The regulatory clock is ticking for the 3rd and final tranche of publicly traded panies to ply with Regulation 33-99002 of the Securities and Exchange mission (“SEC”). This group of smaller cap panies numbers approximately 8,000.

Released on January 30, 2009, Regulation 33-9902 affects all panies traded in US markets. With the fast approaching pliance deadline of June 15, 2011 for this group of panies, this rule requires panies to submit filings with financial statements in XBRL as well as the traditional EDGAR format. XBRL or eXtensible Business Reporting Language, is an XML-based markup language used to municate financial and business data electronically.

The rationale behind this SEC mandate is clear cut. Financial statements written in this format enhance the ease with which analysts and investors can leverage various analytic tools to better analyze the financial data of publicly traded panies. XBRL is used to ende financial statements so that the information in those statements can not only be read automatically by XBRL-enabled software but also be more easily sorted and pared. The markup des used in XBRL describe financial data in a format that puters can classify, sort, and analyze.

The ramifications for NOT plying are very clear. panies that don’t ply will not merely be nsidered non-XBRL pliant, rather they will be nsidered a non-reporting pany!!!

HOW DOES IT WORK

The XBRL, or interactive data files, will be submitted to the SEC as an exhibit to current and periodic reports as well as some registration statements. Seth Farbman, President of Vintage Filings stated.

“Unlike the quick turnaround of a few hours needed to process EDGAR filings, the technical requirements of formatting financial documents in XBRL requires dozens of hours of work, and is not something a pany should take on independently.”

The SEC adopted a three tier phase in period beginning with domestic and foreign large aelerated U.S. GAAP filers with a worldwide public mon equity float above $5 billion filing their first quarterly report with a fiscal period ended after June 15, 2009. The send was required to file by June 15, 2010 and third tiers and 2011 respectively. 

1 Tier 1/Year 1 – Deadline was June 15, 2009 - rules apply only to domestic and foreign large aelerated filers that use U.S. GAAP and have a worldwide public float above $5 billion.

2 Tier 2/Year 2 – Deadline was June 15, 2010 - all other domestic and foreign large aelerated filers using U.S. GAAP would be subject to interactive data reporting.

3 Tier 3/Year 3 – Deadline is June 15, 2011 - all remaining filers using U.S.GAAP, including smaller reporting panies, and all foreign private issuers that prepare their financial statements in acrdance with IFRS as issued by the IASB would be subject to the same interactive data reporting requirements.

WHAT GETS FILED IN XBRL ?

4 For 10-Q / 10-K filers, all 10-Q and 10-K filings need to file in XBRL format. For 20-F filers, only 20-F filings need interactive data.