Max Mansur is a Global Market Manager in Securities Markets at SWIFT.  He works in the asset servicing domain addressing the needs of custodians, securities market infrastructures, broker/dealers, investment managers, issuers, and their agents. Mr. Mansur has 31 years of information technology experience including system design, program management, quality, and financial solutions. He can be reached by email.

7. uld you describe a bit of the history behind using XBRL for rporate action mmunications? When was XBRL first nsidered as a possible solution? How have developments in the XBRL field – such as the SEC mandate and US GAAP taxonomy creation – affected the assessment of XBRL for the rporate action process?

There have been several threads behind looking at XBRL for rporate actions. The problem is long-standing and multinational. It is all driven by “there’s got to be a better way” and “can’t we just get data from the source?” I personally heard the idea of a technology to tag key data within documents in the UK about three years ago. Soon after, I wove it into some presentations I made at Sibos (SWIFT’s annual international nference of financial institutions) and to ECSDA (European Central Securities Depository Association). At the Sibos presentation, DT’s CEO, Don Donohue, was in the audience and the first to mment on the approach. I believe the wheels were already turning there. And SIFMA’s rporate Actions Division had already made unsuessful overtures to the SEC asking for issuers to provide a ver form of key data for filings under the mergers and acquisition regulation. 

So the need for data from the issuers was well established. David Hands of DT had been discussing this in professional groups for the last ten years. The advent of XBRL for SEC filings obviously stimulated interest because the same entities produce rporate actions and, sometimes, even using the same documents. So it was the program, the sponsorship of serious work by XBRL US, the strong leadership of its CEO, Mark Bolgiano, and finally the mandate that created an environment ripe for rporate actions. 

The rest of what we call the “perfect storm” to get the project underway was, unfortunately, the financial crisis. This fueled both the drive for transparency and significant loss of revenue to apply manual effort to address shortfalls in rporate actions processing. The need, plus the right technology, plus the development of ISO 20022 rporate actions messages in XML format, became a foundation when rporate financial reporting in XBRL was mandated.

Underwriting the mmitment of SWIFT and DT, beyond the formation of the Issuer to Investor: rporate Actions initiative, both Chris Church, CEO Americas of SWIFT, and Don Donohue, CEO of DT, have joined XBRL US as founding members. Also, Jamie Shay, Head of Standards for SWIFT has joined the board of XBRL International.

8. How would the adoption of XBRL for the rporate action process our on a global basis? Would it be adopted untry by untry, jurisdiction by jurisdiction? uld the XBRL taxonomy currently being created in njunction with XBRL US be adopted by other untries in whole? Or would different rporate action taxonomies be needed for different regulatory regimes, which would then need to be harmonized, similar to US GAAP and IFRS?

This is a challenge, but the approach we’ve taken in the US is resonating in many markets. Each market would have some differences, but if we are skillful with maintenance of the re taxonomy as aligned with ISO 20022, then the biggest differences would be entry points based on templates appropriate to the market.  This kind of work goes on already via the Securities Market Practice Group (SMPG) for rporate actions. However, each market and jurisdiction would need to work together to establish the templates and then build out the entry points needed for their untry. Given the international vitality of ISO messaging, ongoing work to harmonize market practice, and the discipline being demonstrated within the industry, this is a very achievable goal. The power of the regulators and market infrastructures, since they are charged with protection of investors and market strength, will have an unavoidable role creating the incentive necessary for suess.

9. How would the implementation of an XBRL solution to rporate action events proceed? For example, might it first be adopted for relatively simple and data-specific events (like dividend announcements) and then be implemented for more mplex, text-heavy events (like M&A activity)? Would it be mparable to the SEC mandate, i.e., implemented in stages with the largest mpanies going first? Or would it be adopted by all parties for all events in one fell swoop? Do you anticipate the need for an equivalent of the SEC’s Voluntary Filing Program (VFP)?

Good set of questions. For the moment, we don’t know. One factor: how mpelling is the business case? Do the desires of the financial institutions processing rporate actions meet well with a roll-out strategy? The SIFMA rporate Actions Division effort was focused on the most mplex as being the highest risk – the situations wherein a mistake can incur major damage through claims. However, these are also the less frequent type of rporate action events mpared with dividends and payments which, though simple, ver the lion’s share of all rporate action volume. I would definitely imagine at least a pilot or voluntary program to demonstrate value and work out any bugs since this is the first ISO 20022-based XBRL implementation. The best answer is that the Issuer to Investor team of DT, SWIFT, and XBRL US are working with our Stakeholder Group to determine the best way forward.

10. What kinds of ernment action are required to adopt XBRL for rporate actions? What changes are required in legislation or regulation that must meet SEC approval? Do you believe the regulatory environment is nducive to adopting XBRL?

The discussion is open at this time and pending mpletion of the business case. The regulatory environment appears nducive. At a minimum, it seems straightforward to require XBRL filing for all current required rporate action disclosure. Adding XBRL to rporate actions announcements that are not required for SEC filing may take more effort, but the result may indeed justify this kind of requirement. Why announce some rporate action event types with XBRL to identify key data, but not the rest of the event types? (By the way, please check out The Asset Managers Forum (AMF) web; AMF is a part of SIFMA and has remmended the Issuers to Investors program for rporate actions to the SEC.)

11. In ntrast to the strong and nsistent support for XBRL voiced by the prior SEC mmissioner, the current mmissioner Mary Schapiro has been notably less vocal in her support for interactive data. Do you see that as a significant roadblock for implementation? 

I would refer readers to the three-part interview this blog did with Paul Wilkinson in October and November, particularly question 5 in Part 1. Paul very clearly elucidates Mary Shapiro’s challenges as well as those faced by Chrisher x at the end of his term. And, as widely reported at the XBRL US nference in November 2009, the send mandatory filing revealed significant improvements over the initial 2Q filing in st, speed, and quality. The term “pleasantly surprised” came from many quarters, including, unofficially, the SEC representatives. With the program launched and moving forward – the proof is in the pudding, they say – suess will breed the enthusiasm that the XBRL mmunity would like to see.

12. Maintenance has arisen as a significant issue for XBRL financial reporting (FR) taxonomies. Do you believe maintenance will pose a similar challenge for rporate action taxonomies?

Maintenance is absolutely a significant challenge. How do we avoid a diverging new taxonomy for every market adopting XBRL for rporate Actions? Luckily, this is an area where ISO and SWIFT have been working together suessfully for a long time: global standardization. I am certain that there will be significant opportunities to share in this area. The notion of extensibility is already beginning to be aepted and institutionalized for ISO 20022 messaging, strongly driven by the DT, but like XBRL will need a mechanism to manage the extensions and llaboratively fold back into the re standard. It is a must that we implement a global maintenance scheme to ensure rporate actions taxonomies remain aligned with ISO 20022 while the re taxonomy is adopted and adapted for new markets. I won’t speculate on the solution details because this is another area wherein there is significant ongoing discussion, but maintenance must be solved in a professional, efficient manner or risk moving toward entropy.

13. Are you ncerned that mpanies may simply have had enough XBRL with the mandate for financial reporting and do not want to hear any more about it at this time? Or do you sense an eagerness to leverage the XBRL investment that has been made by extending the data standard to new areas like rporate action events?

I don’t know — we haven’t gone far enough yet. Let’s hope it will be old hat and easy to do by the time we show up with a demand, or rather, an opportunity to expand on clarity and efficiency in mmunicating the financial rporate activities that affect their owners, the shareholders.