WASHINGTON – House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., is seeking information on the Securities and Exchange Commission’s apparent failure to utilize information submitted to it by all public companies that could save the regulator significant time and money.
According to the “Interactive Data Rule,” issued in 2009, U.S. securities issuers must submit financial statements in an electronic, structured-data format known as the eXtensible Business Reporting Language (XBRL).
“The Interactive Data Rule is part of a government-wide move toward structured data formats for a wide variety of federal reports and other materials,” Issa writes in a letter sent yesterday to SEC Chairman Mary Jo White. “ 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.”
Issa notes that according to published reports and information from senior former SEC employees, the Commission’s progress on utilizing the data is “stagnant.”
“[G]iven the SEC’s awareness of interactive data’s potential, it is surprising that the SEC has not yet integrated interactive data into its internal review processes to improve efficiency or reduce costs,” Issa continues. “Rather than use the wealth of structured financial data it is already collecting to automate any level of review, the SEC continues to ask Congress for more money to pay for increased staff, including more than 600 additional staff positions in each of the past three annual budget requests.”
The letter goes on to note that “SEC buys access to commercial databases such as Compustat and Yahoo!Finance that have been shown to contain less accurate data” than the freely available filings they require companies to produce.
“The SEC’s failure to utilize its own superior data, resulting in a continued cost to taxpayers to access commercial databases, requires explanation,” Issa writes.
For a full copy of the letter click here.