SEC proposes XBRL for mutual funds

Mutual funds would be required to use computer tags to label key information about fees, performance and strategies so that investors and analysts can get the information through interactive data, under a proposal unanimously approved today by the Securities and Exchange Commission. Data tagging uses extensible business reporting language software, or XBRL, allowing instant access to comparative data on more than 8,000 mutual funds, the SEC said in a statement. “This exciting new technology will enable investors to instantly analyze and compare not just two or three mutual funds but hundreds or even thousands and to quickly focus on the particular funds that are right for them,” SEC Chairman Christopher Cox said in the statement. “Investors will no longer need to wade through lengthy documents to find the relevant details needed to compare funds one at a time,” he said. “Together with the commission’s recently proposed summary prospectus, this proposal has the potential to transform information access for mutual fund investors,” Andrew “Buddy” Donohue, director of the SEC’s division of investment management, said in the statement. Mutual funds have been submitting information to the SEC in interactive data format on a voluntary basis. The rule proposed today would require all funds to provide data-tagged information beginning with registration statement filings that become effective Dec. 31, 2009. Funds also would be required to post interactive data on their websites, if they maintain them. The SEC has set a deadline of Aug. 1 for public comments on the proposal. Last week, the SEC proposed a similar rule requiring the largest public companies to provide financial information using the interactive data format beginning next year, and within three years for all public companies.