The Securities and Exchange Commission’s Fixed Income Market Structure Advisory Committee will discuss issuer disclosure and machine-readable technology at a meeting next week.
FIMSAC will meet Nov. 4 at the SEC’s New York Regional Office to discuss structured disclosures by municipal issuers and other topics, according to an agenda released Thursday.
“I could not be more pleased with the work of the FIMSAC over the last two years, which has enhanced our understanding of the fixed income markets and informed policy decisions on these issues,” said Jay Clayton, SEC chairman. “Monday’s agenda again demonstrates the committee’s commitment to examining important issues in our fixed income markets, including rating agency compensation, index construction, LIBOR transition, and electronic trading. I encourage fixed income market participants to follow the work of the FIMSAC.”
The morning will begin with the municipal issuers’ structured disclosures discussion. It features Will County, Ill. Auditor Duffy Blackburn, MSRB Chief Operating Officer Mark Kim, XBRL US President Campbell Pryde and Municipal Market Analytics Managing Director Lisa Washburn.
Mike Willis, assistant director of the SEC’s Office of Structured Disclosure, will also be a part of the discussion.
One way to reach a goal of standardized disclosure is Extensible Business Reporting Language or XBRL, which many have said is a way to standardize issuers’ financial documents and improve transparency. XBRL is a standard machine-readable format for financial reports.
Pryde will talk about how thousands of public companies, though all have different characteristics, use one taxonomy, said XBRL US Vice President Michelle Savage.
“All of the information is extremely usable and comparable from entity to entity,” Savage said. “A lot of people think that they’re very unique. There are a lot of similarities that can be drawn out.”
Campbell will also talk about various ways of implementing XBRL and address questions regarding the efficiency and costs of the data.
Ten years ago, the SEC began requiring private companies to use XBRL with the EDGAR system. On the corporate side, the SEC has the authority to establish a set of standards, but not for the municipal market.
Issuers currently put out their yearly financials in a PDF format, which can make it hard for investors to find information about governments’ performance. On the flip side, issuer groups say the rub is the mandate of purchasing a specific technology for reporting purposes. Costs could also weigh heavily on smaller municipalities.
This year the California legislature passed a bill that would have set up a commission to study whether to require state and local governments and agencies to provide financial documents to the state controller’s office in XBRL.
In October, California Gov. Gavin Newsom vetoed the bill because it imposed additional unbudgeted costs for states and contained implementation provisions that he found to be problematic.