August 20, 2008
SEC To Replace EDGAR With New IDEA System
The U.S. Securities and Exchange Commission (SEC) announced Tuesday that it will replace EDGAR, the computer database for filing documents, with a new system that will allow investors to more easily analyze corporate reports and other financial data.
"This is not just a new name for EDGAR, this is a fundamental change in the way the SEC collects, manages and distributes information," SEC Chairman Christopher Cox told a news conference on Tuesday as he unveiled the new system.
The SEC said interactive filings through IDEA will be available later this year, and that the new system will eventually replace the EDGAR after a three-year period of both systems running in parallel. EDGAR, short for electronic data gathering, analysis and retrieval system, currently processes more than 500,000 financial statements annually from public companies and other entities.
The agency has spent tens of millions of dollars to develop IDEA, which will use an interactive data technology known as extensible business reporting language, or XBRL. The technology attaches digital tags to each piece of financial data, allowing investors to easily find and compare the data.
Cox has long supported the use of technology to improve disclosure, and even answered questions from online participants during Tuesday's news conference.
In May, the agency proposed rules that would mandate the largest public companies to begin filing their financial results in XBRL in early 2009. Similar rules were proposed for mutual funds to report their risk and return data by the end of 2009.
Cox also announced that the SEC will host a roundtable on October 8 to discuss how the agency can enhance its disclosure requirements. In June the SEC said it is carrying out a study called the "21st Century Disclosure Initiative" that will examine how to best utilize new technology to deliver information. The initiative will also consider the best way to create disclosure forms that are easier for investors to understand.
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