SEC Publishes "Taxonomy" to Require Foreign Private Issuers to Submit their Financial Statements in XBRL and Approves Rule Amendments to Ease Access to Exhibits in Public Filings.
On March 1, 2017, the Securities and Exchange Commission (the "SEC") published a "taxonomy" requiring foreign private issuers preparing their financial statements in accordance with International Financial Reporting Standards (IFRS) to submit those reports using XBRL. Additionally, the SEC voted to ease access to exhibits referred to in registration statements and periodic reports that were originally provided in previous filings.
Submission of IFRS Financial Statements in XBRL
Originally adopted by the SEC in 2009, the interactive data format known as eXtensible Business Reporting Language (XBRL) requires issuers registered with the SEC to include in certain SEC filings a new exhibit that "tags" the data contained in financial statements. XBRL is a machine-readable data format that allows investors and other data users to more easily access, analyze and compare financial information across reporting periods and companies. The tags or "taxonomy" published by the SEC on March 1, 2017 allows foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the International Accounting Standards Board to submit those reports using XBRL.
Foreign private issuers that prepare their financial statements in accordance with IFRS may begin immediately to submit their financial statements in XBRL. Otherwise, all such foreign private issuers must provide XBRL-tagged financial statements (and post their financial statements in interactive data format on their websites) for fiscal periods ending on or after December 15, 2017.
Note that lead-time is required for an issuer to properly implement interactive data, including tagging its financial statements. To ensure that foreign private issuers timely meet their XBRL filing obligations, we recommend that issuers begin planning for the implementation of interactive data at this time.
Access to Filed Exhibits
A new SEC rule and form amendment require companies registered with the SEC that file registration statements and reports subject to the exhibit requirements of Item 601 of Regulation S-K, or that file Annual Reports on Form 20-F, to include a hyperlink to each exhibit listed in the exhibit index of these filings. To enable the inclusion of such hyperlinks, the amendments also require that companies submit all such filings in HyperText Markup Language (HTML) format. The final rule will take effect September 1, 2017.
Currently, someone seeking to retrieve and access an exhibit that has been incorporated by reference from a previous filing must review the exhibit index to determine where the exhibit was included, and then must search through the company's filings to locate the relevant previous filing. This amendment is intended to make it easier to retrieve and access previously filed exhibits.
Legal Update - Capital Markets | March 2017
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