The Shanghai Stock Exchange (SSE), in line with the "Electronic Information Disclosure Specification for Listed Companies" (herein after shorten as "the Specification") of the China Securities Regulatory Commission (CSRC), has introduced the advanced international standard XBRL (eXtensible Business Reporting Language) to promote the innovation in listed companies' information disclosure. Specifically, keeping ahead home and abroad, the SSE has successfully applied XBRL to the disclosure of the abstracts of annual reports of 2003, the first quarter reports of 2004, the abstracts of annual and semi-annual reports of 2004 and the full texts of annual reports of 2004.

Guarantee listed companies' data quality

As China's securities market expands and the financial field further opens up, domestic and foreign investors pay increasing attention to the financial and operational status of listed companies and ask for higher quality of their public information disclosure.

Before the adoption of the Specification and XBRL standard, listed companies' information documents were disclosed in PDF or Word format, which were similar to image document, containing data hard to be automatically extracted by computer programs. Therefore, investors, securities regulatory authorities, research institutions and securities information provider's encountered problems of repeated data input and data quality when utilizing the information disclosed by the SSE.

XBRL is the application of XML (eXtensible Markup Language) in the information exchange field of financial reports. As the technical standard for the Specification, XBRL can unify the language between the data in companies' financial statement and the off-balance-sheet statement, and realizes the automatic treatment to the articulation of the data in financial statements. All this provides technical supports for the listed companies to disclose information accurately and minimize any possible omissions. Therefore, XBRL ultimately guarantees the accuracy and reliability of listed companies' data, and is of great significance for listed companies to improve the quality of their information disclosure.

Step-by-step promotion of XBRL

At the end of 2002, the CSRC began to organize personnel from the SSE, the Shenzhen Stock Exchange and relevant software companies, to study the XBRL standard in the international business reporting field and stipulate the Specification in line with China's national conditions, which has already been approved by the China Finance Standardization Technical Committee.

In October 2003, a delegation headed by SSE Governor Geng Liang attended the 43rd General Assembly and Annual Meeting of the World Federation of Exchanges (WFE) in New York, the U.S.A., with XBRL as its main topic for discussion. Moreover, in November 2004, WFE Secretary General attended the special meeting on XBRL held by the International Accounting Standards Board in Brussels, Belgium, upon which two representatives of the U.S. Securities and Exchange Commission made an introduction on its application of XBRL. Thus, SSE officials paid great attention to the influence exerted by XBRL on international securities industry. Through overall planning and sufficient deployment, SSE Governor Geng and President Zhu Congjiu, under the guidance of the CSRC Standard Formulation Group, established a special working group for listed companies' information disclosure application based on XBRL, to promote its application and promotion for SSE-listed companies' information disclosure.

However, XBRL, as the newest technology in the world at that time, had not been applied to the domestic securities industry. Therefore, SSE Vice President Zhou Qinye and Assistant to President Bai Shuo organized several meetings to discuss the feasibility of XBRL's application. Meanwhile, the SSE held the symposium on XBRL's application in listed companies' information disclosure, soliciting opinions of experts and institutions at home and abroad including the Chinese Academy of Sciences, PwC and FACTIVA. Thereupon, it adopted the strategy of "Step-by-step Promotion", i.e., to carry out pilot projects before all-around promotion and to apply XBRL first in abstracts and then in full texts.

Thanks to guidance of the CSRC and with aid of all parties, the SSE has adopted the XBRL standard in disclosure of the abstracts of annual reports of 2003, the first quarter reports of 2004, the abstracts of annual and semi-annual reports of 2004 and the full texts of annual reports of 2004, with satisfying effects achieved.

Under the framework of the Specification, the application of XBRL has promoted the innovation in information disclosure of listed companies, improving the accuracy and reliability of listed companies' data. Moreover, as XBRL organizes listed companies' information disclosure in accordance with international standards, domestic listed companies' data can be exchanged and shared with other international stock exchanges in the future, which is conducive to improving the reputation and image of domestic securities markets.

Exchanges with international organizations

The SSE has enhanced exchanges with the XBRL International and relevant institutions based on implementing the industry standard – the Specification.

Firstly, in July 2004, the former Chair Mr. Walter of the XBRL International was invited to evaluate the SSE's XBRL-based information disclosure project of listed companies.

Secondly, it strengthened international exchanges by successfully holding the "International Forum on Application of XBRL Standard in China's Securities Industry" in Shanghai in August 2004. Attendees made exchanges on the international development and applications of the XBRL standard, the progress and specific issues concerning the establishment of the XBRL-CN, the drafting and application of the Specification, the introduction of the XBRL standard, the possible problems and solutions of XBRL's application in China, cases of XBRL application in foreign jurisdictions as well as the demonstration of XBRL application software and analysis tools.

Thirdly, the SSE introduced its application experience in XBRL-based information disclosure project of listed companies to promote XBRL application in Hong Kong's securities industry. In March 2005, representatives of the SSE were invited by the Hong Kong Monetary Authority and the Securities and Futures Commission to attend the seminar themed "XBRL Global Trend and Its Influence on Reporting Standard of Hong Kong's Regulators" in Hong Kong, greatly enhancing the application of XBRL in Hong Kong's securities regulation.

Database Searching

XBRL has, through standard and uniform markup language of corporate financial data, solved important and complicated technological problems, enabling the searching in listed companies' database. On August 3, 2004, the SSE introduced on its website the Specification-based XBRL data search function for constituents of the SSE 50 Index. Investors could search online for list companies' general information, major financial data, and such detailed data as balance sheets, statements of profit appropriation and statements of cash flow. They could also directly download relevant XBRL data files from the SSE website and use software tools to extract data for further analysis. In the past, only professionals or investment and consultancy companies were capable of similar analysis.

The SSE has stored such XBRL data of SSE-listed companies as the abstracts of annual reports of 2003 as well as the first quarter reports, the abstracts of semi-annual reports, the abstracts and full texts of annual reports of 2004. Investors could compare the same accounting subjects or trend of different companies by using these data to learn the financial and operational status of listed companies, which could improve their analytical capabilities, protect their own rights and interests and increase their confidence.