The Securities and Exchange Commission’ Fixed Income Market Structure Advisory Committee held a meeting on July 29, 2019 during which municipal issuer disclosures was addressed, among other topics.
XBRL US submitted a comment letter to the Committee, recommending the use of data standards to increase transparency and improve efficiencies in the municipal securities markets.
Highlights from the XBRL US letter:
Tens of thousands of municipalities prepare financial data in unstructured, inconsistent reports, resulting in time delays, the inability to easily aggregate data, and difficulties comparing local government financials. The lack of automation means inefficient, manual processing, which increases costs to investors, and to the municipalities themselves. Financial data standards would resolve these issues, improve municipalities ability to obtain funds, and empower investors to more easily assess the credit risk of municipal bonds…
XBRL US has established a working group, which has created a demonstration taxonomy to represent the CAFR (Comprehensive Annual Financial Report), along with sample CAFR statements in XBRL format. Members of our working group have also identified several municipal issuers interested in creating Inline XBRL documents on a pilot basis…
To facilitate the pilot, we urge the Fixed Income Market Structure Advisory Committee to recommend that MSRB permit the submission of CAFRs in Inline XBRL format. This change would require minimal cost and does not impose mandates on issuers or other market participants. The pilot would allow us to gather information to determine if bringing data standards into the municipal marketplace will result in the greater efficiencies, transparency, and functionality that we expect. The potential for benefits across the supply chain, and in particular, for the investment community, is significant.
Read the letter: XBRL US Comment RE SEC Fixed Income Advisory Committee File Number 265-30 7-29-19
