XBRL Gerbil Dies a Guinea Pig’s Death?


As Orwell might have said, some eXtensible markup standards are more eXtensible than others.

FSA ditches XBRL: Wow.

Told you so.

Coupled with the U.K. securities industry regulator’s recent negotiations of closer ties with the U.S. SEC — whose chair, Cox, was extremely enthusiastic about the XML-based business reporting markup language and its lobby-like-mad business ecosystem — this is quite an interesting story from a new market machines engineering and global open standards development point of view.

The UK’s Financial Services Authority has stated that it will not be introducing the eXtensible business reporting language (XBRL) format for filing of financial and regulatory returns.

This after Microsoft hard-coded XBRL publishing tools into the latest iteration of its Office productivity software suite, for example.

As actor Keanu Reeves is known for saying: Whoa.

The regulator was expected to introduce XBRL as a common reporting format for its Mandatory Electronic Reporting (MER) system, but says it has decided to use standard XML for electronic reporting instead.

In a statement, the watchdog says that it has decided that the XBRL format “is not the most appropriate technology for the FSA or UK financial services regulation at the current time”.

The FSA says it does not believe there is sufficient XBRL experience within the UK to develop an XBRL-based system “without incurring additional cost and risk” and feedback from regulated firms suggests that the availability of XBRL software support and industry experience within the UK, whilst on the increase, is still relatively low.

“Existing FSA systems, such as the product sales data system, have been developed in the standard XML format and it is therefore a logical step to introduce an MER system that builds upon and further develops the existing technical infrastructure that supports standard XML based reporting,” says the statement.

The regulator goes on to say that although XBRL allows listed companies and mutual funds to make their financial and regulatory information publicly available, unlike other regulators it is not required to provide or facilitate access to such corporate disclosures: “Therefore, one of the main benefits of XBRL as a ‘firm-oriented’ technology would not be realised by the FSA.”

The FSA’s MER system will manageover 150 different e-forms and over 12,000 different reportable facts (referred to as data elements). The system will use these data items and elements and generate tailor-made returns for each and every FSA regulated firm that is required to report via MER.

However, although the FSA has chosen not to adopt XBRL, in the US the Securities Exchange Commission (SEC) is currently developing a system that would enable firms to file periodic and investment company reports using the XBRL format.

Note the implication of the diplomatic wording in that press release, as published whole or gisted — it is hard to tell the difference — by Finextra.

XBRL is not a standard, by the FSA’s standards for standards.

A major defeat for the “de facto standards” party, it seems, for whom “coopetition” is often a fancy way of saying that you use your monopoly power to coerce cooperation.

But of course, “coerced cooperation” is an oxymoron.

Somewhere around here I have some notes for an NMMDEX XBRL sector: publicly traded companies in the XBRL ‘business ecosystem’ …

Let me see if I can find that, and put some numbers from the market to the enormity, or lack thereof, to this development.

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