When it comes to storing massive amounts of information, it’s usually safe to assume that digital is simpler and tidier than paper. But when it comes to the Security and Exchange Commission’s online filing system, Edgar, even Chairman Christopher Cox admits that it’s been an ineffective combination of the old and new. “It is really just a vast electronic filing cabinet,” he told the Senate subcommittee on financial services at a hearing in May. A new online system will truly digitize SEC financial records, utilizing extensible business reporting language (XBRL) to
make the data more interactive.
Until now, Edgar (a popular choice for researching publicly filed SEC documents) has been a repository where companies upload paper-based reports and various financial forms. When people go to assess the data, it’s often lost amid long text or HTML files that are hard to search.
Finding the right numbers “has been nearly impossible for the average retail investor,” Cox said in Congressional testimony.
The new system will use XBRL to tag each file, so users can not only find data about a company but also compare that data with others in the industry to gauge performance and make projections.
According to Cox’s testimony, the SEC will invest $54 million on the project over the next few years; it has not revealed a more specific completion date. Meanwhile, many companies are participating in voluntary pilot programs to submit their data to the SEC in XBRL format.