SEC Chairman Christopher Cox unveiled the successor to the agency's Edgar database and said it will give investors faster and easier access to financial filings on public companies and mutual funds.
Interactive Data Electronic Applications (Idea) is based on new architecture, which the SEC said it is building from the ground up. It will supplement the Edgar system before eventually replacing it.
The SEC said the move would allow it to transition from collecting forms and documents to making the information freely available to investors. The new system should also provide current information in a format that is easy to access, collate, sift through, and compile into new reports.
Most SEC filings have used the Edgar format, which has limited investors and others who want to examine information about public companies to viewing one form at a time.
The SEC wants U.S. companies to provide financial information through interactive data next year. The commission also wants mutual-fund information filed through interactive data, which uses tags to identify contents in companies' disclosures. That would make Internet searches about publicly held companies and mutual funds simpler and more comprehensive. It would also allow information to be more easily downloaded to spreadsheets, entered in databases, and compared.
The SEC noted that the switch would likely generate many new Web-based services and products for investors.
The Idea logo already appears on the SEC's Web site, and visitors can use new features being grafted onto Edgar to allow transfer of Edgar data to spreadsheets and analytical software.
Companies can continue using Edgar through the transition, and Edgar filings will remain available as archives of past years, the SEC said. Companies should be able to submit their filings through Idea later this year, the SEC said in an announcement.
"This new SEC resource powered by interactive data will give investors far faster, more accurate, and more meaningful information about the companies and mutual funds they own," Cox said during a news announcement. "Idea's launch represents a fundamental change in the way the SEC collects and publishes company and fund information -- and in the way that investors will be able to use it."
Disclosure and transparency expert William D. Lutz, who is leading the SEC's 21st Century Disclosure Initiative, said that the switch to an electronic system would help the SEC keep pace with the markets. He also said the new system would give investors a "dynamic system they can use to get the information they need, rather than having to wade through an avalanche of paper forms, legalese, and doublespeak."
David Blaszkowsky, director of the SEC's Office of Interactive Disclosure, said it was exciting to watch the SEC as it prepares to "cross the data threshold" after 75 years of document-based static financial reporting.
"When the investor wins, so does the public company, fund, or other filer who simultaneously benefits from greater transparency and trust in our markets," he said. "By tapping the power of interactive data to tear down barriers to quick and meaningful investment information, markets can become fairer and more efficient, while investors can possess far better quality data than was ever possible before."