Out with EDGAR, in with IDEA; SEC's new system
WASHINGTON (Reuters) - EDGAR, the computer database for filing documents with the U.S. Securities and Exchange Commission, is giving way to a new system that aims to let investors more easily analyze corporate reports and other financial information.
SEC Chairman Christopher Cox unveiled IDEA, short for Interactive Data Electronic Applications, saying it would give investors faster, more accurate and more useful information about public companies and mutual funds.
"This is not just a new name for EDGAR, this is a fundamental change in the way the SEC collects, manages and distributes information," Cox told a news conference on Tuesday.
The investor protection agency said interactive filings will start being available late this year through IDEA, which will eventually replace the EDGAR system after running in parallel for about three years.
EDGAR, short for electronic data gathering, analysis and retrieval system, handles more than 500,000 financial statements every year from public companies and other entities.
The SEC has spent tens of millions of dollars to develop the new IDEA system, which will use interactive data technology known as XBRL, or extensible business reporting language.
XBRL uses digital tags attached to each piece of financial data, allowing investors to easily find and compare key financial figures.
Cox has been an advocate of using technology to improve disclosure, even fielding questions from online participants during the news conference on Tuesday.
The SEC proposed rules in May that would made it mandatory for the largest public companies to start filing their financial results in XBRL in early 2009.
It proposed similar mandatory rules for mutual funds to report their risk and return information using the digital tags by the end of 2009.
Cox also announced on Tuesday that the agency will host a roundtable on October 8 to discuss how the SEC can improve its disclosure requirements.
The agency said in June that it is conducting a study named the "21st Century Disclosure Initiative" that will consider how to use new technology to deliver information. It will also look at how to create disclosure forms that are easier for investors to understand.
(Reporting by Karey Wutkowski; Editing by Tim Dobbyn)
