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1. Jurisdictional Developments in XBRL: July 2009 nor O’Kelly XBRL International Chair, Jurisdiction Development,
2. Jurisdiction Updates
AGENDA
XBRL Adoption Drivers
3. XBRL Adoption Drivers
● Enomics
EU Action Programme to rce admin burden by 25%
mpliance efficiencies / effectiveness – SBR programs
● nverge towards global standards through the IMF, FSF, the Basel mmittee and G20 processes.
● IFRS Adoption and GAAP alignment
● Capital Market Transparency – US SEC Mandate, European mmission, China CSRC
● Alignment in Regulatory nsistency
● Integration with other standards- ISO, W3C, Swift, OECD
4. XBRL Adoption Drivers- Basel II Banking Supervision
The Basel mmittee on Banking Supervision provides regular operation on banking supervisory matters designed to ensure that a bank holds capital reserves appropriate to the risk the bank exposes itself to through its lending and investment practices. Ensuring capital allocation is more risk sensitive; Separating operational risk from credit risk, and quantifying both; align enomic and regulatory capital more closely to rce the spe for regulatory arbitrage.
● XBRL Adopted by US FDIC for US Banking Quarterly Call Reports
● Feb09- mmittee of European Banking Supervisors (CEBS) published work plan outlining priority activities to establish the framework for harmonised supervisory reporting by 2012, in njunction with CEIOPS. Priority activities includes developments to both the REP (Mmon REPorting) and FINREP (FINancial REPorting) taxonomies.
● Oct2008 Reserve Bank of India launch XBRL Basel II reporting for Indian Banking Sector .
● Emerging Basel II XBRL projects in South America, Chile, Brazil, Argentina, lombia, Mexi and
Note (1) EU High Level Group on Financial Supervision in EU , De Lesoriere Report
5. XBRL Adoption Drivers- Europe: Rcing Administrative Burden January 2007: mmission presents Action Programme (AP) for rcing administrative burdens on businesses in the EU by 25% in 2012. It is part of its Better Regulation strategy. AP is endorsed by the European uncil which agreed to a 25% rction target for burdens originating in EU law and invited Member States to “set national targets of mparable ambition.” The EU rction target vers mmunity legislation and related national transposition measures. A 25% rction of AB in the EU uld yield ？ 150 bn in the medium term (an increase of EU GDP of 1.4%). The project will take 18 months . The project started in Sept 2007. The results reviewed by the European uncil March 2009. EU Action Programme for Rcing Administrative Burden
6. XBRL Adoption Drivers- Europe, Market Regulation
● the current financial crisis, which was triggered by US subprime mortgages, has spread worldwide due to the increasingly integrated and ntagious nature of markets, indicating that existing financial market regulation and supervision uld not pe with it and a significant reform is needed
● poorly regulated capital market intermediation and the shadow banking system have emerged as new sources of systemic risk;
● exponential growth in derivatives has increased risk and facilitated new methods of speculation,
● inadequate risk management, irresponsible lending, excessive debt (leverage), and illiquid and mplex financial instruments pose significant risks to financial stability
● financial regulation and innovation, which was designed to diminish risk at the micro level, has led to risk ncentration and has exacerbated risk at the macro level, thus amplifying systemic risk
● failures by credit rating agencies generated substantial negative externalities and market uncertainties; whereas credit rating agencies have offered unsatisfactory selfregulatory solutions
● European Parliament mmittee on Enomic and Moary Affairs
● PR728716EN.doc (June 2008)
7. XBRL Adoption Drivers- Europe, Market Regulation Stoiberg Group, July 2008 – aiming to promote e- and identify best practices in IT use in order to enable the EU to ntribute to international and multi-national initiatives. The group are enuraging the mmission (and Member States) to nsider a ‘pull model – once only’; European Parliament (EP) resolution of 21 May 2008 – a call for the EC to enurage Member States to harmonise the classification of financial information and promote the use of new technology, such as XBRL; uncil meeting of 7 November 2008 – aiming to promote mmon standards between financial centres, more transparency and mprehensive information systems, and reformed multilateral surveillance. 26 January 2009 - EC announced plans to revise the operational framework and decision-making processes of the mmittee of European Securities Regulators (CESR), Banking Supervisors (CEBS) and Insurance & Oupational Pensions Supervisors (CEIOPS ). Seeking to safeguard financial stability by improving supervisory -operation, the decision also proposes provide direct funding to those mmittees and to key international financial reporting and auditing standard-setting bodies, namely the IASC Foundation, the European Financial Reporting Advisory Group (EFRAG) and the Public Interest Oversight Body (PIOB). The proposal is now in the -decision procre for approval by the EP and the uncil.
8. XBRL Adoption Drivers- Europe : High Level Group on Financial Supervision in EU
● Oct2008- EU President Barroso appointed High Level Group on Financial Supervision in EU
● “ .. work with our partners to nverge towards high global standards, through the IMF, FSF, the Basel mmittee and G20 processes.
● Towards a new regulatory agenda – to rce risk and improve risk management; to improve systemic shock absorbers; to weaken pro-cyclical amplifiers; to strengthen transparency; and to get the incentives in financial markets right.
● Towards stronger ordinated supervision – macro-prudential and microprudential. Building on existing structures. Much stronger, ordinated supervision for all financial actors in the European Union. With equivalent standards for all, thereby preserving fair mpetition throughout the internal market.
● Towards effective crisis management procres – to build nfidence among supervisors. And real trust. With agreed methods and criteria. So all Member States can feel that their investors, their depositors, their citizens are properly protected in the European Union….”
● High Level Group on Financial Supervision in EU – De Larosiere Report (Feb 2009)
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● EU Action Programme for Rcing Administrative Burden
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9. XBRL Adoption Drivers- Europe: High Level Group on Financial Supervision in EU
● XBRL Europe fully supports the de Larosière report and its remmendations and mments and its specific remmendation 18 as interalia
● “ A European System of Financial Supervisors (ESFS) should be setup. (…) for which the stage 1 will be “Preparing for the transformation of the level 3 mmittees into European Authorities”.
● The ESFS “should rely on a mmon set of re harmonised rules and have aess to high-quality information”.
● · XBRL Europe endorses the position of FEE regarding the setting up of “harmonised rules” and specifically the “fundamental review of the Basel 2 rules” and the extended use of the IFRS (mment N°25)
● XBRL Europe proposes for the “aess to the high quality of information” to extensively use a unique open source exchange standard XBRL (Extensible Business Reporting Language) based on XML, which is already extensively used for tagging and exchanging financial information by a large number of regulators in Europe (and worldwide like in the US, Japan or China) like Bank of Spain, Bank of France, Bank of Belgium with remmendations from CEBS,
● or by tax authorities like in the UK or the NL or by Business registers in the majority of EU
● untries.
10. XBRL Adoption Drivers- US Securities and Exchange mmission Requires submission of XBRL-formatted financial statements via an ‘XBRL Exhibit’ for annual, quarterly filings and registration statements (and via posting XBRL Exhibit on rporate web). Timing – 3 year phased adoption for all public registrants starting with largest 500 for reporting periods ending on or after June 15, 2009. Initial year requirement is for primary tables and notes as ‘block text’. Subsequent periods require that note disclosures be structured in detail thereby increasing structured disclosures from say 300 to over 3,000. US GAAP Taxonomy exceeds 15,000 disclosure items. Embedded adoption beginning to result is st & time reporting rctions for some mpanies. Credit Rating Agencies (CRAs) lowered the perception of credit risk by giving AAA ratings to the senior tranches of structured financial products like CDOs, the same rating they gave to standard ernment and rporate bonds . SEC mandated reporting by mutual fund risk and return reporting starting in 2011 and ratings agencies starting August 2009. SEC’s 21 st Century Disclosure Initiative outlines migration of all reporting requirements to enhance public aess via structured reporting environment with IDEA updating EDGAR and current RSS and FTP aess. Other taxonomies under development including Mortgage Backed Securities, Proxy disclosures, rporate Actions, ernance Risk and mpliance, Risk Reporting and others. http://WhiteHouse. http://USA. http://Revery.
11. XBRL Adoption Drivers- IFRS
● The April 2 nd release of the IFRS Taxonomy 2009 follows the publication of the exposure draft in January 2009. mments on the exposure draft were received from all over the world and from a wide variety of businesses and anisations. The mments focused on both technical and acunting details, and where appropriate have been reflected in the taxonomy.
● The IASC Foundation also published a draft Due Process Handbook for XBRL Activities for public mment. The handbook sets out the IASC Foundation’s XBRL mission, methodology and spe of work. It describes the mandatory procres followed in developing the IFRS Taxonomy and in all other XBRL activities, and the mment period closes on 26 June 2009.
● The IFRS Taxonomy 2009 and Due Process Handbook for XBRL Activities are freely available on the IASB web at
● Taxonomy Extensions under proposal:
- untry Extensions
- Industry Sector Extensions
- mmon Notes disclosures
12. XBRL Adoption Drivers – Standard Business Reporting (SBR)
● A multi-agency program to rce the reporting burden by 25% or more by:
● removing unnecessary/duplicated information from ernment forms
● adopting a mmon reporting language, based on international standards and best practice providing business with a single secure online sign-on to the agencies involved
● utilising business software to automatically pre-fill ernment forms
● providing an electronic interface to enable business to report to ernment agencies directly from their acunting software, which will provide validation and nfirm receipt of reports
● making financial reporting to ernment a by-product of natural business processes.
● Emerging as a ernmental mpliance best practice in:
- Dutch Taxonomy Project
- New Zealand SBR
- Australian SBR
- Singapore SBR
- Ireland e policy
-Ministry of rporate Affairs India (emerging)
-European mmission driving SBR type projects in EU untries
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