The FSA is aware that a number of regulatory bodies are using eXtensible Business Reporting Language (XBRL) as their chosen technology for the communication of financial and regulatory information. The FSA have also considered XBRL and have determined that it is not the most appropriate technology for the FSA or UK financial services regulation at the current time. This statement reiterates the FSA's position with regards to the usage of XBRL.
In taking the decision to use standard XML rather than XBRL, the FSA gave consideration to a number of important factors. These considerations are outlined below.
·The FSA's Mandatory Electronic Reporting (MER) system will be developed in partnership with an external development supplier. The system will manage in excess of 150 different 'forms' (referred to as data items) 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. This in itself represents a significant technical undertaking for the FSA and its development partner. The FSA does not believe that there is sufficient XBRL experience within the UK currently to develop this system without incurring additional cost and risk and this approach is in line with our statutory obligation to consider the proportionality of burdens placed on authorised firms.
- In order to promote the efficient and effective use of information, the FSA has committed to introducing a common reporting format across all of its regulatory reporting systems. 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.
- XBRL is a technology that allows listed companies and mutual funds to make their financial and regulatory information publicly available. However, unlike other regulators, the FSA 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 has been mindful of the implications of mandating emerging technology within the UK financial services industry. 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. The FSA has opted to use standard XML as it is an established technology in the UK's financial services industry and expertise is readily available in the UK. This means that the UK regulated firms will be able to leverage a rich set of tools for handling XML, and benefit from years of industry experience and best practice.
The FSA's foremost concern is the development of a technical solution that is robust, secure, intuitive to use and flexible. Based on the known requirements, standard XML is the format that best meets the FSA's needs.
The FSA will continue to monitor the development of XBRL and it may become appropriate for the FSA to reassess its position in relation to XBRL. The FSA is already taking steps to ensure that the XML-based architecture that it develops now would support XBRL transformation should the need arise in the future.
