(The news featured below is a selection from the news covered in SEC Today, which is distributed to subscribers of SEC Today.)

SEC Seeks Comment on Voluntary Use of XBRL Data Tagging

The SEC is proposing to permit registrants to voluntarily submit exhibits to certain 1934 Act and Investment Company Act filings using eXtensible Business Reporting Language ("XBRL") beginning in early 2005 (Rel. No. 33-8496, September 27, 2004). XBRL is an open electronic standard that provides a format for tagging financial information. In a companion concept release, the SEC is asking for industry views on the impact of using XBRL data tagging as a format for reporting financial information (Rel. No. 33-8497, September 27, 2004). Comments on the voluntary filing of XBRL exhibits should be submitted by November 1. The comment period on the concept release on data tagging is open until November 15.

Under the proposal to permit the voluntary use of XBRL-tagged financial information, registrants would continue to file their financial information in HTML or ASCII format as currently required. The XBRL exhibit would be disseminated publicly, but would be deemed furnished rather than filed. Registrants who are interested in participating in the voluntary program are encouraged to contact the staff, but are not required to do so. Volunteers may submit their XBRL exhibits regularly or may cease to file them any time they choose. The voluntary program would serve as a test during which the SEC and registrants could evaluate the tagging technology.

Once the staff gains experience with the technology and analyzes the results of the voluntary program it can determine whether to terminate the voluntary program, continue it indefinitely or require some or all filers to use XBRL. If the SEC determines to require the use of XBRL, it would be the subject of a separate rulemaking proposal.

Under the SEC's proposal, non-investment company filers may submit XBRL data as an exhibit to Forms 10-K, 10-Q, 8-K, 10, 10-KSB, 10-QSB and 10SB. Foreign private issuers may use XBRL data for exhibits to Forms 20-F and 6-K, and investment companies may use it for Forms N-CSR and N-Q. The voluntary program is also available to foreign private issuers that file financial information prepared in accordance with U.S. GAAP. Users of EDGAR data would be able to download the XBRL data to perform their own financial analysis, but would have to use their own software. The SEC plans to develop an application that would convert XBRL files into a document that would look similar to traditional financial information.

The proposed program would be open to all volunteers that use one of the following version 2.1 taxonomies in U.S. GAAP: commercial and industrial, banking and savings institutions, insurance and investment companies. Since the program is considered experimental, the revised rules would provide limited protection from liability under the federal securities laws and would exclude XBRL-related documents from being subject to the certification requirements. If the SEC ultimately decides to mandate XBRL filings, it would not propose liability protections or an exclusion from the certification requirements.

In its concept release on data tagging, the SEC noted that data tagging is gaining prominence as a format for enhancing financial reporting data. The European Commission has shown an interest in adopting XBRL in the European Union. The SEC believes that the tagged data may enable users of financial information to more easily examine the component part of the line items, including the information found in footnotes. The SEC is not aware of a more developed tagging technology for business and financial information, but asked for comments on whether other tagging technologies are available.