SEC moves to ease access to financial statement data

At the end of 2014, the Securities and Exchange Commission took a big step toward making corporate financial data more open,  announcing it would repackage the financial statement data it had been gathering from publicly traded companies and releasing them in quarterly datasets.

Since 2009, the SEC has required public companies to transmit financial statement data in the eXtensible Business Reporting Language (XBRL) as part of quarterly filings, a machine readable format. The structured data language allows for users to do automated analysis of filings. However, analysts have been limited by the way the data is presented in the SEC's EDGAR system, a decades-old online filing database. Companies are also required to submit filings in document form, which usually means that the XBRL versions are compiled from completed documents, opening the door for discrepancies and errors.

The XBRL financial data is pegged to individual company entries, requiring those interested in accessing data across companies or over reporting periods to download or scrape individual XBRL filings or capture filings via RSS feeds, and assemble the disparate files into a usable dataset.

By putting all XBRL submissions in a single flat file that is updated quarterly, the SEC has provided analysts with the raw materials to look at company financial information across the spectrum of large and small companies. The move potentially empowers individual data scientists and programmers with the ability to build securities analysis tools that scale across the whole U.S. market.

The announcement shows that the SEC "is really serious about making data work," said Hudson Hollister, executive director of the Data Transparency Coalition. "This is great news for the usefulness of SEC data." Hollister noted that until this move the open data experiment at the SEC has been "a disappointment," because the SEC hadn't enforced data quality and because the agency continued to require that companies submit financial documents.

The initial change includes all financial statement data from company filings. In 2015, it will be expanded to include data from footnotes to financial statements.

The SEC's move may help blunt criticism that the XBRL reporting is redundant and burdensome to small firms. Rep. Robert Hurt (R-Va.), a member of the House Financial Services Committee, has pushed legislation that would end the XBRL filing requirement for companies with annual revenues of under $250 million. That measure passed the House as part of a larger package in September, but was never considered by the Senate. The bill would put XBRL reporting on a voluntary basis for more than 60 percent of covered companies, according to Hollister, and would potentially diminish the prospects of an open data ecosystem covering financial information.