Posted on Wednesday, October 7, 2020

The Securities and Exchange Commission adopted amendments to modernize Regulation S-K Items 101, 103, and 105 which cover the description of business, legal proceedings, and risk factor disclosures with a goal to improve the readability of disclosure documents and discourage repetition and disclosure of information that is not material. The Commission opted against taking the XBRL US recommendation to report Items 101, 103, and 105 in structured format to meet the Commission goal of “improving readability”. The final rule notes in a footnote:

“…while we did not solicit comment on the submission format of the Item 101, 103, and 105 disclosures in the proposal, some commenters stated that the disclosures would be more useful to investors if they were submitted in a machine-readable format, citing comparability and searchability as among the benefits of such a format. See letters from CFA Institute, Better Markets, the California State Teachers’ Retirement System (CalSTRS), and XBRL US (with the latter two specifically recommending the Inline XBRL format). The submission format of the Item 101, 103, and 105 disclosures is outside the scope of this rulemaking.“

While the Commission did not take our suggestion, it’s a good sign that investors, analysts, and others automatically think “machine-readable data” when it comes to disclosures, even text disclosures as this ruling addresses.

Read the final rule.

Read the XBRL US letter submitted October 22, 2019.

Read other supporting letters:

CalSTRS

Better Markets

CFA Institute