentially confuse stakeholders.
• The document lacks an abstract or summary, which might aid readers in quickly understanding the key points or purpose of the notice.
• There might be a lack of clarity for some readers regarding the meaning and implications of terms such as 'eXtensible Business Reporting Language (XBRL)' and 'Regulation S-T', which are not explained in layman's terms.
• The document could benefit from simplifying complex legal and technical references (e.g., multiple CFR citations), which may be difficult for non-specialist stakeholders to understand.
• The section inviting written comments could be more specific about how commenters can assess whether the collection of information has 'practical utility' or 'enhances clarity', providing examples might be helpful.
• There is no mention of any budget or cost analysis, which might help in assessing potential wasteful spending or financial implications.