The Securities and Exchange Commission (SEC) announced the publication of the final rule on Electronic Submission of Certain Materials Under the Securities Exchange Act of 1934; Amendments Regarding the FOCUS Report. This rule requires certain forms to be prepared in XML and certain forms in Inline XBRL, specifically, the Commission is requiring, as proposed, the report required by Exchange Act Rule 15fk-1(c)(2)(ii)(A) and portions of Form 1, Form CA-1, Form 17-H, and Form X-17A5 Part III and related annual filings to be provided in Inline XBRL structured data language. The effective date of this rule is 60 days after publication on the Federal Register. Read the fact sheet.
Read Chair Gensler’s statement, where he notes, “We live in a digital age, in which technology and electronic trading have transformed our markets. In 2024, one might think that all filings to the Commission already could be made electronically. That’s not yet true. The Commission oversees thousands of broker-dealers, the vast majority of whom submit annual audit reports. While many filers voluntarily submit these audits electronically, nearly half submitted them on paper last year. In the digital era, such paper filings have become unnecessarily burdensome and impractical for both filers and the Commission. It costs investors, money and time to travel to the SEC’s reading room. It costs the SEC money and time to process paper filings. “
Commissioners Pierce and Uyeda wrote a dissenting opinion in which they note, “The adopting release acknowledges that, though rare, “[d]ata languages…can be subject to obsolescence.” Yet the Commission proffers no instruction on performing a future review of the prescribed data languages to determine whether they remain appropriate. In an era where large language models and artificial intelligence are rapidly advancing, the possibility that the structured data format may become irrelevant is very real.”
