The Securities and Exchange Commission’s two sitting commissioners voted Wednesday to propose a rule change requiring public companies to file single versions of financial statements using an open format.
Commissioners Michael Piwowar, a Republican, and Kara Stein, a Democrat, voted to propose the changes requiring public companies to file using Inline Extensible Business Reporting Language (XBRL) rather than the two formats that have been required since 2009.
The SEC initially made the format optional for companies last summer. The proposed rule change would require a singular Inline XBRL submission instead of the separate plain-text document and machine-readable data submissions currently required of public companies.
Inline XBRL, which combines computer-readable XBRL and human-readable HTML, was also recently mandated for use by the European Securities and Markets Authority.
Hudson Hollister, executive director of the Data Coalition, said a change to open data would streamline the filing process and help modernize financial regulation.
“With just one version, instead of two, data quality will improve,” Hollister said. “Which means investors and markets can have more confidence in this crucial public data set, and the agency will be able to deploy oversight analytics more effectively.”
The SEC commissioners will hold a vote to finalize the proposed rule changes following a public comment period. Piwowar was designated acting chairman earlier this year by President Donald Trump.
“Switching to a single Inline XBRL document will reduce the burden on companies that today file two separate documents each quarter,” Campbell Pryde, CEO of XBRL US, said following the vote.
The push to amend the filing process comes nine months after the commission began allowing public companies to use the Inline XBRL format for quarterly and annual disclosures on an optional basis.
The Data Coalition has pushed the SEC to replace not only financial statements, but all of its corporate disclosure forms with open data. The group will hold its annual Financial Data Summit later this month to address what it believes is a need to modernize financial regulatory reporting.
The proposed rule change was one of four disclosure recommendations presented to the SEC commissioners on Wednesday. The commission currently has three vacancies.