The SEC has proposed a variety of changes to the interactive data rule, and they are seeking feedback from people on how the change might impact their day-to-day operations.
In early March, the SEC announced that changes could be made to the rule regarding interactive data. Issuers who are filing registration statements under the Securities Act of 1933 and reports under the Securities Exchange Act of 1934 are typically required to submit certain financial documents and statements to the SEC. Then, they are asked to display this same information on their corporate website. This information typically has to be displayed in an interactive data format, usually using XBRL. The goal of the requirement is to make it easier for investors to figure out whether they are looking at a company in which they want to invest. Furthermore, this interactive data style makes it easier for issuers to automate information processing and regulatory filings.
Now, the SEC is seeking feedback on what these requirements mean, the burden they create, and possible changes that could make the process easier.
How The Information Is Currently Collected
This data collection is located in report exit provisions and registration statements. Both of them require interactive data, and this is spelled out in Rule 405 of Regulations S-T. The rule discusses out how to submit and share interactive data on corporate websites.
In this interactive data format, information from financial statements can be downloaded directly into spreadsheets. That way, people downloading the information do not have to worry about transforming the file type from one format to another. It saves time when people want to analyze this information.
Even with the rule changes, any specified financial information can continue to be submitted to the SEC using traditional formats in line with current SEC requirements.
What the SEC Wants To Know About These Rule Changes
Members of the public can submit comments on a variety of matters concerning the proposed rule changes. The SEC wants to learn more about:
Ways to reduce the burden on the collection of information using automated collection programs and other IT advances
Whether the SEC’s estimate of the current burdens imposed by the interactive data rule is accurate
What changes might be made to improve the clarity, utility, and quality of the information the SEC collects
Whether the information continues to have any practical utility for not only the SEC but also investors
The SEC is making an effort to ensure that any rule changes make daily operations easier for companies and investors, not harder. This is an opportunity for people to share their personal stories, talk about the impacts of potential changes, and make suggestions about how to improve the transparency and speed with which information is collected and displayed.
The comment period will be open until May 9th, 2022. Then, the SEC will submit any information to the Office of Management and Budget for review and approval.
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