The SEC's New IDEA: 'Financial Disclosure Meets the Matrix'

Just about every investor and financial professional is familiar with the Security and Exchange Commission's Electronic Data Gathering, or EDGAR, database of regulatory financial filings.  On Tuesday, August 19, the Chairman of the SEC, Christopher Cox, announced that a new database would be introduced, called IDEA, short for Interactive Data Electronic Applications; described by one staff member as "financial disclosure meets the matrix."  

This new database will be similar to the previous EDGAR database, as it will also be provided free to investors, journalists, analysts, and regulators.  However, the EDGAR database is outdated, as it provides only one-dimensional financial reports that are still document-based. 

The new IDEA system will be internet-based and will utilize XBLR, or eXtensible Business Reporting Language.  This will allow users of the IDEA system to apply various different functions to the financial data through the use of its tagging system.  The XBLR system will mark each financial data point with a specific tag, which will allow the data to be pulled from the document and create an interactive environment.  This data will be able to be downloaded into spreadsheets and database software to be manipulated by the user, a huge advantage over the previous EDGAR database.  Dr. William Lutz, professor at Rutgers University and heading up the SEC's new disclosure initiative, described the IDEA database as: "financial disclosure meets the matrix." 

The new interactive database system will be phased in over the next two years, with the 500 largest U.S. publicly traded companies required to prepare and file their financial data by December 15, 2008.  The SEC's IDEA database will allow for more sophisticated and efficient dissemination of financial information to investors. 

Comments

[Did U Think...:]

Just another control mechanism to get the sheeple to gamble their money away in the ponzi scheme which has become the US stock market. If you want to gamble, it's a great place. If you want to save for retirement, get out of the USD until such time as the US debt is taken under control. All of these plans for forced 401ks that are being bandied about are simply trying to force the people to buy into the dollar, and thus into the US debt.

They did the same sorts of things to revigorate confidence in 1933 and they did fool a new crop of sheeple into the markets, but this game is long in the tooth. Dividend investing is true investing (aka value investing). Speculation on share price appreciation is nothing more than gambling and the sooner the US population figures it out and moves their money out of that kind of system, the better off we will be as a nation.

2008 Aug 22 12:19 AM

[Daniel Miller:]

The aggregate total nominal and real return of the stock market has outperformed bonds, gold, and commodities since 1801 according to Jeremy Siegel's research, and (I think its safe to say) with a very healthy margin.

The SEC's new initiative will allow for increased transparency and I think most value investors will agree that a value investing approach is near impossible without understanding the underlying business - both qualitatively and quantitatively.

2008 Aug 23 01:40 PM