WASHINGTON, D.C. – The Securities and Exchange Commission chairman, Christopher Cox, announced Tuesday that the SEC will gradually replace the 1980’s EDGAR database with Interactive Data Electronic Applications which will allow investors to easily compare and analyze financial data from all public companies and mutual funds.
The new IDEA database “represents a giant step in our mission to insure that investors and markets have full, complete, and accurate disclosure from America’s public companies and mutual funds,” said Cox.
Whereas Edgar dates back to an era of mainframe computing, IDEA is based on interactive data, making it faster and cheaper to use. Instead of sorting through the cumbersome and lengthy documents on Edgar, analysts can take advantage of IDEA’s advanced search capabilities and can download information from EDGAR to spreadsheets and analytical software to more easily find and compare financial data.
Cox spoke of the potential for IDEA to grow and improve, stating that once interactive data is available, software can be written for the system, by both the SEC and private companies. He also boasts that IDEA is global, and will support over 40 languages, with translation built into the system. The old Edgar system has no translation capabilities.
The transition from Edgar to IDEA is expected to take roughly three years, during which Edgar and IDEA will function in parallel. Edgar will ultimately remain as an archive for old company filings.
IDEA will be the primary source for all SEC filings, and the SEC proposed requiring U.S. companies to provide financial information using the interactive data format as soon as early next year. The United States is not the first to mandate that public companies file their forms using interactive data. China, Japan, and several European companies have already adopted the system. Chairman Cox predicts that within two years, most of the world will be using systems like IDEA.