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From Securities Regulation Daily, September 11, 2013

House Oversight Chairman presses SEC on XBRL progress

By Matthew Garza, J.D.

Oversight and Government Reform Committee Chairman Darrell Issa (R-Cal.) has sent a letter to SEC Chair Mary Jo White questioning the agency’s implementation and enforcement of its requirement that issuer financial reports, investment company risk-return summaries, and certain disclosures by credit ratings agencies be filed using eXtensible Business Reporting Language (XBRL) (the requirements are contained in Releases 33-9002, January 30, 2009, 34-59342, February 2, 2009, and 33-9006, February 11, 2009). Representative Issa requested information about the SEC’s implementation of the interactive data rules, its use of structured data, its enforcement of the reporting requirements, and its future plans.

Representative Issa said that the SEC’s effort was part of a wider strategy of the federal government to move toward structured data for a variety of federal reports. “The rule was issued with the understanding that interactive data can reduce costs for filing and analysis, improve the data quality of disclosures, and provide greater transparency and access to financial information,” he wrote.

Progress “stagnant.” Despite this government-wide initiative, said Rep. Issa, the SEC’s implementation has been sluggish. He said the SEC does not fully make use of the structured data it currently collects, continues to purchase the same data it collects from filers from commercial databases, and has failed to address concerns about the quality of the filings. He said it was surprising that the SEC does not use the structured data in its internal review processes, instead using “printouts, pencils, and calculators.”

Errors. The data has also deviated from the approved taxonomy and been error-prone, causing skepticism and problems with the usability of the data, according to Rep. Issa. “But the SEC has not issued even one comment letter on any of the more than 1.4 million errors identified,” he noted.

Representative Issa requested a briefing from the SEC by September 23 and set forth in the letter seven questions officials should be prepared to answer, as well as five document production requests to be completed by September 17.

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