82 FR 14282 - Inline XBRL Filing of Tagged Data
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 51 (March 17, 2017)
Federal Register Volume 82, Issue 51 (March 17, 2017)
| Page Range | 14282-14311 | |
| FR Document | 2017-04366 |
[Federal Register Volume 82, Number 51 (Friday, March 17, 2017)] [Proposed Rules] [Pages 14282-14311] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-04366] [[Page 14281]] Vol. 82 Friday, No. 51 March 17, 2017 Part II Securities and Exchange Commission ----------------------------------------------------------------------- 17 CFR Parts 229, 230, 232, et al. Inline XBRL Filing of Tagged Data; Proposed Rule Federal Register / Vol. 82 , No. 51 / Friday, March 17, 2017 / Proposed Rules [[Page 14282]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 229, 230, 232, 239, 249 and 274 [Release Nos. 33-10323; 34-80133; IC-32518; File No. S7-03-17] RIN 3235-AL59 Inline XBRL Filing of Tagged Data AGENCY: Securities and Exchange Commission. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: We are proposing to require the use of the Inline XBRL format for the submission of operating company financial statement information and mutual fund risk/return summaries. The proposed amendments are intended to improve the data's quality, benefiting investors, other market participants, and other data users, and to decrease, over time, the cost of preparing the data for submission to the Commission. The proposed amendments would also eliminate the requirement for filers to post Interactive Data Files on their Web sites and terminate the Commission's voluntary program for the submission of financial statement information interactive data that is currently available only to investment companies and certain other entities. DATES: Comments should be received by May 16, 2017. ADDRESSES: Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml); Send an email to [email protected]. Please include File Number S7-03-17 on the subject line; or Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments. Paper Comments Send paper comments to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number S7-03-17. This file number should be included on the subject line if email is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/proposed.shtml). Comments are also available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Room 1580, Washington, DC 20549 on all official business days between the hours of 10:00 a.m. and 3:00 p.m. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. Studies, memoranda, or other substantive items may be added by the Commission or staff to the comment file during this rulemaking. A notification of the inclusion in the comment file of any such materials will be made available on the Commission's Web site. To ensure direct electronic receipt of such notifications, sign up through the ``Stay Connected'' option at www.sec.gov to receive notifications by email. FOR FURTHER INFORMATION CONTACT: Mark W. Green, Senior Special Counsel (Regulatory Policy), Division of Corporation Finance, at (202) 551- 3430; John Foley, Senior Counsel, or Michael C. Pawluk, Senior Special Counsel, Division of Investment Management, at (202) 551-6792; R. Michael Willis, Assistant Director, Office of Structured Disclosure, Anzhela Knyazeva, Senior Financial Economist, or Hermine Wong, Special Counsel, Division of Economic and Risk Analysis, at (202) 551-6600. SUPPLEMENTARY INFORMATION: We are proposing amendments to Item 601 \1\ of Regulation S-K,\2\ Rules 11,\3\ 201,\4\ 202,\5\ 401 \6\ and 405 \7\ of Regulation S-T,\8\ Rules 144,\9\ 485 \10\ and 497 \11\ and Form F-10 \12\ under the Securities Act of 1933 (Securities Act),\13\ Forms 10- Q,\14\ 10-K,\15\ 20-F,\16\ 40-F \17\ and 6-K \18\ under the Securities Exchange Act of 1934 (Exchange Act),\19\ and Form N-1A \20\ under the Securities Act and Investment Company Act of 1940 (Investment Company Act).\21\ --------------------------------------------------------------------------- \1\ 17 CFR 229.601. \2\ 17 CFR 229.10 et seq. \3\ 17 CFR 232.11. \4\ 17 CFR 232.201. \5\ 17 CFR 232.202. \6\ 17 CFR 232.401. \7\ 17 CFR 232.405. \8\ 17 CFR 232.10 et seq. \9\ 17 CFR 230.144. \10\ 17 CFR 230.485. \11\ 17 CFR 230.497. \12\ 17 CFR 239.40. \13\ 15 U.S.C. 77a et seq. \14\ 17 CFR 249.308a. \15\ 17 CFR 249.310. \16\ 17 CFR 249.220f. \17\ 17 CFR 249.240f. \18\ 17 CFR 249.306. \19\ 15 U.S.C. 78a et seq. \20\ 17 CFR 239.15A and 274.11A. \21\ 15 U.S.C. 80a. I. Introduction II. Background and Economic Baseline A. Overview of Existing XBRL Requirements for Operating Companies and Mutual Funds B. Current XBRL Practices 1. XBRL Preparation 2. XBRL Data Use III. Proposed Amendments and Anticipated Economic Effects A. Overview of Inline XBRL B. Proposed Amendments 1. Inline XBRL Requirements 2. Elimination of Web Site Posting Requirement 3. Termination of the 2005 XBRL Voluntary Program 4. Proposed Technical Amendments 5. Request for Comment C. Potential Economic Effects of the Proposed Amendments 1. Benefits 2. Costs 3. Compliance Dates 4. Alternatives 5. Request for Comment IV. Paperwork Reduction Act A. Background B. Reporting and Cost Burden Estimates 1. Registration Statement and Periodic Reporting 2. Regulation S-K and Regulation S-T C. Request for Comment V. Initial Regulatory Flexibility Act Analysis A. Reasons for, and Objectives of, the Action B. Legal Basis C. Small Entities Subject to the Proposed Amendments D. Projected Reporting, Recordkeeping and Other Compliance Requirements E. Duplicative, Overlapping or Conflicting Federal Rules F. Significant Alternatives G. General Request for Comment VI. Small Business Regulatory Enforcement Fairness Act VII. Statutory Basis and Text of Proposed Rule and Form Amendments I. Introduction In 2009 the Commission adopted rules requiring operating companies to provide the information from the financial statements accompanying their registration statements and periodic and current reports in machine-readable format using eXtensible Business Reporting Language (XBRL) by submitting it to the Commission in exhibits to such reports and posting it on their Web sites, if any.\22\ That same year, the Commission similarly required open-end management investment companies (``mutual funds'') to provide risk/return summary information from their prospectuses in XBRL format by submitting it to the Commission in [[Page 14283]] exhibits and posting it on their Web sites, if any.\23\ --------------------------------------------------------------------------- \22\ 17 CFR 232.405. See also Release No. 33-9002 (Jan. 30, 2009) [74 FR 6776] (``2009 Financial Statement Information Adopting Release'') as corrected by Release No. 33-9002A (Apr. 1, 2009) [74 FR 15666]. \23\ See Release No. 33-9006 (Feb. 11, 2009) [74 FR 7747] (``2009 Risk/Return Summary Adopting Release'') as corrected by Release No. 33-9006A (May 1, 2009) [74 FR 21255]. The risk/return summary is set forth in Items 2, 3, and 4 of Form N-1A. --------------------------------------------------------------------------- XBRL requirements currently apply to operating companies that prepare their financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP) or in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).\24\ XBRL requirements also apply to mutual funds pursuant to Form N-1A and related rules under Regulation S-T.\25\ Filers subject to these XBRL requirements must submit an Interactive Data File,\26\ including information tagged in XBRL, as an exhibit to the Related Official Filing, which is filed in the traditional HyperText Markup Language (HTML) or, less commonly, American Standard Code for Information Interchange (ASCII) format.\27\ The 2009 requirements were intended to make financial information and mutual fund risk/return summaries easier for investors to analyze and to assist in automating regulatory filings and business information processing.\28\ Since that time, some commenters have expressed concerns regarding the quality of, extent of use of, and cost to create XBRL data,\29\ while other commenters have recognized the benefits of XBRL data.\30\ In addition, the Commission staff has identified a number of data quality issues associated with financial statement information XBRL data filed by operating companies.\31\ The amendments we are proposing today are intended to address some of these issues and concerns by facilitating improvements in the quality and usefulness of XBRL data and, over time, decreasing filing costs by decreasing XBRL preparation costs. --------------------------------------------------------------------------- \24\ As used in this release, the phrase ``IFRS as issued by the IASB'' refers to the authoritative text of IFRS. \25\ See General Instruction C.3(g) to Form N-1A; Rule 405 of Regulation S-T. \26\ 17 CFR 232.11; 17 CFR 232.405. The term Interactive Data File means the machine-readable computer code that presents information in XBRL electronic format pursuant to Rule 405 of Regulation S-T. The Interactive Data File currently consists of an ``instance document'' and other documents as described in the Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) Filer Manual. The instance document contains the XBRL tags for the information contained in the corresponding data in the Related Official Filing to satisfy the content and format requirements in Rule 405. The other documents in the Interactive Data File contain contextual information about the XBRL tags. \27\ 17 CFR 232.11. The term Related Official Filing means the ASCII or HTML format part of the official filing with which an Interactive Data File appears as an exhibit or, in the case of Form N-1A, the ASCII or HTML format part of the official filing that contains the information to which an Interactive Data File corresponds. \28\ See 2009 Financial Statement Information Adopting Release, at 6776; 2009 Risk/Return Summary Adopting Release, at 7748. \29\ See notes 70 and 78 below. \30\ See note 169 below. \31\ See, e.g., Staff Observations of Custom Axis Tags (Mar. 29, 2016), available at http://www.sec.gov/structureddata/reportspubs/osd_assessment_custom-axis-tags.html; Staff Observations of Custom Tag Rates (Jul. 7, 2014), available at http://www.sec.gov/dera/reportspubs/assessment-custom-tag-rates-xbrl.html (``Staff XBRL Observations 2014''); Staff Observations from the Review of Interactive Data Financial Statements (Dec. 13, 2011), available at http://www.sec.gov/spotlight/xbrl/staff-review-observations-121311.shtml (``Staff XBRL Observations 2011''). --------------------------------------------------------------------------- The proposed amendments would require financial statement information and mutual fund risk/return summary information to be provided in the Inline XBRL format.\32\ Inline XBRL allows filers to embed XBRL data directly into an HTML document, eliminating the need to tag a copy of the information in a separate XBRL exhibit. Inline XBRL would be both human-readable and machine-readable for purposes of validation, aggregation and analysis. The proposed amendments also would eliminate the requirement for filers to post Interactive Data Files on their Web sites. --------------------------------------------------------------------------- \32\ Inline XBRLTM and iXBRLTM are trademarks of XBRL International. XBRL[supreg] is a registered trademark of XBRL International. --------------------------------------------------------------------------- II. Background and Economic Baseline The XBRL requirements were adopted in 2009 to provide financial statement and risk/return summary data in a form that was intended to improve its usefulness to investors.\33\ Since the XBRL requirements were adopted, the XBRL technology has continued to evolve.\34\ In particular, the Inline XBRL format has seen increased use for various regulatory purposes in several foreign jurisdictions.\35\ --------------------------------------------------------------------------- \33\ The Commission has recently implemented requirements for the structuring of other types of information using the XBRL format, including swap-based security data repository financial statements and credit rating history information maintained by nationally recognized statistical rating organizations, and proposed requirements for the structuring of certain compensation disclosures, including the disclosure of the relationship between executive compensation and the financial performance of the registrant and the compensation recovery policies of listed registrants. See, e.g., Release No. 34-74244 (Feb. 11, 2015) [80 FR 14563]; Release No. 34-72936 (Aug. 27, 2014) [79 FR 55077]; Release No. 34-74835 (Apr. 29, 2015) [80 FR 26329]; Release No. 33-9861 (Jul. 1, 2015) [80 FR 41143]. The Commission also has implemented requirements for the structuring of information in certain forms using XML, including Form N-CEN (annual report for registered investment companies), Form N-PORT (monthly schedule of portfolio investments), Form N-MFP (monthly schedule of portfolio holdings of money market funds), Form PF (investment advisers to private funds), Form D (Regulation D offerings), Form 1-A (Regulation A offering statement), and Form C (securities-based crowdfunding offerings). See Release No. 33-10231 (Oct. 13, 2016) [81 FR 81870], Release No. IC-29132 (Feb. 23, 2010) [75 FR 10059]; Release No. IA-3308 (Oct. 31, 2011) [76 FR 71127]; Release No. 33-8891 (Feb. 6, 2008) [73 FR 10591]; Release No. 33- 9974 (Oct. 30, 2015) [80 FR 71387]; Release No. 33-9741 (Mar. 25, 2015) [80 FR 21805]. \34\ The XBRL preparation industry has gained significant technological expertise and efficiency. See, e.g., William Sinnett, SEC reporting and the impact of XBRL: 2013 survey, Financial Executives Research Foundation (Nov. 15, 2013) (``FERF Study''); Research shows XBRL filing costs lower than expected, American Institute of CPAs, available at http://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/XBRL/DownloadableDocuments/XBRL%20Costs%20for%20Small%20Companies.pdf (retrieved Aug. 30, 2016) (``AICPA Study''). See also Section II.B.1 below. \35\ Inline XBRL has been adopted in several foreign jurisdictions and proposed for required use in another. It has also gained support among several XBRL preparation software vendors in the U.S. See notes 94 and 95 below. Separately, the EDGAR system has been modified to accept voluntary Inline XBRL submissions. See note 58 below and accompanying text. --------------------------------------------------------------------------- In assessing the potential impact of the proposed amendments, we consider as a point of reference the interactive data requirements and XBRL practices as they exist today. This economic baseline includes the current XBRL requirements, information about filers subject to these requirements and current practices related to XBRL filing and use. A. Overview of Existing XBRL Requirements for Operating Companies and Mutual Funds Structured information is currently required to be submitted in an Interactive Data File exhibit to certain forms. These forms are prepared in either HTML or ASCII \36\ electronic formats.\37\ The XBRL requirements for the required information are located in the Interactive Data File provisions of [[Page 14284]] Regulation S-K,\38\ Forms F-10,\39\ 20-F,\40\ 40-F,\41\ 6-K \42\ and N- 1A,\43\ Rule 405 of Regulation S-T, and the EDGAR \44\ Filer Manual. --------------------------------------------------------------------------- \36\ Based on staff review of Form 10-K filings filed during calendar year 2015, fewer than 1% were filed in the ASCII format. The majority of those were filed by smaller reporting companies and non-accelerated filers. Based on staff review of data on Rule 485(b) and Rule 497 filings filed during calendar year 2015, approximately 15% were filed in the ASCII format. \37\ In a companion release we are issuing today, the Commission is adopting amendments to eliminate the ASCII format for registration statements and periodic and current reports that are subject to the exhibit requirements under Item 601 of Regulation S-K and for Forms F-10 and 20-F. See Release No. 33-10322 (Mar. 1, 2017) (``Hyperlinks Adopting Release''). The amendments were proposed in 2016. See Release No. 33-10201 (Aug. 31, 2016) [81 FR 62689] (``Hyperlinks Proposing Release''). \38\ See Item 601(b)(101) of Regulation S-K [17 CFR 229.601(b)(101)]. \39\ See Paragraph (101) of Part II--Information Not Required to be Delivered to Offerees or Purchasers of Form F-10. \40\ See Paragraph 101 of the Instructions as to Exhibits of Form 20-F. \41\ See Paragraph B.(15) of the General Instructions to Form 40-F. \42\ See Paragraph C.(6) of the General Instructions to Form 6- K. \43\ See General Instruction C.3(g) to Form N-1A. \44\ EDGAR performs automated collection, validation, indexing, acceptance, and forwarding of submissions by companies and others who are required to file forms with the Commission. See http://www.sec.gov/edgar/aboutedgar.htm. --------------------------------------------------------------------------- Operating companies are required to submit financial statements and any applicable financial statement schedules in XBRL as exhibits to certain Exchange Act reports and Securities Act registration statements.\45\ In general, operating companies that prepare their financial statements in accordance with U.S. GAAP or in accordance with IFRS as issued by the IASB must submit their financial statements to the Commission in XBRL. Filers that are required to provide information in XBRL must use the taxonomies specified on the Commission's Web site.\46\ --------------------------------------------------------------------------- \45\ Financial statements in XBRL are required as exhibits to Exchange Act reports on Forms 10-Q, 10-K, 20-F, 40-F and, in some cases, 8-K and 6-K. Item 601(b)(101) of Regulation S-K requires an Interactive Data File to be submitted with a Form 8-K only when the Form 8-K contains audited annual financial statements that previously were filed with the Commission but have been revised pursuant to applicable accounting standards to reflect the effects of certain subsequent events, including a discontinued operation, a change in reportable segments or a change in accounting principle. Item 601(b)(101) further specifies that, in such case, the Interactive Data File is required only as to such revised financial statements regardless of whether the Form 8-K contains other financial statements. Paragraph C.(6) of the General Instructions to Form 6-K requires an Interactive Data File to be submitted with a Form 6-K only when the Form 6-K contains either of the following: audited annual financial statements that are a revised version of financial statements that previously were filed with the Commission that have been revised pursuant to applicable accounting standards to reflect the effects of certain subsequent events, including a discontinued operation, a change in reportable segments or a change in accounting principle; or current interim financial statements included pursuant to the nine-month updating requirement of Item 8.A.5 of Form 20-F. Paragraph C.(6) further specifies that, in either such case, the Interactive Data File would be required only as to such revised financial statements or current interim financial statements regardless of whether the Form 6-K contains other financial statements. Financial statements in XBRL also are required as exhibits to Securities Act registration statements that contain financial statements, such as Form S-1 (except registration statements filed in connection with an initial public offering). Securities Act registration statements that do not contain financial statements, such as a Form S-3 or other form filed by an issuer that incorporates by reference all required financial statement information from its periodic reports, and Exchange Act registration statements are not required to include Interactive Data Files. See 2009 Financial Statement Information Adopting Release. \46\ See Rule 405(c)(1) of Regulation S-T. On March 1, 2017, in a companion release, the Commission issued a notice that, for the first time, an IFRS taxonomy had been specified on its Web site for use by foreign private issuers (FPIs) to submit their financial statement information to the Commission in XBRL. See Release No. 33-10320 (Mar. 1, 2017). --------------------------------------------------------------------------- Mutual funds are required to submit risk/return summary information in XBRL as exhibits to registration statements and to prospectuses with risk/return summary information that varies from the registration statement.\47\ In addition, mutual funds, as well as other investment companies registered under the Investment Company Act, business development companies (``BDCs''),\48\ and other entities that report under the Exchange Act and prepare their financial statements in accordance with Article 6 of Regulation S-X \49\ are currently allowed to participate in the Commission's Interactive Data Voluntary Program (the ``2005 XBRL Voluntary Program'') with respect to financial statement information.\50\ --------------------------------------------------------------------------- \47\ See General Instruction C.3(g) to Form N-1A. \48\ Business development companies are a category of closed-end investment companies that are not required to register under the Investment Company Act. See Section 2(a)(48) of the Investment Company Act [15 U.S.C. 80a-2(a)(48)]. \49\ 17 CFR 210.6-01 et seq. \50\ See Rule 401 of Regulation S-T. In 2005, the Commission began to allow public companies, and later mutual funds, to voluntarily submit XBRL-formatted files as exhibits to periodic reports and Investment Company Act filings. See Release No. 33-8529 (Feb. 3, 2005) [70 FR 6556]; Release No. 33-8823 (Jul. 11, 2007) [72 FR 39289]. As a result of rule amendments adopted by the Commission in 2009, the 2005 XBRL Voluntary Program is now only open for participation by investment companies and entities that prepare their financial statements in accordance with Article 6 of Regulation S-X. See 2009 Financial Statement Information Adopting Release and 2009 Risk/Return Summary Adopting Release. --------------------------------------------------------------------------- An operating company generally must submit the Interactive Data File as an exhibit to the Related Official Filing to which it relates.\51\ Mutual funds are required to submit the Interactive Data File within 15 business days after (1) the effective date of the registration statement or post-effective amendment that contains the related information,\52\ or (2) the filing of a form of prospectus made pursuant to paragraph (c) or (e) of Rule 497.\53\ Operating companies and mutual funds may delay submission and posting to the extent provided under a hardship exemption.\54\ --------------------------------------------------------------------------- \51\ See Rule 405(a) of Regulation S-T. \52\ See General Instruction C.3g(i), (iv) to Form N-1A. \53\ See General Instruction C.3g(ii), (iv) to Form N-1A. \54\ An operating company may delay the submission and posting of the Interactive Data File to the extent provided under a temporary or a continuing hardship exemption. See Rules 201 and 202 of Regulation S-T. A mutual fund filer may delay the submission and posting of the Interactive Data File to the extent provided under a continuing hardship exemption. See Rule 202 of Regulation S-T. --------------------------------------------------------------------------- For both operating companies and mutual funds, the Interactive Data File submitted to the Commission also must be posted on the filer's Web site, if any, on the earlier of the calendar day that the filer submitted or was required to submit it.\55\ Operating companies must keep the Interactive Data File posted for at least 12 months.\56\ For mutual funds, the Interactive Data File is required to be posted on the fund's Web site for as long as the registration statement or post- effective amendment to which the Interactive Data File relates remains current.\57\ --------------------------------------------------------------------------- \55\ See Rule 405(g). \56\ Id. \57\ See Rule 405(g) and General Instruction C.3(g)(iii) to Form N-1A. If a mutual fund does not submit or post interactive data as required, its ability to file post-effective amendments to its registration statement under Rule 485(b) under the Securities Act is automatically suspended until it submits and posts the interactive data as required. See Rule 485(c) under the Securities Act. The Interactive Data File also must be submitted in such a manner that will permit the information for each series and, for any information that does not relate to all of the classes in a filing, each class of the mutual fund to be separately identified. See General Instruction C.3(g)(iv) to Form N-1A. --------------------------------------------------------------------------- On June 13, 2016, the Commission issued an exemptive order under the Exchange Act to permit operating companies that comply with certain conditions listed in the order to file structured financial statement data required in their periodic and current reports using Inline XBRL through March 2020.\58\ When it issued the order, the Commission stated that permitting companies to use Inline XBRL on a voluntary, time- limited basis could facilitate the development of Inline XBRL preparation and analysis tools, provide investors and companies with the opportunity to evaluate its usefulness and help inform any future Commission rulemaking in this area. As of February 27, 2017, the Commission [[Page 14285]] has received 55 Inline XBRL filings by 35 filers. --------------------------------------------------------------------------- \58\ See Order Granting Limited and Conditional Exemption under Section 36(a) of the Securities Exchange Act of 1934 from Compliance with Interactive Data File Exhibit Requirement in Forms 6-K, 8-K, 10-Q, 10-K, 20-F and 40-F to Facilitate Inline Filing of Tagged Financial Data, Release No. 34-78041 (Jun. 13, 2016) [81 FR 39741] (``Exemptive Order''). The Exemptive Order does not exempt voluntary filers from the Web site posting requirement. --------------------------------------------------------------------------- B. Current XBRL Practices 1. XBRL Preparation XBRL preparation to comply with financial statement information and risk/return summary XBRL requirements affects operating company and mutual fund filers. There were approximately 9,200 filers of annual and quarterly reports (Forms 10-K, 10-Q, 20-F and 40-F), including amendments, during calendar year 2015.\59\ As of December 2015, there were approximately 11,106 mutual funds that are registered on Form N- 1A.\60\ --------------------------------------------------------------------------- \59\ Based on staff analysis of EDGAR filings. Some filers, including investment companies, asset-backed issuers, and filers who have received a hardship exemption, are not subject to financial statement information interactive data requirements. Interactive data requirements for operating companies also pertain to certain registration statements, as well as certain filings on Forms 8-K and 6-K containing specified financial statements. See note 45 above. \60\ Based on data obtained from the Investment Company Institute (``ICI'') and reports filed by registrants on Form N-SAR. See ICI, 2016 Investment Company Fact Book (56th ed., 2016), at 22, available at http://www.ici.org/pdf/2016_factbook.pdf (retrieved Aug. 30, 2016). This count of 11,106 ``mutual funds'' includes 9,520 traditional open-end mutual funds (including funds of funds and money market funds) and 1,586 exchange-traded funds (``ETFs'') registered as open-end investment companies. Unit investment trusts (``UITs'') (including ETFs registered as UITs) and closed-end funds are not subject to the proposed amendments and are therefore excluded from this count. --------------------------------------------------------------------------- Structured disclosure facilitates the analysis of information by investors, their financial advisors, professional analysts and the Commission and its staff. Structured disclosures include both numeric and narrative-based disclosures that are made machine-readable by having reported disclosure items labeled (tagged) using a markup language, such as XBRL, that can be processed by software for analysis. Structured information can be stored, shared and presented in different systems or platforms. Standardized markup languages, such as XBRL, use sets of data element tags for each required reporting element, referred to as taxonomies. Taxonomies provide common definitions that represent agreed-upon information or reporting standards, such as U.S. GAAP for accounting-based disclosures and, in the case of mutual funds, the risk/return summary information. The resulting standardization allows for aggregation, comparison and large-scale statistical analysis of reported information through significantly more automated means than is possible with HTML. All filers must assign appropriate tags to their reported disclosures based on the taxonomy of the required disclosures as part of the process to create their Interactive Data File. Currently, filers can prepare their Interactive Data Files to comply with the existing XBRL requirements in several ways. Filers may either tag required disclosures in-house or use an outside service provider. Based on data in a 2013 study, the staff estimates that approximately 63% of operating company filers outsourced at least some part of XBRL preparation for their most recent annual filing, with the remainder preparing XBRL in-house.\61\ From the process standpoint, the tagging of required disclosures may involve either standalone or integrated XBRL preparation software. With the standalone approach,\62\ filers or filing agents use information initially prepared in word processing software to create a filing document in the traditional HTML or ASCII format. Filers or filing agents then create an XBRL exhibit by copying the information from the filing document and tagging it in XBRL, which requires them to expend incremental resources to create and tag a copy of the data and verify the consistency of tagged data across documents.\63\ With the integrated approach, XBRL tagging of required disclosures is a part of the disclosure management process, and integrated disclosure management software \64\ is used to generate both the HTML filing and the XBRL exhibit. According to the same study, 71% of operating company filers relied on integrated disclosure management software, as opposed to a standalone XBRL preparation solution.\65\ The integrated approach also is prevalent among mutual fund filers. During 2015 and the first half of 2016, at least 80% of mutual fund risk/ return summary XBRL submissions were created using integrated solutions.\66\ --------------------------------------------------------------------------- \61\ See FERF Study, at 15. \62\ See FERF Study, at 6. Standalone XBRL software typically creates XBRL filings using financial statements and footnotes which have been prepared using other software. \63\ As noted by some industry observers, the creation of two documents that contain the same financial statement information may be unnecessarily costly and/or inefficient. See note 155 below. \64\ Disclosure management software typically integrates document drafting and XBRL tagging. It may also integrate conversion into the HTML format compatible with EDGAR and direct filing of both traditional and XBRL reports with the Commission. See FERF Study, at 6. \65\ See FERF Study, at 6. \66\ Based on indications of the vendor software used to produce the EDGAR filing attachments, when available. --------------------------------------------------------------------------- When filers submit XBRL exhibits during EDGAR filing, the XBRL exhibits are validated and rendered before the attachments are accepted. During EDGAR filing, EDGAR validates XBRL documents that make up an Interactive Data File, producing error and warning messages when issues with the XBRL data are identified, and ``renders'' or creates a human-readable version of XBRL data that can be viewed on the EDGAR Web site.\67\ Thus, EDGAR Web site users can view the information in HTML format or they can view a rendered version of the tagged information submitted in the XBRL exhibit by clicking on the ``Interactive Data'' button next to the relevant filing on EDGAR. --------------------------------------------------------------------------- \67\ See also http://www.sec.gov/structureddata/edgarvalandrender. --------------------------------------------------------------------------- In 2009 the Commission estimated the expected direct cost of compliance with XBRL requirements by operating companies.\68\ After the adoption of the XBRL rules, several studies and commenters have also provided estimates of the cost of compliance with XBRL requirements.\69\ While some [[Page 14286]] observers have expressed concern about the costs associated with XBRL requirements generally, particularly for smaller filers,\70\ other observers have disagreed with the claim that the XBRL requirements impose high costs and emphasized the decrease in costs over time as filers and filing agents have gained experience and widely adopted the XBRL technology, the variety of filing agents that assist with XBRL preparation, and the potential benefits associated with better availability of information about smaller companies from the standpoint of access to capital.\71\ According to a 2013 survey, the median filer required 25 hours for the preparation and 15 hours for the review of XBRL and between $8,000 and $10,000 for the services of outside professionals for its most recent annual filing.\72\ According to another survey, the median small filer paid $10,000 or less on an annual basis for fully outsourced creation and filing of its XBRL exhibits.\73\ --------------------------------------------------------------------------- \68\ See 2009 Financial Statement Information Adopting Release, at 6804 (estimating direct costs of preparing and submitting interactive data-formatted financial statements, excluding the cost of Web site posting, at $39,510-$81,220 ($12,450-$20,340) for the first submission (each subsequent submission) with block-text footnotes and schedules and $29,700-$59,150 ($20,075-$36,940) for the first submission (each subsequent submission) with detailed tagging of footnotes and schedules, and the cost of Web site posting at $1,000 per year). \69\ See FERF Study, at 17 and 19 (estimating the cost of outside services to prepare and review the most recent annual XBRL filing as approximately $21,000 ($10,000) for the average (median) large accelerated filer, $15,000 ($10,000) for the average (median) accelerated filer, $19,000 ($10,000) for the average (median) non- accelerated filer, and $10,000 ($2,000) for the average (median) smaller reporting company and estimating the number of hours to prepare and review XBRL reports as 49 (32) preparation hours and 16 (28) review hours for the average (median) large accelerated filer, 42 (20) preparation hours and 10 (23) review hours for the average (median) accelerated filer, 44 (24) preparation hours and 16 (22) review hours for the average (median) non-accelerated filer, and 23 (24) preparation hours and 8 (11) review hours for the average (median) smaller reporting company filer). See also AICPA Study. XBRL US and the AICPA surveyed 14 XBRL filing agents providing XBRL tagging and filing services to 1,299 small public companies (32% of small publicly listed companies). According to this survey, 69% of small public companies, defined for purposes of the survey as having up to $75 million in market capitalization, paid $10,000 or less on an annual basis for fully outsourced creation and filing of their XBRL exhibits; 18% had annual costs of between $10,000 and $20,000 for full-service outsourced solutions; and 8% paid more than $25,000 per year. Higher fees tended to be associated with complexities in financial statements and with rush charges imposed in the event of last-minute changes to the filings. The exact time frame of the survey is not specified. See also Letter from Data Transparency Coalition (Oct. 29, 2015), available at http://www.sec.gov/comments/disclosure-effectiveness/disclosureeffectiveness-55.pdf (``Data Coalition Letter 1'') (estimating a median small filer's costs of XBRL compliance to be $8,000 based on the AICPA Study); Letter from Committee on Securities Law of the Business Law Section of the Maryland State Bar Association (Jul. 21, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-257.pdf (``Maryland State Bar Letter'') (citing one registrant's cost of XBRL exhibits for fiscal year 2014 as $27,000). \70\ See FERF Study, at 1 (finding, in a 2013 survey of executives and SEC reporting professionals from 442 unique companies, including members of FEI and other reporting companies, that ``the cost/benefit proposition of the XBRL mandate'' was among companies' top concerns about XBRL compliance). See also Letter from the ABA Business Law Section (Feb. 15, 2016), available at http://www.sec.gov/comments/disclosure-effectiveness/disclosureeffectiveness-69.pdf (``ABA Letter''); Advisory Committee on Small and Emerging Companies (ACSEC) Recommendations Regarding Disclosure and Other Requirements for Smaller Public Companies (Mar. 21, 2013), available at http://www.sec.gov/info/smallbus/acsec/acsec-recommendation-032113-smaller-public-co-ltr.pdf (``ACSEC Recommendations 2013'') (recommending that ``the Commission revise its rules to provide an exemption for smaller reporting companies from the requirement to submit financial information in XBRL format for periodic reports and other public filings'' in light of the disproportionate cost and time burden that compliance with financial statement information XBRL requirements imposes on smaller filers); ACSEC Recommendations about Expanding Simplified Disclosure for Smaller Issuers (Sep. 23, 2015), available at http://www.sec.gov/info/smallbus/acsec/acsec-recommendations-expanding-simplified-disclosure-for-smaller-issuers.pdf (``ACSEC Recommendations 2015'') (recommending that ``the Commission exempt smaller reporting companies from XBRL tagging''); Recommendations of the Investor Advisory Committee Regarding the SEC and the Need for the Cost Effective Retrieval of Information by Investors (Jul. 25, 2013), available at http://www.sec.gov/spotlight/investor-advisory-committee-2012/data-tagging-resolution-72513.pdf (``IAC Recommendations'') (recommending that ``the SEC take steps designed to reduce the costs of providing tagged data, particularly for smaller issuers and investors''); Letter from Center for Capital Markets Competitiveness (Jul. 20, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-173.pdf (recommending that smaller reporting companies be exempted from XBRL tagging); Maryland State Bar Letter (stating that XBRL imposes a burden on small registrants); Letter from Prologis (Jul. 21,2016), available at http://www.sec.gov/comments/s7-06-16/s70616-303.pdf (stating that XBRL preparation imposes an internal time burden of approximately one week per quarter in addition to the cost of services of an outside firm). \71\ See AICPA Study; Data Coalition Letter 1. See also Trevor S. Harris and Suzanne Morsfield, ``An Evaluation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts''--``White Paper Number Three,'' Columbia Business School Center for Excellence in Accounting and Security Analysis (December 2012), available at http://www4.gsb.columbia.edu/filemgr?&file_id=7313146 (``Columbia White Paper''), footnote 34 (finding that, based on FEI's FERF survey data for 2011 and 2012, XBRL implementation was either not as costly as anticipated, or had become significantly less costly over time for most filers). See also Mohini Singh and Sandra Peters (2016) Data and Technology: Transforming the Financial Information Landscape, CFA Institute, Codes, Standards and Position Papers, Vol. 2016, Issue 7 (June 2016), available at http://www.cfainstitute.org/learning/products/publications/ccb/Pages/ccb.v2016.n7.1.aspx (``Singh'') (retrieved Sep. 20, 2016), at 48 (stating that ``SMEs [small and medium-sized enterprises] should balance the cost of tagging against the cost of capital'' and that ``XBRL filings make the financial information of SMEs more accessible to investors and lead to a reduction in the cost of capital''). \72\ See FERF Study, at 18-19. \73\ See AICPA Study. --------------------------------------------------------------------------- The 2009 Risk/Return Summary Adopting Release estimated the expected direct cost of compliance with the mutual fund risk/return summary XBRL requirements.\74\ We have not received comments or further data that would lead us to update cost estimates for XBRL requirements pertaining to risk/return summary information. --------------------------------------------------------------------------- \74\ See 2009 Risk/Return Summary Adopting Release, at 7769 (estimating direct costs of preparing and submitting interactive data-formatted risk/return summary information, excluding the cost of Web site posting, at $23,200 ($3,100) for the first submission (each subsequent submission) and the cost of Web site posting at $250). --------------------------------------------------------------------------- To facilitate compliance with XBRL requirements, the staff has taken steps to provide guidance and tools to assist with XBRL filing.\75\ --------------------------------------------------------------------------- \75\ See, e.g., Office of Structured Disclosure Staff Interpretations and FAQs Related to Interactive Data Disclosure, available at http://www.sec.gov/structureddata/FAQs (``OSD FAQs''). The Commission also makes available to the public certain tools to assist with filing. For example, the Previewer can be used by a filer to see how XBRL submissions would appear on the SEC's Web site before submission via EDGAR and rendering by the EDGAR Renderer. The Previewer displays any error and warning messages that EDGAR would display. See http://www.sec.gov/structureddata/edgarvalandrender. See also http://www.sec.gov/structureddata/interactive-data-test-suite. --------------------------------------------------------------------------- 2. XBRL Data Use There is a wide range of users of XBRL data, including investors, financial analysts, economic research firms, data aggregators, academic researchers, and Commission staff. Investors, other market participants, and other data users access XBRL data in various ways. XBRL data for individual filings is available on EDGAR and on each filer's respective Web site. Downloads of XBRL data also are available from the Commission through Really Simple Syndication (RSS) feeds. The Commission combines, organizes and posts for bulk download XBRL data extracted from operating company submissions to facilitate investor analysis and comparisons of public company information.\76\ A number of businesses have created open-source software products, which freely provide XBRL data to investors. Other businesses offer investors additional analytical software and data feeds for a small license fee. Data aggregators (i.e., entities that, in general, collect, package and resell data) have incorporated XBRL data into their products to varying degrees. Various third-party data providers extract or preview information contained in XBRL exhibits, offering XBRL analytics tools or using XBRL data to supplement other reported data based on filer disclosures.\77\ --------------------------------------------------------------------------- \76\ See http://www.sec.gov/dera/data/financial-statement-data-sets.html. \77\ See, e.g., a discussion of XBRL analytics tools, available at http://xbrl.us/use/howto/, http://xbrl.us/home/category/productsservices/service/data-aggregation/. See also Mitchell R. Wenger, Rick Elam, and Kelly L. Williams (2013) A tour of five XBRL tools, Journal of Accountancy (Apr. 1, 2013), available at http://www.journalofaccountancy.com/issues/2013/apr/20126677.html; Letter from XBRL US (Nov. 30, 2015), available at http://www.sec.gov/comments/s7-20-15/s72015-29.pdf (``XBRL US Letter 1'') (suggesting that investment firms often obtain their data through third-party providers, many of which use the XBRL version of public company data); Letter from XBRL US (Oct. 6, 2016), available at http://www.sec.gov/comments/s7-15-16/s71516-16.pdf (stating that XBRL improves productivity by allowing analysts to spend less time on data collection and enabling deeper analysis); Letter from Data Coalition (Jul. 21, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-299.pdf (``Data Coalition Letter 2'') (discussing the availability of tools for XBRL data users). See also note 33. --------------------------------------------------------------------------- The Commission staff uses XBRL data to support risk assessment, rulemaking and enforcement activities. Machine-readable financial market data, including XBRL-formatted data, enhances the Commission's rulemaking and market monitoring activities by allowing staff to efficiently analyze large quantities of information. For example, the Commission staff uses financial statement information XBRL data in the Corporate Issuer Risk Assessment (CIRA) program, which provides a comprehensive overview of the financial reporting environment of filers [[Page 14287]] and assists the staff in detecting anomalous patterns in financial statements that may warrant additional inquiry. However, some commenters have indicated that XBRL data use has been limited, in part due to concerns regarding data quality for operating companies.\78\ Errors may appear in information submitted in XBRL that affect the quality of the data and its potential use by the public and the Commission staff. For example, Commission staff has identified several recurring issues with financial statement information XBRL data, including errors related to the characterization of a number as negative when it is positive, incorrect scaling of a number (e.g., in billions rather than in millions), unnecessary taxonomy extensions (``custom tags''), incomplete tagging (e.g., a failure to tag numbers in parentheses) and missing calculations that show relationships between data (e.g., how subtracting cost of revenue from revenue equals gross profit).\79\ Staff has provided guidance \80\ to improve the quality of XBRL data. Some of these data quality issues seem to have been mitigated over time \81\ while others are recurring. --------------------------------------------------------------------------- \78\ See, e.g., Data Coalition Letter 1; Letter from Center for Capital Markets Competitiveness (Nov. 30, 2015), available at http://www.sec.gov/comments/s7-20-15/s72015-14.pdf; CFA Institute Member Survey: XBRL (December 2011), available at http://www.cfainstitute.org/ethics/Documents/Research%20Topics%20and%20Positions%20Documents/xbrl_member_survey_report_2011.pdf (retrieved Aug. 30, 2016) (``CFA Survey'') (finding that, among respondents aware of XBRL, fewer than 20% used information through an XBRL instance document reader/viewer and fewer than 10% extracted or imported XBRL data directly into financial analysis models); Columbia White Paper; ACSEC Recommendations 2013; Final Report of the 2012 SEC Government- Business Forum on Small Business Capital Formation, available at http://www.sec.gov/info/smallbus/gbfor31.pdf; Letter from Corporate Governance Coalition for Investor Value (Jul. 20, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-188.pdf; Letter from Lark Research, Inc. (Jul. 24, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-317.pdf; Letter from Investor Advisory Committee (Jun. 15, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-22.pdf (``IAC Letter'') (stating that, as part of the staff's Disclosure Effectiveness Initiative, the Commission should take steps to increase the quality of the data that is filed with the Commission). \79\ See note 31 above. \80\ See Sample Letter Sent to Public Companies Regarding XBRL Requirement to Include Calculation Relationships (July 2014), available at http://www.sec.gov/divisions/corpfin/guidance/xbrl-calculation-0714.htm (``CFO Letter''). See also OSD FAQs. \81\ See, e.g., Staff XBRL Observations 2014 (observing a steady decline in custom tag use by large accelerated filers during the phase-in period and thereafter, based on an assessment of XBRL exhibits submitted from 2009 through October 2013). See also Hui Du, Miklos A. Vasarhelyi, and Xiaochuan Zheng (2013) XBRL mandate: thousands of filing errors and so what? Journal of Information Systems, Volume 27, Issue 1, pp. 61-78 (suggesting that filers and software vendors have learned over time, which resulted in a reduced rate of XBRL errors); Ariel J. Markelevich, 2016, The quality and usability of XBRL filings in the US, working paper (Jun. 21, 2016), available at http://ssrn.com/abstract_id=2798732 (retrieved Aug. 30, 2016) (``Markelevich'') (finding declines in several types of XBRL errors other than incorrect signs and declines in custom tag rates during 2012-2015 and also finding a higher incidence of errors among smaller filers); SEC Filers Decreased Errors by 64 Percent by Using Data Quality Committee Validation Rules (May 31, 2016), available at http://xbrl.us/news/dqc-20160531/ (retrieved Aug. 30, 2016) (analyzing the effects on XBRL data quality of guidance and validation rules of XBRL US Data Quality Committee that took effect took effect January 1, 2016 and finding that several types of errors, including incorrect signs, improper value relationships between elements, and incorrect dates, declined during the first quarter of 2016). --------------------------------------------------------------------------- Compared to financial statements of operating companies, mutual fund risk/return summaries have fewer instances in which numeric data is embedded into text, and data is generally more standardized. As discussed above,\82\ risk/return summary filers also rely to a considerable degree on the integrated approach to XBRL preparation. These factors may suggest that there are fewer data quality issues with risk/return summary XBRL data. However, we presently lack sufficient data or other information to assess the quality of risk/return summary XBRL data. --------------------------------------------------------------------------- \82\ See Section II.B.1 above. --------------------------------------------------------------------------- While these data quality issues may have multiple potential causes, we believe that some of these errors may result from the submission of XBRL tagged information as an exhibit separate from the Related Official Filing. This requirement creates an additional opportunity for reporting errors for those companies that first prepare their required disclosures in the HTML or ASCII format before creating a separate XBRL exhibit, often via an incremental set of reporting processes and controls. In particular, tagging information from the Related Official Filing in a separate XBRL exhibit increases the likelihood of inconsistently entering the information.\83\ Furthermore, since the separate XBRL exhibit is subsequently rendered for viewing by readers, although filers are not required to make the rendered version of XBRL data look exactly the same as the Related Official Filing,\84\ filers commonly add unnecessary tags aimed at managing the appearance of the rendered XBRL data that may contribute to data quality issues.\85\ --------------------------------------------------------------------------- \83\ See, e.g., XBRL US Letter 1; Letter from XBRL US (Apr. 14, 2016), available at http://www.sec.gov/comments/s7-27-15/s72715-34.pdf (``XBRL US Letter 2''); Letter from XBRL US (Jul. 21, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-278.pdf (``XBRL US Letter 3'') (referencing the translation risk associated with the preparation of two documents); Data Coalition Letter 2 (stating that Inline XBRL ``reduces the danger that the registrant will file a correct number in a document but misplace a decimal point or flip a negative sign in the corresponding structured data''). See also note 155 below. \84\ See Regulation S-T Compliance and Disclosure Interpretations, Question 130.08 (May 29, 2009), available at http://www.sec.gov/divisions/corpfin/guidance/regs-tinterp.htm (indicating that an Interactive Data File need not appear identical to the traditional format financial statements when displayed by a viewer on the Commission's Web site). \85\ See Staff XBRL Observations 2014; Staff XBRL Observations 2011. See also Inline XBRL--saving cost and effort for company reporting, XBRL UK White Paper, available at http://www.xbrl.org.uk/resources/whitepapers/inlineXBRL-benefits-v1.pdf (retrieved Aug. 30, 2016) (``XBRL White Paper''), at 5; Company reporting in the UK--an XBRL success story, XBRL UK White Paper, available at http://www.xbrl.org.uk/resources/whitepapers/UKcompanyReporting-XBRL-v1.pdf (retrieved Aug. 30, 2016) (``XBRL UK Success Story White Paper''), at 2 and 7. --------------------------------------------------------------------------- The 2005 XBRL Voluntary Program for financial statement information interactive data is currently only available to investment companies and entities that prepare their financial statements in accordance with Article 6 of Regulation S-X. Based on an analysis of EDGAR filings, we estimate that six mutual funds and other permitted participants made such submissions during calendar years 2008-2010, with no submissions in 2011-2015.\86\ --------------------------------------------------------------------------- \86\ Two filers submitted Voluntary Program XBRL exhibits (EX100) in 2015, but those filings seem to have been made in error. --------------------------------------------------------------------------- III. Proposed Amendments and Anticipated Economic Effects A. Overview of Inline XBRL In the 2009 Financial Statement Information Adopting Release, the Commission stated that it ``may consider proposing rules to require a filing format that integrates HTML with XBRL or eliminate financial statement reporting in ASCII or HTML format.'' \87\ The 2009 Risk/ Return Summary Adopting Release stated, in the context of the possibility of embedding interactive data in HTML filings, that it was necessary to monitor interactive data reporting before attempting further integration of the interactive data format.\88\ We believe that current XBRL [[Page 14288]] embedding technology now is sufficiently developed to propose requiring its use in Commission filings. In particular, the Inline XBRL technology \89\ contains a standardized set of requirements for embedding XBRL data into an HTML version of a filing, which eliminates the need to copy and tag the required information with XBRL in a separate exhibit.\90\ The Inline XBRL technology is freely licensed and made available by XBRL International, a consortium of over 600 organizations representing many aspects of the financial reporting supply chain community worldwide.\91\ --------------------------------------------------------------------------- \87\ See 2009 Financial Statement Information Adopting Release, at 6783. When the Commission proposed the XBRL requirements for financial statement information, it similarly stated that ``we may consider proposing rules to require a filing format that integrates ASCII or HTML with XBRL.'' See Release No. 33-8924 (May 30, 2008) [73 FR 32793], at 32800. \88\ See 2009 Risk/Return Summary Adopting Release, at 7755. When the Commission proposed the XBRL requirements for risk/return summary information, it similarly stated that ``we may consider proposing rules to require a filing format that integrates ASCII or HTML with XBRL.'' See Release No. 33-8929 (Jun. 10, 2008) [73 FR 35441], at 35447. \89\ See http://specifications.xbrl.org/spec-group-index-inline-xbrl.html (retrieved Aug. 30, 2016). \90\ See http://specifications.xbrl.org/presentation.html (retrieved Aug. 30, 2016). \91\ See http://www.xbrl.org/the-consortium/about/ (retrieved Aug. 30, 2016). --------------------------------------------------------------------------- With Inline XBRL, similar to existing practices, filers or filing agents would need to tag the required disclosures using the applicable taxonomy. However, the tagging of information would be performed within the HTML document instead of a separate XBRL exhibit.\92\ Inline XBRL also would give the preparer full control over the presentation of filer disclosures because the XBRL data would be displayed within the HTML filing in a browser.\93\ Inline XBRL thus yields a single document that is both human-readable and enables the automated extraction and analysis of embedded XBRL data by the user's XBRL extraction software. --------------------------------------------------------------------------- \92\ See note 159 below. \93\ In an Inline XBRL document, data values are nested within Inline XBRL elements which are themselves nested within HTML or XHTML elements (``Markup Elements''). The browser ignores the Inline XBRL elements and displays the data values as though they were textual content of the Markup Elements, enabling presentation in a human-readable format. See Inline XBRL Part 0: Primer 1.1, available at http://www.xbrl.org/WGN/inlineXBRL-part0/WGN-2015-12-09/inlineXBRL-part0-WGN-2015-12-09.html (retrieved Aug. 30, 2016). --------------------------------------------------------------------------- The Inline XBRL technology is currently used in several other jurisdictions for a variety of regulatory purposes and has been proposed for required use in another.\94\ As a result, some filers that are subject to Inline XBRL reporting requirements in other countries, as well as vendors with customers in these same countries, may already have Inline XBRL capabilities,\95\ although their experience with Inline XBRL may be based on information unrelated to financial statements or mutual fund risk/return summaries. We request comment and input from filing agents, software vendors, investors, other market participants, and other data users about their current ability to accommodate Inline XBRL.\96\ --------------------------------------------------------------------------- \94\ For example, in the United Kingdom, the ``accounts and computations'' part of a ``Company Tax Return'' must be submitted to HM Revenue and Customs using Inline XBRL (http://www.gov.uk/government/publications/xbrl-tagging-when-what-and-how-to-tag, retrieved Aug. 30, 2016). See also XBRL UK Success Story White Paper. Other examples can be found in regulations permitting or requiring the use of Inline XBRL in Australia (http://asic.gov.au/about-asic/media-centre/find-a-media-release/2015-releases/15-104mr-asic-introduces-format-for-improved-communication-of-financial-information/, retrieved Aug. 30, 2016); Ireland (http://www.revenue.ie/en/online/ros/ixbrl/index.html, retrieved Aug. 30, 2016); Denmark and Japan (http://www.xbrl.org/the-standard/why/who-else-uses-xbrl/, retrieved Aug. 30, 2016). We note that the specific disclosure regimes in these countries may differ from that in the United States. According to one commenter, Inline XBRL is used in the UK by approximately 2 million companies for reporting tax information to HMRC Tax Service Online. The commenter notes that ``[a]ccording to the HMRC's former Strategy Architect for the Company Tax online service, an estimated 90% of filings are at zero cost to the issuer because most companies (continue to) use packaged tax and accounting software to which the vendors added inline XBRL production capability as an alternative to printed output'' while ``[t]he remaining 10% of companies outsource their inline XBRL conversion to accounting firms with estimated annual costs ranging from as low as $135 to as high as $4200.'' See XBRL US Letter 2. The European Securities and Markets Authority recently proposed to require issuers in the European Union to prepare their annual financial reports containing IFRS financial statements in the Inline XBRL format using the IFRS taxonomy from January 1, 2020. See ESMA proposes new digital format for issuers' financial reporting, available at http://www.esma.europa.eu/press-news/esma-news/esma-proposes-new-digital-format-issuers%E2%80%99-financial-reporting (retrieved Jan. 31, 2017); ESMA Feedback Statement on the Consultation Paper on the Regulatory Technical Standard on the European Single Electronic Format (ESEF), Dec. 21, 2016, available at http://www.esma.europa.eu/sites/default/files/library/2016-1668_esma_feedback_statement_on_the_rts_on_esef_0.pdf (retrieved Jan. 31, 2017). \95\ In the United States, some XBRL filing agents and software vendors have stated on their Web sites, in press releases or in user documentation that they have or will have in the future the capability to generate Inline XBRL filings. \96\ See Section III.B.5 below. --------------------------------------------------------------------------- B. Proposed Amendments 1. Inline XBRL Requirements a. Use of Inline XBRL Format We propose to require the use of Inline XBRL for operating company financial information and mutual fund risk/return summaries by amending the rules that specify certain content and format requirements for the Interactive Data File. Currently, the requirement to submit and post information in XBRL applies through the exhibit requirements of Item 601(b)(101) of Regulation S-K \97\ and Forms F-10,\98\ 20-F,\99\ 40-F \100\ and 6-K \101\ with regard to financial statement information. Similar requirements for mutual funds to submit and post risk/return summary information in XBRL apply through the exhibit requirements of Form N-1A \102\ and Rule 497.\103\ These exhibit requirements specify when information in the Related Official Filing triggers the requirement to submit and post an Interactive Data File in the manner provided by Rule 405 of Regulation S-T.\104\ Rule 405 sets forth the basic content, format, submission and posting requirements for the Interactive Data File, such as the requirement to submit the Interactive Data File as an exhibit to the Related Official Filing.\105\ Rule 405 also requires that an Interactive Data File be submitted in accordance with the EDGAR Filer Manual.\106\ The EDGAR Filer Manual contains additional formatting and submission requirements for the Interactive Data File. --------------------------------------------------------------------------- \97\ The exhibit requirements of Item 601(b)(101) relate to Forms S-1, S-3, S-4, S-11, F-1, F-3, F-4, 8-K, 10-Q and 10-K. \98\ Paragraph (101) of Part II--Information Not Required to be Delivered to Offerees or Purchasers of Form F-10. \99\ Paragraph 101 of the Instructions as to Exhibits of Form 20-F. \100\ Paragraph B.(15) of the General Instructions to Form 40-F. \101\ Paragraph C.(6) of the General Instructions to Form 6-K. \102\ See General Instruction C.3(g) to Form N-1A. \103\ See Rule 497(c) and (e). \104\ The exhibit provisions that specify when an Interactive Data File is required for financial information also specify when it is optional and when it is prohibited. \105\ See Rule 405(a)(2) for the exhibit requirement. \106\ See Rule 405(a)(3). --------------------------------------------------------------------------- The amendments we are proposing today would revise Rule 405 to require filers to submit the Interactive Data File using Inline XBRL. The proposed amendments would require filers, on a phased in basis, to embed a part of the Interactive Data File within an HTML document using Inline XBRL and to include the rest in an exhibit to that document. The portion filed as an exhibit to the form would contain contextual information about the XBRL tags embedded in the filing. The information as tagged would continue to be required to satisfy all other requirements of Rule 405, including the technical requirements in the EDGAR Filer Manual.\107\ --------------------------------------------------------------------------- \107\ Information presented in multiple locations within the financial statements must be tagged in all those locations. --------------------------------------------------------------------------- We note that Inline XBRL is not compatible with the ASCII format. Thus, filers that currently prepare the Related Official Filing in the ASCII format [[Page 14289]] would need to switch to HTML unless they already have done so to comply with the amendments adopted in the Hyperlinks Adopting Release. We do not expect this to affect many filers, as the vast majority currently file in HTML.\108\ While the filers that use ASCII that would be affected by the proposal to require HTML are primarily small entities and may incur a disproportionately greater burden,\109\ we expect the impact on smaller filers to be partly mitigated by the proposed phase- in. We further expect that the average costs of switching to HTML would not be large because the cost of software with built-in HTML features is minimal. Overall, given the modest costs involved, we do not expect that the proposed amendments would have significant competitive effects for filers. We also note the advantages of HTML for the presentation of information from the standpoint of filers and users. Unlike ASCII documents, HTML documents can include graphics, varied fonts and other visual displays that filers use when they create Internet presentations or material for distribution to shareholders and other investors.\110\ In prior rulemakings, the Commission has noted the possibility of HTML eventually replacing ASCII.\111\ Furthermore, as discussed above, the Commission has adopted amendments to eliminate the ASCII format for registration statements and periodic and current reports that are subject to the exhibit requirements under Item 601 of Regulation S-K and for Forms F-10 and 20-F.\112\ These amendments should further reduce the portion of the cost of operating company ASCII filers switching to HTML that is incremental to the proposed rule. --------------------------------------------------------------------------- \108\ See note 36 above. \109\ Some commenters on the Hyperlinks Proposing Release expressed concern about the cost of switching from ASCII to HTML but have not provided specific estimates. See, e.g., Letter from Corporate Governance Coalition for Investor Value (Oct. 27, 2016), available at http://www.sec.gov/comments/s7-15-16/s71516-34.pdf; Letter from Center for Capital Markets Competitiveness (Oct. 27, 2016), available at http://www.sec.gov/comments/s7-15-16/s71516-33.pdf. \110\ Plain text submissions may not include certain characters that are not in the standard ASCII character set, such as certain foreign characters and special characters for currencies, as well as characters associated with document style and format that may be introduced by standard word processing software. Submissions must not exceed 80 characters per line. Additionally, the conversion of tabular, columnar or footnote material created in standard word processing software into ASCII may pose formatting challenges and require some information to be formatted manually. See EDGAR Filer Manual, Volume II, Section 5.2.1.2, available at http://www.sec.gov/info/edgar/edmanuals.htm. See also http://www.sec.gov/info/edgar/quick-reference/create-ascii-files.pdf. \111\ See Release No. 33-7855 (Apr. 24, 2000) [65 FR 24787], at 24789 and Release No. 33-7684 (May 17, 1999) [64 FR 27888], at 27889 (stating that ``we expect that HTML will eventually replace ASCII for most filings''). \112\ See Hyperlinks Adopting Release. --------------------------------------------------------------------------- b. Timing of Submission of Interactive Data File We are not proposing changes to the timing of the submission of the Interactive Data File for operating company financial statement information. Operating company filers would continue to be generally required to submit the Interactive Data File with the filing.\113\ --------------------------------------------------------------------------- \113\ An operating company may submit its first Interactive Data File as an amendment to the filing. See Rule 405(a) of Regulation S- T. --------------------------------------------------------------------------- In contrast, for mutual funds, we are proposing changes to the General Instructions to Form N-1A that would change the timing requirements for the submission of the Interactive Data File. First, we are proposing to permit mutual funds to submit Interactive Data Files concurrently with certain post-effective amendments filed pursuant to paragraph (b) of Rule 485 under the Securities Act.\114\ Second, we are proposing to eliminate the current 15 business day filing period accorded to all mutual fund filings containing risk/return summaries, including initial registration statements, post-effective amendments, and forms of prospectuses filed pursuant to paragraphs (c) and (e) of Rule 497. In the case of initial registration statements and post- effective amendments, the Interactive Data File would be required to be submitted no later than the effective date of those filings. In the case of forms of prospectuses filed pursuant to Rule 497, the Interactive Data File would be required to be submitted concurrently with the filing. --------------------------------------------------------------------------- \114\ A post-effective amendment filed under Rule 485(b) may become effective immediately upon filing, or at a later date designated on the facing sheet of the amendment of generally up to 30 days after the date on which the amendment is filed. A post- effective amendment may only be filed under Rule 485(b) if it is filed for one or more specified purposes, including to make non- material changes to the registration statement. --------------------------------------------------------------------------- Currently, an Interactive Data File for a Form N-1A filing, whether the filing is an initial registration statement or a post-effective amendment thereto, must be submitted as an amendment to the registration statement to which the Interactive Data File relates.\115\ That amendment with the Interactive Data File also must be submitted after the registration statement or post-effective amendment that contains the related information becomes effective but not later than 15 business days after the effective date of that registration statement or post-effective amendment.\116\ As we noted in the 2009 Risk/Return Summary Adopting Release, the period of 15 business days was intended both to provide funds with adequate time to prepare the exhibit and to make the interactive data available promptly.\117\ We understand that questions have been raised as to whether this 15 business day filing period remains necessary in light of the development of, and resulting efficiencies from, integrated solutions in the XBRL preparation process in use today and the proposed implementation of Inline XBRL. --------------------------------------------------------------------------- \115\ General Instruction C.3(g)(i) to Form N-1A. \116\ Id. Filings on Form N-1A, which contain mutual fund registration statements (or amendments thereto), are often subject to revision prior to effectiveness. For example, initial registration statements and post-effective amendments filed under Rule 485(a) are subject to Commission staff review, and revisions to the registration statement may be made in connection with the staff review process. \117\ See 2009 Risk/Return Summary Adopting Release, footnote 97 and accompanying and following text. For example, mutual funds may require additional time after making the related filing to prepare and file in a subsequent amendment the Interactive Data File due to the staff comment process or otherwise. --------------------------------------------------------------------------- Mutual funds also are required to submit an Interactive Data File for any form of prospectus filed pursuant to Rule 497(c) or (e) under the Securities Act that includes information provided in response to Items 2, 3, or 4 of Form N-1A that varies from the registration statement.\118\ In the case of those filings, however, mutual funds are permitted to file the Interactive Data File concurrently with the filing or up to 15 business days subsequent to the filing.\119\ --------------------------------------------------------------------------- \118\ See General Instruction C.3(g)(ii) to Form N-1A. \119\ Id. --------------------------------------------------------------------------- To help facilitate efficiencies in the mutual fund post-effective amendment filing process, we are proposing to amend the General Instructions to Form N-1A to permit mutual funds to submit Interactive Data Files concurrently with post-effective amendments filed pursuant to paragraphs (b)(1)(i),\120\ [[Page 14290]] (ii),\121\ (v),\122\ or (vii) \123\ of Rule 485 under the Securities Act.\124\ We are proposing this change in recognition of the fact that, in our experience, post-effective amendments filed pursuant to these paragraphs of Rule 485 generally are not subject to further revision.\125\ --------------------------------------------------------------------------- \120\ Subparagraph (i) of Rule 485(b)(1) permits a post- effective amendment filing for the purpose of bringing the financial statements up to date under Section 10(a)(3) of the Securities Act or Rules 3-12 or 3-18 of Regulation S-X. 17 CFR 210.3-12 and 210.3- 18. \121\ Subparagraph (ii) of Rule 485(b)(1) permits a post- effective amendment filing for the purpose of complying with an undertaking to file an amendment containing financial statements, which may be unaudited, within four to six months after the effective date of the registrant's registration statement under the Securities Act. \122\ Subparagraph (v) of Rule 485(b)(1) permits a post- effective amendment filing for the purpose of making any non- material changes which the registrant deems appropriate. \123\ Subparagraph (vii) of Rule 485(b)(1) permits a post- effective amendment filing for any other purpose which the Commission shall approve. \124\ See proposed General Instruction C.3(g)(i)(B) to Form N- 1A. \125\ With the exception of post-effective amendments filed pursuant to Rule 485(b)(1)(iii), a post-effective amendment filed under Rule 485(b)(1) may become effective immediately upon filing. --------------------------------------------------------------------------- With respect to all filings by mutual funds containing risk/return summaries (initial registration statements, post-effective amendments, and forms of prospectuses pursuant to Rule 497), we are proposing to eliminate the current 15 business day period during which mutual funds must submit Interactive Data Files. Inline XBRL involves embedding XBRL data directly into the filing. We believe that most mutual fund risk/ return summary XBRL submissions today are created using integrated solutions.\126\ Therefore, in order to improve the timeliness of the availability of risk/return summary XBRL information, we are proposing that Interactive Date Files be submitted to the Commission as follows: --------------------------------------------------------------------------- \126\ See note 66 above and accompanying text (noting that during 2015 and the first half of 2016, at least 80% of mutual fund risk/return summary XBRL submissions were created using integrated solutions). --------------------------------------------------------------------------- For post-effective amendments filed pursuant to paragraphs (b)(1)(i), (ii), (v), or (vii) of Rule 485, Interactive Data Files must be filed either concurrently with the filing or in a subsequent amendment that is filed on or before the date that the post-effective amendment that contains the related information becomes effective; \127\ --------------------------------------------------------------------------- \127\ See proposed General Instruction C.3(g)(i)(B) to Form N- 1A. --------------------------------------------------------------------------- For initial registration statements and post-effective amendments filed other than pursuant to paragraphs (b)(1)(i), (ii), (v), or (vii) of Rule 485, Interactive Data Files must be filed in a subsequent amendment filed on or before the date the registration statement or post-effective amendment that contains the related information becomes effective; \128\ and --------------------------------------------------------------------------- \128\ See proposed General Instruction C.3(g)(i)(A) to Form N- 1A. --------------------------------------------------------------------------- For any form of prospectus filed pursuant to Rule 497(c) or (e), mutual funds would be required to submit the Interactive Data File concurrently with the filing.\129\ --------------------------------------------------------------------------- \129\ See proposed General Instruction C.3(g)(ii) to Form N-1A. --------------------------------------------------------------------------- c. Phase-in of Inline XBRL Requirements We propose to phase in the Inline XBRL requirements for operating companies in annual increments based on the category of filer status. Large accelerated filers that prepare their financial statements in accordance with U.S. GAAP would be required to comply with Inline XBRL requirements for financial statement information in the second year after the rule is effective, followed by accelerated filers that prepare their financial statements in accordance with U.S. GAAP in the third year and all other operating company filers that are required to submit Interactive Data Files in the fourth year.\130\ This phase-in approach is broadly consistent with the approach in the 2009 Financial Statement Information Adopting Release and is intended to ease the cost of transition for smaller filers and those filers that use IFRS as issued by the IASB. Given that any fixed cost of initial transition would disproportionately burden smaller filers, this approach would give such filers time to develop related expertise, as well as the opportunity to benefit from the experience of larger filers with Inline XBRL. The proposed phase-in might also provide filing agents and software vendors whose main customers are smaller filers with additional time to adopt the Inline XBRL technology and develop related expertise. Filers would be permitted to file using Inline XBRL prior to the compliance date for each category of filers; otherwise, prior to the applicable compliance date, filers that do not file using Inline XBRL would continue to be required to submit the entire Interactive Data File as an exhibit, as they do currently.\131\ --------------------------------------------------------------------------- \130\ See proposed Rule 405(f)(1)(i). \131\ See proposed Rule 405(f)(2). --------------------------------------------------------------------------- Similarly, we propose a phase-in for mutual funds based on net asset size. Specifically, for larger entities (i.e., mutual funds that together with other investment companies in the same ``group of related investment companies'' \132\ have net assets of $1 billion or more as of the end of the most recent fiscal year) we are proposing a compliance date of one year after the effective date to comply with the new reporting requirements. For smaller entities (i.e., mutual funds that together with other investment companies in the same ``group of related investment companies'' have net assets of less than $1 billion as of the end of the most recent fiscal year), we are proposing to provide for an additional year to comply with the new reporting requirements.\133\ Mutual funds would be permitted to file using Inline XBRL prior to the compliance date for each category of filers; otherwise, prior to their applicable compliance date, filers that do not file using Inline XBRL would continue to be required to submit their Interactive Data File as an exhibit to their filing, as they do currently and under the current timing requirements. --------------------------------------------------------------------------- \132\ For these purposes, we expect that the threshold would be based on the definition of a ``group of related investment companies,'' as such term is defined in Rule 0-10 under the Investment Company Act. Rule 0-10 defines the term as applied to management investment companies as two or more management companies (including series thereof) that: (i) Hold themselves out to investors as related companies for purposes of investment and investor services; and (ii) either: (A) Have a common investment adviser or have investment advisers that are affiliated persons of each other; or (B) have a common administrator. 17 CFR 270.0- 10(a)(1). We believe that this broad definition would encompass most types of fund complexes and therefore is an appropriate definition for compliance date purposes. \133\ When the risk/return summary information XBRL requirements were adopted on February 11, 2009, all filers had approximately two years to comply (until January 1, 2011). We do not believe that a similarly extended period would be necessary for larger filers to comply with the proposed Inline XBRL requirements due to the incremental nature of the changes required for the transition to Inline XBRL compared to the initial introduction of XBRL. However, we believe that smaller mutual fund filers may on the margin benefit from the additional time to comply with the Inline XBRL requirements. --------------------------------------------------------------------------- d. Categories of Filers Subject to Inline XBRL Requirements The proposed Inline XBRL requirements for financial statement information would apply to all operating company filers, including smaller reporting companies (SRCs),\134\ emerging growth companies (EGCs) \135\ and FPIs,\136\ that currently are required to submit financial statement information in XBRL. Similarly, the proposed Inline XBRL requirements for risk/return summary information would apply to all mutual fund filers that currently are required to submit risk/ [[Page 14291]] return summary information in XBRL. At this time, we are not proposing changes to the categories of filers subject to XBRL requirements or the scope of information that is subject to XBRL requirements.\137\ --------------------------------------------------------------------------- \134\ Rule 405 under the Securities Act [17 CFR 230.405], Rule 12b-2 of the Exchange Act [17 CFR 240.12b-2] and Item 10(f) of the Regulation S-K [17 CFR 229.10(f)]. \135\ Section 2(a)(19) of the Securities Act [15 U.S.C. 77b(a)(19)] and Section 3(a)(80) of the Exchange Act [15 U.S.C. 78c(a)(80)]. \136\ Rule 3b-4(c) [17 CFR 240.3b-4(c)]. \137\ When the Commission adopted the financial statement information XBRL requirements in 2009, after considering public comments, the Commission stated that a partial or complete exemption would detract from the long-term completeness and uniformity of XBRL financial information and would be inconsistent with the Commission's goal of making financial information easier for investors to analyze while assisting in automating regulatory filings and business information processing. We continue to believe that to be the case. See note 169 below. We recognize, however, that some commenters have expressed concerns about the cost of XBRL for smaller filers. See note 70 above. As part of our recent concept release on modernizing certain business and financial disclosure requirements in Regulation S-K, we solicited comment about whether we should eliminate or reduce any of the XBRL tagging requirements for SRCs. See Release No. 33-10064 (Apr. 13, 2016) [81 FR 23915] (``Regulation S-K Concept Release''). --------------------------------------------------------------------------- In formulating the current proposals, we considered exempting SRCs from the Inline XBRL requirements.\138\ As discussed below,\139\ we do not expect Inline XBRL to significantly affect the overall costs of compliance with XBRL requirements. We expect that while filers may incur a small initial transition cost, filers also may realize reductions in ongoing costs of compliance with XBRL requirements due to the elimination of the effort associated with the creation of a separate exhibit. In addition, exempting smaller filers could result in a reduction of the aggregate data quality benefits, which would affect the usefulness of the information for investors, analysts, other users and the Commission.\140\ --------------------------------------------------------------------------- \138\ The Commission has recently proposed to amend the SRC definition. Under the proposed amendments, registrants with a public float of less than $250 million and registrants with a public float of zero and annual revenues of less than $100 million would qualify as SRCs. See Release No. 33-10107 (Jun. 27, 2016) [81 FR 43130], at 43134 and 43139. \139\ See Section III.C.2 below. \140\ See Section III.C.1 below. Inline XBRL may offer greater benefits to smaller filers since they tend to have more XBRL data errors. See Markelevich. --------------------------------------------------------------------------- 2. Elimination of Web Site Posting Requirement The amendments we are proposing also would eliminate the existing requirement to post the Interactive Data File on the filer's Web site for both operating companies and mutual funds.\141\ In the 2009 Financial Statement Information Adopting Release, the Commission stated that it thought that the Web site availability of the interactive data would encourage its widespread dissemination, make it easier and faster for investors to collect information on a particular filer, enable search engines and other data aggregators to more quickly and cheaply aggregate the data and make them available to investors and potentially increase the reliability of data availability to the public.\142\ However, the Commission also noted that this benefit could be limited since investors seeking to aggregate machine-readable XBRL data across companies, manually or through an automated process, may find XBRL exhibits posted on filers' Web sites less useful.\143\ --------------------------------------------------------------------------- \141\ See Rule 405(g) and General Instruction C.3(g) to Form N- 1A. \142\ See 2009 Financial Statement Information Adopting Release, at 6791-6792. Similarly, in adopting the Web site posting requirement for risk/return summary information, the Commission stated that Web site availability of the interactive data would encourage its widespread dissemination, contributing to lower access costs for users. See 2009 Risk/Return Summary Adopting Release, footnote 263. \143\ See 2009 Financial Statement Information Adopting Release, at 6807. See also 2009 Risk/Return Summary Adopting Release, footnote 263 (``We believe the benefits will stem primarily from the requirement to submit interactive data to the Commission and the Commission's disseminating that data.''). --------------------------------------------------------------------------- Since the adoption of the Web site posting requirement, industry commenters have observed very limited use of XBRL data from corporate Web sites.\144\ Based on our experience, we do not believe that users of XBRL data generally seek the information directly from filers' Web sites; rather, they obtain the data from the Commission's EDGAR system or third-party aggregators. We believe that access to XBRL data for purposes of aggregation and processing, whether by data aggregators or individual users, is most efficiently achieved when such machine- readable data is consistently organized (e.g., with respect to directory structure) and made available at a single source. We further believe that, based on our experience since we adopted the Web site posting requirement in 2009, potential data users can obtain sufficiently reliable access to XBRL data through EDGAR and do not need the backup of a Web site posting on a filer's Web site to access the XBRL data. Thus, we do not expect data users to incur significant costs from the elimination of the requirement to post the XBRL data on filers' Web sites. We expect filers to recognize a modest benefit from the elimination of this requirement, as discussed in greater detail below.\145\ --------------------------------------------------------------------------- \144\ See, e.g., Columbia White Paper, at 21 (suggesting that none of the data users the authors surveyed reported accessing XBRL files from filers' Web sites). We have not received comments or information about the extent of use by investors of XBRL risk/return summary information on mutual fund Web sites after the adoption of the risk/return summary information XBRL requirements. Some of the commenters on the 2008 proposal stated that the Web site posting requirement for risk/ return summary XBRL data was unnecessary. See, e.g., Letter from T. Rowe Price Associates, Inc. (Aug. 1, 2008), available at http://www.sec.gov/comments/s7-12-08/s71208-15.pdf; Letter from Investment Company Institute (Aug. 1, 2008), available at http://www.sec.gov/comments/s7-12-08/s71208-13.pdf; Letter from L. A. Schnase (Jul. 25, 2008), available at http://www.sec.gov/comments/s7-12-08/s71208-7.pdf (Schnase Letter). See also 2009 Risk/Return Summary Adopting Release, at 7755. \145\ See Section III.C.1 below. --------------------------------------------------------------------------- 3. Termination of the 2005 XBRL Voluntary Program Finally, we propose to terminate the 2005 XBRL Voluntary Program for financial statement information interactive data.\146\ Subsequent to the adoption of the interactive data requirements for financial statement information for operating companies in 2009, the only filers that remain eligible for the program are registered investment companies, business development companies, and entities that report under the Exchange Act and prepare their financial statements in accordance with Article 6 of Regulation S-X. The 2005 XBRL Voluntary Program is used very infrequently and thus, we do not believe that its continued existence would provide significant benefits. --------------------------------------------------------------------------- \146\ See Rule 401 of Regulation S-T. --------------------------------------------------------------------------- 4. Proposed Technical Amendments We are proposing to make certain technical, conforming changes to the rules for hardship exemptions, current public information under Rule 144(c)(1) of the Securities Act and form eligibility, consistent with the proposed changes in format to the Interactive Data File and elimination of the Web site posting requirement. We propose to delete the definition of ``promptly'' from Rule 11 because it was only used in Rule 406T, which has expired, and references to Forms S-2 and F-2 because the forms have been eliminated. 5. Request for Comment We request and encourage any interested person to submit comments regarding the proposed amendments, specific issues discussed in this release and other matters that may have an effect on the proposed amendments. We request comment from the point of view of filers, filing agents, and software vendors as well as investors, other market participants, data aggregators, and other data users. With regard to any comments, we note that such comments are of particular assistance to us if accompanied by supporting data and analysis of the issues addressed in those [[Page 14292]] comments. Commenters are urged to be as specific as possible. 1. Should operating companies be required to submit financial statement information using Inline XBRL, as proposed? Why or why not? 2. Should mutual funds be required to submit risk/return summary information using Inline XBRL, as proposed? Why or why not? In this regard, do mutual funds present different issues and considerations from operating companies? If so, how? 3. The Inline XBRL Viewer is now freely available as an open source application.\147\ What future enhancements to the Inline Viewer would help to improve data quality or facilitate the implementation of Inline XBRL? --------------------------------------------------------------------------- \147\ See http://arelle.org/2016/03/08/edgar-update/ (retrieved Sep. 20, 2016). --------------------------------------------------------------------------- 4. Would requiring the submission of information in Inline XBRL affect the quality and use of XBRL interactive data? If so, in what way? 5. Is the Inline XBRL technology sufficiently developed to require its use in Commission filings? 6. To what extent can filing agents and software vendors currently provide filers with the Inline XBRL functionality? For those filing agents and vendors that cannot currently provide this functionality, can it be readily developed in the future? 7. Are vendors likely to develop and make commercially available software applications or Internet products that would extract and/or analyze XBRL data from submissions in Inline XBRL? 8. Should any category of filers that is presently subject to financial statement information XBRL requirements, such as SRCs or EGCs, be exempt from the Inline XBRL requirements? Why or why not? If we were to exempt any such filers from the Inline XBRL requirements, should they be permitted to voluntarily submit their interactive data in the Inline XBRL format? What are the costs to investors, other market participants, and other data users, for instance, due to lower data quality, associated with exempting such filers from the Inline XBRL requirements? 9. Should we adopt a phase-in schedule for the implementation of Inline XBRL for operating company financial statement information, as proposed? Why or why not? Would the proposed phase-in schedule for the submission of financial statement information in Inline XBRL allow sufficient time for vendors and filers to develop and efficiently apply the Inline XBRL technology? If not, what schedule would better provide for this? Are there other factors, besides filer size and accounting principles used, that we should consider for purposes of a phase-in schedule for operating companies? 10. Would the proposed Inline XBRL requirements impose significant costs on ASCII filers? Why or why not? 11. In the case of post-effective amendment filings made pursuant to paragraphs (b)(1)(i), (ii),(v), or (vii) of Rule 485 under the Securities Act, should we, as proposed, permit mutual funds to submit interactive data information concurrently with the related filing? Why or why not? For example, is there a risk that investors may be confused by interactive data information that is filed before effectiveness of the related filing? Should we permit concurrent submission with filings made pursuant to other paragraphs of Rule 485? Conversely, should we not permit concurrent submission with filings made pursuant to one or more of paragraphs (b)(1)(i), (ii), (v), or (vii)? Should we also permit mutual funds to submit interactive data information concurrently with the related filing in the case of initial registration statements and post-effective amendments made pursuant to other paragraphs of Rule 485? Why or why not? Should we instead maintain the current requirement that Interactive Data Files be submitted in a subsequent amendment to the initial registration statement or any post-effective amendment? Why or why not? 12. We are proposing to eliminate the 15 business day filing period currently accorded to all mutual fund filings containing risk/return summaries, including initial registration statements, post-effective amendments, and forms of prospectuses filed pursuant to paragraphs (c) and (e) of Rule 497. Should we instead maintain some filing period after the related filing is made? Why or why not? If we maintain a filing period after the related filing is made, is the current period of 15 business days an appropriate time period for mutual funds to submit the interactive data, or should the time period be shorter or longer (e.g., 1 day, 5 days, 10 days, 20 days, 30 days)? Are there costs or other burdens that may be incurred by filers if the current 15 business day filing period is eliminated? 13. We are proposing that for post-effective amendments filed pursuant to paragraphs (b)(1)(i), (ii), (v), or (vii) of Rule 485, Interactive Data Files must be submitted either concurrently with the filing or in a subsequent amendment that is filed on or before the date that the post-effective amendment that contains the related information becomes effective. Should we instead require that the Interactive Data Files be filed concurrently with the filing? Why or why not? Are there instances in which mutual fund filers would prefer to submit the Interactive Data File in a subsequent amendment? For example, in post- effective amendment filings designating a future effective date, would filers be more likely to submit the Interactive Data File concurrently with the filing or in a subsequent amendment? Should we extend the proposed filing requirements described above to filings made pursuant to other paragraphs of Rule 485? Instead, should different filing requirements extend to filings made pursuant to one or more of paragraphs (b)(1)(i), (ii), (v), or (vii)? 14. Would the proposed phase-in schedule for the submission of risk/return summary information in Inline XBRL allow sufficient time for vendors and filers to develop and efficiently apply the Inline XBRL technology? Is a threshold of $1 billion based on the net assets of mutual funds together with other investment companies in the same ``group of related investment companies'' as of the end of the most recent fiscal year appropriate? Should the threshold include aggregation of net assets with other investment companies in the same ``group of related investment companies''? Why or why not? In lieu of ``group of related investment companies,'' should aggregation be based on a different set of related companies? For example, should aggregate assets be based on ``family of investment companies,'' as such term defined in instruction 1(a) to Item 17 of Form N-1A or ``fund complex'' as defined in instruction 1(b) to Item 17 of Form N-1A? Should we require administrator-sponsored funds to aggregate assets for purposes of this threshold regardless of whether the individual funds (or series thereof) do not hold themselves out to investors as related companies for purposes of investment and investor services? Why or why not? 15. Does the proposed phase-in schedule provide sufficient time for compliance for larger mutual fund filers? If not, what length of time would be appropriate for compliance? Is our 12-month extension of the compliance period for smaller entities appropriate? If not, what length of time would be appropriate for the extension of the compliance period for smaller entities? 16. To what extent do investors and other users of risk/return summary information find tagged risk/return summary information useful for analytical purposes? Is tagged risk/return summary information that is [[Page 14293]] narrative, rather than numerical, useful as an analytical tool? 17. Are any other amendments necessary or appropriate to require the submission of financial statement and risk/return summary information in Inline XBRL? If so, what are they? 18. Should we eliminate the requirement to post financial statement information in XBRL on corporate filer Web sites, as proposed? Would operating company filers benefit from the elimination of the XBRL Web site posting requirement? To what extent do operating company investors access financial statement information XBRL data on filer Web sites? Would eliminating the requirement impede their efforts to access the information? Why or why not? 19. Should we eliminate the XBRL Web site posting requirement for risk/return summary information, as proposed? Would mutual fund filers benefit from the elimination of the XBRL Web site posting requirement? To what extent do mutual fund investors access risk/return summary XBRL data on mutual fund Web sites? Please provide any related data. Would eliminating the Web site posting requirement impede mutual fund investor efforts to access the information? Why or why not? 20. In what ways might the Commission enhance the access to Inline XBRL data submitted by filers? 21. Should the Commission terminate the 2005 XBRL Voluntary Program, as proposed? Why or why not? 22. Should the Commission consider rulemaking to require other types of information to be submitted in the Inline XBRL format? If so, what other types of information would be suitable for the Inline XBRL format and why? Are there other means of embedding structured data into the human-readable format of filings that we should consider? C. Potential Economic Effects of the Proposed Amendments We are mindful of the costs imposed by and the benefits obtained from our rules. Securities Act Section 2(b),\148\ Exchange Act Section 3(f) \149\ and Investment Company Act Section 2(c) \150\ require us, when engaging in rulemaking that requires us to consider or determine whether an action is necessary or appropriate in the public interest, to consider, in addition to the protection of investors, whether the action will promote efficiency, competition and capital formation. Additionally, Exchange Act Section 23(a)(2) requires us, when adopting rules under the Exchange Act, to consider the impact that any new rule would have on competition and not to adopt any rule that would impose a burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act.\151\ --------------------------------------------------------------------------- \148\ 15 U.S.C. 77b(b). \149\ 15 U.S.C. 78c(f). \150\ 15 U.S.C. 80a-2(c). \151\ 15 U.S.C. 78w(a)(2). --------------------------------------------------------------------------- The proposed amendments aim to increase the efficiency and lower the cost of compliance with the existing XBRL requirements applicable to operating companies and mutual funds through process improvements associated with Inline XBRL, thereby potentially improving the quality of XBRL data available to users. The discussion below addresses the potential economic effects of the proposed amendments, including their likely costs and benefits as well as the likely effects of the proposed amendments on efficiency, competition and capital formation, relative to the economic baseline, which is comprised of XBRL practices in existence today.\152\ --------------------------------------------------------------------------- \152\ See Section II.B above. --------------------------------------------------------------------------- At the outset, we note that, where possible, we have attempted to quantify the costs and benefits expected to result from the proposed amendments to the XBRL requirements. However, in some cases we have been unable to quantify the economic effects because we lack the information necessary to provide a reasonable estimate. For example, it is difficult to assess the extent to which the transition to Inline XBRL would result in an initial cost of switching, future savings of XBRL preparation cost and time or potential decreases in the incidence of XBRL data errors. Similarly, it is difficult to quantify the extent to which Inline XBRL would enhance the quality of XBRL data and, if so, whether it would increase XBRL data use. We encourage commenters to provide data that may be relevant for quantifying these impacts. As operating company filers begin to use Inline XBRL on a voluntary basis pursuant to our recently issued Exemptive Order,\153\ we expect to be able to obtain additional information about the effects of Inline XBRL on the quality of XBRL data submitted by filers as well as any reduction in preparation time or costs. We encourage such voluntary filers to provide us information and data from their experiences. --------------------------------------------------------------------------- \153\ See note 58 above. --------------------------------------------------------------------------- Voluntary transition to Inline XBRL could accelerate the economic effects of Inline XBRL and allow filers that are able to file in Inline XBRL or that rely on service providers that already have or are close to developing Inline XBRL capability to realize the benefits of Inline XBRL sooner. The expertise gained by software vendors and filing agents from a voluntary transition to Inline XBRL may facilitate the transition to Inline XBRL by subsequent adopters. Filer demand for Inline XBRL filing under the voluntary program pursuant to the Exemptive Order may also lead filing agents and software vendors to accelerate the development of Inline XBRL filing solutions and accumulate associated expertise, which could potentially lower initial costs per filer should the proposal for mandatory Inline XBRL filing be adopted. 1. Benefits We believe that filing information with Inline XBRL has the potential to provide a number of benefits to both filers and users of this information. In particular, we believe that the use of Inline XBRL may reduce the time and effort associated with preparing XBRL filings, simplify the review process for filers, and improve the quality of structured data and, by improving data quality, increase the use of XBRL data by investors, other market participants, and other data users.\154\ --------------------------------------------------------------------------- \154\ See Letter from CFA Institute (Oct. 6, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-375.pdf; IAC Recommendations (recommending consideration of the use of Inline XBRL to promote standardization and facilitate recovery of data filed with the Commission); IAC Letter (recommending accelerated development and implementation of Inline XBRL); Letter from California State Teachers' Retirement System (Jul. 21, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-226.pdf (stating that the development and implementation of technology such as Inline XBRL should be accelerated ``to provide needed information in a format where investors can drill-down and contrast peer information through robust technology''). See also notes 155 and 162 below. --------------------------------------------------------------------------- Embedding XBRL data in an HTML document rather than tagging a copy of the data to create a separate XBRL exhibit should increase the efficiency and effectiveness of the filing preparation process and, by saving time and effort spent on the filing process, may, over time, reduce the cost of compliance with existing XBRL requirements. Commenters and other sources have noted these potential benefits of Inline XBRL both in the operating company context \155\ and in [[Page 14294]] the mutual fund context.\156\ Inline XBRL eliminates the need to create a separate XBRL instance document, which can reduce the incidence of those re-keying errors that are associated with the presence of separate documents.\157\ Inline XBRL also makes it possible for filers or filing agents to view XBRL meta data \158\ within the HTML document, which can facilitate the review of XBRL data and better equip filers to detect XBRL errors. Further, filers or filing agents can use tools like the open source Inline XBRL Viewer to review the Interactive Data File and more efficiently filter and identify errors. Thus, by facilitating the preparation and review of XBRL data, Inline XBRL can decrease the overall time and cost required by filers to comply with the existing XBRL requirements. --------------------------------------------------------------------------- \155\ See XBRL US Letter 1 (stating that ``In-line XBRL would reduce filing costs for US companies because they would be required to file only one document--not two . . . [and] would also eliminate the translation risk companies bear preparing two documents reporting the same information''); XBRL US Letter 2 (stating that the current process of submitting both an HTML and XBRL version of financial statement information results in companies filing duplicated data and that the burden on reporting entities can be further reduced by leveraging Inline XBRL technology, which combines an HTML and an XBRL file into a single document); XBRL US Letter 3 (stating that ``the disclosure process overall will be further streamlined now that the SEC allows the use of inline XBRL, which eliminates the need to create duplicate versions of the filing''); Letter from XBRL US to Members of the U.S. House of Representatives (Feb. 3, 2016), available at http://xbrl.us/wp-content/uploads/2016/02/XBRL-US-Letter-to-U-S-House-of-Representatives-2-3-16.pdf (stating that ``[I]nline XBRL will enable companies to streamline their current process significantly, further reducing the cost of disclosure . . . and would also improve the efficiency and effectiveness of the current SEC reporting program''); Data Coalition Letter 2 (stating that Inline XBRL ``reduces the danger that the registrant will file a correct number in a document but misplace a decimal point or flip a negative sign in the corresponding structured data'' and that Inline XBRL is a ``significant step toward better quality and predictability''); Letter from Pfizer (Dec. 7, 2015), available at http://www.sec.gov/comments/s7-20-15/s72015-44.pdf (observing that duplication due to the current requirement that both the HTML and XBRL document be filed is not beneficial to investors or registrants and recommending that the Commission avoid imposing certain of the existing machine- readable filing requirements that result in unnecessary duplication); ABA Letter (referencing ``unnecessary duplication'' in the current data tagging framework). See also XBRL White Paper, at 4 (discussing the ease of assessing XBRL tags in an Inline XBRL document); Kamile Asli Basoglu, Clinton E. (Skip) White, Jr. (2015) Inline XBRL versus XBRL for SEC Reporting, Journal of Emerging Technologies in Accounting, Volume 12, Issue 1, pp. 189-199 (discussing the technical advantages of Inline XBRL). \156\ While we are not aware of comment letters or data from other sources specifically addressing Inline XBRL in the context of mutual fund risk/return summary information after the adoption of the risk/return summary information XBRL requirements in 2009, we note that, in the context of the 2008 risk/return summary information proposal, one commenter stated that ``XBRL tags can be embedded seamlessly in the body of the official traditional filing-- or the entire filing can be formatted in XBRL--so that funds will not have to create and bear potential liability for stand-alone submissions containing only XBRL data taken out of context, or have to grapple with portions of their information being required in 2 or 3 different formats'' and that many of the added costs of the XBRL requirement for risk/return summary information ``stem from the fact that the tagged data will appear in a separately created document, rather than embedded seamlessly into the traditional Related Official Filing.'' The commenter also acknowledged that, at the time, ``there may be technological obstacles to embedded tagging.'' See Schnase Letter. Another commenter stated that ``[w]ith respect to the integration of XBRL tagging with HTML, this technology has not yet been fully developed and it would be premature to propose such.'' See Letter from Data Communiqu[eacute] (Jul. 31, 2008), available at http://www.sec.gov/comments/s7-12-08/s71208-11.pdf. As discussed above, we believe that current XBRL embedding technology now is sufficiently developed to propose requiring its use in submitting information to the Commission. \157\ See Section III.A above. \158\ Such meta data include, for example, definitions, reporting period information, data type and related references. --------------------------------------------------------------------------- We expect the benefit of savings in ongoing XBRL preparation and filing costs due to Inline XBRL to be smaller for filers that presently rely on the integrated XBRL preparation approach, which generally involves fewer re-keying issues. To the extent that the integrated XBRL preparation approach is more prevalent among mutual fund filers than operating companies, such filers may realize smaller benefits. However, filers that use the integrated XBRL preparation approach may nonetheless realize incremental time savings and/or efficiencies in the filing process from Inline XBRL.\159\ Additionally, those filers that currently choose XBRL tags so that the data looks similar to the HTML document when rendered by software into a human-readable presentation would have less of an incentive to do so because Inline XBRL would embed XBRL tags into the HTML document. This may result in higher- quality tagged data at a lower cost. --------------------------------------------------------------------------- \159\ Software vendors and filing agents that currently use the integrated XBRL preparation approach, combining the processes of creating interactive data tags and an HTML document, cannot presently take full advantage of the resulting efficiency because of current requirements. At present, filing agents and/or filers that use integrated XBRL solutions must expend the effort, albeit minimal, to split out the interactive data and save it to a separate instance document for filing. --------------------------------------------------------------------------- While we are currently unable to quantify these potential gains in the effectiveness and efficiency of the filing preparation process and the resulting reductions in the ongoing cost of compliance with the XBRL requirements, we believe that the experience of operating company filers using Inline XBRL under the voluntary program pursuant to the Exemptive Order may help provide useful information and data that will help inform any final decision on the proposed rules.\160\ We are also requesting comment on the anticipated effects of adopting Inline XBRL on the efficiency of the XBRL filing process.\161\ --------------------------------------------------------------------------- \160\ We recognize that the experience of operating companies that elect to file in Inline XBRL pursuant to the Exemptive Order may not be fully representative of all operating company filers or of mutual fund filers. \161\ See Section III.C.5 below. --------------------------------------------------------------------------- The use of Inline XBRL may also improve XBRL data quality.\162\ When XBRL is embedded directly into the HTML document, the filer prepares and reviews a single document, rather than separate documents--as is the case with the current reporting requirement--which should enable a reduction in data errors, particularly for those filers that currently use the standalone XBRL preparation approach.\163\ Further, filers or filing agents can use review tools like the open source Inline XBRL Viewer to more readily filter and identify errors. To the extent that Inline XBRL technology can reduce the rate of XBRL errors that are not detected by filers with the current XBRL filing practices and technology, Inline XBRL could incrementally improve XBRL data quality and thus potentially benefit data users.\164\ Additionally, since Inline XBRL filers would have less of an incentive to create custom XBRL tags solely to mimic the appearance of an HTML filing, Inline XBRL could increase the ability of investors, other market participants, and other data users to compare information across filers for those filers that currently [[Page 14295]] engage in such tagging practices.\165\ Due to greater standardization of presentation of mutual fund risk/return summary XBRL information, we do not expect the latter benefit of Inline XBRL to extend to mutual fund risk/return summaries. --------------------------------------------------------------------------- \162\ See Columbia White Paper, at 42 and footnote 48 (arguing that one way to help improve the quality of XBRL data, as well as to make the data more useful and accessible to users, is ``for issuers to move to `Inline XBRL' which ensures that XBRL and HTML data are the same, and which can ease the preparation burden for filers''). See also IAC Recommendations (suggesting that the use of Inline XBRL be considered as one of the means to promote standardization and facilitate recovery of data by investors). \163\ See note 83 above. \164\ Existing format requirements for Interactive Data Files include the element accuracy requirement, which provides that each data element (i.e., all text, line item names, monetary values, percentages, numbers, dates and other labels) contained in the Interactive Data File must reflect the same information in the corresponding data in the Related Official Filing. See Rule 405(c)(1)(i) of Regulation S-T. We also note that the incremental effects of Inline XBRL on the reduction in XBRL errors would be smaller if other initiatives result in a reduction in XBRL data errors. For example, the XBRL US Data Quality Committee has published validation rules to help public companies detect inconsistencies or errors in their XBRL-formatted financial data, such as incorrect negative values, improper relationships between elements and incorrect dates associated with certain data. See http://xbrl.us/data-quality/rules-guidance/. See also XBRL US Letter 3 (stating that the ``XBRL US Data Quality Committee is developing a Framework for Element Selection and Extension Use to help issuers make decisions that will improve the consistency of reported data''). See also note 80 above. \165\ See notes 84, 85 and 93 and accompanying text above. Inline XBRL filers may still use custom tags to represent certain company-specific data. --------------------------------------------------------------------------- To the extent that Inline XBRL might improve data quality, it may contribute to wider use of XBRL data by investors, other market participants, and other data users and may enhance the benefits that are associated with XBRL more generally for filers that presently submit interactive data using the XBRL format. In the 2009 Financial Statement Information Adopting Release, the Commission stated that requiring filers to submit their financial statement information in XBRL would enable investors, analysts and the Commission staff to capture and analyze that information more quickly and at a lower cost; enable investors and others to search and analyze the financial information dynamically; and facilitate comparison of financial and business performance across filers, reporting periods and industries.\166\ The 2009 Financial Statement Information Adopting Release also referenced potential gains in the efficiency of capital formation and allocation, suggesting that, if interactive data, through increased availability or reduced cost of collecting and analyzing corporate financial data, were to reduce the information barriers faced by investors, which make it costly for companies to find appropriate sources of finance, it would lower the cost of capital and increase the efficiency of capital formation, particularly for smaller public companies.\167\ Similarly, in the 2009 Risk/Return Summary Adopting Release, we noted that requiring mutual funds to file their risk/return summary information using the interactive data format would enable investors, third-party information providers and the Commission staff to capture and analyze that information more quickly and at a lower cost than is possible using the same information provided in a static format, facilitate comparisons of mutual fund costs, performance and other information across classes of securities and across funds and help investors make more well-informed investment decisions.\168\ Thus, to the extent that Inline XBRL contributes to an increase in XBRL data quality and XBRL data use by investors, other market participants, and other data users, it could potentially increase the informational efficiency of prices and the efficiency of capital formation and allocation and potentially decrease the cost of capital. --------------------------------------------------------------------------- \166\ See 2009 Financial Statement Information Adopting Release, at 6777. \167\ See 2009 Financial Statement Information Adopting Release, at 6807-6808. \168\ See 2009 Risk/Return Summary Adopting Release, at 7766- 7768. --------------------------------------------------------------------------- Based on our experience with XBRL so far, we believe that the XBRL requirements are providing these benefits,\169\ including to smaller filers. The realization of these benefits of XBRL is conditional on the quality and use of interactive data. Thus, to the extent that Inline XBRL results in an improvement in XBRL data quality and in increased use of XBRL data, we expect that these benefits would be enhanced. We note, however, that because the proposed Inline XBRL requirements would not modify the scope and substance of existing XBRL requirements or the categories of filers subject to the requirements, both the improvement in data quality due to Inline XBRL and the associated economic benefits that are incremental to Inline XBRL likely would be smaller than the benefits of the XBRL requirements more generally. To the extent that risk/return summary XBRL data might be associated with fewer data quality issues, the data quality benefits incremental to Inline XBRL might be smaller for risk/return summary information than for financial statement information. --------------------------------------------------------------------------- \169\ For academic research on the benefits of XBRL, see, e.g., Yi Dong, Oliver Zhen Li, Yupeng Lin, and Chenkai Ni (2016) Does information processing cost affect firm-specific information acquisition? Evidence from XBRL adoption, Journal of Financial and Quantitative Analysis, Volume 51, Issue 2, pp. 435-462; Chunhui Liu, Tawei Wang, and Lee J. Yao (2014) XBRL's impact on analyst forecast behavior: An empirical study, Journal of Accounting and Public Policy, Volume 33, Issue 1, pp. 69-82; Kosal Ly (2012) Extensible Business Reporting Language for Financial Reporting (XBRL-FR) and financial analysts' activity: early evidence, Academy of Accounting and Financial Studies Journal, Volume 16, Issue 2, pp. 25-44; Yu Cong, Jia Hao, and Lin Zou (2014) The impact of XBRL reporting on market efficiency, Journal of Information Systems, Volume 28, Issue 2, pp. 181-207; Lizhong Hao and Mark J. Kohlbeck (2013) The market impact of mandatory interactive data: Evidence from bank regulatory XBRL filings, Journal of Emerging Technologies in Accounting, Volume 10, Issue 1, pp. 41-62; Ariel Markelevich, Tracey Riley, and Lewis Shaw (2015) Towards harmonizing reporting standards and communication of international financial information: The status and the role of IFRS and XBRL, Journal of Knowledge Globalization Volume 8, Issue 2; Elizabeth Blankespoor (2012) The impact of investor information processing costs on firm disclosure choice: evidence from the XBRL mandate, working paper, available at http://fisher.osu.edu/supplements/10/11702/Job%20Market%20Paper_Blakespoor_12-4-11(2).pdf (retrieved Aug. 30, 2016); Jeff Zeyun Chen, Hyun A. Hong, Jeong-Bon Kim, and Ji Woo Ryou (2016) Information processing costs and corporate tax aggressiveness: Evidence from the SEC's XBRL mandate, working paper, available at http://ssrn.com/abstract_id=2754427 (retrieved Aug. 30, 2016) (relating the reduction in information processing costs associated with XBRL to a decrease in tax avoidance). But see Elizabeth Blankespoor, Brian P. Miller, and Hal White (2014) Initial evidence on the market impact of the XBRL mandate, Review of Accounting Studies, Volume 19, Issue 4, pp. 1468-1503. See also Singh (discussing the benefits of structured disclosure for filers, investors, and other data users; stating that ``costs (or savings) and benefits realized are largely dependent on how financial executives view XBRL mandates: narrowly, as a simple compliance requirement, or more broadly, as a business reporting supply chain standardization opportunity to streamline and cost effectively enhance a broad range of compliance processes . . . SMEs [small and medium-sized enterprises] should balance the cost of tagging against the cost of capital. XBRL filings make the financial information of SMEs more accessible to investors and lead to a reduction in the cost of capital'') and Arif Perdana, Alastair Robb, and Fiona Rohde (2015) An integrative review and synthesis of XBRL research in academic journals, Journal of Information Systems, Volume 29, Issue 1, pp. 115-153 (surveying academic research on XBRL). Several commenters also have addressed the benefits of XBRL. See, e.g., XBRL US Letter 3 (stating that ``[t]he benefits of standardized financials for companies--regardless of size--are significant in terms of faster delivery of comparable data to market and greater usability,'' and ``[d]ata providers can process XBRL- formatted data much more quickly and inexpensively than traditional data types''); Data Coalition Letter 2 (stating that ``[f]or structured data to be most effective for regulators and investors, it is important to have a complete data set for all reporting entities''); Letter from Merrill Corporation (Jul. 19, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-153.pdf (stating that the tagging requirement should be the same for all registrants); Letter from New York State Society of CPAs (Jul. 19, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-150.pdf (stating that, if any companies are exempt from using XBRL, their reports would not be readily comparable to other reports, thereby leading investors to assign a greater risk profile to these companies); Letter from Morningstar (Jul. 20, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-179.pdf; Letter from CFA Institute (Mar. 2, 2016), available at http://www.sec.gov/comments/s7-20-15/s72015-50.pdf (stating that the expanded use of XBRL is an opportunity to leverage data, enhance analysis, and facilitate company comparisons); Letter from AFSCME (Jul. 21, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-269.pdf (stating that ``data-tagging facilitates more accurate, less costly extraction and use of information, creating more usable disclosure''). --------------------------------------------------------------------------- While we lack the ability to quantify the incremental contribution of Inline XBRL to potential increases in the use of XBRL data and the broader benefits of XBRL, we anticipate that the contribution would depend on several factors, including the extent of XBRL data quality improvements following the transition to Inline XBRL, changes in the extent of reliance by investors, other market participants, and other data users on XBRL data and technological innovation in XBRL preparation and analytics solutions. [[Page 14296]] Inline XBRL also could enhance how users view XBRL data related to Commission disclosures. With Inline XBRL, the EDGAR system would enable users to view information about the reported XBRL data embedded in Inline XBRL filings on the Commission's Web site, using any recent standard Internet browser, without the need to access a separate document. With this feature, when a user views a filing submitted with Inline XBRL on EDGAR, the user would be able to see tags and the related meta data while viewing the HTML filing. The software enabling this feature has been made freely available in an effort to facilitate the creation of cost effective Inline XBRL viewers and analytical products.\170\ The aggregate benefit to data users associated with Inline XBRL would depend on the current level of XBRL data use,\171\ the potential increase in XBRL data use following the transition to Inline XBRL and the data quality gains associated with Inline XBRL. --------------------------------------------------------------------------- \170\ See http://www.sec.gov/structureddata/edgarvalandrender. \171\ See note 78 above. --------------------------------------------------------------------------- The proposed elimination of the Web site posting requirement is expected to yield cost savings. For purposes of the Paperwork Reduction Act, we estimate that the elimination of the Web site posting requirement would result in the average reduction in the annual internal burden of approximately four hours per filer for operating companies and approximately one hour per filing for mutual funds.\172\ --------------------------------------------------------------------------- \172\ See Section V.B.1 below. --------------------------------------------------------------------------- 2. Costs The proposed requirement to adopt Inline XBRL would result in costs for filers, XBRL preparation software vendors, filing agents and data users. a. Filers We expect that changes to the XBRL requirements would affect filers.\173\ The proposed Inline XBRL requirements could result in an initial increase in compliance costs for filers associated with the transition to Inline XBRL technology. Filers could switch to Inline XBRL either by using Inline XBRL enabled preparation software that they develop or license or by obtaining Inline XBRL preparation services from a third-party service provider (filing agent). Filers that prepare XBRL filings in-house would need to replace or update their XBRL preparation software with versions that include Inline XBRL features and capabilities. Filers that rely on filing agents for XBRL preparation may also incur an incremental cost of Inline XBRL upgrades (to the extent that the cost incurred by filing agents is passed on to filers).\174\ Filers also may incur an internal cost to train their personnel to use Inline XBRL and to comply with the Inline XBRL requirements. --------------------------------------------------------------------------- \173\ See Section II.B.1 above for estimates of the number of filers. \174\ We expect this cost to be lower if there is more competition among filing agents and software vendors that offer Inline XBRL capabilities. --------------------------------------------------------------------------- Filers that use software that is already enabled for Inline XBRL or that can readily be modified to accommodate the Inline XBRL format and filers that use filing agents that use such software, are expected to incur a minimal initial cost.\175\ We expect the cost to be lower for filers and filing agents that presently rely on integrated XBRL filing solutions, which can more easily accommodate the use of Inline XBRL. With such software solutions, filing in Inline XBRL could require only a very minor adjustment to the filing process, similar to choosing the format in which the file would be saved out of several available formats. Due to greater reliance of mutual fund filers on integrated XBRL filing solutions and a higher level of automation of the XBRL preparation process, we expect the majority of mutual fund filers to incur a minimal initial economic cost of adopting Inline XBRL.\176\ Although we recognize the likelihood of somewhat greater initial costs being incurred by filers that do not use such software or such filing agents, we believe that, as a general matter, the initial economic cost due to the transition to Inline XBRL technology would be small. In particular, we expect this to be the case because the rules we are proposing today do not modify the substance of the XBRL requirements, and thus, do not affect the process of selecting tags from the taxonomy for the required disclosures (the disclosure mapping process that precedes the creation of the XBRL submission and accounts for the overwhelming majority of the XBRL preparation time and cost). The creation of the Inline XBRL document would occur after the mapping of company disclosures to the taxonomy is completed and would consist largely of a software function, which could include a broad range of file formats (e.g., HTML, PDF, XBRL, Inline XBRL, etc.). --------------------------------------------------------------------------- \175\ See note 95 above. \176\ See Section II.B.1 above. --------------------------------------------------------------------------- Filers that currently prepare the Related Official Filing in the ASCII format may incur additional costs unless they already have switched to HTML to comply with the amendments adopted in the Hyperlinks Adopting Release. In particular, those filers would need to switch to the HTML format because Inline XBRL cannot be used with ASCII filings. We expect that the majority of filers would not be affected by this change.\177\ We do not expect the costs of switching to HTML to be significant given that the cost of software with built-in HTML features is minimal, although we recognize that any fixed costs would have a greater effect on smaller entities. Overall, given the minimal costs involved, we expect that this requirement would not have significant competitive effects for filers. --------------------------------------------------------------------------- \177\ See note 36 above. Smaller filers are more likely to file in ASCII, based on staff analysis of EDGAR filings by operating company filers. --------------------------------------------------------------------------- While we expect that filers would continue to incur ongoing costs of compliance with the XBRL requirements,\178\ we do not expect these ongoing costs to increase due to Inline XBRL. Overall, for most filers, we anticipate that the transition to Inline XBRL might, over time, somewhat reduce the ongoing cost of compliance with the XBRL requirements due to the removal of the requirement to create a separate instance document. --------------------------------------------------------------------------- \178\ See 2009 Financial Statement Information Adopting Release, at 6800-6802, 6804-6806; 2009 Risk/Return Summary Adopting Release, at 7763-7766, 7768-7770. --------------------------------------------------------------------------- We note that some filers may incur an increased burden if their filings contain a major technical error in the XBRL data. In particular, currently, when there is a major technical error with XBRL data submitted in an exhibit, the EDGAR validation system causes the exhibit to be removed from the submission, but the submission as a whole is not suspended.\179\ With Inline XBRL, the EDGAR validation system would suspend an Inline XBRL filing that contains a major technical error in embedded XBRL data, which would require the filing to be revised before it could be accepted by EDGAR. Based on staff observations, very few XBRL exhibits are suspended, in part, because filers and filing agents routinely use tools the Commission makes available to submit test filings to help identify and correct technical errors prior to EDGAR filing. Similar tools to submit test filings would be available to Inline XBRL filers. Because we expect that Inline XBRL filers would utilize available tools to submit test filings to identify and correct any technical errors prior to [[Page 14297]] EDGAR filing, we believe that such suspensions should be similarly rare for Inline XBRL filers. --------------------------------------------------------------------------- \179\ During filing and validation, the EDGAR Renderer creates error and warning messages when issues with the XBRL data are identified. Certain errors would result in the XBRL exhibits being ``stripped'' from a filing, although the rest of the filing is accepted in EDGAR. For information about the effect of error and warning messages displayed during EDGAR filing, see Question A.3 of OSD FAQs. --------------------------------------------------------------------------- Since Inline XBRL would involve embedding tags into the filing itself and since most funds already use integrated XBRL preparation solutions, as discussed above, we propose to eliminate the 15 business day filing period and require that risk/return summary information in XBRL be submitted on or before the date the registration statement or post-effective amendment to it under Rule 485 containing the related information becomes effective. We also propose to eliminate the 15 business day filing period currently provided to mutual funds to file the required XBRL exhibit after the filing of the related form of prospectus under Rule 497(c) or (e). The increased timeliness of the availability of risk/return summary information from such filings in the XBRL format is expected to benefit investors, other market participants, and other data users by reducing the time required to obtain risk/return summary information in a structured format that can facilitate analysis and comparisons across funds. At the same time, we recognize that more timely availability of free risk/return summary information in XBRL may reduce demand for some subscription products and services of mutual fund data aggregators, to the extent that their value added is reduced by the timely availability of free XBRL information. We further recognize that eliminating the 15- day period would eliminate the flexibility with respect to the timing of the preparation and review of XBRL data that is presently afforded to mutual fund filers, most of which currently submit XBRL data after the post-effective amendment or form of prospectus to which it relates, and potentially increase ongoing XBRL compliance costs for mutual fund filers and their filing agents (that may pass these costs on to filers). We lack data to quantify the anticipated cost increase, but expect that any such increase would be partially mitigated by the relatively high degree of integration and automation in mutual fund XBRL preparation, the technological improvements in XBRL preparation since the effectiveness of the 2009 requirements, and the efficiencies due to embedding tags into the filing. However, we solicit comment from filers, filing agents, and data users on the anticipated economic costs and benefits of this proposed change. For post-effective amendments to registration statements under Rule 485(b)(1)(i), (ii), (v), or (vii),\180\ we propose to permit filers to submit XBRL concurrently with the filing. The proposed change would eliminate the requirement to make a second filing that solely contains the required XBRL exhibit for such post-effective amendments. The proposed change would enable filers to fully realize efficiency gains in XBRL preparation due to embedding XBRL into the filing and potentially decrease overall preparation and filing costs associated with the submission of a second post-effective amendment. --------------------------------------------------------------------------- \180\ As discussed above, in our experience, filings under Rule 485(b)(1)(i), (ii), (v), or (vii) and Rule 497(c) or (e) generally are not subject to revision after filing. The remaining filings containing risk/return summary information, including registration statements on Form N-1A and post-effective amendments under Rule 485(a) and other paragraphs of Rule 485(b) may be subject to revision after filing and prior to effectiveness. --------------------------------------------------------------------------- We do not anticipate any change in filer costs relative to the baseline with respect to officer certifications or auditor assurance.\181\ --------------------------------------------------------------------------- \181\ Currently, the financial statement information Interactive Data File is excluded from the officer certification requirements under Rules 13a-14(f) and 15d-14(f) of the Exchange Act [17 CFR 240.13a-14 and 240.15d-14]. Furthermore, auditors are not required to apply AS 2710 (Other Information in Documents Containing Audited Financial Statements), AS 4101 (Responsibilities Regarding Filings Under Federal Securities Statutes), or AS 4105 (Reviews of Interim Financial Information) (prior to December 31, 2016, AU Sections 550, 711 and 722, respectively) to the Interactive Data File submitted with a company's reports or registration statements. In addition, filers are not required to obtain assurance on their Interactive Data File or involve third parties, such as auditors or consultants, in the creation of their Interactive Data File. See 2009 Financial Statement Information Adopting Release, at 6796-6797. However, the Commission has previously stated that XBRL is part of an issuer's disclosure controls and procedures. See 2009 Financial Statement Information Adopting Release, at 6797. As our proposal to require the submission of interactive data in the Inline XBRL format relates only to the manner of submitting the Interactive Data File and not the data that comprises the file, at this time we do not propose to change these positions pertaining to the exclusion of the Interactive Data File from the officer certification and assurance requirements. Risk/return summary information Interactive Data File requirements do not require mutual funds to involve third parties, such as auditors or consultants, in the creation of the interactive data provided as an exhibit to a mutual fund's Form N-1A filing, including assurance. With respect to registration statements, SAS 37 (currently AS 4101) was issued in April 1981 to address the auditor's responsibilities in connection with filings under the federal securities statutes. With respect to existing risk/return summary information Interactive Data File requirements, an auditor is not required to apply AS 4101 to the Interactive Data File. See 2009 Risk/Return Summary Adopting Release, at 7760-7761 and footnote 183. --------------------------------------------------------------------------- The termination of the 2005 XBRL Voluntary Program could potentially adversely affect participating filers, to the extent that they presently benefit from the availability of their financial statement information in XBRL. The effects on participating filers would likely be mitigated by the cost savings from no longer preparing and submitting interactive data. Given close to zero participation in the program, we expect the aggregate economic effects of terminating the program on filers to be negligible. b. XBRL Preparation Software Vendors and Filing Agents Changes to the XBRL format may affect XBRL preparation software vendors and filing agents.\182\ XBRL preparation software vendors and filing agents that adopt Inline XBRL technology may have to expend resources to upgrade or replace software to accommodate the Inline XBRL format and may also have to train staff in the Inline XBRL technology and compliance requirements. These additional costs may be relatively greater for software vendors and filing agents that do not already use Inline XBRL enabled software or software that can be readily upgraded to enable Inline XBRL submissions or processing.\183\ Some of the initial cost of switching to Inline XBRL could be mitigated by the availability of the royalty-free Inline XBRL specification and transformation registry, which defines how the values of facts that appear in HTML documents are converted to the required data types for XBRL.\184\ Because Inline XBRL already is used in several other countries for various regulatory purposes, it is also possible that the transition costs associated with adopting Inline XBRL for Commission filings may be lower for some software vendors or filing agents to the extent that the expertise gained from Inline XBRL filings in other jurisdictions can be used to facilitate the transition of Commission filings to Inline XBRL.\185\ We note that some of these costs may be passed on to filers. --------------------------------------------------------------------------- \182\ See, e.g., FERF Study for a discussion of XBRL preparation vendors. \183\ See note 95 above. \184\ See note 89 above. \185\ See, e.g., XBRL White Paper at 9 (indicating that, in the UK context, Inline XBRL is an established and growing means of reporting in XBRL, with a large number of software vendors providing applications for preparing or processing Inline XBRL reports and a range of accounting firms having strong experience in its use). See also note 94 above. --------------------------------------------------------------------------- Requiring the use of Inline XBRL may also have effects on competition in the market for XBRL preparation and filing services. Initially, XBRL preparation software vendors and filing agents that do not currently have or cannot readily implement Inline XBRL capabilities would be at a competitive disadvantage [[Page 14298]] relative to XBRL preparation software vendors and filing agents that currently have these capabilities. The fixed component of the initial cost of any software upgrades and training could contribute to a relative competitive disadvantage for smaller software vendors and filing agents with fewer customers compared to larger software vendors and filing agents. Additionally, to the extent that software vendors and filing agents that have experience with Inline XBRL in other jurisdictions can implement the Inline XBRL capability for Commission filings at a lower cost, these vendors and filing agents would be at a relative competitive advantage to software vendors and filing agents without such experience. We note that the phase-in periods associated with the rule could give software vendors and filing agents additional time to develop and update software, which could potentially mitigate some of these competitive effects. Ultimately, the net effect on competition is unclear but is expected to evolve over time, depending on the speed and cost of switching to Inline XBRL by XBRL preparation software vendors and filing agents and the rate of entry, if any, of new software vendors and filing agents that can readily implement Inline XBRL. The termination of the 2005 XBRL Voluntary Program could potentially adversely affect filing agents and software vendors, to the extent that participating filers use their XBRL preparation services or products. Given close to zero participation in the program, however, we expect the aggregate economic effects of terminating the program on filing agents and software vendors to be negligible. c. Data Users With the transition to Inline XBRL, data users, such as investors, analysts, other market participants, filers, data aggregators, and others, may incur costs to modify their software or algorithms to be able to extract the XBRL data.\186\ We believe, however, that such costs would be minimal because the proposed amendments do not affect the taxonomy or the scope of the information required to be tagged. Additionally, the software enabling users to view information about the reported XBRL data contained in embedded tags and to extract XBRL data has been made freely available to the public in an effort to facilitate the creation of cost effective Inline XBRL viewers and analytical products.\187\ The availability of this open-source software should decrease potential costs for data users. --------------------------------------------------------------------------- \186\ For example, XBRL extraction algorithms may need to be adjusted to download files from a different URL, to use different filenames, and to parse XBRL information from a different file format. \187\ See http://www.sec.gov/structureddata/edgarvalandrender and http://arelle.org/download/. --------------------------------------------------------------------------- While the Inline XBRL document may be smaller than the combined size of the separate XBRL instance and HTML documents, the Inline XBRL document may be larger than a standalone XBRL instance document or HTML document, which may slightly increase processing times for some data users that previously only processed either HTML documents or XBRL instance documents. Thus, depending on how data users currently access XBRL data,\188\ some users may be affected by the increase in the size of files with XBRL data, such as through increased processing times, after the transition to Inline XBRL. However, in light of the advanced state of existing computing technology and internet connectivity speeds, we do not expect this effect to be a significant limitation for most users. --------------------------------------------------------------------------- \188\ Currently, EDGAR users may extract machine-readable XBRL information from the ZIP archive with the XBRL exhibits submitted by the filer, from a separate XML document with XBRL data, or from the combined ``complete submission file'' (which contains the contents of the EDGAR header, all HTML and XBRL data submitted by the filer, and HTML and other files produced by EDGAR Rendering). See also note 67 above. --------------------------------------------------------------------------- The elimination of the Web site posting requirement could impose costs on some data users by reducing their access to XBRL data about individual filers. However, industry commenters have observed very limited use of financial statement information XBRL data from corporate Web sites.\189\ Based on our experience, we believe that data users can efficiently and reliably access XBRL data through EDGAR for purposes of aggregation and processing. Thus, we do not expect data users to incur significant costs from the elimination of the requirement to post the XBRL data on the Web site. We have not received comments or data from other sources regarding the incidence of use of XBRL data posted on mutual fund Web sites. We solicit comment below on this issue.\190\ --------------------------------------------------------------------------- \189\ See note 144 above. \190\ See Sections III.B.5 and III.C.5. --------------------------------------------------------------------------- The termination of the 2005 XBRL Voluntary Program could potentially adversely affect data users, to the extent that they presently benefit from the availability of participating filers' financial statement information in XBRL. The aggregate economic effects on data users, however, would likely be negligible given close to zero participation in the program. 3. Compliance Dates The proposed amendments include a phase-in schedule for the mandatory use of Inline XBRL for financial statement information and risk/return summary information. Thus, the costs and benefits of Inline XBRL would be deferred for some categories of filers. To the extent that the initial cost of adopting Inline XBRL has a fixed component that is independent of filer size, it would have a relatively greater effect on smaller filers. In light of this, under the phase-in schedules we are proposing, smaller filers would be given additional time to adopt Inline XBRL, which would defer the initial cost for small filers and partly mitigate the associated competitive effects. We further anticipate that late adopters would incur a lower switching cost in absolute terms than early adopters.\191\ In particular, as time elapses after the initial group of filers adopts Inline XBRL, we expect XBRL filing agents and XBRL preparation software vendors to accumulate Inline XBRL expertise and refine technological solutions offered to filers. Furthermore, if the market for Inline XBRL preparation services and software becomes more competitive over time, the switching cost incurred by subsequent filers may be reduced. --------------------------------------------------------------------------- \191\ See also 2009 Financial Statement Information Adopting Release, at 6785 (discussing the effects on early versus late adopters). --------------------------------------------------------------------------- As discussed above, the proposed amendments would permit filers to use Inline XBRL prior to the compliance date for their respective category. A high rate of such early transition to Inline XBRL would accelerate the economic impact of Inline XBRL. Until all filers adopt Inline XBRL, data users would have to maintain the capability to extract data in both the Inline XBRL and the traditional XBRL formats, which may be incrementally costlier than using a single format (e.g., if all filers were required to use Inline XBRL at the same time and if early switching to Inline XBRL were not allowed). Given the very limited scope of modifications to the XBRL data extraction algorithm that data users are likely to incur from switching to Inline XBRL and the public availability of open-source tools to facilitate Inline XBRL data use, we expect this potential cost to be minimal. 4. Alternatives One alternative would be to require Inline XBRL for all filers as of the same date. Faster transition to Inline XBRL on [[Page 14299]] a wide scale could accelerate the realization of efficiency and data quality gains and shorten the time period during which data users would need to maintain the capability to process XBRL data in both formats. However, compared to the proposed amendments, this alternative would accelerate initial compliance costs for smaller filers. As another alternative, we could apply a different phase-in schedule for operating company or mutual fund filers, based on filer status, size \192\ or other criteria. The tradeoff between the costs and benefits of an alternative phase-in schedule would depend on the number of affected filers, the net effect of Inline XBRL on the cost of compliance with XBRL requirements and on the quality of XBRL data for different categories of affected filers, the timing of the phase-in and the number of early adopters. --------------------------------------------------------------------------- \192\ For example, the XBRL requirements for financial statement information adopted in 2009 initially applied to domestic and foreign large accelerated U.S. GAAP filers with a worldwide public common equity float above $5 billion as of the end of the second fiscal quarter of their most recently completed fiscal year, beginning with their first quarterly report on Form 10-Q, or annual report on Form 20-F or Form 40-F, that contained financial statements for fiscal periods ending on or after June 15, 2009. See 2009 Financial Statement Information Adopting Release, at 6781-6782 and Rule 405(f)(1). --------------------------------------------------------------------------- Inline XBRL requirements for financial statement information would apply to all operating company filers, including SRCs,\193\ EGCs,\194\ and FPIs,\195\ that currently are required to submit financial statement information in XBRL. Similarly, Inline XBRL requirements for risk/return summary information would apply to all mutual fund filers that currently are required to submit risk/return summary information in XBRL. --------------------------------------------------------------------------- \193\ Based on staff analysis of EDGAR filings, we estimate that SRCs filed approximately 3,000 Forms 10-K, excluding amendments and co-registrants, during calendar year 2015. See note 59 above. \194\ Based on staff analysis of EDGAR filings, we estimate that approximately 1,600 filers have identified themselves as EGCs in filings with the Commission during calendar year 2015. The estimate excludes EGCs that did not identify themselves as EGCs in filings made during that year. See note 59 above. \195\ Based on staff analysis of EDGAR filings, we estimate that there were approximately 800 filers of Forms 20-F and 40-F during calendar year 2015. The estimate excludes FPIs that filed only domestic forms. See note 59 above. --------------------------------------------------------------------------- As an alternative, we could exempt one or more of these categories of filers from the Inline XBRL requirement or create a new category of exempt filers (based on assets, revenues or other criteria). To the extent that some filers that are currently subject to XBRL requirements would not be required to adopt Inline XBRL under these alternatives, the alternatives would likely result in smaller economic costs and benefits compared to the amendments we are proposing today. Compared to the proposed amendments, the alternative of exempting smaller filers from the Inline XBRL requirements rather than deferring their compliance date would place those smaller filers that do not have the Inline XBRL capability at a smaller competitive disadvantage to larger filers, to the extent that smaller filers are more likely to be affected by the initial fixed cost of switching to Inline XBRL. However, compared to the proposed amendments, the alternative of exempting such filers from submitting their financial information in Inline XBRL could undermine the data quality benefits expected from Inline XBRL and diminish the ability of investors, analysts and the Commission to evaluate the information submitted by the exempted filers.\196\ --------------------------------------------------------------------------- \196\ See note 140 above. --------------------------------------------------------------------------- Additionally, compared to the proposed amendments, the alternative of exempting FPIs from the Inline XBRL requirements could place those filers at a relative competitive advantage to domestic filers, particularly, smaller domestic filers, to the extent that exempt filers would not incur the cost of switching to Inline XBRL. It also would deprive investors and users of structured data of the associated benefits of Inline XBRL. The proposed amendments would eliminate the existing 15 business day filing period for mutual funds to submit risk/return summary information in XBRL after the effectiveness of the registration statement or post-effective amendment or the filing of a form of prospectus pursuant to Rule 497(c) or (e). The proposed amendments also would permit mutual fund filers to submit Interactive Data Files concurrently with post-effective amendments to registration statements filed pursuant to paragraphs (b)(1)(i), (ii), (v), or (vii) of Rule 485. As an alternative, we could preserve the 15 business day filing period after the effective date of the post-effective amendments but allow filers to submit XBRL concurrently with the filing of these post- effective amendments. Under such an alternative, some funds could avail themselves of the efficiencies in XBRL preparation afforded by the embedding of XBRL data directly into the filing and eliminate an additional post-effective amendment containing only the XBRL exhibit, while other funds that benefit from the flexibility and the additional time to prepare and review XBRL data would continue to be able to take advantage of the 15 business day filing period. However, given the high degree of automation and integration in existing mutual fund XBRL preparation practices, the cost savings for filers (and filing agents, which may pass these cost savings onto filers) under this alternative compared to the proposed amendments would likely be small. Importantly, under this alternative, data users would not be able to derive the same benefit of improved timeliness of the availability of XBRL data that they would under the proposed amendments. As another alternative, we could adopt a different filing period after the effective date of the registration statement or post- effective amendment to it under Rule 485 or the filing date of the form of prospectus under Rule 497, such as 1 day, 5 days, 10 days, 20 days, or 30 days. Similar to the discussion above, such alternatives would present a tradeoff between the flexibility accorded to filers by way of a longer filing period and the timeliness of the availability of risk/ return summary information in XBRL to data users. As another alternative, we could require filers to submit Interactive Data Files concurrently with any mutual fund filing containing a risk/return summary, including initial registration statements or post-effective amendments under other paragraphs of Rule 485. Under such an alternative, in the event of revisions to the registration statement or post-effective amendment prior to effectiveness, filers would need to revise and review the associated XBRL data multiple times, resulting in potentially higher XBRL preparation costs. Such an alternative may also result in the availability of XBRL information for registration statements and post- effective amendments that have not been declared effective, which may introduce investor confusion. The proposed Inline XBRL amendments would be mandatory. An alternative would be to allow but not require the use of Inline XBRL. Compared to the proposed amendments, a fully voluntary Inline XBRL program would lower costs for those filers and filing agents that do not find Inline XBRL to be cost efficient. However, a voluntary program would also reduce potential data quality benefits compared to mandatory Inline XBRL to the extent that Inline XBRL use would be more widespread under a mandatory rule than a voluntary one. It also would potentially impose an incremental cost on data users associated with maintaining indefinitely the capability [[Page 14300]] to process data in the XBRL and Inline XBRL formats. 5. Request for Comment We request comment on all aspects of our economic analysis, including the potential costs and benefits of the proposed amendments and whether the rules, if adopted, would promote efficiency, competition and capital formation or have an impact on investor protection. In particular, we invite filers, software vendors, filing agents, data users, government agencies and other commenters that have experience with Inline XBRL to provide information on the costs and benefits of adopting and implementing Inline XBRL for different categories of XBRL filers and data users. Commenters are requested to provide empirical data, estimation methodologies and other factual support for their views, in particular, on the estimates of costs and benefits. Our specific questions follow below. 23. Would Inline XBRL requirements affect data quality and the use of XBRL data by investors, other market participants, and other data users? Please explain. 24. What are the likely effects of changes to XBRL data quality due to Inline XBRL on the availability of information about filers and informational efficiency? What are the likely effects of Inline XBRL, if any, on capital formation? 25. How would Inline XBRL affect the efficiency of the XBRL filing process for different categories of filers, relative to the current XBRL requirements? 26. What are the likely effects of the proposed Inline XBRL requirements on the cost of compliance with XBRL requirements for different categories of filers, relative to the current XBRL requirements? What would be the initial cost to filers, if any, to switch to using Inline XBRL? Would this cost be likely to affect competition among filers? What would be the ongoing cost, if any, of using Inline XBRL as compared to the ongoing cost of the current XBRL requirements? 27. What cost, if any, would ASCII filers incur from switching to HTML? 28. What are the likely cost savings for filers from the elimination of the Web site posting requirement? 29. For filing agents and software vendors that do not currently have the Inline XBRL capability, what would be the cost to switch to Inline XBRL and how would it affect the price of XBRL preparation services or software? How would the proposed Inline XBRL requirements affect competition in the market for XBRL preparation services and XBRL preparation and analysis software? 30. Does XBRL preparation for mutual funds differ from the XBRL preparation practices of operating companies? Are most funds using integrated XBRL preparation solutions? Does the use of risk/return summary XBRL data differ from the use of financial statement information XBRL data? 31. How would the economic effects of the proposed Inline XBRL requirements for mutual fund risk/return summary information differ from the economic effects of the Inline XBRL requirements for financial statement information? 32. What would the impact of the proposed elimination of the 15 business day period for the submission of risk/return summary information in XBRL be on filers, filing agents, and data users? 33. What other economic effects are likely to be associated with the proposed Inline XBRL requirements? V. Paperwork Reduction Act A. Background The proposed amendments contain ``collection of information'' requirements within the meaning of the Paperwork Reduction Act of 1995 (``PRA'').\197\ They would amend the collections of information ``Interactive Data'' (OMB Control No. 3235-0645) and ``Mutual Fund Interactive Data'' (OMB Control No. 3235-0642). These collections of information require filers to submit specified information to the Commission as an exhibit to their current and periodic reports and registration statements and post it on their Web sites, if any, in interactive data format. The information required is referred to as an ``Interactive Data File.'' The proposed amendments would require filers, on a phased in basis, to embed part of the Interactive Data File within an HTML document using Inline XBRL and include the rest in an exhibit to that document. The amendments also would eliminate the Web site posting requirement. Compliance with the amendments would be mandatory according to the phase-in schedule but filers that have not yet been phased in could comply voluntarily. Responses to the collections of information would not be kept confidential by the Commission and there is no mandatory retention period for the collections of information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information requirement unless it displays a currently valid Office of Management and Budget (``OMB'') control number. --------------------------------------------------------------------------- \197\ 44 U.S.C. 3501 et seq. --------------------------------------------------------------------------- B. Reporting and Cost Burden Estimates 1. Registration Statement and Periodic Reporting Form S-1 (OMB Control No. 3235-0065), Form S-3 (OMB Control No. 3235-0073), Form S-4 (OMB Control No. 3235-0324) and Form S-11 (OMB Control No. 3235-0067) prescribe information that a filer must disclose to register certain offers and sales of securities under the Securities Act. Form F-1 (OMB Control No. 3235-0258), Form F-3 (OMB Control No. 3235-0256), Form F-4 (OMB Control No. 3235-0325) and Form F-10 (OMB Control No. 3235-0380) prescribe information that a foreign private issuer must disclose to register certain offers and sales of securities under the Securities Act. Form 10-K (OMB Control No. 3235-0063) prescribes information that a filer must disclose annually to the market about its business. Form 10-Q (OMB Control No. 3235-0070) prescribes information that a filer must disclose quarterly to the market about its business. Form 10 (OMB No. 3235-0064) prescribes information that a filer must disclose when registering a class of securities pursuant to the Exchange Act. Form 8-K (OMB No. 3235-0060) prescribes information an issuer must disclose to the market upon the occurrence of certain specified events and enables an issuer to disclose other information voluntarily. Form 20-F (OMB Control No. 3235-0288) and Form 40-F (OMB No. 3235-0381) are used by a foreign private issuer both to register a class of securities under the Exchange Act as well as to provide its annual report required under the Exchange Act. Form 6-K (OMB No. 3235-0116) prescribes information that a foreign private issuer must disclose regarding certain specified changes to its business and securities pursuant to the Exchange Act and enables an issuer to disclose other information voluntarily. The information required by the Interactive Data collection of information corresponds to specified financial information required by these forms. Form N-1A (OMB Control No. 3235-0307) is used by mutual funds to register under the Investment Company Act and to offer their securities under the Securities Act. The information required by the Mutual Fund Interactive Data collection of information corresponds to specified risk/return summary information now required by Form N-1A and is required to appear in exhibits to registration statements on [[Page 14301]] Form N-1A and Rule 497 submissions and on fund Web sites. Although the Mutual Fund Interactive Data filing requirements are included in Form N-1A, the Commission has separately reflected the burden for these requirements in the burden estimate for Mutual Fund Interactive Data and not in the burden for Form N-1A. We estimate that the proposed Inline XBRL requirement for financial statement information would result in an initial increase in the existing internal burden of XBRL requirements (56 hours per response) by eight hours to switch to Inline XBRL. This increase in burden would be borne only for the initial response that uses Inline XBRL. We further estimate that reductions in review time would result in a decrease of two hours per response in the existing internal burden, beginning with the initial response and continuing on an ongoing basis.\198\ We also estimate that the average filer would incur a small increase in external cost of $5 per response (from $6,170 to $6,175) on an ongoing basis, beginning in the first year of compliance for its phase-in category. Based on the number of filers that we expect to be phased in during each of the first three years under the requirements,\199\ the number of filings that we expect those filers to make that would require interactive data \200\ and the internal burden hour and external cost estimates per response discussed above, we estimate that, over the first three years of the Inline XBRL requirements, switching to the Inline XBRL format would decrease the aggregate average yearly burden of financial statement information XBRL requirements by 20,900 hours of in-house personnel time \201\ and increase the aggregate average yearly cost of services of outside professionals by $109,663.\202\ --------------------------------------------------------------------------- \198\ Thus, for the initial response using Inline XBRL, we estimate that filers would experience a net increase in hour burden of 6 hours (8 hours - 2 hours = 6 hours). \199\ Based on staff analysis of Form 10-K filings during calendar year 2015, approximately 26% were filed by large accelerated filers and approximately 18% by accelerated filers. For purposes of this estimate, we assume that these percentages are representative of the percentages of filers in different phase-in categories. \200\ We estimate that in order to comply with the Interactive Data collection requirements, approximately 8,601 respondents per year would each submit an average of approximately 4.5 responses per year for an estimated total of 38,705 responses. \201\ The first response is estimated to incur a net additional burden of six hours per response and the remaining responses are estimated to incur a net decrease in burden of two hours per response. The calculation below considers the aggregate average yearly change in internal burden incurred by each of the three categories of filers during the first three years of the proposed Inline XBRL requirements. Filers that are phased in during year two are assumed to incur no change in burden during year one. Filers that are phased in during year three are assumed to incur no change in burden during years one and two. Filers phased in during year one: 8,601 x 26%. Average yearly change in internal burden per filer: [6 + (3.5 + 4.5 + 4.5) x (-2)]/ 3 = -6.33 hours. Aggregate average yearly change in internal burden for filers phased in during year one: 8,601 x 26% x (-6.33 hours) = -14,156 hours. Filers phased in during year two: 8,601 x 18%. Average yearly change in internal burden per filer: [0 + 6 + (3.5 + 4.5) x (-2)]/3 = -3.33 hours. Aggregate average yearly change in internal burden for filers phased in during year two: 8,601 x 18% x (-3.33 hours) = -5,155 hours. Filers phased in during year three: 8,601 x 56%. Average yearly change in internal burden per filer: [0 + 0 + 6 + 3.5 x (-2)]/3 = - 0.33 hours. Aggregate average yearly change in internal burden for filers phased in during year three: 8,601 x 56% x (-0.33 hours) = - 1,589 hours. Aggregate average yearly change in internal burden: -14,156 - 5,155 - 1,589 = -20,900 hours. \202\ Filers are estimated to incur an additional $5 per response beginning with the first year of compliance for their phase-in category. The calculation below considers the aggregate average yearly change in external cost incurred by each of the three categories of filers during the first three years after the effectiveness of the proposed Inline XBRL requirements. Filers that are phased in during year two are assumed to incur no change in external cost during year one. Filers that are phased in during year three are assumed to incur no change in external cost during years one and two. Filers phased in during year one: 8,601 x 26%. Average yearly change in external cost per filer: [$5 x 3 x 4.5]/3 = $22.5. Aggregate average yearly change in external cost for filers phased in during year one: 8,601 x 26% x $22.5 = $50,316. Filers phased in during year two: 8,601 x 18%. Average yearly change in external cost per filer: [$0 + $5 x 2 x 4.5]/3 = $15. Aggregate average yearly change in external cost for filers phased in during year two: 8,601 x 18% x $15 = $23,223. Filers phased in during year three: 8,601 x 56%. Average yearly change in external cost per filer: [$0 + $0 + $5 x 4.5]/3 = $7.5 Aggregate average yearly change in external cost for filers phased in during year three: 8,601 x 56% x $7.5 = $36,124. Aggregate average yearly change in external cost: $50,316 + $23,223 + $36,124 = $109,663. --------------------------------------------------------------------------- The elimination of the Web site posting requirement also is expected to reduce the paperwork burden. We previously estimated that operating companies would incur an average of approximately four burden hours per filer per year to post interactive data to their Web sites. Based on our estimate of 8,601 filers, we estimate that the elimination of the Web site posting requirement would decrease the aggregate average yearly burden on operating company filers by 34,404 hours.\203\ --------------------------------------------------------------------------- \203\ 8,601 x (-4) = -34,404 hours. --------------------------------------------------------------------------- We previously estimated the aggregate average yearly burden of the existing XBRL requirements for operating companies as 2,167,480 hours of in-house personnel time \204\ and $238,809,850 in the cost of services of outside professionals.\205\ We estimate that in the first three years under the proposed amendments, the aggregate average yearly burden of XBRL requirements for operating companies would be 2,112,176 hours of in-house personnel time \206\ and $238,919,513 in the cost of services of outside professionals, which represents a decrease of 55,304 hours of in-house personnel time \207\ and an increase of $109,663 in the cost of services of outside professionals \208\ or a decrease of 6.43 hours of in-house personnel time per filer \209\ and an increase of $12.75 in the cost of services of outside professionals per filer.\210\ --------------------------------------------------------------------------- \204\ 8,601 x 4.5 = 38,705 responses. 38,705 responses x 56 hours per response = 2,167,480 hours. \205\ 8,601 x 4.5 = 38,705 responses. 38,705 responses x $6,170 per response = $238,809,850. \206\ 2,167,480 - 55,304 = 2,112,176 hours. See note 204 above and note 207 below. \207\ -20,900 - 34,404 = -55,304 hours. See notes 201 and 203 above. \208\ $238,809,850 + $109,663 = $238,919,513. See notes 202 and 205 above. \209\ -55,304 hours/8,601 filers = -6.43 hours per filer. See note 207 above. \210\ $109,663/8,601 filers = $12.75 per filer. See note 202 above. --------------------------------------------------------------------------- With respect to mutual fund risk/return summaries, we previously estimated that each mutual fund would submit one Interactive Data File as an exhibit to a registration statement or a post-effective amendment thereto, and that 36% of mutual funds would submit an additional Interactive Data File as an exhibit to a filing pursuant to Rule 485(b) or Rule 497. We also previously estimated that tagging and submitting mutual fund risk/return data in XBRL format requires 11 hours per response and posting interactive data to the fund Web site requires one additional hour per response. In addition, we previously estimated an external cost burden of $890 for the cost of goods and services purchased to comply with the current Interactive Data requirements, such as for software and/or the services of consultants and filing agents. The cost burden does not include the cost of the hour burden described above. We estimate that the proposed Inline XBRL requirement for mutual fund risk/return summary information would result in an initial increase in internal burden by two hours to switch to Inline XBRL. This increase in burden would be borne only for the initial response that uses Inline XBRL. We further estimate that there would be a reduction in review time that would result in a decrease in internal burden of approximately 0.5 hours per response, beginning with the initial response and [[Page 14302]] continuing on an ongoing basis.\211\ Considering the phase-in of the requirement would occur over a two-year period and examining the impact on the aggregate average yearly burden of different filer categories,\212\ we estimate that the aggregate average yearly internal burden of risk/return summary information XBRL requirements would increase by 1,538 hours of in-house personnel time,\213\ based on the estimate of 11,106 mutual funds.\214\ We also estimate that the average mutual fund would incur an increase in software costs of $10 per mutual fund on an ongoing annual basis, beginning in the first year of compliance for its phase-in category with the proposed Inline XBRL requirement. Based on the estimate of 11,106 mutual funds,\215\ we estimate that the proposed Inline XBRL requirement would result in an increase of $86,281 in the aggregate average yearly cost of services of outside professionals.\216\ --------------------------------------------------------------------------- \211\ Thus, for the initial response using Inline XBRL, we estimate that mutual funds would experience a net increase in hour burden of 1.5 hours (2.0 hours - 0.5 hours = 1.5 hours). \212\ See note 132 above and accompanying text. Based on staff analysis of data obtained from Morningstar Direct, as of June 2016, we estimate that a $1 billion asset threshold for groups of related investment companies would provide an extended compliance period to approximately 2/3, or approximately 67%, of all mutual funds affected by the proposed Inline XBRL requirement (i.e., approximately 7,441 of 11,106 affected mutual funds). \213\ See id; see also note 60 above and accompanying text. The calculation below considers the aggregate average yearly change in burden incurred by each of the two categories of funds during the first three years of the proposed Inline XBRL requirements. Funds that are phased in during year two are assumed to incur no change in burden in year one. Funds phased in during year one: 33% x 11,106 funds = 3,665 funds. Aggregate average yearly change in internal burden for funds phased in during year one: 3,665 funds x {[1.5 + (0.36 + 1.36 + 1.36) x (-0.5)]/3{time} hours per fund = -49 hours. Funds phased in during year two: 67% x 11,106 funds = 7,441 funds. Aggregate average yearly change in internal burden for funds phased in during year two: 7,441 funds x {[0 + 1.5 + (0.36 + 1.36) x (-0.5)]/3{time} hours per fund = 1,587 hours. Aggregate average yearly change in burden: -49 + 1,587 = 1,538 hours. \214\ See note 60 above and accompanying text. \215\ Id. \216\ Funds are estimated to incur an additional $10 per year beginning with the first year of compliance for their phase-in category. The calculation below considers the aggregate average yearly change in external cost incurred by each of the two categories of funds during the first three years of the proposed Inline XBRL requirements. Funds that are phased in during the second year are assumed to incur no change in external cost in the first year after the effectiveness of the proposed Inline XBRL requirements. Funds phased in during year one: 33% x 11,106 funds = 3,665 funds. Average yearly change in external cost per fund: [$10 + $10 + $10]/3 = $10 per fund. Aggregate average yearly change in external cost for all funds phased in during year one: 3,665 funds x $10 per fund = $36,650. Funds phased in during year two: 67% x 11,106 funds = 7,441 funds. Average yearly change in external cost per fund: [$0 + $10 + $10]/3 = $6.67 per fund. Aggregate average yearly change in external cost for all funds phased in during year two: 7,441 funds x $6.67 per fund = $49,631. Aggregate average yearly change in external cost: $36,650 + $49,631 = $86,281. --------------------------------------------------------------------------- In addition, the elimination of the Web site posting requirement is expected to reduce the paperwork burden. We previously estimated that mutual funds incur an average of approximately one burden hour per response to post interactive data to their Web sites, in addition to the burden of tagging and submitting interactive data to the Commission. Based on our estimate of 15,104 responses, we estimate that the elimination of the web posting requirement would decrease the aggregate average yearly burden on mutual funds by 15,104 hours of in- house personnel time.\217\ --------------------------------------------------------------------------- \217\ 11,106 funds x 1.36 responses = 15,104 responses. 15,104 responses x (-1) hour = -15,104 hours. --------------------------------------------------------------------------- We previously estimated that the existing XBRL requirements require mutual funds to expend 172,320 hours of in-house personnel time and $9,397,510 in the cost of services of outside professionals, based on the estimate of 10,559 funds.\218\ Based on the estimate of 11,106 funds, the existing XBRL requirements for mutual funds would require 181,248 hours of in-house personnel time \219\ and $9,884,340 in the cost of services of outside professionals.\220\ We estimate that in the first three years of the Inline XBRL requirements, based on the estimate of 11,106 funds, the use of Inline XBRL and the elimination of the Web site posting requirement would change the aggregate average yearly burden of XBRL requirements for mutual funds to 167,682 hours of in-house personnel time \221\ and $9,970,621 in the cost of services of outside professionals,\222\ which would represent a decrease of 13,566 hours of in-house personnel time \223\ and an increase of $86,281 in the cost of services of outside professionals \224\ or a decrease of 1.22 hours of in-house personnel time per fund \225\ and an increase of $7.77 in the cost of services of outside professionals per fund.\226\ --------------------------------------------------------------------------- \218\ Currently, approved burden estimates include 11 hours per response to comply with the tagging and submission of XBRL data, one hour per response to comply with the Web site posting requirement, and $890 per fund in the cost of services of outside professionals. 10,559 funds x 1.36 responses per fund = 14,360 responses. 14,360 responses x (11 + 1) hours per response = 172,320 hours. 10,559 funds x $890 per fund = $9,397,510. \219\ 11,106 funds x 1.36 responses per fund = 15,104 responses. 15,104 responses x (11 + 1) hours per response = 181,248 hours. \220\ 11,106 funds x $890 per fund = $9,884,340. \221\ 181,248 - 13,566 = 167,682 hours. See notes 219 above and 223 below. \222\ $9,884,340 + $86,281 = $9,970,621. See notes 216 and 220 above. \223\ 1,538 - 15,104 = -13,566 hours. See notes 213 and 217 above. \224\ See note 216 above. \225\ -13,566 hours/11,106 funds = -1.22 hours per fund. See note 223 above. \226\ $86,281/11,106 funds = $7.77 per fund. See note 216 above. --------------------------------------------------------------------------- We are submitting these revised burden estimates to OMB for review in accordance with the PRA and its implementing regulations at this time.\227\ --------------------------------------------------------------------------- \227\ 44 U.S.C. 3507(d); 5 CFR 1320.11. --------------------------------------------------------------------------- 2. Regulation S-K and Regulation S-T Regulation S-K (OMB Control No. 3235-0071) specifies information that must be provided in filings under both the Securities Act and the Exchange Act. Regulation S-T (OMB Control No. 3235-0424) specifies the requirements that govern the electronic submission of documents. The proposed amendments to these items would revise rules under Regulations S-K and S-T. Any changes in the paperwork burden arising from these amendments, however, would be reflected in the Interactive Data collection of information and the Mutual Fund Interactive Data collection of information. The rules in Regulations S-K and S-T do not impose any separate burden. We assign one burden hour each to Regulations S-K and S-T for administrative convenience to reflect the fact that these regulations do not impose any direct burden on filers.\228\ --------------------------------------------------------------------------- \228\ For purposes of the PRA, we estimate that no funds participate in the 2005 XBRL Voluntary Program each year. This information collection, therefore, imposes no hour burden. The proposed termination of the program would therefore not result in changes in burden, except the elimination of one hour associated with this information collection for administrative purposes. --------------------------------------------------------------------------- C. Request for Comment Pursuant to 44 U.S.C. 3506(c)(2)(A), the Commission solicits comments to: (1) Evaluate whether the collections of information are necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) evaluate the accuracy of the Commission's estimate of the burden of the collection of information; (3) determine whether there are ways to enhance the quality, utility and clarity of the information to be collected; and (4) evaluate whether there are ways to minimize the burden of the collection of information on those who are required [[Page 14303]] to respond, including through the use of automated collection techniques or other forms of information technology. Persons submitting comments on the collection of information requirements should direct the comments to the Office of Management and Budget, Attention: Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Washington, DC 20503, and send a copy to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090, with reference to File No. S7-03-17. Requests for materials submitted to OMB by the Commission with regard to these collections of information should be in writing, refer to File No. S7-03-17, and be submitted to the Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549-2736. OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this release. Consequently, a comment to OMB is assured of having its full effect if OMB receives it within 30 days of publication. V. Initial Regulatory Flexibility Act Analysis The Regulatory Flexibility Act (``RFA'') \229\ requires the Commission, in promulgating rules under Section 553 of the Administrative Procedure Act,\230\ to consider the impact of those rules on small entities. The Commission has prepared this Initial Regulatory Flexibility Analysis (``IRFA'') in accordance with Section 603 of the RFA.\231\ This IRFA relates to the proposed amendments to Item 601 of Regulation S-K, Rules 11, 201, 202, 401 and 405 of Regulation S-T, Rules 144, 485 and 497 under the Securities Act, Forms S-3, S-8, F-3 and F-10 under the Securities Act, Forms 10-Q, 10-K, 20- F, 40-F and 6-K under the Exchange Act and Form N-1A under the Investment Company Act. --------------------------------------------------------------------------- \229\ 5 U.S.C. 601 et seq. \230\ 5 U.S.C. 553. \231\ 5 U.S.C. 603. --------------------------------------------------------------------------- A. Reasons for, and Objectives of, the Action The primary reason for, and objective of, the proposed amendments is to improve the usefulness and quality of, and, over time, to decrease the cost of preparing for submission, certain information filers are required to submit to the Commission in interactive data form. B. Legal Basis We are proposing the amendments under Sections 7, 10, and 19(a) of the Securities Act,\232\ Sections 3, 12, 13, 15(d), 23(a), and 35A of the Exchange Act,\233\ and Sections 8, 24, 30, and 38 of the Investment Company Act.\234\ --------------------------------------------------------------------------- \232\ 15 U.S.C. 77g, 77j, and 77s(a). \233\ 15 U.S.C. 78c, 78l, 78m, 78o(d), 78w(a), and 78ll. \234\ 15 U.S.C. 80a-8, 80a-24, 80a-29, and 80a-37. --------------------------------------------------------------------------- C. Small Entities Subject to the Proposed Amendments For purposes of the RFA, under our rules, an entity, other than an investment company, is a ``small business'' or ``small organization'' if it had total assets of $5 million or less on the last day of its most recent fiscal year.\235\ We estimate that there are approximately 841 \236\ filers other than investment companies that may be considered small entities and are required to file reports with the Commission under the Exchange Act. All of these filers would become subject to the proposed rules by the end of the phase-in. --------------------------------------------------------------------------- \235\ 17 CFR 240.0-10(a). \236\ The estimate is based on staff analysis of XBRL data submitted with EDGAR filings of Forms 10-K, 20-F and 40-F with fiscal periods ending between January 31, 2015-January 31, 2016. --------------------------------------------------------------------------- In addition, for purposes of the RFA, an investment company is a small entity if it, together with other investment companies in the same group of related investment companies, has net assets of $50 million or less as of the end of its most recent fiscal year.\237\ We estimate that approximately 78 mutual funds registered on Form N-1A meet this definition.\238\ --------------------------------------------------------------------------- \237\ 17 CFR 270.0-10. \238\ This estimate is based on staff analysis of publicly available data as of December 2015. --------------------------------------------------------------------------- D. Projected Reporting, Recordkeeping and Other Compliance Requirements All filers subject to the proposed amendments currently are required to file an Interactive Data File entirely as an exhibit to their Commission filings. Under the proposed amendments, these filers would be required to embed part of the Interactive Data File within an HTML document using Inline XBRL and include the rest in an exhibit to that document. The proposed requirement to adopt Inline XBRL might result in a minimal initial switching cost for filers but, as discussed in Section III.C.1 above, overall, for most filers, we anticipate that the use of Inline XBRL might, over time, reduce the ongoing cost of compliance with the XBRL requirements due to the removal of the requirement to include the entire Interactive Data File within an exhibit. We also expect that the proposed elimination of the requirement to post the Interactive Data File on filers' Web sites would reduce their compliance costs. The proposed Inline XBRL requirement is expected to result in an initial cost of transition for filers when the requirement is implemented. Filer costs may include obtaining Inline XBRL preparation software or service capabilities from their own or third-party sources. Filers that already use their own or third-party Inline XBRL enabled filing solutions or filing solutions that can readily be modified to accommodate the Inline XBRL format are expected to incur a minimal initial cost.\239\ Although we recognize the likelihood of somewhat greater initial costs being incurred by filers that do not use such filing solutions, we believe that the initial cost to transition to Inline XBRL for those filers would still be small. In particular, we expect the cost to be minimal because the rules we are proposing today consist primarily of an electronic format change. The proposed amendments do not modify the substance of the XBRL requirements, and thus, do not affect the disclosure mapping process that precedes the creation of the XBRL submission and accounts for the overwhelming majority of the XBRL preparation burden. --------------------------------------------------------------------------- \239\ See note 95 above. --------------------------------------------------------------------------- Filers that currently prepare the Related Official Filing in the ASCII format would incur additional costs unless they already have switched to HTML to comply with the amendments adopted in the Hyperlinks Adopting Release. In particular, those filers would need to switch to the HTML format because Inline XBRL cannot be used with ASCII filings. Although this may impose a cost on some filers, we expect that the majority of filers would not be affected by this change.\240\ We acknowledge that the burden may be disproportionate for smaller entities. However, even if there is a disproportionate impact, we do not expect the costs of switching to HTML to be significant because the software tools to prepare and file documents in HTML are widely used and available at a minimal cost. --------------------------------------------------------------------------- \240\ See note 36 above. --------------------------------------------------------------------------- E. Duplicative, Overlapping or Conflicting Federal Rules The Commission believes that there are no federal rules that duplicate, overlap or conflict with the proposed amendments. [[Page 14304]] F. Significant Alternatives The RFA directs us to consider significant alternatives that would accomplish the stated objectives of our amendments, while minimizing any significant adverse impact on small entities. Specifically, we considered the following alternatives: (1) establishing different compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) clarifying, consolidating or simplifying compliance and reporting requirements for small entities under the rule; (3) using performance rather than design standards; and (4) exempting small entities from coverage of all or part of the proposed amendments. The proposed amendments include different compliance schedules based on filer size and use of accounting principles. Small entities would not be subject to the proposed requirements until year three of the phase-in (for operating companies) and until year two (for mutual funds). This different compliance timetable would enable these filers to defer the burden of any additional cost, learn from filers that comply earlier and take advantage of any increases in the quality or decreases in the price of Inline XBRL preparation services or software that arise from expertise or competition that develops prior to their phase-in. The elimination of the Web site posting requirement would consolidate and simplify the compliance and reporting requirements for all companies with respect to their interactive data. We do not believe that further clarification, consolidation, or simplification for small entities would be appropriate because we believe a phased in mandatory conversion to Inline XBRL is necessary to realize the data quality benefits of Inline XBRL. We are not proposing a partial or complete exemption from the proposed requirements or the use of performance rather than design standards because we believe that long-term uniformity in interactive data submissions facilitates automated analysis across filers and that the use of Inline XBRL may reduce the time and effort required to prepare XBRL filings, simplify the review process for filers, improve the quality of structured data and, by improving data quality, increase the use of XBRL data by investors, other market participants, and other data users. We also note that the proposed amendments to eliminate the Web site posting requirement are expected to decrease the burden on all filers, including small entities. We solicit comment, however, on whether additional differing compliance, reporting or timetable requirements; further clarification, consolidation, or simplification; a partial or complete exemption; or the use of performance rather than design standards would be consistent with our stated objective to improve the usefulness and quality of, and to decrease the cost of preparing for submission, the information that filers are required to submit to the Commission in interactive data form. G. General Request for Comment We encourage comments with respect to any aspect of this initial regulatory flexibility analysis. In particular, we request comments regarding: The number of small entities that may be affected by the proposed amendments; The existence or nature of the potential impact of the proposed amendments on small entities discussed in the analysis; and How to quantify the impact of the proposed amendments. Commenters are asked to describe the nature of any impact and provide empirical data supporting the extent of the impact. Such comments will be considered in the preparation of the Final Regulatory Flexibility Analysis, if the proposals are adopted, and will be placed in the same public file as comments on the proposed amendments themselves. VI. Small Business Regulatory Enforcement Fairness Act For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) \241\ the Commission must advise the OMB as to whether a proposed regulation constitutes a ``major'' rule. Under SBREFA, a rule is considered ``major'' where, if adopted, it results or is likely to result in: --------------------------------------------------------------------------- \241\ 5 U.S.C. 801 et seq. --------------------------------------------------------------------------- An annual effect on the economy of $100 million or more (either in the form of an increase or a decrease); A major increase in costs or prices for consumers or individual industries; or Significant adverse effects on competition, investment or innovation. If a rule is ``major'', its effectiveness will generally be delayed for 60 days pending Congressional review. We request comment on whether our proposed amendments would be a ``major rule'' for purposes of SBREFA. We solicit comment and empirical data on The potential annual effect on the economy; Any potential increase in costs or prices for consumers or individual industries; and Any potential effect on competition, investment, or innovation. We request those submitting comments to provide empirical data and other factual support for their views to the extent possible. VII. Statutory Basis and Text of Proposed Rule and Form Amendments The amendments contained in this document are being proposed under the authority set forth in Sections 7, 10, and 19(a) of the Securities Act, Sections 3, 12, 13, 15(d), 23(a), and 35A of the Exchange Act and Sections 8, 24, 30, and 38 of the Investment Company Act. List of Subjects 17 CFR Part 229 Reporting and recordkeeping requirements, Securities. 17 CFR Part 230 Investment companies, Reporting and recordkeeping requirements, Securities. 17 CFR Part 232 Administrative practice and procedure, Reporting and recordkeeping requirements, Securities. 17 CFR Parts 239 and 249 Reporting and recordkeeping requirements, Securities. 17 CFR Part 274 Investment companies, Reporting and recordkeeping requirements, Securities. For the reasons stated in the preamble, the Commission is proposing to amend title 17, chapter II of the Code of the Federal Regulations as follows: PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975--REGULATION S-K 0 1. The authority citation for part 229 continues to read as follows: Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 78o, 78u- 5, 78w, 78ll, 78 mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a- 31(c), 80a-37, 80a-38(a), 80a-39, 80b-11 and 7201 et seq.; 18 U.S.C. 1350; Sec. 953(b) Pub. L. 111-203, 124 Stat. 1904; Sec. 102(a)(3) Pub. L. 112-106, 126 Stat. 309; and Sec. 84001, Pub. L. 114-94, 129 Stat.1312. 0 2. Amend Sec. 229.601 by revising paragraph (b)(101) to read as follows: [[Page 14305]] Sec. 229.601 (Item 601) Exhibits. * * * * * (b) * * * (101) Interactive Data File. Where a registrant prepares its financial statements in accordance with either generally accepted accounting principles as used in the United States or International Financial Reporting Standards as issued by the International Accounting Standards Board, an Interactive Data File (Sec. 232.11 of this chapter) is: (i) Required to be submitted. Required to be submitted to the Commission in the manner provided by Sec. 232.405 of this chapter if the registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 to 210.6-10.), except that an Interactive Data File: (A) First is required for a periodic report on Form 10-Q (Sec. 249.308a of this chapter), Form 20-F (Sec. 249.220f of this chapter) or Form 40-F (Sec. 249.240f of this chapter), as applicable; (B) Is required for a registration statement under the Securities Act only if the registration statement contains a price or price range; and (C) Is required for a Form 8-K (Sec. 249.308 of this chapter) only when the Form 8-K contains audited annual financial statements that are a revised version of financial statements that previously were filed with the Commission that have been revised pursuant to applicable accounting standards to reflect the effects of certain subsequent events, including a discontinued operation, a change in reportable segments or a change in accounting principle, and, in such case, the Interactive Data File would be required only as to such revised financial statements regardless whether the Form 8-K contains other financial statements. (ii) Permitted to be submitted. Permitted to be submitted to the Commission in the manner provided by Sec. 232.405 of this chapter if the: (A) Registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 to 210.6- 10.); and (B) Interactive Data File is not required to be submitted to the Commission under paragraph (b)(101)(i) of this section. Instruction to paragraphs (b)(101)(i) and (ii): When an Interactive Data File is submitted as provided by Sec. 232.405(a)(3)(i) of this chapter, the exhibit index must include the word ``Inline'' within the title description for any eXtensible Business Reporting Language (XBRL)-related exhibit. (iii) Not permitted to be submitted. Not permitted to be submitted to the Commission if the registrant prepares its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 to 210.6-10). * * * * * PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933 0 3. The authority citation for Part 230 continues to read in part as follows: Authority: 15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o- 7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a- 30, and 80a-37, and Pub. L. 112-106, sec. 201(a), sec. 401, 126 Stat. 313 (2012), unless otherwise noted. * * * * * 0 4. Amend Sec. 230.144 by revising paragraph (c)(1)(ii) and paragraphs 1.b and 2 of Note to Sec. 230.144(c) to read as follows: Sec. 230.144 Persons deemed not to be engaged in a distribution and therefore not underwriters. * * * * * (c) * * * (1) * * * (ii) Submitted electronically every Interactive Data File (Sec. 232.11 of this chapter) required to be submitted pursuant to Sec. 232.405 of this chapter, during the 12 months preceding such sale (or for such shorter period that the issuer was required to submit such files); or * * * * * Note to Sec. 230.144(c): * * * * * 1. * * * b. Submitted electronically every Interactive Data File (Sec. 232.11 of this chapter) required to be submitted pursuant to Sec. 232.405 of this chapter, during the preceding 12 months (or for such shorter period that the issuer was required to submit such files); or 2. A written statement from the issuer that it has complied with such reporting or submission requirements. * * * * * 0 5. Amend Sec. 230.485 by revising paragraph (c)(3) to read as follows: Sec. 230.485 Effective date of post-effective amendments filed by certain registered investment companies. * * * * * (c) * * * (3) A registrant's ability to file a post-effective amendment, other than an amendment filed solely for purposes of submitting an Interactive Data File, under paragraph (b) of this section is automatically suspended if a registrant fails to submit any Interactive Data File as required by General Instruction C.3.(g) of Form N-1A (Sec. Sec. 239.15A and 274.11A of this chapter). A suspension under this paragraph (c)(3) shall become effective at such time as the registrant fails to submit an Interactive Data File as required by General Instruction C.3.(g) of Form N-1A. Any such suspension, so long as it is in effect, shall apply to any post-effective amendment that is filed after the suspension becomes effective, but shall not apply to any post-effective amendment that was filed before the suspension became effective. Any suspension shall apply only to the ability to file a post-effective amendment pursuant to paragraph (b) of this section and shall not otherwise affect any post-effective amendment. Any suspension under this paragraph (c)(3) shall terminate as soon as a registrant has submitted the Interactive Data File as required by General Instruction C.3.(g) of Form N-1A. * * * * * 0 6. Amend Sec. 230.497 by revising the last sentence of paragraphs (c) and (e) to read as follows: Sec. 230.497 Filing of investment company prospectuses--number of copies. * * * * * (c) * * * Investment companies filing on Form N-1A must, if applicable pursuant to General Instruction C.3.(g) of Form N-1A, submit an Interactive Data File (Sec. 232.11 of this chapter). * * * * * (e) * * * Investment companies filing on Form N-1A must, if applicable pursuant to General Instruction C.3.(g) of Form N-1A, submit an Interactive Data File (Sec. 232.11 of this chapter). * * * * * PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR ELECTRONIC FILINGS 0 7. The authority citation for Part 232 continues to read in part as follows: Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c), 80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and 18 U.S.C. 1350, unless otherwise noted. * * * * * 0 8. Amend Sec. 232.11 by revising the definition of ``Interactive Data File'', removing the definition of ``Promptly'' and revising the definition of ``Related Official Filing'' to read as follows: Sec. 232.11 232.11 Definition of terms used in part 232. * * * * * Interactive Data File. The term Interactive Data File means the [[Page 14306]] machine-readable computer code that presents information in eXtensible Business Reporting Language (XBRL) electronic format pursuant to Sec. 232.405 and as specified by the EDGAR Filer Manual. When a filing is submitted using Inline XBRL as provided by Sec. 232.405(a)(3), a portion of the Interactive Data File is embedded into a form with the remainder submitted as an exhibit to the form. * * * * * Related Official Filing. The term Related Official Filing means the ASCII or HTML format part of the official filing with which all or part of an Interactive Data File appears as an exhibit or, in the case of a filing on Form N-1A (Sec. Sec. 239.15A and 274.11A of this chapter), the ASCII or HTML format part of an official filing that contains the information to which an Interactive Data File corresponds. * * * * * 0 9. Amend Sec. 232.201 by revising Note 1 to paragraph (b), paragraph (c) and Note to paragraph (c) to read as follows: Sec. 232.201 Temporary hardship exemption. * * * * * Note 1 to paragraph (b): Failure to submit the confirming electronic copy of a paper filing made in reliance on the temporary hardship exemption, as required in paragraph (b) of this section, will result in ineligibility to use Forms S-3, S-8, F-3 and SF-3 (see Sec. Sec. 239.13, 239.16b 239.33 and 239.45 of this chapter, respectively), restrict incorporation by reference into an electronic filing of the document submitted in paper (see Sec. 232.303), and toll certain time periods associated with tender offers (see Sec. 240.13e-4(f)(12) of this chapter and Sec. 240.14e-1(e) of this chapter). * * * * * (c) If an electronic filer experiences unanticipated technical difficulties preventing the timely preparation and submission of an Interactive Data File (Sec. 232.11) as required pursuant to Sec. 232.405, the electronic filer still can timely satisfy the requirement to submit the Interactive Data File in the following manner: (1) Substitute for the Interactive Data File a document that sets forth the following legend: IN ACCORDANCE WITH THE TEMPORARY HARDSHIP EXEMPTION PROVIDED BY RULE 201 OF REGULATION S-T, THE DATE BY WHICH THE INTERACTIVE DATA FILE IS REQUIRED TO BE SUBMITTED HAS BEEN EXTENDED BY SIX BUSINESS DAYS; and (2) Submit the required Interactive Data File no later than six business days after the Interactive Data File originally was required to be submitted. Note to paragraph (c): Electronic filers unable to submit the Interactive Data File under the circumstances specified by paragraph (c) of this section, must comply with the provisions of this section and cannot use Form 12b-25 (Sec. 249.322 of this chapter) as a notification of late filing. Failure to submit the Interactive Data File as required by the end of the six-business-day period specified by paragraph (c) of this section will result in ineligibility to use Forms S-3, S-8 and F-3 (Sec. Sec. 239.13, 239.16b, and 239.33 of this chapter, respectively) and constitute a failure to have filed all required reports for purposes of the current public information requirements of Sec. 230.144(c)(1) of this chapter. * * * * * 0 10. Amend Sec. 232.202 by: 0 a. Revising the introductory text of paragraph (a); 0 b. Revising paragraphs (a)(2), (b)(2), (b)(3), (c)(1) and (c)(2); 0 c. Removing paragraph (c)(3); and 0 d. Revising paragraphs (d)(1) and (d)(2) and Notes 3 and 4 to Sec. 232.202. The revisions read as follows: Sec. 232.202 Continuing hardship exemption. (a) An electronic filer may apply in writing for a continuing hardship exemption if all or part of a filing, group of filings or submission, other than a Form ID (Sec. Sec. 239.63, 249.446, 269.7, and 274.402 of this chapter), a Form D (Sec. 239.500 of this chapter), or an Asset Data File (Sec. 232.11), otherwise to be filed or submitted in electronic format cannot be so filed or submitted, as applicable, without undue burden or expense. Such written application shall be made at least ten business days before the required due date of the filing(s) or submission(s) or the proposed filing or submission date, as appropriate, or within such shorter period as may be permitted. The written application shall contain the information set forth in paragraph (b) of this section. * * * * * (2) If the Commission, or the staff acting pursuant to delegated authority, denies the application for a continuing hardship exemption, the electronic filer shall file or submit the required document or Interactive Data File in electronic format, as applicable, on the required due date or the proposed filing or submission date, or such other date as may be permitted. * * * * * (b) * * * (2) The burden and expense involved to employ alternative means to make the electronic submission; and/or (3) The reasons for not submitting electronically the document, group of documents or Interactive Data File, as well as the justification for the requested time period. (c) * * * (1) Electronic filing of a document or group of documents, not electronic submission of an Interactive Data File, then the electronic filer shall submit the document or group of documents for which the continuing hardship exemption is granted in paper format on the required due date specified in the applicable form, rule or regulation, or the proposed filing date, as appropriate and the following legend shall be placed in capital letters at the top of the cover page of the paper format document(s): IN ACCORDANCE WITH RULE 202 OF REGULATION S-T, THIS (specify document) IS BEING FILED IN PAPER PURSUANT TO A CONTINUING HARDSHIP EXEMPTION. (2) Electronic submission of an Interactive Data File, then the electronic filer shall substitute for the Interactive Data File a document that sets forth one of the following legends, as appropriate: * * * * * (d) * * * (1) Electronic filing of a document or group of documents, not electronic submission of an Interactive Data File, then the grant may be conditioned upon the filing of the document or group of documents that is the subject of the exemption in electronic format upon the expiration of the period for which the exemption is granted. The electronic format version shall contain the following statement in capital letters at the top of the first page of the document: THIS DOCUMENT IS A COPY OF THE (specify document) FILED ON (date) PURSUANT TO A RULE 202(d) CONTINUING HARDSHIP EXEMPTION. (2) Electronic submission of an Interactive Data File, then the grant may be conditioned upon the electronic submission of the Interactive Data File that is the subject of the exemption upon the expiration of the period for which the exemption is granted. * * * * * Note 3 to Sec. 232.202: Failure to submit a required confirming electronic copy of a paper filing made in reliance on a continuing hardship exemption granted pursuant to paragraph (d) of this section will result in ineligibility to use Forms S-3, S-8 and F-3 (see, Sec. Sec. 239.13, 239.16b and 239.33 of this chapter, respectively), restrict incorporation by reference into an electronic filing of the document submitted in paper (see Sec. 232.303), and toll certain time periods associated with tender offers (see Sec. 240.13e-4(f)(12) of this chapter and Sec. 240.14e-1(e) of this chapter). Note 4 to Sec. 232.202: Failure to submit the Interactive Data File as required by Sec. 232.405 by the end of the continuing hardship [[Page 14307]] exemption if granted for a limited period of time, will result in ineligibility to use Forms S-3, S-8, and F-3 (Sec. Sec. 239.13, 239.16b and 239.33 of this chapter, respectively), constitute a failure to have filed all required reports for purposes of the current public information requirements of Sec. 230.144(c)(1) of this chapter, and, pursuant to Sec. 230.485(c)(3) of this chapter, suspend the ability to file post-effective amendments under Sec. 230.485 of this chapter. Sec. 232.401 [Removed and reserved]. 0 11. Remove and reserve Sec. 232.401. 0 12. Amend Sec. 232.405 by: 0 a. Revising the section heading; 0 b. Removing ``Preliminary Note 1'' and ``Preliminary Note 2'' and adding introductory text; 0 c. Removing Preliminary Note 3; 0 d. Revising the heading of paragraph (a); 0 e. Revising paragraphs (a)(1) and (a)(2); 0 f. Removing paragraph (a)(4) and redesignating paragraph (a)(3) as new paragraph (a)(4); 0 g. Adding new paragraph (a)(3); 0 h. Revising newly redesignated paragraph (a)(4); 0 i. Revising the introductory text of paragraphs (d) and (e); 0 j. Revising paragraph (f); 0 k. Removing paragraph (g); and 0 l. Revising Note to Sec. 232.405. The revisions and addition read as follows: Sec. 232.405 Interactive Data File submissions. Section 405 of Regulation S-T (Sec. 232.405) applies to electronic filers that submit Interactive Data Files. Item 601(b)(101) of Regulation S-K (Sec. 229.601(b)(101) of this chapter), paragraph (101) of Part II--Information Not Required to be Delivered to Offerees or Purchasers of Form F-10 (Sec. 239.40 of this chapter), paragraph 101 of the Instructions as to Exhibits of Form 20-F (Sec. 249.220f of this chapter), paragraph B.(15) of the General Instructions to Form 40-F (Sec. 249.240f of this chapter), and paragraph C.(6) of the General Instructions to Form 6-K (Sec. 249.306 of this chapter), and General Instruction C.3.(g) of Form N-1A (Sec. Sec. 239.15A and 274.11A of this chapter) specify when electronic filers are required to submit an Interactive Data File (Sec. 232.11), as further described in the Note to Sec. 232.405. Section 405 imposes content, format and submission requirements for an Interactive Data File, but does not change the substantive content requirements for the financial and other disclosures in the Related Official Filing (Sec. 232.11). (a) Content, format and submission requirements--General. * * * (1) Comply with the content, format and submission requirements of this section; (2) Be submitted only by an electronic filer either required or permitted to submit an Interactive Data File as specified by Item 601(b)(101) of Regulation S-K (Sec. 229.601(b)(101) of this chapter), paragraph (101) of Part II--Information Not Required to be Delivered to Offerees or Purchasers of Form F-10 (Sec. 239.40 of this chapter), paragraph 101 of the Instructions as to Exhibits of Form 20-F (Sec. 249.220f of this chapter), paragraph B.(15) of the General Instructions to Form 40-F (Sec. 249.240f of this chapter), paragraph C.(6) of the General Instructions to Form 6-K (Sec. 249.306 of this chapter), or General Instruction C.3.(g) of Form N-1A (Sec. Sec. 239.15A and 274.11A of this chapter), as applicable; (3) Be submitted using Inline XBRL, (i) If the electronic filer is not an open-end management investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.) and is not within one of the categories specified in paragraph (f) of this section, as partly embedded into a form with the remainder simultaneously submitted as an exhibit to: (A) A form that contains the disclosure required by this section; or (B) An amendment to a form that contains the disclosure required by this section if the amendment is filed no more than 30 days after the earlier of the due date or filing date of the form and the Interactive Data File is the first Interactive Data File the electronic filer submits; or (ii) If the electronic filer is an open-end management investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.) and is not within one of the categories specified in paragraph (f) of this section, as partly embedded into a form with the remainder simultaneously submitted as an exhibit to a form that contains the disclosure required by this section; and (4) Be submitted in accordance with the EDGAR Filer Manual and, as applicable, either Item 601(b)(101) of Regulation S-K (Sec. 229.601(b)(101) of this chapter), paragraph (101) of Part II-- Information Not Required to be Delivered to Offerees or Purchasers of Form F-10 (Sec. 239.40 of this chapter), paragraph 101 of the Instructions as to Exhibits of Form 20-F (Sec. 249.220f of this chapter), paragraph B.(15) of the General Instructions to Form 40-F (Sec. 249.240f of this chapter), paragraph C.(6) of the General Instructions to Form 6-K (Sec. 249.306 of this chapter), or General Instruction C.3.(g) of Form N-1A (Sec. Sec. 239.15A and 274.11A of this chapter). * * * * * (d) Format--Footnotes--Generally. The part of the Interactive Data File for which the corresponding data in the Related Official Filing consists of footnotes to financial statements must comply with the requirements of paragraphs (c)(1) and (c)(2) of this section, as modified by this paragraph (d). Footnotes to financial statements must be tagged as follows: * * * * * (e) Format--Schedules--Generally. The part of the Interactive Data File for which the corresponding data in the Related Official Filing consists of financial statement schedules as set forth in Article 12 of Regulation S-X (17 CFR 210.12-01 to 210.12-29) must comply with the requirements of paragraphs (c)(1) and (c)(2) of this section, as modified by this paragraph (e). Financial statement schedules as set forth in Article 12 of Regulation S-X (17 CFR 210.12-01 to 210.12-29) must be tagged as follows: * * * * * (f) Format--Phase-in for Inline XBRL submissions. (1) The following electronic filers may choose to submit an Interactive Data File: (i) In the manner specified in paragraph (f)(2)(i) or (ii) of this section rather than as specified by paragraph (a)(3)(i) of this section: any electronic filer that is not an open-end management investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.) if it is: (A) A large accelerated filer (Sec. 240.12b-2 of this chapter) that prepares its financial statements in accordance with generally accepted accounting principles as used in the United States and none of the financial statements for which an Interactive Data File is required is for a fiscal period that ends on or after [one year after the final rule is effective]; (B) An accelerated filer (Sec. 240.12b-2 of this chapter) that prepares its financial statements in accordance with generally accepted accounting principles as used in the United States and none of the financial statements for which an Interactive Data File is required is for a fiscal period that ends on or after [two years after the final rule is effective]; and (C) A filer not specified in paragraph (f)(1)(i)(A) or (f)(1)(i)(B) of this section that prepares its financial statements in accordance with either generally [[Page 14308]] accepted accounting principles as used in the United States or International Financial Reporting Standards as issued by the International Accounting Standards Board and none of the financial statements for which an Interactive Data File is required is for a fiscal period that ends on or after [three years after the final rule is effective]; (ii) In the manner specified in paragraph (f)(2)(i) of this section rather than as specified by paragraph (a)(3)(ii) of this section: any electronic filer that is an open-end management investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.) that, together with other investment companies in the same ``group of related investment companies,'' as such term is defined in Sec. 270.0-10 of this chapter, has assets of: (A) $1 billion or more as of the end of the most recent fiscal year until it files an initial registration statement (or post-effective amendment that is an annual update to an effective registration statement) that becomes effective on or after [one year after the final rule is effective]; and (B) Less than $1 billion as of the end of the most recent fiscal year until it files an initial registration statement (or post- effective amendment that is an annual update to an effective registration statement) that becomes effective on or after [two years after the final rule is effective]. (2) The electronic filers specified in paragraph (f)(1) of this section may submit the Interactive Data File solely as an exhibit to: (i) A form that contains the disclosure required by this section; or (ii) If the electronic filer is not an open-end management investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.), an amendment to a form that contains the disclosure required by this section if the amendment is filed no more than 30 days after the earlier of the due date or filing date of the form and the Interactive Data File is the first Interactive Data File the electronic filer submits. Note To Sec. 232.405: Item 601(b)(101) of Regulation S-K (Sec. 229.601(b)(101) of this chapter) specifies the circumstances under which an Interactive Data File must be submitted and the circumstances under which it is permitted to be submitted, with respect to Forms S-1 (Sec. 239.11 of this chapter), S-3 (Sec. 239.13 of this chapter), S-4 (Sec. 239.25 of this chapter), S-11 (Sec. 239.18 of this chapter), F-1 (Sec. 239.31 of this chapter), F-3 (Sec. 239.33 of this chapter), F-4 (Sec. 239.34 of this chapter), 10-K (Sec. 249.310 of this chapter), 10-Q (Sec. 249.308a of this chapter) and 8-K (Sec. 249.308 of this chapter). Paragraph (101) of Part II--Information not Required to be Delivered to Offerees or Purchasers of Form F-10 (Sec. 239.40 of this chapter) specifies the circumstances under which an Interactive Data File must be submitted and the circumstances under which it is permitted to be submitted, with respect to Form F-10. Paragraph 101 of the Instructions as to Exhibits of Form 20-F (Sec. 249.220f of this chapter) specifies the circumstances under which an Interactive Data File must be submitted and the circumstances under which it is permitted to be submitted, with respect to Form 20-F. Paragraph B.(15) of the General Instructions to Form 40-F (Sec. 249.240f of this chapter) and Paragraph C.(6) of the General Instructions to Form 6-K (Sec. 249.306 of this chapter) specify the circumstances under which an Interactive Data File must be submitted and the circumstances under which it is permitted to be submitted, with respect to Form 40-F and Form 6-K(Sec. 249.240f of this chapter and Sec. 249.306 of this chapter), respectively. Item 601(b)(101) of Regulation S-K, paragraph (101) of Part II--Information not Required to be Delivered to Offerees or Purchasers of Form F-10, paragraph 101 of the Instructions as to Exhibits of Form 20-F, paragraph B.(15) of the General Instructions to Form 40-F and paragraph C.(6) of the General Instructions to Form 6-K all prohibit submission of an Interactive Data File by an issuer that prepares its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 to 210.6-10). For an issuer that is an open-end management investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.), General Instruction C.3.(g) of Form N- 1A (Sec. Sec. 239.15A and 274.11A of this chapter) specifies the circumstances under which an Interactive Data File must be submitted. PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933 0 13. The authority citation for part 239 continues to read in part as follows: Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z- 3, 77sss, 78c, 78l, 78m, 78n, 78o(d), 78o-7 note, 78u-5, 78w(a),78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29, 80a-30, 80a-37, and Sec. 71003 and Sec. 84001, Pub. L. 114-94, 129 Stat. 1312, unless otherwise noted. * * * * * 0 14. Amend Sec. 239.13 by revising paragraph (a)(7)(ii) to read as follows: Sec. 239.13 Form S-3, for registration under the Securities Act of 1933 of securities of certain issuers offered pursuant to certain types of transactions. * * * * * (a) * * * (7) * * * (ii) Submitted electronically to the Commission all Interactive Data Files required to be submitted pursuant to Sec. 232.405 of this chapter during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement on this Form (or for such shorter period of time that the registrant was required to submit such files). * * * * * 0 15. Amend Form S-3 (referenced in Sec. 239.13) by revising General Instruction I.A.7.(b) to read as follows: Note: The text of Form S-3 does not, and this amendment will not, appear in the Code of Federal Regulations. Form S-3 Registration Statement Under the Securities Act of 1933 * * * * * General Instructions I. Eligibility Requirements for Use of Form S-3 * * * * * A. * * * 7. * * * (b) Submitted electronically to the Commission all Interactive Data Files required to be submitted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement on this Form (or for such shorter period of time that the registrant was required to submit such files). * * * * * 0 16. Amend Sec. 239.16b by revising paragraph (b)(2) to read as follows: Sec. 239.16b Form S-8, for registration under the Securities Act of 1933 of securities to be offered to employees pursuant to employee benefit plans. * * * * * (b) * * * (2) Submitted electronically to the Commission all Interactive Data Files required to be submitted pursuant to Sec. 232.405 of this chapter during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement on this Form (or for such shorter period of time that the registrant was required to submit such files). 0 17. Amend Form S-8 (referenced in Sec. 239.16b) by revising General Instruction A.3.(b) to read as follows: Note: The text of Form S-8 does not, and this amendment will not, appear in the Code of Federal Regulations. Form S-8 Registration Statement Under the Securities Act of 1933 * * * * * [[Page 14309]] General Instructions A. Rule as to Use of Form S-8 * * * * * 3. * * * (b) Submitted electronically to the Commission all Interactive Data Files required to be submitted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement on this Form (or for such shorter period of time that the registrant was required to submit such files). * * * * * 0 18. Amend Sec. 239.33 by revising paragraph (a)(6)(ii) to read as follows: 239.33 Form F-3, for registration under the Securities Act of 1933 of securities of certain foreign private issuers offered pursuant to certain types of transactions. * * * * * (a) * * * (6) * * * (ii) Submitted electronically to the Commission all Interactive Data Files required to be submitted pursuant to Sec. 232.405 of this chapter during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement on this Form (or for such shorter period of time that the registrant was required to submit such files). * * * * * 0 19. Amend Form F-3 (referenced in Sec. 239.33) by revising paragraph I.A.6.(ii) to read as follows: Note: The text of Form F-3 does not, and this amendment will not, appear in the Code of Federal Regulations. Form F-3 Registration Statement Under the Securities Act of 1933 * * * * * General Instructions I. Eligibility Requirements for Use of Form F-3 * * * * * A. Registrant Requirements * * * * * 6. Electronic filings. * * * * * * * * (ii) Submitted electronically to the Commission all Interactive Data Files required to be submitted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the twelve calendar months and any portion of a month immediately preceding the filing of the registration statement on this Form (or for such shorter period of time that the registrant was required to submit such files). * * * * * 0 20. Amend Form F-10 (referenced in Sec. 239.40) by revising paragraph (101) of Part II--Information Not Required to be Delivered to Offerees or Purchasers to read as follows: Note: The text of Form F-10 does not, and this amendment will not, appear in the Code of Federal Regulations. Form F-10 Registration Statement Under the Securities Act of 1933 * * * * * Part II--Information Not Required To Be Delivered To Offerees or Purchasers * * * * * (101) Where a registrant prepares its financial statements in accordance with either generally accepted accounting principles as used in the United States or International Financial Reporting Standards as issued by the International Accounting Standards Board, an Interactive Data File (Sec. 232.11 of this chapter) is: (a) Required to be submitted. Required to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) if the registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.), except that an Interactive Data File: (i) First is required for a periodic report on Form 10-Q (Sec. 249.308a of this chapter), Form 20-F (Sec. 249.220f of this chapter) or Form 40-F (Sec. 249.240f of this chapter), as applicable; and (ii) Is required for a registration statement under the Securities Act only if the registration statement contains a price or price range. (b) Permitted to be submitted. Permitted to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) if the: (i) Registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.); and (ii) Interactive Data File is not required to be submitted to the Commission under subparagraph (a) of this paragraph (101). (c) Not permitted to be submitted. Not permitted to be submitted to the Commission if the registrant prepares its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.). Instruction to paragraphs (101)(a) and (b): When an Interactive Data File is submitted as provided by Rule 405(a)(3)(i) of Regulation S-T (Sec. 232.405(a)(3)(i) of this chapter), the exhibit index must include the word ``Inline'' within the title description for any eXtensible Business Reporting Language (XBRL)-related exhibit. PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934 0 21. The authority citation for part 249 continues to read in part as follows: Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C. 5461 et seq.; 18 U.S.C. 1350; Sec. 953(b), Pub. L. 111-203, 124 Stat. 1904; and Sec. 102(a)(3), Pub. L. 112-106, 126 Stat. 309 (2012); Sec. 107, Pub. L. 112-106, 126 Stat. 313 (2012), and Sec. 72001, Pub. L. 114-94, 129 Stat. 1312 (2015), unless otherwise noted. * * * * * 0 22. Amend Form 20-F (referenced in Sec. 249.220f) by: 0 a. Revising the undesignated paragraph on the cover that begins ``Indicate by check mark whether the registrant has submitted electronically''; and 0 b. Revising paragraph 101 of the Instructions as to Exhibits. The revisions read as follows: Note: The text of Form 20-F does not, and this amendment will not, appear in the Code of Federal Regulations. Form 20-F [square] Registration Statement Pursuant To Section 12(b) OR (g) of the Securities Exchange Act of 1934 Or [square] Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 * * * * * Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). * * * * * Instructions as to Exhibits * * * * * 101. Interactive Data File. Where a registrant prepares its financial statements in accordance with either generally accepted accounting principles as used in the United States or International Financial Reporting Standards as issued by the International Accounting Standards Board, an [[Page 14310]] Interactive Data File (Sec. 232.11 of this chapter) is: (a) Required to be submitted. Required to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) if the Form 20-F is an annual report and the registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.). (b) Permitted to be submitted. Permitted to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) if the: (i) Registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.); and (ii) Interactive Data File is not required to be submitted to the Commission under subparagraph (a) of this paragraph 101. (c) Not permitted to be submitted. Not permitted to be submitted to the Commission if the registrant prepares its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.). Instruction to paragraphs 101.(a) and (b): When an Interactive Data File is submitted as provided by Rule 405(a)(3)(i) of Regulation S-T (Sec. 232.405(a)(3)(i) of this chapter), the exhibit index must include the word ``Inline'' within the title description for any eXtensible Business Reporting Language (XBRL)-related exhibit. 0 23. Amend Form 40-F (referenced in Sec. 249.240f) by: 0 a. Revising the undesignated paragraph on the cover that begins ``Indicate by check mark whether the registrant has submitted electronically''; and 0 b. Revising paragraph B.(15) of the General Instructions. The revisions read as follows: Note: The text of Form 40-F does not, and this amendment will not, appear in the Code of Federal Regulations. Form 40-F [square] Registration Statement Pursuant To Section 12 of the Securities Exchange Act of 1934 Or [square] Annual Report Pursuant To Section 13(a) or 15(d) of the Securities Exchange Act of 1934 * * * * * Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). * * * * * General Instructions * * * * * B. Information To Be Filed on This Form * * * * * (15) Where a registrant prepares its financial statements in accordance with either generally accepted accounting principles as used in the United States or International Financial Reporting Standards as issued by the International Accounting Standards Board, an Interactive Data File (Sec. 232.11 of this chapter) is: (a) Required to be submitted. Required to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) and, to the extent submitted as an exhibit, listed as exhibit 101, if the Form 40-F is an annual report and the registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.). (b) Permitted to be submitted. Permitted to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) if the: (i) Registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.); and (ii) Interactive Data File is not required to be submitted to the Commission under subparagraph (a) of this paragraph B.(15). (c) Not permitted to be submitted. Not permitted to be submitted to the Commission if the registrant prepares its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.). Instruction to paragraphs B.(15)(a) and (b): When an Interactive Data File is submitted as provided by Rule 405(a)(3)(i) of Regulation S-T (Sec. 232.405(a)(3)(i) of this chapter), the exhibit index must include the word ``Inline'' within the title description for any eXtensible Business Reporting Language (XBRL)-related exhibit. * * * * * 0 24. Amend Form 6-K (referenced in Sec. 249.306) by revising paragraph (6) to General Instruction C to read as follows: Note: The text of Form 6-K does not, and this amendment will not, appear in the Code of Federal Regulations. Form 6-K Report Foreign Private Issuer Pursuant To Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 * * * * * General Instructions * * * * * C. Preparation and Filing of Report * * * * * (6) Interactive Data File. Where a registrant prepares its financial statements in accordance with either generally accepted accounting principles as used in the United States or International Financial Reporting Standards as issued by the International Accounting Standards Board, an Interactive Data File (Sec. 232.11 of this chapter) is: (a) Required to be submitted. Required to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) and, to the extent submitted as an exhibit, listed as exhibit 101, if the registrant does not prepare its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.), except that an Interactive Data File: (i) First is required for a periodic report on Form 10-Q (Sec. 249.308a of this chapter), Form 20-F (Sec. 249.220f of this chapter) or Form 40-F (Sec. 249.240f of this chapter), as applicable; and (ii) Is required for a Form 6-K (Sec. 249.306 of this chapter) only when the Form 6-K contains either of the following: audited annual financial statements that are a revised version of financial statements that previously were filed with the Commission that have been revised pursuant to applicable accounting standards to reflect the effects of certain subsequent events, including a discontinued operation, a change in reportable segments or a change in accounting principle; or current interim financial statements included pursuant to the nine-month updating requirement of Item 8.A.5 of Form 20-F, and, in either such case, the Interactive Data File would be required only as to such revised financial statements or current interim financial statements regardless whether the Form 6-K contains other financial statements. (b) Permitted to be submitted. Permitted to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) if the: (i) Registrant does not prepare its financial statements in accordance with [[Page 14311]] Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.); and (ii) Interactive Data File is not required to be submitted to the Commission under subparagraph (a) of this paragraph C.(6). (c) Not permitted to be submitted. Not permitted to be submitted to the Commission if the registrant prepares its financial statements in accordance with Article 6 of Regulation S-X (17 CFR 210.6-01 et seq.). Instruction to paragraphs C.(6)(a) and (b): When an Interactive Data File is submitted as provided by Rule 405(a)(3)(i) of Regulation S-T (Sec. 232.405(a)(3)(i) of this chapter), the exhibit index must include the word ``Inline'' within the title description for any eXtensible Business Reporting Language (XBRL)-related exhibit. * * * * * 0 25. Amend Form 10-Q (referenced in Sec. 249.308a) by revising the undesignated paragraph on the cover that begins ``Indicate by check mark whether the registrant has submitted electronically'' to read as follows: Note: The text of Form 10-Q does not, and this amendment will not, appear in the Code of Federal Regulations. Form 10-Q * * * * * [square] Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 * * * * * [square] Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 * * * * * Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). * * * * * 0 26. Amend Form 10-K (referenced in Sec. 249.310) by revising the undesignated paragraph on the cover that begins ``Indicate by check mark whether the registrant has submitted electronically'' to read as follows: Note: The text of Form 10-K does not, and this amendment will not, appear in the Code of Federal Regulations. Form 10-K * * * * * [square] Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 * * * * * [square] Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 * * * * * Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). * * * * * PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940 0 27. The authority citation for part 274 continues to read in part as follows: Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b),78l, 78m, 78n, 78o(d), 80a-8, 80a-24, 80a-26, 80a-29, and Pub. L. 111-203, sec. 939A, 124 Stat. 1376 (2010), unless otherwise noted. * * * * * 0 28. Amend Form N-1A (referenced in Sec. Sec. 239.15A and 274.11A) by revising General Instruction C.3.(g) to read as follows: Note: The text of Form N-1A does not, and this amendment will not, appear in the Code of Federal Regulations. Form N-1A * * * * * [square] Registration Statement Under the Securities Act OF 1933 * * * * * [square] Registration Statement Under the Investment Company Act of 1940 * * * * * General Instructions * * * * * C. * * * 3. * * * (g) Interactive Data File (i) An Interactive Data File (Sec. 232.11 of this chapter) is required to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) for any registration statement or post-effective amendment thereto on Form N-1A that includes or amends information provided in response to Items 2, 3, or 4. (A) Except as required by paragraph (g)(i)(B), the Interactive Data File must be submitted as an amendment to the registration statement to which the Interactive Data File relates. The amendment must be submitted on or before the date the registration statement or post- effective amendment that contains the related information becomes effective. (B) In the case of a post-effective amendment to a registration statement filed pursuant to paragraphs (b)(1)(i), (ii), (v), or (vii) of rule 485 under the Securities Act [17 CFR 230.485(b)], the Interactive Data File must be submitted either with the filing, or as an amendment to the registration statement to which the Interactive Data Filing relates that is submitted on or before the date the post- effective amendment that contains the related information becomes effective. (ii) An Interactive Data File is required to be submitted to the Commission in the manner provided by Rule 405 of Regulation S-T for any form of prospectus filed pursuant to paragraphs (c) or (e) of rule 497 under the Securities Act [17 CFR 230.497(c) or (e)] that includes information provided in response to Items 2, 3, or 4 that varies from the registration statement. The Interactive Data File must be submitted with the filing made pursuant to rule 497. (iii) The Interactive Data File must be submitted in such a manner that will permit the information for each Series and, for any information that does not relate to all of the Classes in a filing, each Class of the Fund to be separately identified. * * * * * By the Commission. Dated: March 1, 2017. Brent J. Fields, Secretary. [FR Doc. 2017-04366 Filed 3-16-17; 8:45 am] BILLING CODE 8011-01-P
![14282 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules
SECURITIES AND EXCHANGE printing in the Commission’s Public I. Introduction
COMMISSION Reference Room, 100 F Street NE., Room II. Background and Economic Baseline
1580, Washington, DC 20549 on all A. Overview of Existing XBRL
17 CFR Parts 229, 230, 232, 239, 249 official business days between the hours Requirements for Operating Companies
and 274 and Mutual Funds
of 10:00 a.m. and 3:00 p.m. All B. Current XBRL Practices
[Release Nos. 33–10323; 34–80133; IC– comments received will be posted 1. XBRL Preparation
32518; File No. S7–03–17] without change; we do not edit personal 2. XBRL Data Use
identifying information from III. Proposed Amendments and Anticipated
RIN 3235–AL59 submissions. You should submit only Economic Effects
information that you wish to make A. Overview of Inline XBRL
Inline XBRL Filing of Tagged Data B. Proposed Amendments
available publicly. Studies, memoranda,
AGENCY: Securities and Exchange or other substantive items may be added 1. Inline XBRL Requirements
by the Commission or staff to the 2. Elimination of Web Site Posting
Commission.
Requirement
ACTION: Proposed rule. comment file during this rulemaking. A 3. Termination of the 2005 XBRL
notification of the inclusion in the Voluntary Program
SUMMARY: We are proposing to require comment file of any such materials will 4. Proposed Technical Amendments
the use of the Inline XBRL format for the be made available on the Commission’s 5. Request for Comment
submission of operating company Web site. To ensure direct electronic C. Potential Economic Effects of the
financial statement information and receipt of such notifications, sign up Proposed Amendments
mutual fund risk/return summaries. The through the ‘‘Stay Connected’’ option at 1. Benefits
proposed amendments are intended to www.sec.gov to receive notifications by 2. Costs
improve the data’s quality, benefiting email. 3. Compliance Dates
4. Alternatives
investors, other market participants, and FOR FURTHER INFORMATION CONTACT: 5. Request for Comment
other data users, and to decrease, over Mark W. Green, Senior Special Counsel IV. Paperwork Reduction Act
time, the cost of preparing the data for (Regulatory Policy), Division of A. Background
submission to the Commission. The Corporation Finance, at (202) 551–3430; B. Reporting and Cost Burden Estimates
proposed amendments would also John Foley, Senior Counsel, or Michael 1. Registration Statement and Periodic
eliminate the requirement for filers to C. Pawluk, Senior Special Counsel, Reporting
post Interactive Data Files on their Web Division of Investment Management, at 2. Regulation S–K and Regulation S–T
sites and terminate the Commission’s C. Request for Comment
(202) 551–6792; R. Michael Willis,
voluntary program for the submission of V. Initial Regulatory Flexibility Act Analysis
Assistant Director, Office of Structured A. Reasons for, and Objectives of, the
financial statement information Disclosure, Anzhela Knyazeva, Senior Action
interactive data that is currently Financial Economist, or Hermine Wong, B. Legal Basis
available only to investment companies Special Counsel, Division of Economic C. Small Entities Subject to the Proposed
and certain other entities. and Risk Analysis, at (202) 551–6600. Amendments
DATES: Comments should be received by SUPPLEMENTARY INFORMATION: We are D. Projected Reporting, Recordkeeping and
May 16, 2017. proposing amendments to Item 601 1 of Other Compliance Requirements
E. Duplicative, Overlapping or Conflicting
ADDRESSES: Comments may be Regulation S–K,2 Rules 11,3 201,4 202,5
Federal Rules
submitted by any of the following 401 6 and 405 7 of Regulation S–T,8 F. Significant Alternatives
methods: Rules 144,9 485 10 and 497 11 and Form G. General Request for Comment
F–10 12 under the Securities Act of 1933 VI. Small Business Regulatory Enforcement
Electronic Comments (Securities Act),13 Forms 10–Q,14 10– Fairness Act
• Use the Commission’s Internet K,15 20–F,16 40–F 17 and 6–K 18 under VII. Statutory Basis and Text of Proposed
comment form (http://www.sec.gov/ the Securities Exchange Act of 1934 Rule and Form Amendments
rules/proposed.shtml); (Exchange Act),19 and Form N–1A 20 I. Introduction
• Send an email to rule-comments@ under the Securities Act and Investment
sec.gov. Please include File Number S7– Company Act of 1940 (Investment In 2009 the Commission adopted
03–17 on the subject line; or Company Act).21 rules requiring operating companies to
• Use the Federal eRulemaking Portal provide the information from the
(http://www.regulations.gov). Follow the 1 17 CFR 229.601. financial statements accompanying their
instructions for submitting comments. 2 17 CFR 229.10 et seq. registration statements and periodic and
3 17 CFR 232.11. current reports in machine-readable
Paper Comments 4 17 CFR 232.201.
format using eXtensible Business
• Send paper comments to Brent J. 5 17 CFR 232.202.
Reporting Language (XBRL) by
6 17 CFR 232.401.
Fields, Secretary, Securities and 7 17 CFR 232.405.
submitting it to the Commission in
Exchange Commission, 100 F Street NE., 8 17 CFR 232.10 et seq.
exhibits to such reports and posting it
Washington, DC 20549–1090. 9 17 CFR 230.144. on their Web sites, if any.22 That same
All submissions should refer to File 10 17 CFR 230.485. year, the Commission similarly required
Number S7–03–17. This file number 11 17 CFR 230.497. open-end management investment
companies (‘‘mutual funds’’) to provide
mstockstill on DSK3G9T082PROD with PROPOSALS2
should be included on the subject line 12 17 CFR 239.40.
if email is used. To help us process and 13 15 U.S.C. 77a et seq. risk/return summary information from
review your comments more efficiently,
14 17 CFR 249.308a.
their prospectuses in XBRL format by
15 17 CFR 249.310.
please use only one method. The submitting it to the Commission in
16 17 CFR 249.220f.
Commission will post all comments on 17 17 CFR 249.240f.
22 17 CFR 232.405. See also Release No. 33–9002
the Commission’s Internet Web site 18 17 CFR 249.306.
(Jan. 30, 2009) [74 FR 6776] (‘‘2009 Financial
(http://www.sec.gov/rules/ 19 15 U.S.C. 78a et seq.
Statement Information Adopting Release’’) as
proposed.shtml). Comments are also 20 17 CFR 239.15A and 274.11A.
corrected by Release No. 33–9002A (Apr. 1, 2009)
available for Web site viewing and 21 15 U.S.C. 80a. [74 FR 15666].
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![Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules 14283
exhibits and posting it on their Web number of data quality issues associated XBRL requirements were adopted, the
sites, if any.23 with financial statement information XBRL technology has continued to
XBRL requirements currently apply to XBRL data filed by operating evolve.34 In particular, the Inline XBRL
operating companies that prepare their companies.31 The amendments we are format has seen increased use for
financial statements in accordance with proposing today are intended to address various regulatory purposes in several
U.S. generally accepted accounting some of these issues and concerns by foreign jurisdictions.35
principles (U.S. GAAP) or in accordance facilitating improvements in the quality
and usefulness of XBRL data and, over In assessing the potential impact of
with International Financial Reporting
Standards (IFRS) as issued by the time, decreasing filing costs by the proposed amendments, we consider
International Accounting Standards decreasing XBRL preparation costs. as a point of reference the interactive
Board (IASB).24 XBRL requirements also The proposed amendments would data requirements and XBRL practices
apply to mutual funds pursuant to Form require financial statement information as they exist today. This economic
N–1A and related rules under and mutual fund risk/return summary baseline includes the current XBRL
Regulation S–T.25 Filers subject to these information to be provided in the Inline requirements, information about filers
XBRL requirements must submit an XBRL format.32 Inline XBRL allows subject to these requirements and
Interactive Data File,26 including filers to embed XBRL data directly into current practices related to XBRL filing
information tagged in XBRL, as an an HTML document, eliminating the and use.
exhibit to the Related Official Filing, need to tag a copy of the information in
a separate XBRL exhibit. Inline XBRL A. Overview of Existing XBRL
which is filed in the traditional
would be both human-readable and Requirements for Operating Companies
HyperText Markup Language (HTML)
machine-readable for purposes of and Mutual Funds
or, less commonly, American Standard
Code for Information Interchange validation, aggregation and analysis.
Structured information is currently
(ASCII) format.27 The 2009 The proposed amendments also would
eliminate the requirement for filers to required to be submitted in an
requirements were intended to make Interactive Data File exhibit to certain
financial information and mutual fund post Interactive Data Files on their Web
sites. forms. These forms are prepared in
risk/return summaries easier for either HTML or ASCII 36 electronic
investors to analyze and to assist in II. Background and Economic Baseline formats.37 The XBRL requirements for
automating regulatory filings and
The XBRL requirements were adopted the required information are located in
business information processing.28
in 2009 to provide financial statement the Interactive Data File provisions of
Since that time, some commenters have
and risk/return summary data in a form
expressed concerns regarding the
that was intended to improve its Release No. 33–10231 (Oct. 13, 2016) [81 FR 81870],
quality of, extent of use of, and cost to usefulness to investors.33 Since the Release No. IC–29132 (Feb. 23, 2010) [75 FR 10059];
create XBRL data,29 while other Release No. IA–3308 (Oct. 31, 2011) [76 FR 71127];
commenters have recognized the 31 See, e.g., Staff Observations of Custom Axis Release No. 33–8891 (Feb. 6, 2008) [73 FR 10591];
benefits of XBRL data.30 In addition, the Tags (Mar. 29, 2016), available at http:// Release No. 33–9974 (Oct. 30, 2015) [80 FR 71387];
Commission staff has identified a www.sec.gov/structureddata/reportspubs/osd_ Release No. 33–9741 (Mar. 25, 2015) [80 FR 21805].
34 The XBRL preparation industry has gained
assessment_custom-axis-tags.html; Staff
23 See Release No. 33–9006 (Feb. 11, 2009) [74 FR Observations of Custom Tag Rates (Jul. 7, 2014), significant technological expertise and efficiency.
available at http://www.sec.gov/dera/reportspubs/ See, e.g., William Sinnett, SEC reporting and the
7747] (‘‘2009 Risk/Return Summary Adopting impact of XBRL: 2013 survey, Financial Executives
assessment-custom-tag-rates-xbrl.html (‘‘Staff XBRL
Release’’) as corrected by Release No. 33–9006A Research Foundation (Nov. 15, 2013) (‘‘FERF
Observations 2014’’); Staff Observations from the
(May 1, 2009) [74 FR 21255]. The risk/return Study’’); Research shows XBRL filing costs lower
Review of Interactive Data Financial Statements
summary is set forth in Items 2, 3, and 4 of Form
(Dec. 13, 2011), available at http://www.sec.gov/ than expected, American Institute of CPAs,
N–1A.
24 As used in this release, the phrase ‘‘IFRS as
spotlight/xbrl/staff-review-observations- available at http://www.aicpa.org/InterestAreas/
121311.shtml (‘‘Staff XBRL Observations 2011’’). FRC/AccountingFinancialReporting/XBRL/
issued by the IASB’’ refers to the authoritative text 32 Inline XBRLTM and iXBRLTM are trademarks of DownloadableDocuments/XBRL%20Costs%20
of IFRS.
25 See General Instruction C.3(g) to Form N–1A;
XBRL International. XBRL® is a registered for%20Small%20Companies.pdf (retrieved Aug. 30,
trademark of XBRL International. 2016) (‘‘AICPA Study’’). See also Section II.B.1
Rule 405 of Regulation S–T. 33 The Commission has recently implemented below.
26 17 CFR 232.11; 17 CFR 232.405. The term 35 Inline XBRL has been adopted in several
requirements for the structuring of other types of
Interactive Data File means the machine-readable information using the XBRL format, including foreign jurisdictions and proposed for required use
computer code that presents information in XBRL swap-based security data repository financial in another. It has also gained support among several
electronic format pursuant to Rule 405 of statements and credit rating history information XBRL preparation software vendors in the U.S. See
Regulation S–T. The Interactive Data File currently maintained by nationally recognized statistical notes 94 and 95 below. Separately, the EDGAR
consists of an ‘‘instance document’’ and other rating organizations, and proposed requirements for system has been modified to accept voluntary Inline
documents as described in the Electronic Data the structuring of certain compensation disclosures, XBRL submissions. See note 58 below and
Gathering, Analysis, and Retrieval system (EDGAR) including the disclosure of the relationship between accompanying text.
Filer Manual. The instance document contains the executive compensation and the financial 36 Based on staff review of Form 10–K filings filed
XBRL tags for the information contained in the performance of the registrant and the compensation during calendar year 2015, fewer than 1% were
corresponding data in the Related Official Filing to recovery policies of listed registrants. See, e.g., filed in the ASCII format. The majority of those
satisfy the content and format requirements in Rule Release No. 34–74244 (Feb. 11, 2015) [80 FR were filed by smaller reporting companies and non-
405. The other documents in the Interactive Data 14563]; Release No. 34–72936 (Aug. 27, 2014) [79 accelerated filers. Based on staff review of data on
File contain contextual information about the XBRL FR 55077]; Release No. 34–74835 (Apr. 29, 2015) Rule 485(b) and Rule 497 filings filed during
tags. [80 FR 26329]; Release No. 33–9861 (Jul. 1, 2015) calendar year 2015, approximately 15% were filed
27 17 CFR 232.11. The term Related Official Filing
[80 FR 41143]. in the ASCII format.
means the ASCII or HTML format part of the official
mstockstill on DSK3G9T082PROD with PROPOSALS2
The Commission also has implemented 37 In a companion release we are issuing today,
filing with which an Interactive Data File appears requirements for the structuring of information in the Commission is adopting amendments to
as an exhibit or, in the case of Form N–1A, the certain forms using XML, including Form N–CEN eliminate the ASCII format for registration
ASCII or HTML format part of the official filing that (annual report for registered investment statements and periodic and current reports that are
contains the information to which an Interactive companies), Form N–PORT (monthly schedule of subject to the exhibit requirements under Item 601
Data File corresponds. portfolio investments), Form N–MFP (monthly of Regulation S–K and for Forms F–10 and 20–F.
28 See 2009 Financial Statement Information
schedule of portfolio holdings of money market See Release No. 33–10322 (Mar. 1, 2017)
Adopting Release, at 6776; 2009 Risk/Return funds), Form PF (investment advisers to private (‘‘Hyperlinks Adopting Release’’). The amendments
Summary Adopting Release, at 7748. funds), Form D (Regulation D offerings), Form 1– were proposed in 2016. See Release No. 33–10201
29 See notes 70 and 78 below.
A (Regulation A offering statement), and Form C (Aug. 31, 2016) [81 FR 62689] (‘‘Hyperlinks
30 See note 169 below. (securities-based crowdfunding offerings). See Proposing Release’’).
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![14284 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules
Regulation S–K,38 Forms F–10,39 20– in XBRL. Filers that are required to posting to the extent provided under a
F,40 40–F,41 6–K 42 and N–1A,43 Rule provide information in XBRL must use hardship exemption.54
405 of Regulation S–T, and the the taxonomies specified on the For both operating companies and
EDGAR 44 Filer Manual. Commission’s Web site.46 mutual funds, the Interactive Data File
Operating companies are required to
Mutual funds are required to submit submitted to the Commission also must
submit financial statements and any
risk/return summary information in be posted on the filer’s Web site, if any,
applicable financial statement schedules
in XBRL as exhibits to certain Exchange XBRL as exhibits to registration on the earlier of the calendar day that
Act reports and Securities Act statements and to prospectuses with the filer submitted or was required to
registration statements.45 In general, risk/return summary information that submit it.55 Operating companies must
operating companies that prepare their varies from the registration statement.47 keep the Interactive Data File posted for
financial statements in accordance with In addition, mutual funds, as well as at least 12 months.56 For mutual funds,
U.S. GAAP or in accordance with IFRS other investment companies registered the Interactive Data File is required to
as issued by the IASB must submit their under the Investment Company Act, be posted on the fund’s Web site for as
financial statements to the Commission business development companies long as the registration statement or
(‘‘BDCs’’),48 and other entities that post-effective amendment to which the
38 See Item 601(b)(101) of Regulation S–K [17 CFR report under the Exchange Act and Interactive Data File relates remains
229.601(b)(101)]. prepare their financial statements in current.57
39 See Paragraph (101) of Part II—Information Not
accordance with Article 6 of Regulation
Required to be Delivered to Offerees or Purchasers On June 13, 2016, the Commission
S–X 49 are currently allowed to
of Form F–10. issued an exemptive order under the
40 See Paragraph 101 of the Instructions as to participate in the Commission’s
Exchange Act to permit operating
Exhibits of Form 20–F. Interactive Data Voluntary Program (the
companies that comply with certain
41 See Paragraph B.(15) of the General
‘‘2005 XBRL Voluntary Program’’) with
Instructions to Form 40–F. respect to financial statement conditions listed in the order to file
42 See Paragraph C.(6) of the General Instructions
information.50 structured financial statement data
to Form 6–K. required in their periodic and current
43 See General Instruction C.3(g) to Form N–1A.
An operating company generally must reports using Inline XBRL through
44 EDGAR performs automated collection,
submit the Interactive Data File as an March 2020.58 When it issued the order,
validation, indexing, acceptance, and forwarding of
submissions by companies and others who are
exhibit to the Related Official Filing to the Commission stated that permitting
required to file forms with the Commission. See which it relates.51 Mutual funds are companies to use Inline XBRL on a
http://www.sec.gov/edgar/aboutedgar.htm. required to submit the Interactive Data voluntary, time-limited basis could
45 Financial statements in XBRL are required as
File within 15 business days after (1) the facilitate the development of Inline
exhibits to Exchange Act reports on Forms 10–Q,
10–K, 20–F, 40–F and, in some cases, 8–K and 6–
effective date of the registration XBRL preparation and analysis tools,
K. Item 601(b)(101) of Regulation S–K requires an statement or post-effective amendment
provide investors and companies with
Interactive Data File to be submitted with a Form that contains the related information,52
8–K only when the Form 8–K contains audited the opportunity to evaluate its
or (2) the filing of a form of prospectus
annual financial statements that previously were usefulness and help inform any future
filed with the Commission but have been revised made pursuant to paragraph (c) or (e) of
Commission rulemaking in this area. As
pursuant to applicable accounting standards to Rule 497.53 Operating companies and
of February 27, 2017, the Commission
reflect the effects of certain subsequent events, mutual funds may delay submission and
including a discontinued operation, a change in
reportable segments or a change in accounting 54 An operating company may delay the
46 See Rule 405(c)(1) of Regulation S–T.
principle. Item 601(b)(101) further specifies that, in submission and posting of the Interactive Data File
such case, the Interactive Data File is required only On March 1, 2017, in a companion release, the to the extent provided under a temporary or a
as to such revised financial statements regardless of Commission issued a notice that, for the first time, continuing hardship exemption. See Rules 201 and
whether the Form 8–K contains other financial an IFRS taxonomy had been specified on its Web 202 of Regulation S–T. A mutual fund filer may
statements. Paragraph C.(6) of the General site for use by foreign private issuers (FPIs) to delay the submission and posting of the Interactive
Instructions to Form 6–K requires an Interactive submit their financial statement information to the Data File to the extent provided under a continuing
Data File to be submitted with a Form 6–K only Commission in XBRL. See Release No. 33–10320 hardship exemption. See Rule 202 of Regulation
when the Form 6–K contains either of the (Mar. 1, 2017). S–T.
following: audited annual financial statements that 47 See General Instruction C.3(g) to Form N–1A. 55 See Rule 405(g).
are a revised version of financial statements that 48 Business development companies are a 56 Id.
previously were filed with the Commission that category of closed-end investment companies that 57 See Rule 405(g) and General Instruction
have been revised pursuant to applicable are not required to register under the Investment
accounting standards to reflect the effects of certain C.3(g)(iii) to Form N–1A.
Company Act. See Section 2(a)(48) of the
subsequent events, including a discontinued If a mutual fund does not submit or post
Investment Company Act [15 U.S.C. 80a–2(a)(48)].
operation, a change in reportable segments or a 49 17 CFR 210.6–01 et seq.
interactive data as required, its ability to file post-
change in accounting principle; or current interim effective amendments to its registration statement
50 See Rule 401 of Regulation S–T. In 2005, the
financial statements included pursuant to the nine- under Rule 485(b) under the Securities Act is
month updating requirement of Item 8.A.5 of Form Commission began to allow public companies, and automatically suspended until it submits and posts
20–F. Paragraph C.(6) further specifies that, in later mutual funds, to voluntarily submit XBRL- the interactive data as required. See Rule 485(c)
either such case, the Interactive Data File would be formatted files as exhibits to periodic reports and under the Securities Act. The Interactive Data File
required only as to such revised financial Investment Company Act filings. See Release No. also must be submitted in such a manner that will
statements or current interim financial statements 33–8529 (Feb. 3, 2005) [70 FR 6556]; Release No. permit the information for each series and, for any
regardless of whether the Form 6–K contains other 33–8823 (Jul. 11, 2007) [72 FR 39289]. As a result information that does not relate to all of the classes
financial statements. Financial statements in XBRL of rule amendments adopted by the Commission in in a filing, each class of the mutual fund to be
also are required as exhibits to Securities Act 2009, the 2005 XBRL Voluntary Program is now separately identified. See General Instruction
only open for participation by investment
mstockstill on DSK3G9T082PROD with PROPOSALS2
registration statements that contain financial C.3(g)(iv) to Form N–1A.
statements, such as Form S–1 (except registration companies and entities that prepare their financial 58 See Order Granting Limited and Conditional
statements filed in connection with an initial public statements in accordance with Article 6 of Exemption under Section 36(a) of the Securities
offering). Securities Act registration statements that Regulation S–X. See 2009 Financial Statement Exchange Act of 1934 from Compliance with
do not contain financial statements, such as a Form Information Adopting Release and 2009 Risk/ Interactive Data File Exhibit Requirement in Forms
S–3 or other form filed by an issuer that Return Summary Adopting Release. 6–K, 8–K, 10–Q, 10–K, 20–F and 40–F to Facilitate
51 See Rule 405(a) of Regulation S–T.
incorporates by reference all required financial Inline Filing of Tagged Financial Data, Release No.
52 See General Instruction C.3g(i), (iv) to Form
statement information from its periodic reports, and 34–78041 (Jun. 13, 2016) [81 FR 39741]
Exchange Act registration statements are not N–1A. (‘‘Exemptive Order’’). The Exemptive Order does
required to include Interactive Data Files. See 2009 53 See General Instruction C.3g(ii), (iv) to Form not exempt voluntary filers from the Web site
Financial Statement Information Adopting Release. N–1A. posting requirement.
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observers have expressed concern about capital.71 According to a 2013 survey, financial analysts, economic research
the costs associated with XBRL the median filer required 25 hours for firms, data aggregators, academic
requirements generally, particularly for the preparation and 15 hours for the researchers, and Commission staff.
smaller filers,70 other observers have review of XBRL and between $8,000 and Investors, other market participants, and
disagreed with the claim that the XBRL $10,000 for the services of outside other data users access XBRL data in
requirements impose high costs and professionals for its most recent annual various ways. XBRL data for individual
emphasized the decrease in costs over filing.72 According to another survey, filings is available on EDGAR and on
time as filers and filing agents have the median small filer paid $10,000 or each filer’s respective Web site.
gained experience and widely adopted less on an annual basis for fully Downloads of XBRL data also are
outsourced creation and filing of its available from the Commission through
the XBRL technology, the variety of
XBRL exhibits.73 Really Simple Syndication (RSS) feeds.
filing agents that assist with XBRL The 2009 Risk/Return Summary
preparation, and the potential benefits The Commission combines, organizes
Adopting Release estimated the and posts for bulk download XBRL data
associated with better availability of expected direct cost of compliance with extracted from operating company
information about smaller companies the mutual fund risk/return summary submissions to facilitate investor
from the standpoint of access to XBRL requirements.74 We have not analysis and comparisons of public
received comments or further data that company information.76 A number of
effectiveness-55.pdf (‘‘Data Coalition Letter 1’’) would lead us to update cost estimates businesses have created open-source
(estimating a median small filer’s costs of XBRL for XBRL requirements pertaining to
compliance to be $8,000 based on the AICPA software products, which freely provide
Study); Letter from Committee on Securities Law of risk/return summary information. XBRL data to investors. Other
the Business Law Section of the Maryland State Bar To facilitate compliance with XBRL businesses offer investors additional
Association (Jul. 21, 2016), available at http:// requirements, the staff has taken steps to analytical software and data feeds for a
www.sec.gov/comments/s7-06-16/s70616-257.pdf provide guidance and tools to assist
(‘‘Maryland State Bar Letter’’) (citing one small license fee. Data aggregators (i.e.,
with XBRL filing.75 entities that, in general, collect, package
registrant’s cost of XBRL exhibits for fiscal year
2014 as $27,000). 2. XBRL Data Use and resell data) have incorporated XBRL
70 See FERF Study, at 1 (finding, in a 2013 survey
There is a wide range of users of data into their products to varying
of executives and SEC reporting professionals from
442 unique companies, including members of FEI XBRL data, including investors, degrees. Various third-party data
and other reporting companies, that ‘‘the cost/ providers extract or preview
benefit proposition of the XBRL mandate’’ was 71 See AICPA Study; Data Coalition Letter 1. See information contained in XBRL exhibits,
among companies’ top concerns about XBRL also Trevor S. Harris and Suzanne Morsfield, ‘‘An offering XBRL analytics tools or using
compliance). See also Letter from the ABA Business
Law Section (Feb. 15, 2016), available at http://
Evaluation of the Current State and Future of XBRL XBRL data to supplement other reported
and Interactive Data for Investors and Analysts’’— data based on filer disclosures.77
www.sec.gov/comments/disclosure-effectiveness/ ‘‘White Paper Number Three,’’ Columbia Business
disclosureeffectiveness-69.pdf (‘‘ABA Letter’’); School Center for Excellence in Accounting and The Commission staff uses XBRL data
Advisory Committee on Small and Emerging Security Analysis (December 2012), available at to support risk assessment, rulemaking
Companies (ACSEC) Recommendations Regarding http://www4.gsb.columbia.edu/filemgr?&file_
Disclosure and Other Requirements for Smaller
and enforcement activities. Machine-
id=7313146 (‘‘Columbia White Paper’’), footnote 34
Public Companies (Mar. 21, 2013), available at (finding that, based on FEI’s FERF survey data for
readable financial market data,
http://www.sec.gov/info/smallbus/acsec/acsec- 2011 and 2012, XBRL implementation was either including XBRL-formatted data,
recommendation-032113-smaller-public-co-ltr.pdf not as costly as anticipated, or had become enhances the Commission’s rulemaking
(‘‘ACSEC Recommendations 2013’’) (recommending significantly less costly over time for most filers).
that ‘‘the Commission revise its rules to provide an
and market monitoring activities by
See also Mohini Singh and Sandra Peters (2016)
exemption for smaller reporting companies from the Data and Technology: Transforming the Financial allowing staff to efficiently analyze large
requirement to submit financial information in Information Landscape, CFA Institute, Codes, quantities of information. For example,
XBRL format for periodic reports and other public Standards and Position Papers, Vol. 2016, Issue 7 the Commission staff uses financial
filings’’ in light of the disproportionate cost and (June 2016), available at http://
time burden that compliance with financial www.cfainstitute.org/learning/products/
statement information XBRL data in the
statement information XBRL requirements imposes publications/ccb/Pages/ccb.v2016.n7.1.aspx Corporate Issuer Risk Assessment
on smaller filers); ACSEC Recommendations about (‘‘Singh’’) (retrieved Sep. 20, 2016), at 48 (stating (CIRA) program, which provides a
Expanding Simplified Disclosure for Smaller that ‘‘SMEs [small and medium-sized enterprises] comprehensive overview of the
Issuers (Sep. 23, 2015), available at http:// should balance the cost of tagging against the cost
www.sec.gov/info/smallbus/acsec/acsec- of capital’’ and that ‘‘XBRL filings make the financial reporting environment of filers
recommendations-expanding-simplified-disclosure- financial information of SMEs more accessible to
for-smaller-issuers.pdf (‘‘ACSEC Recommendations investors and lead to a reduction in the cost of 76 See http://www.sec.gov/dera/data/financial-
2015’’) (recommending that ‘‘the Commission capital’’). statement-data-sets.html.
72 See FERF Study, at 18–19. 77 See, e.g., a discussion of XBRL analytics tools,
exempt smaller reporting companies from XBRL
tagging’’); Recommendations of the Investor 73 See AICPA Study. available at http://xbrl.us/use/howto/, http://
Advisory Committee Regarding the SEC and the 74 See 2009 Risk/Return Summary Adopting xbrl.us/home/category/productsservices/service/
Need for the Cost Effective Retrieval of Information Release, at 7769 (estimating direct costs of data-aggregation/. See also Mitchell R. Wenger,
by Investors (Jul. 25, 2013), available at http:// preparing and submitting interactive data-formatted Rick Elam, and Kelly L. Williams (2013) A tour of
www.sec.gov/spotlight/investor-advisory- risk/return summary information, excluding the five XBRL tools, Journal of Accountancy (Apr. 1,
committee-2012/data-tagging-resolution-72513.pdf cost of Web site posting, at $23,200 ($3,100) for the 2013), available at http://www.journalofa
(‘‘IAC Recommendations’’) (recommending that first submission (each subsequent submission) and ccountancy.com/issues/2013/apr/20126677.html;
‘‘the SEC take steps designed to reduce the costs of the cost of Web site posting at $250). Letter from XBRL US (Nov. 30, 2015), available at
providing tagged data, particularly for smaller 75 See, e.g., Office of Structured Disclosure Staff http://www.sec.gov/comments/s7-20-15/s72015-
issuers and investors’’); Letter from Center for Interpretations and FAQs Related to Interactive 29.pdf (‘‘XBRL US Letter 1’’) (suggesting that
Capital Markets Competitiveness (Jul. 20, 2016), Data Disclosure, available at http://www.sec.gov/ investment firms often obtain their data through
mstockstill on DSK3G9T082PROD with PROPOSALS2
available at http://www.sec.gov/comments/s7-06- structureddata/FAQs (‘‘OSD FAQs’’). The third-party providers, many of which use the XBRL
16/s70616-173.pdf (recommending that smaller Commission also makes available to the public version of public company data); Letter from XBRL
reporting companies be exempted from XBRL certain tools to assist with filing. For example, the US (Oct. 6, 2016), available at http://www.sec.gov/
tagging); Maryland State Bar Letter (stating that Previewer can be used by a filer to see how XBRL comments/s7-15-16/s71516-16.pdf (stating that
XBRL imposes a burden on small registrants); Letter submissions would appear on the SEC’s Web site XBRL improves productivity by allowing analysts
from Prologis (Jul. 21,2016), available at http:// before submission via EDGAR and rendering by the to spend less time on data collection and enabling
www.sec.gov/comments/s7-06-16/s70616-303.pdf EDGAR Renderer. The Previewer displays any error deeper analysis); Letter from Data Coalition (Jul. 21,
(stating that XBRL preparation imposes an internal and warning messages that EDGAR would display. 2016), available at http://www.sec.gov/comments/
time burden of approximately one week per quarter See http://www.sec.gov/structureddata/ s7-06-16/s70616-299.pdf (‘‘Data Coalition Letter 2’’)
in addition to the cost of services of an outside edgarvalandrender. See also http://www.sec.gov/ (discussing the availability of tools for XBRL data
firm). structureddata/interactive-data-test-suite. users). See also note 33.
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![Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules 14287
and assists the staff in detecting Compared to financial statements of Filing,84 filers commonly add
anomalous patterns in financial operating companies, mutual fund risk/ unnecessary tags aimed at managing the
statements that may warrant additional return summaries have fewer instances appearance of the rendered XBRL data
inquiry. in which numeric data is embedded into that may contribute to data quality
However, some commenters have text, and data is generally more issues.85
indicated that XBRL data use has been standardized. As discussed above,82 The 2005 XBRL Voluntary Program
limited, in part due to concerns risk/return summary filers also rely to a for financial statement information
regarding data quality for operating considerable degree on the integrated interactive data is currently only
companies.78 Errors may appear in approach to XBRL preparation. These available to investment companies and
information submitted in XBRL that factors may suggest that there are fewer entities that prepare their financial
affect the quality of the data and its data quality issues with risk/return statements in accordance with Article 6
potential use by the public and the summary XBRL data. However, we of Regulation S–X. Based on an analysis
Commission staff. For example, presently lack sufficient data or other of EDGAR filings, we estimate that six
Commission staff has identified several information to assess the quality of risk/ mutual funds and other permitted
recurring issues with financial return summary XBRL data. participants made such submissions
statement information XBRL data, While these data quality issues may during calendar years 2008–2010, with
including errors related to the have multiple potential causes, we no submissions in 2011–2015.86
characterization of a number as negative believe that some of these errors may
when it is positive, incorrect scaling of result from the submission of XBRL III. Proposed Amendments and
a number (e.g., in billions rather than in tagged information as an exhibit Anticipated Economic Effects
millions), unnecessary taxonomy separate from the Related Official Filing. A. Overview of Inline XBRL
extensions (‘‘custom tags’’), incomplete This requirement creates an additional
tagging (e.g., a failure to tag numbers in opportunity for reporting errors for In the 2009 Financial Statement
parentheses) and missing calculations those companies that first prepare their Information Adopting Release, the
that show relationships between data required disclosures in the HTML or Commission stated that it ‘‘may
(e.g., how subtracting cost of revenue ASCII format before creating a separate consider proposing rules to require a
from revenue equals gross profit).79 Staff XBRL exhibit, often via an incremental filing format that integrates HTML with
has provided guidance 80 to improve the set of reporting processes and controls. XBRL or eliminate financial statement
quality of XBRL data. Some of these In particular, tagging information from reporting in ASCII or HTML format.’’ 87
data quality issues seem to have been the Related Official Filing in a separate The 2009 Risk/Return Summary
mitigated over time 81 while others are XBRL exhibit increases the likelihood of Adopting Release stated, in the context
recurring. inconsistently entering the of the possibility of embedding
information.83 Furthermore, since the interactive data in HTML filings, that it
78 See, e.g., Data Coalition Letter 1; Letter from separate XBRL exhibit is subsequently was necessary to monitor interactive
Center for Capital Markets Competitiveness (Nov. rendered for viewing by readers, data reporting before attempting further
30, 2015), available at http://www.sec.gov/ integration of the interactive data
comments/s7-20-15/s72015-14.pdf; CFA Institute
although filers are not required to make
Member Survey: XBRL (December 2011), available the rendered version of XBRL data look format.88 We believe that current XBRL
at http://www.cfainstitute.org/ethics/Documents/ exactly the same as the Related Official 84 See Regulation S–T Compliance and Disclosure
Research%20Topics%20and%20Positions%20
Documents/xbrl_member_survey_report_2011.pdf Interpretations, Question 130.08 (May 29, 2009),
of filing errors and so what? Journal of Information available at http://www.sec.gov/divisions/corpfin/
(retrieved Aug. 30, 2016) (‘‘CFA Survey’’) (finding
Systems, Volume 27, Issue 1, pp. 61–78 (suggesting guidance/regs-tinterp.htm (indicating that an
that, among respondents aware of XBRL, fewer than
that filers and software vendors have learned over Interactive Data File need not appear identical to
20% used information through an XBRL instance
time, which resulted in a reduced rate of XBRL the traditional format financial statements when
document reader/viewer and fewer than 10%
errors); Ariel J. Markelevich, 2016, The quality and displayed by a viewer on the Commission’s Web
extracted or imported XBRL data directly into
usability of XBRL filings in the US, working paper site).
financial analysis models); Columbia White Paper; (Jun. 21, 2016), available at http://ssrn.com/
ACSEC Recommendations 2013; Final Report of the 85 See Staff XBRL Observations 2014; Staff XBRL
abstract_id=2798732 (retrieved Aug. 30, 2016)
2012 SEC Government-Business Forum on Small (‘‘Markelevich’’) (finding declines in several types Observations 2011. See also Inline XBRL—saving
Business Capital Formation, available at http:// of XBRL errors other than incorrect signs and cost and effort for company reporting, XBRL UK
www.sec.gov/info/smallbus/gbfor31.pdf; Letter from declines in custom tag rates during 2012–2015 and White Paper, available at http://www.xbrl.org.uk/
Corporate Governance Coalition for Investor Value also finding a higher incidence of errors among resources/whitepapers/inlineXBRL-benefits-v1.pdf
(Jul. 20, 2016), available at http://www.sec.gov/ smaller filers); SEC Filers Decreased Errors by 64 (retrieved Aug. 30, 2016) (‘‘XBRL White Paper’’), at
comments/s7-06-16/s70616-188.pdf; Letter from Percent by Using Data Quality Committee 5; Company reporting in the UK—an XBRL success
Lark Research, Inc. (Jul. 24, 2016), available at Validation Rules (May 31, 2016), available at http:// story, XBRL UK White Paper, available at http://
http://www.sec.gov/comments/s7-06-16/s70616- xbrl.us/news/dqc-20160531/ (retrieved Aug. 30, www.xbrl.org.uk/resources/whitepapers/
317.pdf; Letter from Investor Advisory Committee 2016) (analyzing the effects on XBRL data quality UKcompanyReporting-XBRL-v1.pdf (retrieved Aug.
(Jun. 15, 2016), available at http://www.sec.gov/ of guidance and validation rules of XBRL US Data 30, 2016) (‘‘XBRL UK Success Story White Paper’’),
comments/s7-06-16/s70616-22.pdf (‘‘IAC Letter’’) Quality Committee that took effect took effect at 2 and 7.
(stating that, as part of the staff’s Disclosure January 1, 2016 and finding that several types of 86 Two filers submitted Voluntary Program XBRL
Effectiveness Initiative, the Commission should errors, including incorrect signs, improper value exhibits (EX100) in 2015, but those filings seem to
take steps to increase the quality of the data that relationships between elements, and incorrect have been made in error.
is filed with the Commission). dates, declined during the first quarter of 2016). 87 See 2009 Financial Statement Information
79 See note 31 above. 82 See Section II.B.1 above. Adopting Release, at 6783. When the Commission
80 See Sample Letter Sent to Public Companies 83 See, e.g., XBRL US Letter 1; Letter from XBRL proposed the XBRL requirements for financial
Regarding XBRL Requirement to Include US (Apr. 14, 2016), available at http://www.sec.gov/ statement information, it similarly stated that ‘‘we
mstockstill on DSK3G9T082PROD with PROPOSALS2
Calculation Relationships (July 2014), available at comments/s7-27-15/s72715-34.pdf (‘‘XBRL US may consider proposing rules to require a filing
http://www.sec.gov/divisions/corpfin/guidance/ Letter 2’’); Letter from XBRL US (Jul. 21, 2016), format that integrates ASCII or HTML with XBRL.’’
xbrl-calculation-0714.htm (‘‘CFO Letter’’). See also available at http://www.sec.gov/comments/s7-06- See Release No. 33–8924 (May 30, 2008) [73 FR
OSD FAQs. 16/s70616-278.pdf (‘‘XBRL US Letter 3’’) 32793], at 32800.
81 See, e.g., Staff XBRL Observations 2014 (referencing the translation risk associated with the 88 See 2009 Risk/Return Summary Adopting
(observing a steady decline in custom tag use by preparation of two documents); Data Coalition Release, at 7755. When the Commission proposed
large accelerated filers during the phase-in period Letter 2 (stating that Inline XBRL ‘‘reduces the the XBRL requirements for risk/return summary
and thereafter, based on an assessment of XBRL danger that the registrant will file a correct number information, it similarly stated that ‘‘we may
exhibits submitted from 2009 through October in a document but misplace a decimal point or flip consider proposing rules to require a filing format
2013). See also Hui Du, Miklos A. Vasarhelyi, and a negative sign in the corresponding structured that integrates ASCII or HTML with XBRL.’’ See
Xiaochuan Zheng (2013) XBRL mandate: thousands data’’). See also note 155 below. Continued
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![14288 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules
embedding technology now is some filers that are subject to Inline Regulation S–K 97 and Forms F–10,98
sufficiently developed to propose XBRL reporting requirements in other 20–F,99 40–F 100 and 6–K 101 with regard
requiring its use in Commission filings. countries, as well as vendors with to financial statement information.
In particular, the Inline XBRL customers in these same countries, may Similar requirements for mutual funds
technology 89 contains a standardized already have Inline XBRL capabilities,95 to submit and post risk/return summary
set of requirements for embedding XBRL although their experience with Inline information in XBRL apply through the
data into an HTML version of a filing, XBRL may be based on information exhibit requirements of Form N–1A 102
which eliminates the need to copy and unrelated to financial statements or and Rule 497.103 These exhibit
tag the required information with XBRL mutual fund risk/return summaries. We requirements specify when information
in a separate exhibit.90 The Inline XBRL in the Related Official Filing triggers the
request comment and input from filing
technology is freely licensed and made requirement to submit and post an
agents, software vendors, investors,
available by XBRL International, a Interactive Data File in the manner
consortium of over 600 organizations other market participants, and other provided by Rule 405 of Regulation S–
representing many aspects of the data users about their current ability to T.104 Rule 405 sets forth the basic
financial reporting supply chain accommodate Inline XBRL.96 content, format, submission and posting
community worldwide.91 B. Proposed Amendments requirements for the Interactive Data
With Inline XBRL, similar to existing File, such as the requirement to submit
practices, filers or filing agents would 1. Inline XBRL Requirements the Interactive Data File as an exhibit to
need to tag the required disclosures a. Use of Inline XBRL Format the Related Official Filing.105 Rule 405
using the applicable taxonomy. also requires that an Interactive Data
However, the tagging of information We propose to require the use of File be submitted in accordance with
would be performed within the HTML Inline XBRL for operating company the EDGAR Filer Manual.106 The
document instead of a separate XBRL financial information and mutual fund EDGAR Filer Manual contains
exhibit.92 Inline XBRL also would give risk/return summaries by amending the additional formatting and submission
the preparer full control over the rules that specify certain content and requirements for the Interactive Data
presentation of filer disclosures because format requirements for the Interactive File.
the XBRL data would be displayed Data File. Currently, the requirement to The amendments we are proposing
within the HTML filing in a browser.93 submit and post information in XBRL today would revise Rule 405 to require
Inline XBRL thus yields a single filers to submit the Interactive Data File
applies through the exhibit
document that is both human-readable using Inline XBRL. The proposed
requirements of Item 601(b)(101) of
and enables the automated extraction amendments would require filers, on a
and analysis of embedded XBRL data by phased in basis, to embed a part of the
Japan (http://www.xbrl.org/the-standard/why/who-
the user’s XBRL extraction software. Interactive Data File within an HTML
else-uses-xbrl/, retrieved Aug. 30, 2016). We note
The Inline XBRL technology is that the specific disclosure regimes in these document using Inline XBRL and to
currently used in several other countries may differ from that in the United States. include the rest in an exhibit to that
jurisdictions for a variety of regulatory According to one commenter, Inline XBRL is document. The portion filed as an
purposes and has been proposed for used in the UK by approximately 2 million exhibit to the form would contain
required use in another.94 As a result, companies for reporting tax information to HMRC contextual information about the XBRL
Tax Service Online. The commenter notes that tags embedded in the filing. The
Release No. 33–8929 (Jun. 10, 2008) [73 FR 35441], ‘‘[a]ccording to the HMRC’s former Strategy information as tagged would continue to
at 35447. Architect for the Company Tax online service, an
89 See http://specifications.xbrl.org/spec-group- estimated 90% of filings are at zero cost to the
be required to satisfy all other
index-inline-xbrl.html (retrieved Aug. 30, 2016). issuer because most companies (continue to) use requirements of Rule 405, including the
90 See http://specifications.xbrl.org/ packaged tax and accounting software to which the technical requirements in the EDGAR
presentation.html (retrieved Aug. 30, 2016). vendors added inline XBRL production capability Filer Manual.107
91 See http://www.xbrl.org/the-consortium/about/ as an alternative to printed output’’ while ‘‘[t]he We note that Inline XBRL is not
(retrieved Aug. 30, 2016). remaining 10% of companies outsource their inline compatible with the ASCII format. Thus,
92 See note 159 below. XBRL conversion to accounting firms with filers that currently prepare the Related
93 In an Inline XBRL document, data values are estimated annual costs ranging from as low as $135
nested within Inline XBRL elements which are to as high as $4200.’’ See XBRL US Letter 2.
Official Filing in the ASCII format
themselves nested within HTML or XHTML The European Securities and Markets Authority 97 The exhibit requirements of Item 601(b)(101)
elements (‘‘Markup Elements’’). The browser recently proposed to require issuers in the
ignores the Inline XBRL elements and displays the relate to Forms S–1, S–3, S–4, S–11, F–1, F–3, F–
European Union to prepare their annual financial
data values as though they were textual content of 4, 8–K, 10–Q and 10–K.
reports containing IFRS financial statements in the
the Markup Elements, enabling presentation in a 98 Paragraph (101) of Part II—Information Not
Inline XBRL format using the IFRS taxonomy from
human-readable format. See Inline XBRL Part 0: Required to be Delivered to Offerees or Purchasers
Primer 1.1, available at http://www.xbrl.org/WGN/ January 1, 2020. See ESMA proposes new digital of Form F–10.
inlineXBRL-part0/WGN-2015-12-09/inlineXBRL- format for issuers’ financial reporting, available at 99 Paragraph 101 of the Instructions as to Exhibits
part0-WGN-2015-12-09.html (retrieved Aug. 30, http://www.esma.europa.eu/press-news/esma- of Form 20–F.
2016). news/esma-proposes-new-digital-format- 100 Paragraph B.(15) of the General Instructions to
94 For example, in the United Kingdom, the issuers%E2%80%99-financial-reporting (retrieved Form 40–F.
‘‘accounts and computations’’ part of a ‘‘Company Jan. 31, 2017); ESMA Feedback Statement on the 101 Paragraph C.(6) of the General Instructions to
Tax Return’’ must be submitted to HM Revenue and Consultation Paper on the Regulatory Technical Form 6–K.
Customs using Inline XBRL (http://www.gov.uk/ Standard on the European Single Electronic Format 102 See General Instruction C.3(g) to Form N–1A.
mstockstill on DSK3G9T082PROD with PROPOSALS2
government/publications/xbrl-tagging-when-what- (ESEF), Dec. 21, 2016, available at http:// 103 See Rule 497(c) and (e).
and-how-to-tag, retrieved Aug. 30, 2016). See also www.esma.europa.eu/sites/default/files/library/ 104 The exhibit provisions that specify when an
XBRL UK Success Story White Paper. Other 2016-1668_esma_feedback_statement_on_the_rts_
examples can be found in regulations permitting or Interactive Data File is required for financial
on_esef_0.pdf (retrieved Jan. 31, 2017). information also specify when it is optional and
requiring the use of Inline XBRL in Australia 95 In the United States, some XBRL filing agents
(http://asic.gov.au/about-asic/media-centre/find-a- when it is prohibited.
media-release/2015-releases/15-104mr-asic- and software vendors have stated on their Web 105 See Rule 405(a)(2) for the exhibit requirement.
introduces-format-for-improved-communication-of- sites, in press releases or in user documentation 106 See Rule 405(a)(3).
financial-information/, retrieved Aug. 30, 2016); that they have or will have in the future the 107 Information presented in multiple locations
Ireland (http://www.revenue.ie/en/online/ros/ixbrl/ capability to generate Inline XBRL filings. within the financial statements must be tagged in
index.html, retrieved Aug. 30, 2016); Denmark and 96 See Section III.B.5 below. all those locations.
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would need to switch to HTML unless further reduce the portion of the cost of statement or post-effective
they already have done so to comply operating company ASCII filers amendment.116 As we noted in the 2009
with the amendments adopted in the switching to HTML that is incremental Risk/Return Summary Adopting
Hyperlinks Adopting Release. We do to the proposed rule. Release, the period of 15 business days
not expect this to affect many filers, as was intended both to provide funds
b. Timing of Submission of Interactive
the vast majority currently file in with adequate time to prepare the
Data File
HTML.108 While the filers that use exhibit and to make the interactive data
ASCII that would be affected by the We are not proposing changes to the
available promptly.117 We understand
proposal to require HTML are primarily timing of the submission of the
Interactive Data File for operating that questions have been raised as to
small entities and may incur a
company financial statement whether this 15 business day filing
disproportionately greater burden,109 we
information. Operating company filers period remains necessary in light of the
expect the impact on smaller filers to be
partly mitigated by the proposed phase- would continue to be generally required development of, and resulting
in. We further expect that the average to submit the Interactive Data File with efficiencies from, integrated solutions in
costs of switching to HTML would not the filing.113 the XBRL preparation process in use
be large because the cost of software In contrast, for mutual funds, we are today and the proposed implementation
with built-in HTML features is minimal. proposing changes to the General of Inline XBRL.
Overall, given the modest costs Instructions to Form N–1A that would Mutual funds also are required to
involved, we do not expect that the change the timing requirements for the submit an Interactive Data File for any
proposed amendments would have submission of the Interactive Data File. form of prospectus filed pursuant to
significant competitive effects for filers. First, we are proposing to permit mutual
Rule 497(c) or (e) under the Securities
We also note the advantages of HTML funds to submit Interactive Data Files
Act that includes information provided
for the presentation of information from concurrently with certain post-effective
amendments filed pursuant to in response to Items 2, 3, or 4 of Form
the standpoint of filers and users. N–1A that varies from the registration
Unlike ASCII documents, HTML paragraph (b) of Rule 485 under the
Securities Act.114 Second, we are statement.118 In the case of those filings,
documents can include graphics, varied
proposing to eliminate the current 15 however, mutual funds are permitted to
fonts and other visual displays that
filers use when they create Internet business day filing period accorded to file the Interactive Data File
presentations or material for all mutual fund filings containing risk/ concurrently with the filing or up to 15
distribution to shareholders and other return summaries, including initial business days subsequent to the
investors.110 In prior rulemakings, the registration statements, post-effective filing.119
Commission has noted the possibility of amendments, and forms of prospectuses To help facilitate efficiencies in the
HTML eventually replacing ASCII.111 filed pursuant to paragraphs (c) and (e) mutual fund post-effective amendment
Furthermore, as discussed above, the of Rule 497. In the case of initial filing process, we are proposing to
Commission has adopted amendments registration statements and post- amend the General Instructions to Form
to eliminate the ASCII format for effective amendments, the Interactive N–1A to permit mutual funds to submit
registration statements and periodic and Data File would be required to be Interactive Data Files concurrently with
current reports that are subject to the submitted no later than the effective post-effective amendments filed
exhibit requirements under Item 601 of date of those filings. In the case of forms
pursuant to paragraphs (b)(1)(i),120
Regulation S–K and for Forms F–10 and of prospectuses filed pursuant to Rule
20–F.112 These amendments should 497, the Interactive Data File would be
required to be submitted concurrently
108 See note 36 above. with the filing.
109 Some commenters on the Hyperlinks Currently, an Interactive Data File for
Proposing Release expressed concern about the cost a Form N–1A filing, whether the filing
of switching from ASCII to HTML but have not
provided specific estimates. See, e.g., Letter from is an initial registration statement or a
Corporate Governance Coalition for Investor Value post-effective amendment thereto, must 116 Id. Filings on Form N–1A, which contain
(Oct. 27, 2016), available at http://www.sec.gov/ be submitted as an amendment to the mutual fund registration statements (or
comments/s7-15-16/s71516-34.pdf; Letter from registration statement to which the amendments thereto), are often subject to revision
Center for Capital Markets Competitiveness (Oct.
27, 2016), available at http://www.sec.gov/ Interactive Data File relates.115 That prior to effectiveness. For example, initial
comments/s7-15-16/s71516-33.pdf. amendment with the Interactive Data registration statements and post-effective
amendments filed under Rule 485(a) are subject to
110 Plain text submissions may not include certain
File also must be submitted after the
characters that are not in the standard ASCII Commission staff review, and revisions to the
registration statement or post-effective registration statement may be made in connection
character set, such as certain foreign characters and
special characters for currencies, as well as amendment that contains the related with the staff review process.
characters associated with document style and information becomes effective but not 117 See 2009 Risk/Return Summary Adopting
format that may be introduced by standard word later than 15 business days after the Release, footnote 97 and accompanying and
processing software. Submissions must not exceed effective date of that registration following text. For example, mutual funds may
80 characters per line. Additionally, the conversion
require additional time after making the related
of tabular, columnar or footnote material created in
standard word processing software into ASCII may 113 An operating company may submit its first filing to prepare and file in a subsequent
pose formatting challenges and require some Interactive Data File as an amendment to the filing. amendment the Interactive Data File due to the staff
See Rule 405(a) of Regulation S–T. comment process or otherwise.
mstockstill on DSK3G9T082PROD with PROPOSALS2
information to be formatted manually. See EDGAR
Filer Manual, Volume II, Section 5.2.1.2, available 114 A post-effective amendment filed under Rule 118 See General Instruction C.3(g)(ii) to Form N–
at http://www.sec.gov/info/edgar/edmanuals.htm. 485(b) may become effective immediately upon 1A.
See also http://www.sec.gov/info/edgar/quick- filing, or at a later date designated on the facing 119 Id.
reference/create-ascii-files.pdf. sheet of the amendment of generally up to 30 days 120 Subparagraph (i) of Rule 485(b)(1) permits a
111 See Release No. 33–7855 (Apr. 24, 2000) [65 after the date on which the amendment is filed. A
FR 24787], at 24789 and Release No. 33–7684 (May post-effective amendment may only be filed under post-effective amendment filing for the purpose of
17, 1999) [64 FR 27888], at 27889 (stating that ‘‘we Rule 485(b) if it is filed for one or more specified bringing the financial statements up to date under
expect that HTML will eventually replace ASCII for purposes, including to make non-material changes Section 10(a)(3) of the Securities Act or Rules 3–12
most filings’’). to the registration statement. or 3–18 of Regulation S–X. 17 CFR 210.3–12 and
112 See Hyperlinks Adopting Release. 115 General Instruction C.3(g)(i) to Form N–1A. 210.3–18.
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(ii),121 (v),122 or (vii) 123 of Rule 485 that contains the related information billion or more as of the end of the most
under the Securities Act.124 We are becomes effective; 128 and recent fiscal year) we are proposing a
proposing this change in recognition of • For any form of prospectus filed compliance date of one year after the
the fact that, in our experience, post- pursuant to Rule 497(c) or (e), mutual effective date to comply with the new
effective amendments filed pursuant to funds would be required to submit the reporting requirements. For smaller
these paragraphs of Rule 485 generally Interactive Data File concurrently with entities (i.e., mutual funds that together
are not subject to further revision.125 the filing.129 with other investment companies in the
With respect to all filings by mutual c. Phase-in of Inline XBRL same ‘‘group of related investment
funds containing risk/return summaries Requirements companies’’ have net assets of less than
(initial registration statements, post- $1 billion as of the end of the most
We propose to phase in the Inline recent fiscal year), we are proposing to
effective amendments, and forms of XBRL requirements for operating
prospectuses pursuant to Rule 497), we provide for an additional year to comply
companies in annual increments based with the new reporting requirements.133
are proposing to eliminate the current on the category of filer status. Large
15 business day period during which Mutual funds would be permitted to file
accelerated filers that prepare their using Inline XBRL prior to the
mutual funds must submit Interactive financial statements in accordance with
Data Files. Inline XBRL involves compliance date for each category of
U.S. GAAP would be required to filers; otherwise, prior to their
embedding XBRL data directly into the comply with Inline XBRL requirements
filing. We believe that most mutual fund applicable compliance date, filers that
for financial statement information in do not file using Inline XBRL would
risk/return summary XBRL submissions the second year after the rule is
today are created using integrated continue to be required to submit their
effective, followed by accelerated filers Interactive Data File as an exhibit to
solutions.126 Therefore, in order to that prepare their financial statements their filing, as they do currently and
improve the timeliness of the in accordance with U.S. GAAP in the under the current timing requirements.
availability of risk/return summary third year and all other operating
XBRL information, we are proposing company filers that are required to d. Categories of Filers Subject to Inline
that Interactive Date Files be submitted submit Interactive Data Files in the XBRL Requirements
to the Commission as follows: fourth year.130 This phase-in approach The proposed Inline XBRL
• For post-effective amendments filed is broadly consistent with the approach requirements for financial statement
pursuant to paragraphs (b)(1)(i), (ii), (v), in the 2009 Financial Statement information would apply to all
or (vii) of Rule 485, Interactive Data Information Adopting Release and is operating company filers, including
Files must be filed either concurrently intended to ease the cost of transition smaller reporting companies (SRCs),134
with the filing or in a subsequent for smaller filers and those filers that emerging growth companies (EGCs) 135
amendment that is filed on or before the use IFRS as issued by the IASB. Given and FPIs,136 that currently are required
date that the post-effective amendment that any fixed cost of initial transition to submit financial statement
that contains the related information would disproportionately burden information in XBRL. Similarly, the
becomes effective; 127 smaller filers, this approach would give proposed Inline XBRL requirements for
such filers time to develop related risk/return summary information would
• For initial registration statements
expertise, as well as the opportunity to apply to all mutual fund filers that
and post-effective amendments filed
benefit from the experience of larger currently are required to submit risk/
other than pursuant to paragraphs
filers with Inline XBRL. The proposed
(b)(1)(i), (ii), (v), or (vii) of Rule 485,
phase-in might also provide filing ‘‘group of related investment companies,’’ as such
Interactive Data Files must be filed in a
agents and software vendors whose term is defined in Rule 0–10 under the Investment
subsequent amendment filed on or Company Act. Rule 0–10 defines the term as
main customers are smaller filers with
before the date the registration applied to management investment companies as
additional time to adopt the Inline
statement or post-effective amendment two or more management companies (including
XBRL technology and develop related series thereof) that: (i) Hold themselves out to
121 Subparagraph (ii) of Rule 485(b)(1) permits a
expertise. Filers would be permitted to investors as related companies for purposes of
file using Inline XBRL prior to the investment and investor services; and (ii) either: (A)
post-effective amendment filing for the purpose of Have a common investment adviser or have
complying with an undertaking to file an compliance date for each category of investment advisers that are affiliated persons of
amendment containing financial statements, which filers; otherwise, prior to the applicable each other; or (B) have a common administrator. 17
may be unaudited, within four to six months after compliance date, filers that do not file CFR 270.0–10(a)(1). We believe that this broad
the effective date of the registrant’s registration definition would encompass most types of fund
statement under the Securities Act.
using Inline XBRL would continue to be
complexes and therefore is an appropriate
122 Subparagraph (v) of Rule 485(b)(1) permits a required to submit the entire Interactive definition for compliance date purposes.
post-effective amendment filing for the purpose of Data File as an exhibit, as they do 133 When the risk/return summary information
making any non-material changes which the currently.131 XBRL requirements were adopted on February 11,
registrant deems appropriate. Similarly, we propose a phase-in for 2009, all filers had approximately two years to
123 Subparagraph (vii) of Rule 485(b)(1) permits a
mutual funds based on net asset size. comply (until January 1, 2011). We do not believe
post-effective amendment filing for any other that a similarly extended period would be necessary
purpose which the Commission shall approve. Specifically, for larger entities (i.e., for larger filers to comply with the proposed Inline
124 See proposed General Instruction C.3(g)(i)(B) mutual funds that together with other XBRL requirements due to the incremental nature
to Form N–1A. investment companies in the same of the changes required for the transition to Inline
125 With the exception of post-effective
‘‘group of related investment XBRL compared to the initial introduction of XBRL.
amendments filed pursuant to Rule 485(b)(1)(iii), a However, we believe that smaller mutual fund filers
mstockstill on DSK3G9T082PROD with PROPOSALS2
companies’’ 132 have net assets of $1 may on the margin benefit from the additional time
post-effective amendment filed under Rule
485(b)(1) may become effective immediately upon to comply with the Inline XBRL requirements.
128 See proposed General Instruction C.3(g)(i)(A)
filing. 134 Rule 405 under the Securities Act [17 CFR
126 See note 66 above and accompanying text to Form N–1A. 230.405], Rule 12b–2 of the Exchange Act [17 CFR
129 See proposed General Instruction C.3(g)(ii) to
(noting that during 2015 and the first half of 2016, 240.12b–2] and Item 10(f) of the Regulation S–K [17
at least 80% of mutual fund risk/return summary Form N–1A. CFR 229.10(f)].
130 See proposed Rule 405(f)(1)(i).
XBRL submissions were created using integrated 135 Section 2(a)(19) of the Securities Act [15
solutions). 131 See proposed Rule 405(f)(2). U.S.C. 77b(a)(19)] and Section 3(a)(80) of the
127 See proposed General Instruction C.3(g)(i)(B) 132 For these purposes, we expect that the Exchange Act [15 U.S.C. 78c(a)(80)].
to Form N–1A. threshold would be based on the definition of a 136 Rule 3b–4(c) [17 CFR 240.3b–4(c)].
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return summary information in XBRL. widespread dissemination, make it sufficiently reliable access to XBRL data
At this time, we are not proposing easier and faster for investors to collect through EDGAR and do not need the
changes to the categories of filers subject information on a particular filer, enable backup of a Web site posting on a filer’s
to XBRL requirements or the scope of search engines and other data Web site to access the XBRL data. Thus,
information that is subject to XBRL aggregators to more quickly and cheaply we do not expect data users to incur
requirements.137 aggregate the data and make them significant costs from the elimination of
In formulating the current proposals, available to investors and potentially the requirement to post the XBRL data
we considered exempting SRCs from the increase the reliability of data on filers’ Web sites. We expect filers to
Inline XBRL requirements.138 As availability to the public.142 However, recognize a modest benefit from the
discussed below,139 we do not expect the Commission also noted that this elimination of this requirement, as
Inline XBRL to significantly affect the benefit could be limited since investors discussed in greater detail below.145
overall costs of compliance with XBRL seeking to aggregate machine-readable
3. Termination of the 2005 XBRL
requirements. We expect that while XBRL data across companies, manually
or through an automated process, may Voluntary Program
filers may incur a small initial transition
cost, filers also may realize reductions find XBRL exhibits posted on filers’ Finally, we propose to terminate the
in ongoing costs of compliance with Web sites less useful.143 2005 XBRL Voluntary Program for
XBRL requirements due to the Since the adoption of the Web site financial statement information
elimination of the effort associated with posting requirement, industry interactive data.146 Subsequent to the
the creation of a separate exhibit. In commenters have observed very limited adoption of the interactive data
addition, exempting smaller filers could use of XBRL data from corporate Web requirements for financial statement
result in a reduction of the aggregate sites.144 Based on our experience, we do information for operating companies in
data quality benefits, which would not believe that users of XBRL data 2009, the only filers that remain eligible
affect the usefulness of the information generally seek the information directly for the program are registered
for investors, analysts, other users and from filers’ Web sites; rather, they investment companies, business
the Commission.140 obtain the data from the Commission’s development companies, and entities
EDGAR system or third-party that report under the Exchange Act and
2. Elimination of Web Site Posting aggregators. We believe that access to prepare their financial statements in
Requirement XBRL data for purposes of aggregation accordance with Article 6 of Regulation
The amendments we are proposing and processing, whether by data S-X. The 2005 XBRL Voluntary Program
also would eliminate the existing aggregators or individual users, is most is used very infrequently and thus, we
requirement to post the Interactive Data efficiently achieved when such do not believe that its continued
File on the filer’s Web site for both machine-readable data is consistently existence would provide significant
operating companies and mutual organized (e.g., with respect to directory benefits.
funds.141 In the 2009 Financial structure) and made available at a single
source. We further believe that, based 4. Proposed Technical Amendments
Statement Information Adopting
Release, the Commission stated that it on our experience since we adopted the We are proposing to make certain
thought that the Web site availability of Web site posting requirement in 2009, technical, conforming changes to the
the interactive data would encourage its potential data users can obtain rules for hardship exemptions, current
public information under Rule 144(c)(1)
137 When the Commission adopted the financial
142 See 2009 Financial Statement Information
of the Securities Act and form
statement information XBRL requirements in 2009, Adopting Release, at 6791–6792. Similarly, in eligibility, consistent with the proposed
after considering public comments, the Commission adopting the Web site posting requirement for risk/
return summary information, the Commission changes in format to the Interactive Data
stated that a partial or complete exemption would
detract from the long-term completeness and
stated that Web site availability of the interactive File and elimination of the Web site
data would encourage its widespread posting requirement. We propose to
uniformity of XBRL financial information and
dissemination, contributing to lower access costs
would be inconsistent with the Commission’s goal
for users. See 2009 Risk/Return Summary Adopting
delete the definition of ‘‘promptly’’ from
of making financial information easier for investors Rule 11 because it was only used in
Release, footnote 263.
to analyze while assisting in automating regulatory
filings and business information processing. We
143 See 2009 Financial Statement Information Rule 406T, which has expired, and
continue to believe that to be the case. See note 169 Adopting Release, at 6807. See also 2009 Risk/ references to Forms S-2 and F-2 because
Return Summary Adopting Release, footnote 263 the forms have been eliminated.
below. We recognize, however, that some
(‘‘We believe the benefits will stem primarily from
commenters have expressed concerns about the cost
the requirement to submit interactive data to the 5. Request for Comment
of XBRL for smaller filers. See note 70 above. As
Commission and the Commission’s disseminating
part of our recent concept release on modernizing
certain business and financial disclosure
that data.’’). We request and encourage any
requirements in Regulation S–K, we solicited
144 See, e.g., Columbia White Paper, at 21
interested person to submit comments
comment about whether we should eliminate or (suggesting that none of the data users the authors regarding the proposed amendments,
reduce any of the XBRL tagging requirements for surveyed reported accessing XBRL files from filers’
Web sites). specific issues discussed in this release
SRCs. See Release No. 33–10064 (Apr. 13, 2016) [81
FR 23915] (‘‘Regulation S–K Concept Release’’). We have not received comments or information and other matters that may have an
138 The Commission has recently proposed to about the extent of use by investors of XBRL risk/ effect on the proposed amendments. We
return summary information on mutual fund Web request comment from the point of view
amend the SRC definition. Under the proposed
sites after the adoption of the risk/return summary
amendments, registrants with a public float of less
information XBRL requirements. Some of the
of filers, filing agents, and software
than $250 million and registrants with a public float vendors as well as investors, other
commenters on the 2008 proposal stated that the
of zero and annual revenues of less than $100
mstockstill on DSK3G9T082PROD with PROPOSALS2
million would qualify as SRCs. See Release No. 33–
Web site posting requirement for risk/return market participants, data aggregators,
summary XBRL data was unnecessary. See, e.g., and other data users. With regard to any
10107 (Jun. 27, 2016) [81 FR 43130], at 43134 and
Letter from T. Rowe Price Associates, Inc. (Aug. 1,
43139.
2008), available at http://www.sec.gov/comments/ comments, we note that such comments
139 See Section III.C.2 below.
s7-12-08/s71208-15.pdf; Letter from Investment are of particular assistance to us if
140 See Section III.C.1 below. Inline XBRL may
Company Institute (Aug. 1, 2008), available at accompanied by supporting data and
offer greater benefits to smaller filers since they http://www.sec.gov/comments/s7-12-08/s71208-
tend to have more XBRL data errors. See analysis of the issues addressed in those
13.pdf; Letter from L. A. Schnase (Jul. 25, 2008),
Markelevich. available at http://www.sec.gov/comments/s7-12-
141 See Rule 405(g) and General Instruction C.3(g) 145 See Section III.C.1 below.
08/s71208-7.pdf (Schnase Letter). See also 2009
to Form N–1A. Risk/Return Summary Adopting Release, at 7755. 146 See Rule 401 of Regulation S-T.
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![Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules 14293
narrative, rather than numerical, useful competition and capital formation. able to file in Inline XBRL or that rely
as an analytical tool? Additionally, Exchange Act Section on service providers that already have
17. Are any other amendments 23(a)(2) requires us, when adopting or are close to developing Inline XBRL
necessary or appropriate to require the rules under the Exchange Act, to capability to realize the benefits of
submission of financial statement and consider the impact that any new rule Inline XBRL sooner. The expertise
risk/return summary information in would have on competition and not to gained by software vendors and filing
Inline XBRL? If so, what are they? adopt any rule that would impose a agents from a voluntary transition to
18. Should we eliminate the burden on competition that is not Inline XBRL may facilitate the transition
requirement to post financial statement necessary or appropriate in furtherance to Inline XBRL by subsequent adopters.
information in XBRL on corporate filer of the purposes of the Exchange Act.151 Filer demand for Inline XBRL filing
Web sites, as proposed? Would The proposed amendments aim to under the voluntary program pursuant
operating company filers benefit from increase the efficiency and lower the to the Exemptive Order may also lead
the elimination of the XBRL Web site cost of compliance with the existing filing agents and software vendors to
posting requirement? To what extent do XBRL requirements applicable to accelerate the development of Inline
operating company investors access operating companies and mutual funds XBRL filing solutions and accumulate
financial statement information XBRL through process improvements associated expertise, which could
data on filer Web sites? Would associated with Inline XBRL, thereby potentially lower initial costs per filer
eliminating the requirement impede potentially improving the quality of should the proposal for mandatory
their efforts to access the information? XBRL data available to users. The Inline XBRL filing be adopted.
Why or why not? discussion below addresses the
potential economic effects of the 1. Benefits
19. Should we eliminate the XBRL
Web site posting requirement for risk/ proposed amendments, including their We believe that filing information
return summary information, as likely costs and benefits as well as the with Inline XBRL has the potential to
proposed? Would mutual fund filers likely effects of the proposed provide a number of benefits to both
benefit from the elimination of the amendments on efficiency, competition filers and users of this information. In
XBRL Web site posting requirement? To and capital formation, relative to the particular, we believe that the use of
what extent do mutual fund investors economic baseline, which is comprised Inline XBRL may reduce the time and
access risk/return summary XBRL data of XBRL practices in existence today.152 effort associated with preparing XBRL
on mutual fund Web sites? Please At the outset, we note that, where filings, simplify the review process for
provide any related data. Would possible, we have attempted to quantify filers, and improve the quality of
eliminating the Web site posting the costs and benefits expected to result structured data and, by improving data
requirement impede mutual fund from the proposed amendments to the quality, increase the use of XBRL data
investor efforts to access the XBRL requirements. However, in some by investors, other market participants,
information? Why or why not? cases we have been unable to quantify and other data users.154
20. In what ways might the the economic effects because we lack Embedding XBRL data in an HTML
Commission enhance the access to the information necessary to provide a document rather than tagging a copy of
Inline XBRL data submitted by filers? reasonable estimate. For example, it is the data to create a separate XBRL
21. Should the Commission terminate difficult to assess the extent to which exhibit should increase the efficiency
the 2005 XBRL Voluntary Program, as the transition to Inline XBRL would and effectiveness of the filing
proposed? Why or why not? result in an initial cost of switching, preparation process and, by saving time
22. Should the Commission consider future savings of XBRL preparation cost and effort spent on the filing process,
rulemaking to require other types of and time or potential decreases in the may, over time, reduce the cost of
information to be submitted in the incidence of XBRL data errors. compliance with existing XBRL
Inline XBRL format? If so, what other Similarly, it is difficult to quantify the requirements. Commenters and other
types of information would be suitable extent to which Inline XBRL would sources have noted these potential
for the Inline XBRL format and why? enhance the quality of XBRL data and, benefits of Inline XBRL both in the
Are there other means of embedding if so, whether it would increase XBRL operating company context 155 and in
structured data into the human-readable data use. We encourage commenters to
154 See Letter from CFA Institute (Oct. 6, 2016),
format of filings that we should provide data that may be relevant for available at http://www.sec.gov/comments/s7-06-
consider? quantifying these impacts. 16/s70616-375.pdf; IAC Recommendations
As operating company filers begin to (recommending consideration of the use of Inline
C. Potential Economic Effects of the use Inline XBRL on a voluntary basis XBRL to promote standardization and facilitate
Proposed Amendments pursuant to our recently issued recovery of data filed with the Commission); IAC
Letter (recommending accelerated development and
We are mindful of the costs imposed Exemptive Order,153 we expect to be implementation of Inline XBRL); Letter from
by and the benefits obtained from our able to obtain additional information California State Teachers’ Retirement System (Jul.
rules. Securities Act Section 2(b),148 about the effects of Inline XBRL on the 21, 2016), available at http://www.sec.gov/
Exchange Act Section 3(f) 149 and comments/s7-06-16/s70616-226.pdf (stating that the
quality of XBRL data submitted by filers development and implementation of technology
Investment Company Act Section as well as any reduction in preparation such as Inline XBRL should be accelerated ‘‘to
2(c) 150 require us, when engaging in time or costs. We encourage such provide needed information in a format where
rulemaking that requires us to consider voluntary filers to provide us investors can drill-down and contrast peer
mstockstill on DSK3G9T082PROD with PROPOSALS2
information through robust technology’’). See also
or determine whether an action is information and data from their notes 155 and 162 below.
necessary or appropriate in the public experiences. 155 See XBRL US Letter 1 (stating that ‘‘In-line
interest, to consider, in addition to the Voluntary transition to Inline XBRL XBRL would reduce filing costs for US companies
protection of investors, whether the could accelerate the economic effects of because they would be required to file only one
action will promote efficiency, Inline XBRL and allow filers that are document—not two . . . [and] would also eliminate
the translation risk companies bear preparing two
documents reporting the same information’’); XBRL
148 15 U.S.C. 77b(b). 151 15 U.S.C. 78w(a)(2). US Letter 2 (stating that the current process of
149 15 U.S.C. 78c(f). 152 See Section II.B above. submitting both an HTML and XBRL version of
150 15 U.S.C. 80a–2(c). 153 See note 58 above. Continued
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the mutual fund context.156 Inline XBRL Inline XBRL also makes it possible for requesting comment on the anticipated
eliminates the need to create a separate filers or filing agents to view XBRL meta effects of adopting Inline XBRL on the
XBRL instance document, which can data 158 within the HTML document, efficiency of the XBRL filing process.161
reduce the incidence of those re-keying which can facilitate the review of XBRL The use of Inline XBRL may also
errors that are associated with the data and better equip filers to detect improve XBRL data quality.162 When
presence of separate documents.157 XBRL errors. Further, filers or filing XBRL is embedded directly into the
agents can use tools like the open source HTML document, the filer prepares and
financial statement information results in Inline XBRL Viewer to review the reviews a single document, rather than
companies filing duplicated data and that the Interactive Data File and more
burden on reporting entities can be further reduced separate documents—as is the case with
by leveraging Inline XBRL technology, which efficiently filter and identify errors. the current reporting requirement—
combines an HTML and an XBRL file into a single Thus, by facilitating the preparation and which should enable a reduction in data
document); XBRL US Letter 3 (stating that ‘‘the review of XBRL data, Inline XBRL can
disclosure process overall will be further errors, particularly for those filers that
streamlined now that the SEC allows the use of decrease the overall time and cost currently use the standalone XBRL
inline XBRL, which eliminates the need to create required by filers to comply with the preparation approach.163 Further, filers
duplicate versions of the filing’’); Letter from XBRL existing XBRL requirements.
US to Members of the U.S. House of Representatives or filing agents can use review tools like
We expect the benefit of savings in
(Feb. 3, 2016), available at http://xbrl.us/wp- the open source Inline XBRL Viewer to
content/uploads/2016/02/XBRL-US-Letter-to-U-S- ongoing XBRL preparation and filing
more readily filter and identify errors.
House-of-Representatives-2-3-16.pdf (stating that costs due to Inline XBRL to be smaller
To the extent that Inline XBRL
‘‘[I]nline XBRL will enable companies to streamline for filers that presently rely on the
their current process significantly, further reducing technology can reduce the rate of XBRL
integrated XBRL preparation approach,
the cost of disclosure . . . and would also improve
which generally involves fewer re- errors that are not detected by filers
the efficiency and effectiveness of the current SEC
reporting program’’); Data Coalition Letter 2 (stating keying issues. To the extent that the with the current XBRL filing practices
that Inline XBRL ‘‘reduces the danger that the integrated XBRL preparation approach and technology, Inline XBRL could
registrant will file a correct number in a document
is more prevalent among mutual fund incrementally improve XBRL data
but misplace a decimal point or flip a negative sign quality and thus potentially benefit data
in the corresponding structured data’’ and that filers than operating companies, such
Inline XBRL is a ‘‘significant step toward better filers may realize smaller benefits. users.164 Additionally, since Inline
quality and predictability’’); Letter from Pfizer (Dec. However, filers that use the integrated XBRL filers would have less of an
7, 2015), available at http://www.sec.gov/ incentive to create custom XBRL tags
comments/s7-20-15/s72015-44.pdf (observing that XBRL preparation approach may
duplication due to the current requirement that nonetheless realize incremental time solely to mimic the appearance of an
both the HTML and XBRL document be filed is not savings and/or efficiencies in the filing HTML filing, Inline XBRL could
beneficial to investors or registrants and
process from Inline XBRL.159 increase the ability of investors, other
recommending that the Commission avoid market participants, and other data
imposing certain of the existing machine-readable Additionally, those filers that currently
filing requirements that result in unnecessary choose XBRL tags so that the data looks users to compare information across
duplication); ABA Letter (referencing ‘‘unnecessary similar to the HTML document when filers for those filers that currently
duplication’’ in the current data tagging
framework). See also XBRL White Paper, at 4 rendered by software into a human-
(discussing the ease of assessing XBRL tags in an readable presentation would have less to the Exemptive Order may not be fully
Inline XBRL document); Kamile Asli Basoglu, representative of all operating company filers or of
of an incentive to do so because Inline mutual fund filers.
Clinton E. (Skip) White, Jr. (2015) Inline XBRL
versus XBRL for SEC Reporting, Journal of
XBRL would embed XBRL tags into the 161 See Section III.C.5 below.
Emerging Technologies in Accounting, Volume 12, HTML document. This may result in 162 See Columbia White Paper, at 42 and footnote
Issue 1, pp. 189-199 (discussing the technical higher-quality tagged data at a lower 48 (arguing that one way to help improve the
advantages of Inline XBRL). cost. quality of XBRL data, as well as to make the data
156 While we are not aware of comment letters or more useful and accessible to users, is ‘‘for issuers
data from other sources specifically addressing
While we are currently unable to to move to ‘Inline XBRL’ which ensures that XBRL
Inline XBRL in the context of mutual fund risk/ quantify these potential gains in the and HTML data are the same, and which can ease
return summary information after the adoption of effectiveness and efficiency of the filing the preparation burden for filers’’). See also IAC
the risk/return summary information XBRL preparation process and the resulting Recommendations (suggesting that the use of Inline
requirements in 2009, we note that, in the context XBRL be considered as one of the means to promote
of the 2008 risk/return summary information reductions in the ongoing cost of standardization and facilitate recovery of data by
proposal, one commenter stated that ‘‘XBRL tags compliance with the XBRL investors).
can be embedded seamlessly in the body of the requirements, we believe that the 163 See note 83 above.
official traditional filing—or the entire filing can be
formatted in XBRL—so that funds will not have to
experience of operating company filers 164 Existing format requirements for Interactive
using Inline XBRL under the voluntary Data Files include the element accuracy
create and bear potential liability for stand-alone
requirement, which provides that each data element
submissions containing only XBRL data taken out program pursuant to the Exemptive (i.e., all text, line item names, monetary values,
of context, or have to grapple with portions of their Order may help provide useful percentages, numbers, dates and other labels)
information being required in 2 or 3 different
formats’’ and that many of the added costs of the information and data that will help contained in the Interactive Data File must reflect
XBRL requirement for risk/return summary inform any final decision on the the same information in the corresponding data in
the Related Official Filing. See Rule 405(c)(1)(i) of
information ‘‘stem from the fact that the tagged data proposed rules.160 We are also Regulation S–T.
will appear in a separately created document, rather
than embedded seamlessly into the traditional We also note that the incremental effects of Inline
158 Such meta data include, for example,
Related Official Filing.’’ The commenter also XBRL on the reduction in XBRL errors would be
acknowledged that, at the time, ‘‘there may be definitions, reporting period information, data type smaller if other initiatives result in a reduction in
technological obstacles to embedded tagging.’’ See and related references. XBRL data errors. For example, the XBRL US Data
159 Software vendors and filing agents that
Schnase Letter. Another commenter stated that Quality Committee has published validation rules
mstockstill on DSK3G9T082PROD with PROPOSALS2
‘‘[w]ith respect to the integration of XBRL tagging currently use the integrated XBRL preparation to help public companies detect inconsistencies or
with HTML, this technology has not yet been fully approach, combining the processes of creating errors in their XBRL-formatted financial data, such
developed and it would be premature to propose interactive data tags and an HTML document, as incorrect negative values, improper relationships
such.’’ See Letter from Data Communiqué (Jul. 31, cannot presently take full advantage of the resulting between elements and incorrect dates associated
2008), available at http://www.sec.gov/comments/ efficiency because of current requirements. At with certain data. See http://xbrl.us/data-quality/
s7-12-08/s71208-11.pdf. As discussed above, we present, filing agents and/or filers that use rules-guidance/. See also XBRL US Letter 3 (stating
believe that current XBRL embedding technology integrated XBRL solutions must expend the effort, that the ‘‘XBRL US Data Quality Committee is
now is sufficiently developed to propose requiring albeit minimal, to split out the interactive data and developing a Framework for Element Selection and
its use in submitting information to the save it to a separate instance document for filing. Extension Use to help issuers make decisions that
Commission. 160 We recognize that the experience of operating will improve the consistency of reported data’’). See
157 See Section III.A above. companies that elect to file in Inline XBRL pursuant also note 80 above.
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![Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules 14295
engage in such tagging practices.165 Due Thus, to the extent that Inline XBRL The realization of these benefits of
to greater standardization of contributes to an increase in XBRL data XBRL is conditional on the quality and
presentation of mutual fund risk/return quality and XBRL data use by investors, use of interactive data. Thus, to the
summary XBRL information, we do not other market participants, and other extent that Inline XBRL results in an
expect the latter benefit of Inline XBRL data users, it could potentially increase improvement in XBRL data quality and
to extend to mutual fund risk/return the informational efficiency of prices in increased use of XBRL data, we
summaries. and the efficiency of capital formation expect that these benefits would be
To the extent that Inline XBRL might and allocation and potentially decrease enhanced. We note, however, that
improve data quality, it may contribute the cost of capital. because the proposed Inline XBRL
to wider use of XBRL data by investors, Based on our experience with XBRL requirements would not modify the
other market participants, and other so far, we believe that the XBRL scope and substance of existing XBRL
data users and may enhance the benefits requirements are providing these requirements or the categories of filers
that are associated with XBRL more benefits,169 including to smaller filers. subject to the requirements, both the
generally for filers that presently submit improvement in data quality due to
interactive data using the XBRL format. 169 For academic research on the benefits of
Inline XBRL and the associated
In the 2009 Financial Statement XBRL, see, e.g., Yi Dong, Oliver Zhen Li, Yupeng
Lin, and Chenkai Ni (2016) Does information economic benefits that are incremental
Information Adopting Release, the processing cost affect firm-specific information to Inline XBRL likely would be smaller
Commission stated that requiring filers acquisition? Evidence from XBRL adoption, Journal than the benefits of the XBRL
to submit their financial statement of Financial and Quantitative Analysis, Volume 51,
requirements more generally. To the
information in XBRL would enable Issue 2, pp. 435–462; Chunhui Liu, Tawei Wang,
and Lee J. Yao (2014) XBRL’s impact on analyst extent that risk/return summary XBRL
investors, analysts and the Commission forecast behavior: An empirical study, Journal of data might be associated with fewer data
staff to capture and analyze that Accounting and Public Policy, Volume 33, Issue 1, quality issues, the data quality benefits
information more quickly and at a lower pp. 69–82; Kosal Ly (2012) Extensible Business
Reporting Language for Financial Reporting (XBRL– incremental to Inline XBRL might be
cost; enable investors and others to
FR) and financial analysts’ activity: early evidence, smaller for risk/return summary
search and analyze the financial Academy of Accounting and Financial Studies information than for financial statement
information dynamically; and facilitate Journal, Volume 16, Issue 2, pp. 25–44; Yu Cong,
information.
comparison of financial and business Jia Hao, and Lin Zou (2014) The impact of XBRL
performance across filers, reporting reporting on market efficiency, Journal of While we lack the ability to quantify
Information Systems, Volume 28, Issue 2, pp. 181– the incremental contribution of Inline
periods and industries.166 The 2009 207; Lizhong Hao and Mark J. Kohlbeck (2013) The
Financial Statement Information market impact of mandatory interactive data: XBRL to potential increases in the use
Adopting Release also referenced Evidence from bank regulatory XBRL filings, of XBRL data and the broader benefits
potential gains in the efficiency of Journal of Emerging Technologies in Accounting, of XBRL, we anticipate that the
Volume 10, Issue 1, pp. 41–62; Ariel Markelevich,
capital formation and allocation, Tracey Riley, and Lewis Shaw (2015) Towards
contribution would depend on several
suggesting that, if interactive data, harmonizing reporting standards and factors, including the extent of XBRL
through increased availability or communication of international financial data quality improvements following
reduced cost of collecting and analyzing information: The status and the role of IFRS and the transition to Inline XBRL, changes
XBRL, Journal of Knowledge Globalization Volume
corporate financial data, were to reduce 8, Issue 2; Elizabeth Blankespoor (2012) The impact
in the extent of reliance by investors,
the information barriers faced by of investor information processing costs on firm other market participants, and other
investors, which make it costly for disclosure choice: evidence from the XBRL data users on XBRL data and
companies to find appropriate sources mandate, working paper, available at http:// technological innovation in XBRL
fisher.osu.edu/supplements/10/11702/
of finance, it would lower the cost of Job%20Market%20Paper_Blakespoor_12-4-
preparation and analytics solutions.
capital and increase the efficiency of 11(2).pdf (retrieved Aug. 30, 2016); Jeff Zeyun
capital formation, particularly for Chen, Hyun A. Hong, Jeong-Bon Kim, and Ji Woo (stating that ‘‘[t]he benefits of standardized
smaller public companies.167 Similarly, Ryou (2016) Information processing costs and financials for companies—regardless of size—are
corporate tax aggressiveness: Evidence from the significant in terms of faster delivery of comparable
in the 2009 Risk/Return Summary SEC’s XBRL mandate, working paper, available at data to market and greater usability,’’ and ‘‘[d]ata
Adopting Release, we noted that http://ssrn.com/abstract_id=2754427 (retrieved providers can process XBRL-formatted data much
requiring mutual funds to file their risk/ Aug. 30, 2016) (relating the reduction in more quickly and inexpensively than traditional
return summary information using the information processing costs associated with XBRL data types’’); Data Coalition Letter 2 (stating that
to a decrease in tax avoidance). But see Elizabeth ‘‘[f]or structured data to be most effective for
interactive data format would enable Blankespoor, Brian P. Miller, and Hal White (2014) regulators and investors, it is important to have a
investors, third-party information Initial evidence on the market impact of the XBRL complete data set for all reporting entities’’); Letter
providers and the Commission staff to mandate, Review of Accounting Studies, Volume from Merrill Corporation (Jul. 19, 2016), available
capture and analyze that information 19, Issue 4, pp. 1468–1503. See also Singh at http://www.sec.gov/comments/s7-06-16/s70616-
(discussing the benefits of structured disclosure for 153.pdf (stating that the tagging requirement should
more quickly and at a lower cost than filers, investors, and other data users; stating that be the same for all registrants); Letter from New
is possible using the same information ‘‘costs (or savings) and benefits realized are largely York State Society of CPAs (Jul. 19, 2016), available
provided in a static format, facilitate dependent on how financial executives view XBRL at http://www.sec.gov/comments/s7-06-16/s70616-
comparisons of mutual fund costs, mandates: narrowly, as a simple compliance 150.pdf (stating that, if any companies are exempt
requirement, or more broadly, as a business from using XBRL, their reports would not be readily
performance and other information reporting supply chain standardization opportunity comparable to other reports, thereby leading
across classes of securities and across to streamline and cost effectively enhance a broad investors to assign a greater risk profile to these
funds and help investors make more range of compliance processes . . . SMEs [small companies); Letter from Morningstar (Jul. 20, 2016),
well-informed investment decisions.168 and medium-sized enterprises] should balance the available at http://www.sec.gov/comments/s7-06-
mstockstill on DSK3G9T082PROD with PROPOSALS2
cost of tagging against the cost of capital. XBRL 16/s70616-179.pdf; Letter from CFA Institute (Mar.
filings make the financial information of SMEs 2, 2016), available at http://www.sec.gov/
165 See notes 84, 85 and 93 and accompanying
more accessible to investors and lead to a reduction comments/s7-20-15/s72015-50.pdf (stating that the
text above. Inline XBRL filers may still use custom in the cost of capital’’) and Arif Perdana, Alastair expanded use of XBRL is an opportunity to leverage
tags to represent certain company-specific data. Robb, and Fiona Rohde (2015) An integrative data, enhance analysis, and facilitate company
166 See 2009 Financial Statement Information
review and synthesis of XBRL research in academic comparisons); Letter from AFSCME (Jul. 21, 2016),
Adopting Release, at 6777. journals, Journal of Information Systems, Volume available at http://www.sec.gov/comments/s7-06-
167 See 2009 Financial Statement Information 29, Issue 1, pp. 115–153 (surveying academic 16/s70616-269.pdf (stating that ‘‘data-tagging
Adopting Release, at 6807–6808. research on XBRL). facilitates more accurate, less costly extraction and
168 See 2009 Risk/Return Summary Adopting Several commenters also have addressed the use of information, creating more usable
Release, at 7766–7768. benefits of XBRL. See, e.g., XBRL US Letter 3 disclosure’’).
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![Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules 14297
EDGAR filing, we believe that such 485(b)(1)(i), (ii), (v), or (vii),180 we statement information in XBRL. The
suspensions should be similarly rare for propose to permit filers to submit XBRL effects on participating filers would
Inline XBRL filers. concurrently with the filing. The likely be mitigated by the cost savings
Since Inline XBRL would involve proposed change would eliminate the from no longer preparing and
embedding tags into the filing itself and requirement to make a second filing that submitting interactive data. Given close
since most funds already use integrated solely contains the required XBRL to zero participation in the program, we
XBRL preparation solutions, as exhibit for such post-effective expect the aggregate economic effects of
discussed above, we propose to amendments. The proposed change terminating the program on filers to be
eliminate the 15 business day filing would enable filers to fully realize negligible.
period and require that risk/return efficiency gains in XBRL preparation
b. XBRL Preparation Software Vendors
due to embedding XBRL into the filing
summary information in XBRL be and Filing Agents
and potentially decrease overall
submitted on or before the date the Changes to the XBRL format may
preparation and filing costs associated
registration statement or post-effective affect XBRL preparation software
with the submission of a second post-
amendment to it under Rule 485 vendors and filing agents.182 XBRL
effective amendment.
containing the related information We do not anticipate any change in preparation software vendors and filing
becomes effective. We also propose to filer costs relative to the baseline with agents that adopt Inline XBRL
eliminate the 15 business day filing respect to officer certifications or technology may have to expend
period currently provided to mutual auditor assurance.181 resources to upgrade or replace software
funds to file the required XBRL exhibit The termination of the 2005 XBRL to accommodate the Inline XBRL format
after the filing of the related form of Voluntary Program could potentially and may also have to train staff in the
prospectus under Rule 497(c) or (e). The adversely affect participating filers, to Inline XBRL technology and compliance
increased timeliness of the availability the extent that they presently benefit requirements. These additional costs
of risk/return summary information from the availability of their financial may be relatively greater for software
from such filings in the XBRL format is vendors and filing agents that do not
expected to benefit investors, other 180 As discussed above, in our experience, filings already use Inline XBRL enabled
market participants, and other data under Rule 485(b)(1)(i), (ii), (v), or (vii) and Rule software or software that can be readily
users by reducing the time required to 497(c) or (e) generally are not subject to revision
after filing. The remaining filings containing risk/
upgraded to enable Inline XBRL
obtain risk/return summary information return summary information, including registration submissions or processing.183 Some of
in a structured format that can facilitate statements on Form N–1A and post-effective the initial cost of switching to Inline
analysis and comparisons across funds. amendments under Rule 485(a) and other XBRL could be mitigated by the
paragraphs of Rule 485(b) may be subject to revision availability of the royalty-free Inline
At the same time, we recognize that after filing and prior to effectiveness.
more timely availability of free risk/ 181 Currently, the financial statement information XBRL specification and transformation
return summary information in XBRL Interactive Data File is excluded from the officer registry, which defines how the values
may reduce demand for some certification requirements under Rules 13a–14(f) of facts that appear in HTML documents
and 15d–14(f) of the Exchange Act [17 CFR are converted to the required data types
subscription products and services of 240.13a–14 and 240.15d–14]. Furthermore, auditors
mutual fund data aggregators, to the are not required to apply AS 2710 (Other
for XBRL.184 Because Inline XBRL
extent that their value added is reduced Information in Documents Containing Audited already is used in several other
by the timely availability of free XBRL Financial Statements), AS 4101 (Responsibilities countries for various regulatory
Regarding Filings Under Federal Securities purposes, it is also possible that the
information. We further recognize that Statutes), or AS 4105 (Reviews of Interim Financial
eliminating the 15-day period would transition costs associated with
Information) (prior to December 31, 2016, AU
eliminate the flexibility with respect to Sections 550, 711 and 722, respectively) to the adopting Inline XBRL for Commission
the timing of the preparation and review Interactive Data File submitted with a company’s filings may be lower for some software
of XBRL data that is presently afforded reports or registration statements. In addition, filers vendors or filing agents to the extent
are not required to obtain assurance on their that the expertise gained from Inline
to mutual fund filers, most of which Interactive Data File or involve third parties, such
currently submit XBRL data after the as auditors or consultants, in the creation of their XBRL filings in other jurisdictions can
post-effective amendment or form of Interactive Data File. See 2009 Financial Statement be used to facilitate the transition of
prospectus to which it relates, and Information Adopting Release, at 6796–6797. Commission filings to Inline XBRL.185
However, the Commission has previously stated We note that some of these costs may be
potentially increase ongoing XBRL that XBRL is part of an issuer’s disclosure controls
compliance costs for mutual fund filers and procedures. See 2009 Financial Statement
passed on to filers.
and their filing agents (that may pass Information Adopting Release, at 6797. As our Requiring the use of Inline XBRL may
these costs on to filers). We lack data to proposal to require the submission of interactive also have effects on competition in the
quantify the anticipated cost increase,
data in the Inline XBRL format relates only to the market for XBRL preparation and filing
manner of submitting the Interactive Data File and services. Initially, XBRL preparation
but expect that any such increase would not the data that comprises the file, at this time we
do not propose to change these positions pertaining software vendors and filing agents that
be partially mitigated by the relatively
to the exclusion of the Interactive Data File from the do not currently have or cannot readily
high degree of integration and officer certification and assurance requirements. implement Inline XBRL capabilities
automation in mutual fund XBRL Risk/return summary information Interactive Data would be at a competitive disadvantage
preparation, the technological File requirements do not require mutual funds to
improvements in XBRL preparation involve third parties, such as auditors or
182 See, e.g., FERF Study for a discussion of XBRL
since the effectiveness of the 2009 consultants, in the creation of the interactive data
preparation vendors.
mstockstill on DSK3G9T082PROD with PROPOSALS2
provided as an exhibit to a mutual fund’s Form N–
requirements, and the efficiencies due 1A filing, including assurance. With respect to
183 See note 95 above.
to embedding tags into the filing. registration statements, SAS 37 (currently AS 4101) 184 See note 89 above.
However, we solicit comment from was issued in April 1981 to address the auditor’s 185 See, e.g., XBRL White Paper at 9 (indicating
filers, filing agents, and data users on responsibilities in connection with filings under the that, in the UK context, Inline XBRL is an
federal securities statutes. With respect to existing established and growing means of reporting in
the anticipated economic costs and risk/return summary information Interactive Data XBRL, with a large number of software vendors
benefits of this proposed change. File requirements, an auditor is not required to providing applications for preparing or processing
apply AS 4101 to the Interactive Data File. See 2009 Inline XBRL reports and a range of accounting firms
For post-effective amendments to Risk/Return Summary Adopting Release, at 7760– having strong experience in its use). See also note
registration statements under Rule 7761 and footnote 183. 94 above.
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Form N–1A and Rule 497 submissions the aggregate average yearly cost of $238,809,850 in the cost of services of
and on fund Web sites. Although the services of outside professionals by outside professionals.205 We estimate
Mutual Fund Interactive Data filing $109,663.202 that in the first three years under the
requirements are included in Form N– The elimination of the Web site proposed amendments, the aggregate
1A, the Commission has separately posting requirement also is expected to average yearly burden of XBRL
reflected the burden for these reduce the paperwork burden. We requirements for operating companies
requirements in the burden estimate for previously estimated that operating would be 2,112,176 hours of in-house
Mutual Fund Interactive Data and not in companies would incur an average of personnel time 206 and $238,919,513 in
the burden for Form N–1A. approximately four burden hours per the cost of services of outside
We estimate that the proposed Inline filer per year to post interactive data to professionals, which represents a
XBRL requirement for financial their Web sites. Based on our estimate
decrease of 55,304 hours of in-house
statement information would result in of 8,601 filers, we estimate that the
personnel time 207 and an increase of
an initial increase in the existing elimination of the Web site posting
internal burden of XBRL requirements requirement would decrease the $109,663 in the cost of services of
(56 hours per response) by eight hours aggregate average yearly burden on outside professionals 208 or a decrease of
to switch to Inline XBRL. This increase operating company filers by 34,404 6.43 hours of in-house personnel time
in burden would be borne only for the hours.203 per filer 209 and an increase of $12.75 in
initial response that uses Inline XBRL. We previously estimated the aggregate the cost of services of outside
We further estimate that reductions in average yearly burden of the existing professionals per filer.210
review time would result in a decrease XBRL requirements for operating With respect to mutual fund risk/
of two hours per response in the companies as 2,167,480 hours of in- return summaries, we previously
existing internal burden, beginning with house personnel time 204 and estimated that each mutual fund would
the initial response and continuing on submit one Interactive Data File as an
an ongoing basis.198 We also estimate assumed to incur no change in burden during years exhibit to a registration statement or a
that the average filer would incur a one and two.
Filers phased in during year one: 8,601 x 26%.
post-effective amendment thereto, and
small increase in external cost of $5 per Average yearly change in internal burden per filer: that 36% of mutual funds would submit
response (from $6,170 to $6,175) on an [6 + (3.5 + 4.5 + 4.5) × (¥2)]/3 = ¥6.33 hours. an additional Interactive Data File as an
ongoing basis, beginning in the first year Aggregate average yearly change in internal burden exhibit to a filing pursuant to Rule
of compliance for its phase-in category. for filers phased in during year one: 8,601 × 26%
× (¥6.33 hours) = ¥14,156 hours. 485(b) or Rule 497. We also previously
Based on the number of filers that we estimated that tagging and submitting
Filers phased in during year two: 8,601 × 18%.
expect to be phased in during each of Average yearly change in internal burden per filer: mutual fund risk/return data in XBRL
the first three years under the [0 + 6 + (3.5 + 4.5) × (¥2)]/3 = ¥3.33 hours. format requires 11 hours per response
requirements,199 the number of filings Aggregate average yearly change in internal burden
and posting interactive data to the fund
that we expect those filers to make that for filers phased in during year two: 8,601 × 18%
× (¥3.33 hours) = ¥5,155 hours. Web site requires one additional hour
would require interactive data 200 and Filers phased in during year three: 8,601 × 56%. per response. In addition, we previously
the internal burden hour and external Average yearly change in internal burden per filer:
[0 + 0 + 6 + 3.5 × (¥2)]/3 = ¥0.33 hours. Aggregate
estimated an external cost burden of
cost estimates per response discussed
above, we estimate that, over the first average yearly change in internal burden for filers $890 for the cost of goods and services
phased in during year three: 8,601 × 56% × (¥0.33 purchased to comply with the current
three years of the Inline XBRL hours) = ¥1,589 hours.
requirements, switching to the Inline Interactive Data requirements, such as
Aggregate average yearly change in internal
XBRL format would decrease the burden: ¥14,156 ¥ 5,155 ¥ 1,589 = ¥20,900
for software and/or the services of
aggregate average yearly burden of hours. consultants and filing agents. The cost
financial statement information XBRL 202 Filers are estimated to incur an additional $5 burden does not include the cost of the
per response beginning with the first year of hour burden described above.
requirements by 20,900 hours of in- compliance for their phase-in category. The
house personnel time 201 and increase calculation below considers the aggregate average We estimate that the proposed Inline
yearly change in external cost incurred by each of XBRL requirement for mutual fund risk/
198 Thus, for the initial response using Inline the three categories of filers during the first three
years after the effectiveness of the proposed Inline
return summary information would
XBRL, we estimate that filers would experience a
net increase in hour burden of 6 hours (8 hours ¥ XBRL requirements. Filers that are phased in during result in an initial increase in internal
2 hours = 6 hours). year two are assumed to incur no change in external burden by two hours to switch to Inline
199 Based on staff analysis of Form 10–K filings cost during year one. Filers that are phased in XBRL. This increase in burden would be
during calendar year 2015, approximately 26% during year three are assumed to incur no change
in external cost during years one and two. borne only for the initial response that
were filed by large accelerated filers and
approximately 18% by accelerated filers. For Filers phased in during year one: 8,601 × 26%. uses Inline XBRL. We further estimate
purposes of this estimate, we assume that these Average yearly change in external cost per filer: [$5 that there would be a reduction in
percentages are representative of the percentages of × 3 × 4.5]/3 = $22.5. Aggregate average yearly review time that would result in a
filers in different phase-in categories. change in external cost for filers phased in during
200 We estimate that in order to comply with the year one: 8,601 × 26% × $22.5 = $50,316. decrease in internal burden of
Interactive Data collection requirements, Filers phased in during year two: 8,601 x 18%. approximately 0.5 hours per response,
approximately 8,601 respondents per year would Average yearly change in external cost per filer: [$0 beginning with the initial response and
each submit an average of approximately 4.5 + $5 × 2 × 4.5]/3 = $15. Aggregate average yearly
responses per year for an estimated total of 38,705 change in external cost for filers phased in during
205 8,601 × 4.5 = 38,705 responses. 38,705
responses. year two: 8,601 × 18% × $15 = $23,223.
Filers phased in during year three: 8,601 x 56%. responses × $6,170 per response = $238,809,850.
mstockstill on DSK3G9T082PROD with PROPOSALS2
201 The first response is estimated to incur a net
206 2,167,480 ¥ 55,304 = 2,112,176 hours. See
additional burden of six hours per response and the Average yearly change in external cost per filer: [$0
remaining responses are estimated to incur a net + $0 + $5 × 4.5]/3 = $7.5 Aggregate average yearly note 204 above and note 207 below.
change in external cost for filers phased in during 207 ¥20,900 ¥ 34,404 = ¥55,304 hours. See
decrease in burden of two hours per response. The
calculation below considers the aggregate average year three: 8,601 × 56% × $7.5 = $36,124. notes 201 and 203 above.
Aggregate average yearly change in external cost: 208 $238,809,850 + $109,663 = $238,919,513. See
yearly change in internal burden incurred by each
of the three categories of filers during the first three $50,316 + $23,223 + $36,124 = $109,663. notes 202 and 205 above.
203 8,601 × (¥4) = ¥34,404 hours. 209 ¥55,304 hours/8,601 filers = ¥6.43 hours per
years of the proposed Inline XBRL requirements.
Filers that are phased in during year two are 204 8,601 × 4.5 = 38,705 responses. 38,705 filer. See note 207 above.
assumed to incur no change in burden during year responses × 56 hours per response = 2,167,480 210 $109,663/8,601 filers = $12.75 per filer. See
one. Filers that are phased in during year three are hours. note 202 above.
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![14302 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules
continuing on an ongoing basis.211 In addition, the elimination of the personnel time 223 and an increase of
Considering the phase-in of the Web site posting requirement is $86,281 in the cost of services of outside
requirement would occur over a two- expected to reduce the paperwork professionals 224 or a decrease of 1.22
year period and examining the impact burden. We previously estimated that hours of in-house personnel time per
on the aggregate average yearly burden mutual funds incur an average of fund 225 and an increase of $7.77 in the
of different filer categories,212 we approximately one burden hour per cost of services of outside professionals
estimate that the aggregate average response to post interactive data to their per fund.226
yearly internal burden of risk/return Web sites, in addition to the burden of We are submitting these revised
summary information XBRL tagging and submitting interactive data burden estimates to OMB for review in
requirements would increase by 1,538 to the Commission. Based on our accordance with the PRA and its
hours of in-house personnel time,213 estimate of 15,104 responses, we implementing regulations at this
based on the estimate of 11,106 mutual estimate that the elimination of the web time.227
funds.214 We also estimate that the posting requirement would decrease the
average mutual fund would incur an 2. Regulation S–K and Regulation S–T
aggregate average yearly burden on
increase in software costs of $10 per mutual funds by 15,104 hours of in- Regulation S–K (OMB Control No.
mutual fund on an ongoing annual house personnel time.217 3235–0071) specifies information that
basis, beginning in the first year of We previously estimated that the must be provided in filings under both
compliance for its phase-in category existing XBRL requirements require the Securities Act and the Exchange
with the proposed Inline XBRL mutual funds to expend 172,320 hours Act. Regulation S–T (OMB Control No.
requirement. Based on the estimate of of in-house personnel time and 3235–0424) specifies the requirements
11,106 mutual funds,215 we estimate $9,397,510 in the cost of services of that govern the electronic submission of
that the proposed Inline XBRL outside professionals, based on the documents. The proposed amendments
requirement would result in an increase estimate of 10,559 funds.218 Based on to these items would revise rules under
of $86,281 in the aggregate average the estimate of 11,106 funds, the Regulations S–K and S–T. Any changes
yearly cost of services of outside existing XBRL requirements for mutual in the paperwork burden arising from
professionals.216 funds would require 181,248 hours of these amendments, however, would be
in-house personnel time 219 and reflected in the Interactive Data
211 Thus, for the initial response using Inline
$9,884,340 in the cost of services of collection of information and the
XBRL, we estimate that mutual funds would
experience a net increase in hour burden of 1.5 outside professionals.220 We estimate Mutual Fund Interactive Data collection
hours (2.0 hours ¥ 0.5 hours = 1.5 hours). that in the first three years of the Inline of information. The rules in Regulations
212 See note 132 above and accompanying text.
XBRL requirements, based on the S–K and S–T do not impose any
Based on staff analysis of data obtained from separate burden. We assign one burden
Morningstar Direct, as of June 2016, we estimate
estimate of 11,106 funds, the use of
that a $1 billion asset threshold for groups of related Inline XBRL and the elimination of the hour each to Regulations S–K and S–T
investment companies would provide an extended Web site posting requirement would for administrative convenience to reflect
compliance period to approximately 2/3, or change the aggregate average yearly the fact that these regulations do not
approximately 67%, of all mutual funds affected by impose any direct burden on filers.228
the proposed Inline XBRL requirement (i.e.,
burden of XBRL requirements for
approximately 7,441 of 11,106 affected mutual mutual funds to 167,682 hours of in- C. Request for Comment
funds). house personnel time 221 and $9,970,621
213 See id; see also note 60 above and
in the cost of services of outside Pursuant to 44 U.S.C. 3506(c)(2)(A),
accompanying text. The calculation below
professionals,222 which would represent the Commission solicits comments to:
considers the aggregate average yearly change in (1) Evaluate whether the collections of
burden incurred by each of the two categories of a decrease of 13,566 hours of in-house
funds during the first three years of the proposed information are necessary for the proper
Inline XBRL requirements. Funds that are phased external cost for all funds phased in during year
performance of the functions of the
in during year two are assumed to incur no change one: 3,665 funds × $10 per fund = $36,650. agency, including whether the
in burden in year one. information will have practical utility;
Funds phased in during year two: 67% × 11,106
Funds phased in during year one: 33% × 11,106
funds = 3,665 funds. Aggregate average yearly
funds = 7,441 funds. Average yearly change in (2) evaluate the accuracy of the
external cost per fund: [$0 + $10 + $10]/3 = $6.67 Commission’s estimate of the burden of
change in internal burden for funds phased in per fund. Aggregate average yearly change in
during year one: 3,665 funds × {[1.5 + (0.36 + 1.36 external cost for all funds phased in during year the collection of information; (3)
+ 1.36) × (¥0.5)]/3} hours per fund = ¥49 hours. determine whether there are ways to
two: 7,441 funds × $6.67 per fund = $49,631.
Funds phased in during year two: 67% × 11,106
funds = 7,441 funds. Aggregate average yearly
Aggregate average yearly change in external cost: enhance the quality, utility and clarity
$36,650 + $49,631 = $86,281. of the information to be collected; and
change in internal burden for funds phased in 217 11,106 funds × 1.36 responses = 15,104
during year two: 7,441 funds × {[0 + 1.5 + (0.36 + (4) evaluate whether there are ways to
1.36) × (¥0.5)]/3} hours per fund = 1,587 hours. responses. 15,104 responses × (¥1) hour = ¥15,104
hours. minimize the burden of the collection of
Aggregate average yearly change in burden: ¥49 218 Currently, approved burden estimates include information on those who are required
+ 1,587 = 1,538 hours.
214 See note 60 above and accompanying text. 11 hours per response to comply with the tagging
215 Id.
and submission of XBRL data, one hour per 223 1,538 ¥ 15,104 = ¥13,566 hours. See notes
response to comply with the Web site posting 213 and 217 above.
216 Funds are estimated to incur an additional $10
requirement, and $890 per fund in the cost of 224 See note 216 above.
per year beginning with the first year of compliance services of outside professionals. 225 ¥13,566 hours/11,106 funds = ¥1.22 hours
for their phase-in category. The calculation below
10,559 funds × 1.36 responses per fund = 14,360 per fund. See note 223 above.
considers the aggregate average yearly change in
responses. 14,360 responses × (11 + 1) hours per 226 $86,281/11,106 funds = $7.77 per fund. See
mstockstill on DSK3G9T082PROD with PROPOSALS2
external cost incurred by each of the two categories
response = 172,320 hours. note 216 above.
of funds during the first three years of the proposed
Inline XBRL requirements. Funds that are phased 10,559 funds × $890 per fund = $9,397,510. 227 44 U.S.C. 3507(d); 5 CFR 1320.11.
219 11,106 funds × 1.36 responses per fund =
in during the second year are assumed to incur no 228 For purposes of the PRA, we estimate that no
change in external cost in the first year after the 15,104 responses. 15,104 responses × (11 + 1) hours funds participate in the 2005 XBRL Voluntary
effectiveness of the proposed Inline XBRL per response = 181,248 hours. Program each year. This information collection,
220 11,106 funds × $890 per fund = $9,884,340.
requirements. therefore, imposes no hour burden. The proposed
Funds phased in during year one: 33% × 11,106 221 181,248 ¥ 13,566 = 167,682 hours. See notes
termination of the program would therefore not
funds = 3,665 funds. Average yearly change in 219 above and 223 below. result in changes in burden, except the elimination
external cost per fund: [$10 + $10 + $10]/3 = $10 222 $9,884,340 + $86,281 = $9,970,621. See notes of one hour associated with this information
per fund. Aggregate average yearly change in 216 and 220 above. collection for administrative purposes.
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![Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules 14307
exemption if granted for a limited period of (1) Comply with the content, format Instruction C.3.(g) of Form N–1A
time, will result in ineligibility to use Forms and submission requirements of this (§§ 239.15A and 274.11A of this
S–3, S–8, and F–3 (§§ 239.13, 239.16b and section; chapter).
239.33 of this chapter, respectively), (2) Be submitted only by an electronic
constitute a failure to have filed all required * * * * *
filer either required or permitted to (d) Format—Footnotes—Generally.
reports for purposes of the current public
information requirements of § 230.144(c)(1)
submit an Interactive Data File as The part of the Interactive Data File for
of this chapter, and, pursuant to specified by Item 601(b)(101) of which the corresponding data in the
§ 230.485(c)(3) of this chapter, suspend the Regulation S–K (§ 229.601(b)(101) of Related Official Filing consists of
ability to file post-effective amendments this chapter), paragraph (101) of Part footnotes to financial statements must
under § 230.485 of this chapter. II—Information Not Required to be comply with the requirements of
Delivered to Offerees or Purchasers of paragraphs (c)(1) and (c)(2) of this
§ 232.401 [Removed and reserved]. Form F–10 (§ 239.40 of this chapter), section, as modified by this paragraph
■ 11. Remove and reserve § 232.401. paragraph 101 of the Instructions as to (d). Footnotes to financial statements
■ 12. Amend § 232.405 by: Exhibits of Form 20–F (§ 249.220f of this must be tagged as follows:
■ a. Revising the section heading; chapter), paragraph B.(15) of the General
Instructions to Form 40–F (§ 249.240f of * * * * *
■ b. Removing ‘‘Preliminary Note 1’’ (e) Format—Schedules—Generally.
and ‘‘Preliminary Note 2’’ and adding this chapter), paragraph C.(6) of the
The part of the Interactive Data File for
introductory text; General Instructions to Form 6–K
which the corresponding data in the
■ c. Removing Preliminary Note 3; (§ 249.306 of this chapter), or General
Instruction C.3.(g) of Form N–1A Related Official Filing consists of
■ d. Revising the heading of paragraph
(§§ 239.15A and 274.11A of this financial statement schedules as set
(a); forth in Article 12 of Regulation S–X (17
■ e. Revising paragraphs (a)(1) and chapter), as applicable;
(3) Be submitted using Inline XBRL, CFR 210.12–01 to 210.12–29) must
(a)(2);
(i) If the electronic filer is not an comply with the requirements of
■ f. Removing paragraph (a)(4) and
open-end management investment paragraphs (c)(1) and (c)(2) of this
redesignating paragraph (a)(3) as new
company registered under the section, as modified by this paragraph
paragraph (a)(4);
Investment Company Act of 1940 (15 (e). Financial statement schedules as set
■ g. Adding new paragraph (a)(3);
■ h. Revising newly redesignated U.S.C. 80a et seq.) and is not within one forth in Article 12 of Regulation S–X (17
paragraph (a)(4); of the categories specified in paragraph CFR 210.12–01 to 210.12–29) must be
■ i. Revising the introductory text of (f) of this section, as partly embedded tagged as follows:
paragraphs (d) and (e); into a form with the remainder * * * * *
■ j. Revising paragraph (f); simultaneously submitted as an exhibit (f) Format—Phase-in for Inline XBRL
■ k. Removing paragraph (g); and to: submissions.
■ l. Revising Note to § 232.405. (A) A form that contains the (1) The following electronic filers may
The revisions and addition read as disclosure required by this section; or choose to submit an Interactive Data
follows: (B) An amendment to a form that File:
contains the disclosure required by this (i) In the manner specified in
§ 232.405 Interactive Data File section if the amendment is filed no paragraph (f)(2)(i) or (ii) of this section
submissions. more than 30 days after the earlier of the rather than as specified by paragraph
Section 405 of Regulation S–T due date or filing date of the form and (a)(3)(i) of this section: any electronic
(§ 232.405) applies to electronic filers the Interactive Data File is the first filer that is not an open-end
that submit Interactive Data Files. Item Interactive Data File the electronic filer management investment company
601(b)(101) of Regulation S–K submits; or registered under the Investment
(§ 229.601(b)(101) of this chapter), (ii) If the electronic filer is an open- Company Act of 1940 (15 U.S.C. 80a et
paragraph (101) of Part II—Information end management investment company seq.) if it is:
Not Required to be Delivered to Offerees registered under the Investment (A) A large accelerated filer
or Purchasers of Form F–10 (§ 239.40 of Company Act of 1940 (15 U.S.C. 80a et (§ 240.12b–2 of this chapter) that
this chapter), paragraph 101 of the seq.) and is not within one of the prepares its financial statements in
Instructions as to Exhibits of Form 20– categories specified in paragraph (f) of accordance with generally accepted
F (§ 249.220f of this chapter), paragraph this section, as partly embedded into a accounting principles as used in the
B.(15) of the General Instructions to form with the remainder simultaneously United States and none of the financial
Form 40–F (§ 249.240f of this chapter), submitted as an exhibit to a form that statements for which an Interactive Data
and paragraph C.(6) of the General contains the disclosure required by this File is required is for a fiscal period that
Instructions to Form 6–K (§ 249.306 of section; and ends on or after [one year after the final
this chapter), and General Instruction (4) Be submitted in accordance with rule is effective];
C.3.(g) of Form N–1A (§§ 239.15A and the EDGAR Filer Manual and, as (B) An accelerated filer (§ 240.12b–2
274.11A of this chapter) specify when applicable, either Item 601(b)(101) of of this chapter) that prepares its
electronic filers are required to submit Regulation S–K (§ 229.601(b)(101) of financial statements in accordance with
an Interactive Data File (§ 232.11), as this chapter), paragraph (101) of Part generally accepted accounting
further described in the Note to II—Information Not Required to be principles as used in the United States
mstockstill on DSK3G9T082PROD with PROPOSALS2
§ 232.405. Section 405 imposes content, Delivered to Offerees or Purchasers of and none of the financial statements for
format and submission requirements for Form F–10 (§ 239.40 of this chapter), which an Interactive Data File is
an Interactive Data File, but does not paragraph 101 of the Instructions as to required is for a fiscal period that ends
change the substantive content Exhibits of Form 20–F (§ 249.220f of this on or after [two years after the final rule
requirements for the financial and other chapter), paragraph B.(15) of the General is effective]; and
disclosures in the Related Official Filing Instructions to Form 40–F (§ 249.240f of (C) A filer not specified in paragraph
(§ 232.11). this chapter), paragraph C.(6) of the (f)(1)(i)(A) or (f)(1)(i)(B) of this section
(a) Content, format and submission General Instructions to Form 6–K that prepares its financial statements in
requirements—General. * * * (§ 249.306 of this chapter), or General accordance with either generally
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![14308 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules
accepted accounting principles as used Paragraph (101) of Part II—Information not filing of the registration statement on
in the United States or International Required to be Delivered to Offerees or this Form (or for such shorter period of
Financial Reporting Standards as issued Purchasers of Form F–10 (§ 239.40 of this time that the registrant was required to
chapter) specifies the circumstances under
by the International Accounting submit such files).
which an Interactive Data File must be
Standards Board and none of the submitted and the circumstances under * * * * *
financial statements for which an which it is permitted to be submitted, with ■ 15. Amend Form S–3 (referenced in
Interactive Data File is required is for a respect to Form F–10. Paragraph 101 of the § 239.13) by revising General Instruction
fiscal period that ends on or after [three Instructions as to Exhibits of Form 20–F I.A.7.(b) to read as follows:
years after the final rule is effective]; (§ 249.220f of this chapter) specifies the
(ii) In the manner specified in circumstances under which an Interactive Note: The text of Form S–3 does not, and
Data File must be submitted and the this amendment will not, appear in the Code
paragraph (f)(2)(i) of this section rather of Federal Regulations.
than as specified by paragraph (a)(3)(ii) circumstances under which it is permitted to
be submitted, with respect to Form 20–F.
of this section: any electronic filer that Form S–3
Paragraph B.(15) of the General Instructions
is an open-end management investment to Form 40–F (§ 249.240f of this chapter) and
company registered under the Registration Statement Under the
Paragraph C.(6) of the General Instructions to
Investment Company Act of 1940 (15 Form 6–K (§ 249.306 of this chapter) specify
Securities Act of 1933
U.S.C. 80a et seq.) that, together with the circumstances under which an Interactive * * * * *
other investment companies in the same Data File must be submitted and the
‘‘group of related investment circumstances under which it is permitted to General Instructions
companies,’’ as such term is defined in be submitted, with respect to Form 40–F and I. Eligibility Requirements for Use of
§ 270.0–10 of this chapter, has assets of: Form 6–K(§ 249.240f of this chapter and
Form S–3
§ 249.306 of this chapter), respectively. Item
(A) $1 billion or more as of the end
601(b)(101) of Regulation S–K, paragraph * * * * *
of the most recent fiscal year until it (101) of Part II—Information not Required to
files an initial registration statement (or be Delivered to Offerees or Purchasers of A. * * *
post-effective amendment that is an Form F–10, paragraph 101 of the Instructions 7. * * *
annual update to an effective as to Exhibits of Form 20–F, paragraph B.(15)
registration statement) that becomes of the General Instructions to Form 40–F and (b) Submitted electronically to the
effective on or after [one year after the paragraph C.(6) of the General Instructions to Commission all Interactive Data Files
final rule is effective]; and Form 6–K all prohibit submission of an required to be submitted pursuant to
(B) Less than $1 billion as of the end Interactive Data File by an issuer that Rule 405 of Regulation S–T (§ 232.405 of
of the most recent fiscal year until it prepares its financial statements in this chapter) during the twelve calendar
accordance with Article 6 of Regulation S–X
files an initial registration statement (or months and any portion of a month
(17 CFR 210.6–01 to 210.6–10). For an issuer
post-effective amendment that is an that is an open-end management investment immediately preceding the filing of the
annual update to an effective company registered under the Investment registration statement on this Form (or
registration statement) that becomes Company Act of 1940 (15 U.S.C. 80a et seq.), for such shorter period of time that the
effective on or after [two years after the General Instruction C.3.(g) of Form N–1A registrant was required to submit such
final rule is effective]. (§§ 239.15A and 274.11A of this chapter) files).
(2) The electronic filers specified in specifies the circumstances under which an * * * * *
paragraph (f)(1) of this section may Interactive Data File must be submitted.
■ 16. Amend § 239.16b by revising
submit the Interactive Data File solely as paragraph (b)(2) to read as follows:
an exhibit to: PART 239—FORMS PRESCRIBED
(i) A form that contains the disclosure UNDER THE SECURITIES ACT OF 1933 § 239.16b Form S–8, for registration under
required by this section; or the Securities Act of 1933 of securities to
(ii) If the electronic filer is not an ■ 13. The authority citation for part 239 be offered to employees pursuant to
open-end management investment continues to read in part as follows: employee benefit plans.
company registered under the Authority: 15 U.S.C. 77c, 77f, 77g, 77h, * * * * *
Investment Company Act of 1940 (15 77j, 77s, 77z–2, 77z–3, 77sss, 78c, 78l, 78m, (b) * * *
U.S.C. 80a et seq.), an amendment to a 78n, 78o(d), 78o–7 note, 78u–5, 78w(a),78ll, (2) Submitted electronically to the
form that contains the disclosure 78mm, 80a–2(a), 80a–3, 80a–8, 80a–9, 80a– Commission all Interactive Data Files
required by this section if the 10, 80a–13, 80a–24, 80a–26, 80a–29, 80a–30, required to be submitted pursuant to
80a–37, and Sec. 71003 and Sec. 84001, Pub. § 232.405 of this chapter during the
amendment is filed no more than 30 L. 114–94, 129 Stat. 1312, unless otherwise
days after the earlier of the due date or noted.
twelve calendar months and any portion
filing date of the form and the of a month immediately preceding the
* * * * * filing of the registration statement on
Interactive Data File is the first
■ 14. Amend § 239.13 by revising
Interactive Data File the electronic filer this Form (or for such shorter period of
paragraph (a)(7)(ii) to read as follows:
submits. time that the registrant was required to
Note To § 232.405: Item 601(b)(101) of § 239.13 Form S–3, for registration under submit such files).
Regulation S–K (§ 229.601(b)(101) of this the Securities Act of 1933 of securities of ■ 17. Amend Form S–8 (referenced in
chapter) specifies the circumstances under certain issuers offered pursuant to certain § 239.16b) by revising General
which an Interactive Data File must be types of transactions. Instruction A.3.(b) to read as follows:
mstockstill on DSK3G9T082PROD with PROPOSALS2
submitted and the circumstances under * * * * * Note: The text of Form S–8 does not, and
which it is permitted to be submitted, with (a) * * * this amendment will not, appear in the Code
respect to Forms S–1 (§ 239.11 of this (7) * * * of Federal Regulations.
chapter), S–3 (§ 239.13 of this chapter), S–4 (ii) Submitted electronically to the
(§ 239.25 of this chapter), S–11 (§ 239.18 of Commission all Interactive Data Files
this chapter), F–1 (§ 239.31 of this chapter), Form S–8
F–3 (§ 239.33 of this chapter), F–4 (§ 239.34 required to be submitted pursuant to
§ 232.405 of this chapter during the Registration Statement Under the
of this chapter), 10–K (§ 249.310 of this Securities Act of 1933
chapter), 10–Q (§ 249.308a of this chapter) twelve calendar months and any portion
and 8–K (§ 249.308 of this chapter). of a month immediately preceding the * * * * *
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![Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Proposed Rules 14311
Article 6 of Regulation S–X (17 CFR Form 10–K manner provided by Rule 405 of
210.6–01 et seq.); and * * * * * Regulation S–T (§ 232.405 of this
(ii) Interactive Data File is not chapter) for any registration statement
required to be submitted to the b Annual Report Pursuant To Section or post-effective amendment thereto on
Commission under subparagraph (a) of 13 or 15(d) of the Securities Exchange Form N–1A that includes or amends
this paragraph C.(6). Act of 1934 information provided in response to
(c) Not permitted to be submitted. Not * * * * * Items 2, 3, or 4.
permitted to be submitted to the
Commission if the registrant prepares its b Transition Report Pursuant To (A) Except as required by paragraph
financial statements in accordance with Section 13 or 15(d) of the Securities (g)(i)(B), the Interactive Data File must
Article 6 of Regulation S–X (17 CFR Exchange Act of 1934 be submitted as an amendment to the
210.6–01 et seq.). * * * * * registration statement to which the
Instruction to paragraphs C.(6)(a) and Indicate by check mark whether the Interactive Data File relates. The
(b): When an Interactive Data File is registrant has submitted electronically amendment must be submitted on or
submitted as provided by Rule every Interactive Data File required to before the date the registration
405(a)(3)(i) of Regulation S–T be submitted pursuant to Rule 405 of statement or post-effective amendment
(§ 232.405(a)(3)(i) of this chapter), the Regulation S–T (§ 232.405 of this that contains the related information
exhibit index must include the word chapter) during the preceding 12 becomes effective.
‘‘Inline’’ within the title description for months (or for such shorter period that
any eXtensible Business Reporting (B) In the case of a post-effective
the registrant was required to submit amendment to a registration statement
Language (XBRL)-related exhibit. such files).
* * * * * filed pursuant to paragraphs (b)(1)(i),
* * * * * (ii), (v), or (vii) of rule 485 under the
■ 25. Amend Form 10–Q (referenced in
§ 249.308a) by revising the undesignated Securities Act [17 CFR 230.485(b)], the
PART 274—FORMS PRESCRIBED
paragraph on the cover that begins Interactive Data File must be submitted
UNDER THE INVESTMENT COMPANY
‘‘Indicate by check mark whether the either with the filing, or as an
ACT OF 1940
registrant has submitted electronically’’ amendment to the registration statement
to read as follows: ■ 27. The authority citation for part 274 to which the Interactive Data Filing
Note: The text of Form 10–Q does not, and
continues to read in part as follows: relates that is submitted on or before the
this amendment will not, appear in the Code Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, date the post-effective amendment that
of Federal Regulations. 78c(b),78l, 78m, 78n, 78o(d), 80a-8, 80a-24, contains the related information
80a-26, 80a-29, and Pub. L. 111–203, sec. becomes effective.
Form 10–Q 939A, 124 Stat. 1376 (2010), unless otherwise
noted. (ii) An Interactive Data File is
* * * * * required to be submitted to the
* * * * *
b Quarterly Report Pursuant To ■ 28. Amend Form N–1A (referenced in Commission in the manner provided by
Section 13 or 15(d) of the Securities §§ 239.15A and 274.11A) by revising Rule 405 of Regulation S–T for any form
Exchange Act of 1934 General Instruction C.3.(g) to read as of prospectus filed pursuant to
follows: paragraphs (c) or (e) of rule 497 under
* * * * *
Note: The text of Form N–1A does not, and
the Securities Act [17 CFR 230.497(c) or
b Transition Report Pursuant To this amendment will not, appear in the Code (e)] that includes information provided
Section 13 or 15(d) of the Securities of Federal Regulations. in response to Items 2, 3, or 4 that varies
Exchange Act of 1934 from the registration statement. The
* * * * * Form N–1A Interactive Data File must be submitted
Indicate by check mark whether the * * * * * with the filing made pursuant to rule
registrant has submitted electronically 497.
every Interactive Data File required to b Registration Statement Under the
Securities Act OF 1933 (iii) The Interactive Data File must be
be submitted pursuant to Rule 405 of submitted in such a manner that will
Regulation S–T (§ 232.405 of this * * * * * permit the information for each Series
chapter) during the preceding 12
months (or for such shorter period that b Registration Statement Under the and, for any information that does not
Investment Company Act of 1940 relate to all of the Classes in a filing,
the registrant was required to submit
such files). each Class of the Fund to be separately
* * * * *
identified.
* * * * * General Instructions
■ 26. Amend Form 10–K (referenced in * * * * *
§ 249.310) by revising the undesignated * * * * * By the Commission.
paragraph on the cover that begins C. * * * Dated: March 1, 2017.
‘‘Indicate by check mark whether the
3. * * * Brent J. Fields,
registrant has submitted electronically’’
to read as follows: Secretary.
(g) Interactive Data File
mstockstill on DSK3G9T082PROD with PROPOSALS2
(i) An Interactive Data File (§ 232.11 [FR Doc. 2017–04366 Filed 3–16–17; 8:45 am]
Note: The text of Form 10–K does not, and
this amendment will not, appear in the Code of this chapter) is required to be BILLING CODE 8011–01–P
of Federal Regulations. submitted to the Commission in the
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Document Created: 2017-03-17 02:49:07
Document Modified: 2017-03-17 02:49:07
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Proposed rule. | |
| Dates | Comments should be received by May 16, 2017. | |
| Contact | Mark W. Green, Senior Special Counsel (Regulatory Policy), Division of Corporation Finance, at (202) 551- 3430; John Foley, Senior Counsel, or Michael C. Pawluk, Senior Special Counsel, Division of Investment Management, at (202) 551-6792; R. Michael Willis, Assistant Director, Office of Structured Disclosure, Anzhela Knyazeva, Senior Financial Economist, or Hermine Wong, Special Counsel, Division of Economic and Risk Analysis, at (202) 551-6600. | |
| FR Citation | 82 FR 14282 | |
| RIN Number | 3235-AL59 | |
| CFR Citation | 17
CFR
229 17 CFR 230 17 CFR 232 17 CFR 239 17 CFR 249 17 CFR 274 | |
| CFR Associated | Reporting and Recordkeeping Requirements; Securities; Investment Companies and Administrative Practice and Procedure |
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