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 promoted the innovation in listed companies' information disclosure. Moreover, keeping ahead home and abroad in listed companies' information disclosure based on the advanced international standard XBRL (eXtensible Business Reporting Language), 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.

"Bar codes" for financial statements of listed companies

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 only provided content in the 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 data in financial statements. All this provides "bar codes" for listed companies' financial statement and technically supports 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.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 securities markets in the future, which is conducive to improving the reputation and image of domestic securities markets.

At the end of 2002, the CSRC began to organize personnel from the SSE, the Shenzhen Stock Exchange and some software companies to study the XBRL standard in the international business reporting field and stipulate the Specification in line with China's national conditions. As the recommended financial industry standard, the Specification has already been promulgated on March 25, 2005 in line with the "Standardization Law of the People's Republic of China". It regulates the electronic announcement documents of listed companies as well as the data process of important information in the documents, including the integration process of information disclosure and information collection.

Overall planning and rational argumentation

The SSE began to cast eyes on the XBRL technology 2 years ago. In 2003, a delegation headed by SSE officials 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. Therefore, through overall planning and sufficient deployment, the SSE officials, 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 information disclosure of SSE-listed companies.

However, XBRL, as the newest technology in the world at that time, had not been applied to the domestic securities industry. Therefore, relevant SSE officials 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. Currently, XBRL is used in all the full texts of annual reports of companies listed on the SSE, with satisfying effects achieved.

XBRL Data Searching

XBRL, defining corporate financial data with standard and uniform language, solves important and complicated technological problems, enabling the searching in listed companies' database.

When the SSE introduced on its website the XBRL data search function for constituents of the SSE 50 Index in 2004, 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 & 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.

International Exchange of XBRL

The SSE has enhanced exchanges with the XBRL International and relevant institutions based on implementing the industry standard – the Specification. In July 2004, the SSE invited the former Chair of the XBRL International to evaluate its XBRL-based information disclosure project of listed companies. Besides, it successfully held the "International Forum on Application of XBRL Standard in China's Securities Industry" in August 2004. In March 2005, representatives of the SSE attended the seminar themed "XBRL Global Trend and Its Influence on Reporting Standard of Hong Kong's Regulators" in Hong Kong and made keynote speech, winning wide attention and high praise.

The former Chair of the XBRL International said that the SSE, by developing the template system with the third party providers, made great efforts to develop the current XBRL taxonomies reflecting the requirements of China's accounting standards and information disclosure of listed companies. The development and application of the system has entered a new stage and achieved a great achievement.