[Federal Register Volume 82, Number 51 (Friday, March 17, 2017)]
[Proposed Rules]
[Pages 14282-14311]
[FR Doc No: 2017-04366]

Vol. 82

Friday,

No. 51

March 17, 2017

Part II

 Securities and Exchange Commission

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17 CFR Parts 229, 230, 232, et al.

Inline XBRL Filing of Tagged Data; Proposed Rule

Federal Register / Vol. 82 , No. 51 / Friday, March 17, 2017 /
Proposed Rules

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 229, 230, 232, 239, 249 and 274

[Release Nos. 33-10323; 34-80133; IC-32518; File No. S7-03-17]
RIN 3235-AL59

Inline XBRL Filing of Tagged Data

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: We are proposing to require the use of the Inline XBRL format
for the submission of operating company financial statement information
and mutual fund risk/return summaries. The proposed amendments are
intended to improve the data's quality, benefiting investors, other
market participants, and other data users, and to decrease, over time,
the cost of preparing the data for submission to the Commission. The
proposed amendments would also eliminate the requirement for filers to
post Interactive Data Files on their Web sites and terminate the
Commission's voluntary program for the submission of financial
statement information interactive data that is currently available only
to investment companies and certain other entities.

DATES: Comments should be received by May 16, 2017.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml);
     Send an email to<EMAIL_ADDRESS>Please include
File Number S7-03-17 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments to Brent J. Fields, Secretary,
Securities and Exchange Commission, 100 F Street NE., Washington, DC
20549-1090.

All submissions should refer to File Number S7-03-17. This file number
should be included on the subject line if email is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
Internet Web site (http://www.sec.gov/rules/proposed.shtml). Comments
are also available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F Street NE., Room 1580,
Washington, DC 20549 on all official business days between the hours of
10:00 a.m. and 3:00 p.m. All comments received will be posted without
change; we do not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. Studies, memoranda, or other substantive items may
be added by the Commission or staff to the comment file during this
rulemaking. A notification of the inclusion in the comment file of any
such materials will be made available on the Commission's Web site. To
ensure direct electronic receipt of such notifications, sign up through
the ``Stay Connected'' option at www.sec.gov to receive notifications
by email.

FOR FURTHER INFORMATION CONTACT: Mark W. Green, Senior Special Counsel
(Regulatory Policy), Division of Corporation Finance, at (202) 551-
3430; John Foley, Senior Counsel, or Michael C. Pawluk, Senior Special
Counsel, Division of Investment Management, at<PHONE_NUMBER>; R.
Michael Willis, Assistant Director, Office of Structured Disclosure,
Anzhela Knyazeva, Senior Financial Economist, or Hermine Wong, Special
Counsel, Division of Economic and Risk Analysis, at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: We are proposing amendments to Item 601 \1\
of Regulation S-K,\2\ Rules 11,\3\ 201,\4\ 202,\5\ 401 \6\ and 405 \7\
of Regulation S-T,\8\ Rules 144,\9\ 485 \10\ and 497 \11\ and Form F-10
\12\ under the Securities Act of 1933 (Securities Act),\13\ Forms 10-
Q,\14\ 10-K,\15\ 20-F,\16\ 40-F \17\ and 6-K \18\ under the Securities
Exchange Act of 1934 (Exchange Act),\19\ and Form N-1A \20\ under the
Securities Act and Investment Company Act of 1940 (Investment Company
Act).\21\
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    \1\ 17 CFR 229.601.
    \2\ 17 CFR 229.10 et seq.
    \3\ 17 CFR 232.11.
    \4\ 17 CFR 232.201.
    \5\ 17 CFR 232.202.
    \6\ 17 CFR 232.401.
    \7\ 17 CFR 232.405.
    \8\ 17 CFR 232.10 et seq.
    \9\ 17 CFR 230.144.
    \10\ 17 CFR 230.485.
    \11\ 17 CFR 230.497.
    \12\ 17 CFR 239.40.
    \13\ 15 U.S.C. 77a et seq.
    \14\ 17 CFR 249.308a.
    \15\ 17 CFR 249.310.
    \16\ 17 CFR 249.220f.
    \17\ 17 CFR 249.240f.
    \18\ 17 CFR 249.306.
    \19\ 15 U.S.C. 78a et seq.
    \20\ 17 CFR 239.15A and 274.11A.
    \21\ 15 U.S.C. 80a.

I. Introduction
II. Background and Economic Baseline
    A. Overview of Existing XBRL Requirements for Operating
Companies and Mutual Funds
    B. Current XBRL Practices
    1. XBRL Preparation
    2. XBRL Data Use
III. Proposed Amendments and Anticipated Economic Effects
    A. Overview of Inline XBRL
    B. Proposed Amendments
    1. Inline XBRL Requirements
    2. Elimination of Web Site Posting Requirement
    3. Termination of the 2005 XBRL Voluntary Program
    4. Proposed Technical Amendments
    5. Request for Comment
    C. Potential Economic Effects of the Proposed Amendments
    1. Benefits
    2. Costs
    3. Compliance Dates
    4. Alternatives
    5. Request for Comment
IV. Paperwork Reduction Act
    A. Background
    B. Reporting and Cost Burden Estimates
    1. Registration Statement and Periodic Reporting
    2. Regulation S-K and Regulation S-T
    C. Request for Comment
V. Initial Regulatory Flexibility Act Analysis
    A. Reasons for, and Objectives of, the Action
    B. Legal Basis
    C. Small Entities Subject to the Proposed Amendments
    D. Projected Reporting, Recordkeeping and Other Compliance
Requirements
    E. Duplicative, Overlapping or Conflicting Federal Rules
    F. Significant Alternatives
    G. General Request for Comment
VI. Small Business Regulatory Enforcement Fairness Act
VII. Statutory Basis and Text of Proposed Rule and Form Amendments

I. Introduction

    In 2009 the Commission adopted rules requiring operating companies
to provide the information from the financial statements accompanying
their registration statements and periodic and current reports in
machine-readable format using eXtensible Business Reporting Language
(XBRL) by submitting it to the Commission in exhibits to such reports
and posting it on their Web sites, if any.\22\ That same year, the
Commission similarly required open-end management investment companies
(``mutual funds'') to provide risk/return summary information from
their prospectuses in XBRL format by submitting it to the Commission in

exhibits and posting it on their Web sites, if any.\23\
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    \22\ 17 CFR 232.405. See also Release No. 33-9002 (Jan. 30,
2009) [74 FR 6776] (``2009 Financial Statement Information Adopting
Release'') as corrected by Release No. 33-9002A (Apr. 1, 2009) [74
FR 15666].
    \23\ See Release No. 33-9006 (Feb. 11, 2009) [74 FR 7747]
(``2009 Risk/Return Summary Adopting Release'') as corrected by
Release No. 33-9006A (May 1, 2009) [74 FR 21255]. The risk/return
summary is set forth in Items 2, 3, and 4 of Form N-1A.
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    XBRL requirements currently apply to operating companies that
prepare their financial statements in accordance with U.S. generally
accepted accounting principles (U.S. GAAP) or in accordance with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).\24\ XBRL requirements
also apply to mutual funds pursuant to Form N-1A and related rules
under Regulation S-T.\25\ Filers subject to these XBRL requirements
must submit an Interactive Data File,\26\ including information tagged
in XBRL, as an exhibit to the Related Official Filing, which is filed
in the traditional HyperText Markup Language (HTML) or, less commonly,
American Standard Code for Information Interchange (ASCII) format.\27\
The 2009 requirements were intended to make financial information and
mutual fund risk/return summaries easier for investors to analyze and
to assist in automating regulatory filings and business information
processing.\28\ Since that time, some commenters have expressed
concerns regarding the quality of, extent of use of, and cost to create
XBRL data,\29\ while other commenters have recognized the benefits of
XBRL data.\30\ In addition, the Commission staff has identified a
number of data quality issues associated with financial statement
information XBRL data filed by operating companies.\31\ The amendments
we are proposing today are intended to address some of these issues and
concerns by facilitating improvements in the quality and usefulness of
XBRL data and, over time, decreasing filing costs by decreasing XBRL
preparation costs.
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    \24\ As used in this release, the phrase ``IFRS as issued by the
IASB'' refers to the authoritative text of IFRS.
    \25\ See General Instruction C.3(g) to Form N-1A; Rule 405 of
Regulation S-T.
    \26\ 17 CFR 232.11; 17 CFR 232.405. The term Interactive Data
File means the machine-readable computer code that presents
information in XBRL electronic format pursuant to Rule 405 of
Regulation S-T. The Interactive Data File currently consists of an
``instance document'' and other documents as described in the
Electronic Data Gathering, Analysis, and Retrieval system (EDGAR)
Filer Manual. The instance document contains the XBRL tags for the
information contained in the corresponding data in the Related
Official Filing to satisfy the content and format requirements in
Rule 405. The other documents in the Interactive Data File contain
contextual information about the XBRL tags.
    \27\ 17 CFR 232.11. The term Related Official Filing means the
ASCII or HTML format part of the official filing with which an
Interactive Data File appears as an exhibit or, in the case of Form
N-1A, the ASCII or HTML format part of the official filing that
contains the information to which an Interactive Data File
corresponds.
    \28\ See 2009 Financial Statement Information Adopting Release,
at 6776; 2009 Risk/Return Summary Adopting Release, at 7748.
    \29\ See notes 70 and 78 below.
    \30\ See note 169 below.
    \31\ See, e.g., Staff Observations of Custom Axis Tags (Mar. 29,
2016), available at http://www.sec.gov/structureddata/reportspubs/osd_assessment_custom-axis-tags.html; Staff Observations of Custom
Tag Rates (Jul. 7, 2014), available at http://www.sec.gov/dera/reportspubs/assessment-custom-tag-rates-xbrl.html (``Staff XBRL
Observations 2014''); Staff Observations from the Review of
Interactive Data Financial Statements (Dec. 13, 2011), available at
http://www.sec.gov/spotlight/xbrl/staff-review-observations-121311.shtml (``Staff XBRL Observations 2011'').
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    The proposed amendments would require financial statement
information and mutual fund risk/return summary information to be
provided in the Inline XBRL format.\32\ Inline XBRL allows filers to
embed XBRL data directly into an HTML document, eliminating the need to
tag a copy of the information in a separate XBRL exhibit. Inline XBRL
would be both human-readable and machine-readable for purposes of
validation, aggregation and analysis. The proposed amendments also
would eliminate the requirement for filers to post Interactive Data
Files on their Web sites.
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    \32\ Inline XBRLTM and iXBRLTM are
trademarks of XBRL International. XBRL[supreg] is a registered
trademark of XBRL International.
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II. Background and Economic Baseline

    The XBRL requirements were adopted in 2009 to provide financial
statement and risk/return summary data in a form that was intended to
improve its usefulness to investors.\33\ Since the XBRL requirements
were adopted, the XBRL technology has continued to evolve.\34\ In
particular, the Inline XBRL format has seen increased use for various
regulatory purposes in several foreign jurisdictions.\35\
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    \33\ The Commission has recently implemented requirements for
the structuring of other types of information using the XBRL format,
including swap-based security data repository financial statements
and credit rating history information maintained by nationally
recognized statistical rating organizations, and proposed
requirements for the structuring of certain compensation
disclosures, including the disclosure of the relationship between
executive compensation and the financial performance of the
registrant and the compensation recovery policies of listed
registrants. See, e.g., Release No. 34-74244 (Feb. 11, 2015) [80 FR
14563]; Release No. 34-72936 (Aug. 27, 2014) [79 FR 55077]; Release
No. 34-74835 (Apr. 29, 2015) [80 FR 26329]; Release No. 33-9861
(Jul. 1, 2015) [80 FR 41143].
    The Commission also has implemented requirements for the
structuring of information in certain forms using XML, including
Form N-CEN (annual report for registered investment companies), Form
N-PORT (monthly schedule of portfolio investments), Form N-MFP
(monthly schedule of portfolio holdings of money market funds), Form
PF (investment advisers to private funds), Form D (Regulation D
offerings), Form 1-A (Regulation A offering statement), and Form C
(securities-based crowdfunding offerings). See Release No. 33-10231
(Oct. 13, 2016) [81 FR 81870], Release No. IC-29132 (Feb. 23, 2010)
[75 FR 10059]; Release No. IA-3308 (Oct. 31, 2011) [76 FR 71127];
Release No. 33-8891 (Feb. 6, 2008) [73 FR 10591]; Release No. 33-
9974 (Oct. 30, 2015) [80 FR 71387]; Release No. 33-9741 (Mar. 25,
2015) [80 FR 21805].
    \34\ The XBRL preparation industry has gained significant
technological expertise and efficiency. See, e.g., William Sinnett,
SEC reporting and the impact of XBRL: 2013 survey, Financial
Executives Research Foundation (Nov. 15, 2013) (``FERF Study'');
Research shows XBRL filing costs lower than expected, American
Institute of CPAs, available at http://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/XBRL/DownloadableDocuments/XBRL%20Costs%20for%20Small%20Companies.pdf (retrieved Aug. 30, 2016)
(``AICPA Study''). See also Section II.B.1 below.
    \35\ Inline XBRL has been adopted in several foreign
jurisdictions and proposed for required use in another. It has also
gained support among several XBRL preparation software vendors in
the U.S. See notes 94 and 95 below. Separately, the EDGAR system has
been modified to accept voluntary Inline XBRL submissions. See note
58 below and accompanying text.
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    In assessing the potential impact of the proposed amendments, we
consider as a point of reference the interactive data requirements and
XBRL practices as they exist today. This economic baseline includes the
current XBRL requirements, information about filers subject to these
requirements and current practices related to XBRL filing and use.

A. Overview of Existing XBRL Requirements for Operating Companies and
Mutual Funds

    Structured information is currently required to be submitted in an
Interactive Data File exhibit to certain forms. These forms are
prepared in either HTML or ASCII \36\ electronic formats.\37\ The XBRL
requirements for the required information are located in the
Interactive Data File provisions of

Regulation S-K,\38\ Forms F-10,\39\ 20-F,\40\ 40-F,\41\ 6-K \42\ and N-
1A,\43\ Rule 405 of Regulation S-T, and the EDGAR \44\ Filer Manual.
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    \36\ Based on staff review of Form 10-K filings filed during
calendar year 2015, fewer than 1% were filed in the ASCII format.
The majority of those were filed by smaller reporting companies and
non-accelerated filers. Based on staff review of data on Rule 485(b)
and Rule 497 filings filed during calendar year 2015, approximately
15% were filed in the ASCII format.
    \37\ In a companion release we are issuing today, the Commission
is adopting amendments to eliminate the ASCII format for
registration statements and periodic and current reports that are
subject to the exhibit requirements under Item 601 of Regulation S-K
and for Forms F-10 and 20-F. See Release No. 33-10322 (Mar. 1, 2017)
(``Hyperlinks Adopting Release''). The amendments were proposed in
2016. See Release No. 33-10201 (Aug. 31, 2016) [81 FR 62689]
(``Hyperlinks Proposing Release'').
    \38\ See Item 601(b)(101) of Regulation S-K [17 CFR
229.601(b)(101)].
    \39\ See Paragraph (101) of Part II--Information Not Required to
be Delivered to Offerees or Purchasers of Form F-10.
    \40\ See Paragraph 101 of the Instructions as to Exhibits of
Form 20-F.
    \41\ See Paragraph B.(15) of the General Instructions to Form
40-F.
    \42\ See Paragraph C.(6) of the General Instructions to Form 6-
K.
    \43\ See General Instruction C.3(g) to Form N-1A.
    \44\ EDGAR performs automated collection, validation, indexing,
acceptance, and forwarding of submissions by companies and others
who are required to file forms with the Commission. See http://www.sec.gov/edgar/aboutedgar.htm.
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    Operating companies are required to submit financial statements and
any applicable financial statement schedules in XBRL as exhibits to
certain Exchange Act reports and Securities Act registration
statements.\45\ In general, operating companies that prepare their
financial statements in accordance with U.S. GAAP or in accordance with
IFRS as issued by the IASB must submit their financial statements to
the Commission in XBRL. Filers that are required to provide information
in XBRL must use the taxonomies specified on the Commission's Web
site.\46\
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    \45\ Financial statements in XBRL are required as exhibits to
Exchange Act reports on Forms 10-Q, 10-K, 20-F, 40-F and, in some
cases, 8-K and 6-K. Item 601(b)(101) of Regulation S-K requires an
Interactive Data File to be submitted with a Form 8-K only when the
Form 8-K contains audited annual financial statements that
previously were filed with the Commission but have been revised
pursuant to applicable accounting standards to reflect the effects
of certain subsequent events, including a discontinued operation, a
change in reportable segments or a change in accounting principle.
Item 601(b)(101) further specifies that, in such case, the
Interactive Data File is required only as to such revised financial
statements regardless of whether the Form 8-K contains other
financial statements. Paragraph C.(6) of the General Instructions to
Form 6-K requires an Interactive Data File to be submitted with a
Form 6-K only when the Form 6-K contains either of the following:
audited annual financial statements that are a revised version of
financial statements that previously were filed with the Commission
that have been revised pursuant to applicable accounting standards
to reflect the effects of certain subsequent events, including a
discontinued operation, a change in reportable segments or a change
in accounting principle; or current interim financial statements
included pursuant to the nine-month updating requirement of Item
8.A.5 of Form 20-F. Paragraph C.(6) further specifies that, in
either such case, the Interactive Data File would be required only
as to such revised financial statements or current interim financial
statements regardless of whether the Form 6-K contains other
financial statements. Financial statements in XBRL also are required
as exhibits to Securities Act registration statements that contain
financial statements, such as Form S-1 (except registration
statements filed in connection with an initial public offering).
Securities Act registration statements that do not contain financial
statements, such as a Form S-3 or other form filed by an issuer that
incorporates by reference all required financial statement
information from its periodic reports, and Exchange Act registration
statements are not required to include Interactive Data Files. See
2009 Financial Statement Information Adopting Release.
    \46\ See Rule 405(c)(1) of Regulation S-T.
     On March 1, 2017, in a companion release, the Commission issued
a notice that, for the first time, an IFRS taxonomy had been
specified on its Web site for use by foreign private issuers (FPIs)
to submit their financial statement information to the Commission in
XBRL. See Release No. 33-10320 (Mar. 1, 2017).
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    Mutual funds are required to submit risk/return summary information
in XBRL as exhibits to registration statements and to prospectuses with
risk/return summary information that varies from the registration
statement.\47\ In addition, mutual funds, as well as other investment
companies registered under the Investment Company Act, business
development companies (``BDCs''),\48\ and other entities that report
under the Exchange Act and prepare their financial statements in
accordance with Article 6 of Regulation S-X \49\ are currently allowed
to participate in the Commission's Interactive Data Voluntary Program
(the ``2005 XBRL Voluntary Program'') with respect to financial
statement information.\50\
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    \47\ See General Instruction C.3(g) to Form N-1A.
    \48\ Business development companies are a category of closed-end
investment companies that are not required to register under the
Investment Company Act. See Section 2(a)(48) of the Investment
Company Act [15 U.S.C. 80a-2(a)(48)].
    \49\ 17 CFR 210.6-01 et seq.
    \50\ See Rule 401 of Regulation S-T. In 2005, the Commission
began to allow public companies, and later mutual funds, to
voluntarily submit XBRL-formatted files as exhibits to periodic
reports and Investment Company Act filings. See Release No. 33-8529
(Feb. 3, 2005) [70 FR 6556]; Release No. 33-8823 (Jul. 11, 2007) [72
FR 39289]. As a result of rule amendments adopted by the Commission
in 2009, the 2005 XBRL Voluntary Program is now only open for
participation by investment companies and entities that prepare
their financial statements in accordance with Article 6 of
Regulation S-X. See 2009 Financial Statement Information Adopting
Release and 2009 Risk/Return Summary Adopting Release.
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    An operating company generally must submit the Interactive Data
File as an exhibit to the Related Official Filing to which it
relates.\51\ Mutual funds are required to submit the Interactive Data
File within 15 business days after (1) the effective date of the
registration statement or post-effective amendment that contains the
related information,\52\ or (2) the filing of a form of prospectus made
pursuant to paragraph (c) or (e) of Rule 497.\53\ Operating companies
and mutual funds may delay submission and posting to the extent
provided under a hardship exemption.\54\
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    \51\ See Rule 405(a) of Regulation S-T.
    \52\ See General Instruction C.3g(i), (iv) to Form N-1A.
    \53\ See General Instruction C.3g(ii), (iv) to Form N-1A.
    \54\ An operating company may delay the submission and posting
of the Interactive Data File to the extent provided under a
temporary or a continuing hardship exemption. See Rules 201 and 202
of Regulation S-T. A mutual fund filer may delay the submission and
posting of the Interactive Data File to the extent provided under a
continuing hardship exemption. See Rule 202 of Regulation S-T.
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    For both operating companies and mutual funds, the Interactive Data
File submitted to the Commission also must be posted on the filer's Web
site, if any, on the earlier of the calendar day that the filer
submitted or was required to submit it.\55\ Operating companies must
keep the Interactive Data File posted for at least 12 months.\56\ For
mutual funds, the Interactive Data File is required to be posted on the
fund's Web site for as long as the registration statement or post-
effective amendment to which the Interactive Data File relates remains
current.\57\
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    \55\ See Rule 405(g).
    \56\ Id.
    \57\ See Rule 405(g) and General Instruction C.3(g)(iii) to Form
N-1A.
    If a mutual fund does not submit or post interactive data as
required, its ability to file post-effective amendments to its
registration statement under Rule 485(b) under the Securities Act is
automatically suspended until it submits and posts the interactive
data as required. See Rule 485(c) under the Securities Act. The
Interactive Data File also must be submitted in such a manner that
will permit the information for each series and, for any information
that does not relate to all of the classes in a filing, each class
of the mutual fund to be separately identified. See General
Instruction C.3(g)(iv) to Form N-1A.
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    On June 13, 2016, the Commission issued an exemptive order under
the Exchange Act to permit operating companies that comply with certain
conditions listed in the order to file structured financial statement
data required in their periodic and current reports using Inline XBRL
through March 2020.\58\ When it issued the order, the Commission stated
that permitting companies to use Inline XBRL on a voluntary, time-
limited basis could facilitate the development of Inline XBRL
preparation and analysis tools, provide investors and companies with
the opportunity to evaluate its usefulness and help inform any future
Commission rulemaking in this area. As of February 27, 2017, the
Commission

has received 55 Inline XBRL filings by 35 filers.
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    \58\ See Order Granting Limited and Conditional Exemption under
Section 36(a) of the Securities Exchange Act of 1934 from Compliance
with Interactive Data File Exhibit Requirement in Forms 6-K, 8-K,
10-Q, 10-K, 20-F and 40-F to Facilitate Inline Filing of Tagged
Financial Data, Release No. 34-78041 (Jun. 13, 2016) [81 FR 39741]
(``Exemptive Order''). The Exemptive Order does not exempt voluntary
filers from the Web site posting requirement.
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B. Current XBRL Practices

1. XBRL Preparation
    XBRL preparation to comply with financial statement information and
risk/return summary XBRL requirements affects operating company and
mutual fund filers. There were approximately 9,200 filers of annual and
quarterly reports (Forms 10-K, 10-Q, 20-F and 40-F), including
amendments, during calendar year 2015.\59\ As of December 2015, there
were approximately 11,106 mutual funds that are registered on Form N-
1A.\60\
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    \59\ Based on staff analysis of EDGAR filings. Some filers,
including investment companies, asset-backed issuers, and filers who
have received a hardship exemption, are not subject to financial
statement information interactive data requirements. Interactive
data requirements for operating companies also pertain to certain
registration statements, as well as certain filings on Forms 8-K and
6-K containing specified financial statements. See note 45 above.
    \60\ Based on data obtained from the Investment Company
Institute (``ICI'') and reports filed by registrants on Form N-SAR.
See ICI, 2016 Investment Company Fact Book (56th ed., 2016), at 22,
available at http://www.ici.org/pdf/2016_factbook.pdf (retrieved
Aug. 30, 2016). This count of 11,106 ``mutual funds'' includes 9,520
traditional open-end mutual funds (including funds of funds and
money market funds) and 1,586 exchange-traded funds (``ETFs'')
registered as open-end investment companies. Unit investment trusts
(``UITs'') (including ETFs registered as UITs) and closed-end funds
are not subject to the proposed amendments and are therefore
excluded from this count.
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    Structured disclosure facilitates the analysis of information by
investors, their financial advisors, professional analysts and the
Commission and its staff. Structured disclosures include both numeric
and narrative-based disclosures that are made machine-readable by
having reported disclosure items labeled (tagged) using a markup
language, such as XBRL, that can be processed by software for analysis.
Structured information can be stored, shared and presented in different
systems or platforms. Standardized markup languages, such as XBRL, use
sets of data element tags for each required reporting element, referred
to as taxonomies. Taxonomies provide common definitions that represent
agreed-upon information or reporting standards, such as U.S. GAAP for
accounting-based disclosures and, in the case of mutual funds, the
risk/return summary information. The resulting standardization allows
for aggregation, comparison and large-scale statistical analysis of
reported information through significantly more automated means than is
possible with HTML. All filers must assign appropriate tags to their
reported disclosures based on the taxonomy of the required disclosures
as part of the process to create their Interactive Data File.
    Currently, filers can prepare their Interactive Data Files to
comply with the existing XBRL requirements in several ways. Filers may
either tag required disclosures in-house or use an outside service
provider. Based on data in a 2013 study, the staff estimates that
approximately 63% of operating company filers outsourced at least some
part of XBRL preparation for their most recent annual filing, with the
remainder preparing XBRL in-house.\61\ From the process standpoint, the
tagging of required disclosures may involve either standalone or
integrated XBRL preparation software. With the standalone approach,\62\
filers or filing agents use information initially prepared in word
processing software to create a filing document in the traditional HTML
or ASCII format. Filers or filing agents then create an XBRL exhibit by
copying the information from the filing document and tagging it in
XBRL, which requires them to expend incremental resources to create and
tag a copy of the data and verify the consistency of tagged data across
documents.\63\ With the integrated approach, XBRL tagging of required
disclosures is a part of the disclosure management process, and
integrated disclosure management software \64\ is used to generate both
the HTML filing and the XBRL exhibit. According to the same study, 71%
of operating company filers relied on integrated disclosure management
software, as opposed to a standalone XBRL preparation solution.\65\ The
integrated approach also is prevalent among mutual fund filers. During
2015 and the first half of 2016, at least 80% of mutual fund risk/
return summary XBRL submissions were created using integrated
solutions.\66\
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    \61\ See FERF Study, at 15.
    \62\ See FERF Study, at 6. Standalone XBRL software typically
creates XBRL filings using financial statements and footnotes which
have been prepared using other software.
    \63\ As noted by some industry observers, the creation of two
documents that contain the same financial statement information may
be unnecessarily costly and/or inefficient. See note 155 below.
    \64\ Disclosure management software typically integrates
document drafting and XBRL tagging. It may also integrate conversion
into the HTML format compatible with EDGAR and direct filing of both
traditional and XBRL reports with the Commission. See FERF Study, at
6.
    \65\ See FERF Study, at 6.
    \66\ Based on indications of the vendor software used to produce
the EDGAR filing attachments, when available.
---------------------------------------------------------------------------

    When filers submit XBRL exhibits during EDGAR filing, the XBRL
exhibits are validated and rendered before the attachments are
accepted. During EDGAR filing, EDGAR validates XBRL documents that make
up an Interactive Data File, producing error and warning messages when
issues with the XBRL data are identified, and ``renders'' or creates a
human-readable version of XBRL data that can be viewed on the EDGAR Web
site.\67\ Thus, EDGAR Web site users can view the information in HTML
format or they can view a rendered version of the tagged information
submitted in the XBRL exhibit by clicking on the ``Interactive Data''
button next to the relevant filing on EDGAR.
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    \67\ See also http://www.sec.gov/structureddata/edgarvalandrender.
---------------------------------------------------------------------------

    In 2009 the Commission estimated the expected direct cost of
compliance with XBRL requirements by operating companies.\68\ After the
adoption of the XBRL rules, several studies and commenters have also
provided estimates of the cost of compliance with XBRL
requirements.\69\ While some

observers have expressed concern about the costs associated with XBRL
requirements generally, particularly for smaller filers,\70\ other
observers have disagreed with the claim that the XBRL requirements
impose high costs and emphasized the decrease in costs over time as
filers and filing agents have gained experience and widely adopted the
XBRL technology, the variety of filing agents that assist with XBRL
preparation, and the potential benefits associated with better
availability of information about smaller companies from the standpoint
of access to capital.\71\ According to a 2013 survey, the median filer
required 25 hours for the preparation and 15 hours for the review of
XBRL and between $8,000 and $10,000 for the services of outside
professionals for its most recent annual filing.\72\ According to
another survey, the median small filer paid $10,000 or less on an
annual basis for fully outsourced creation and filing of its XBRL
exhibits.\73\
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    \68\ See 2009 Financial Statement Information Adopting Release,
at 6804 (estimating direct costs of preparing and submitting
interactive data-formatted financial statements, excluding the cost
of Web site posting, at $39,510-$81,220 ($12,450-$20,340) for the
first submission (each subsequent submission) with block-text
footnotes and schedules and $29,700-$59,150 ($20,075-$36,940) for
the first submission (each subsequent submission) with detailed
tagging of footnotes and schedules, and the cost of Web site posting
at $1,000 per year).
    \69\ See FERF Study, at 17 and 19 (estimating the cost of
outside services to prepare and review the most recent annual XBRL
filing as approximately $21,000 ($10,000) for the average (median)
large accelerated filer, $15,000 ($10,000) for the average (median)
accelerated filer, $19,000 ($10,000) for the average (median) non-
accelerated filer, and $10,000 ($2,000) for the average (median)
smaller reporting company and estimating the number of hours to
prepare and review XBRL reports as 49 (32) preparation hours and 16
(28) review hours for the average (median) large accelerated filer,
42 (20) preparation hours and 10 (23) review hours for the average
(median) accelerated filer, 44 (24) preparation hours and 16 (22)
review hours for the average (median) non-accelerated filer, and 23
(24) preparation hours and 8 (11) review hours for the average
(median) smaller reporting company filer).
    See also AICPA Study. XBRL US and the AICPA surveyed 14 XBRL
filing agents providing XBRL tagging and filing services to 1,299
small public companies (32% of small publicly listed companies).
According to this survey, 69% of small public companies, defined for
purposes of the survey as having up to $75 million in market
capitalization, paid $10,000 or less on an annual basis for fully
outsourced creation and filing of their XBRL exhibits; 18% had
annual costs of between $10,000 and $20,000 for full-service
outsourced solutions; and 8% paid more than $25,000 per year. Higher
fees tended to be associated with complexities in financial
statements and with rush charges imposed in the event of last-minute
changes to the filings. The exact time frame of the survey is not
specified.
    See also Letter from Data Transparency Coalition (Oct. 29,
2015), available at http://www.sec.gov/comments/disclosure-effectiveness/disclosureeffectiveness-55.pdf (``Data Coalition
Letter 1'') (estimating a median small filer's costs of XBRL
compliance to be $8,000 based on the AICPA Study); Letter from
Committee on Securities Law of the Business Law Section of the
Maryland State Bar Association (Jul. 21, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-257.pdf (``Maryland State Bar
Letter'') (citing one registrant's cost of XBRL exhibits for fiscal
year 2014 as $27,000).
    \70\ See FERF Study, at 1 (finding, in a 2013 survey of
executives and SEC reporting professionals from 442 unique
companies, including members of FEI and other reporting companies,
that ``the cost/benefit proposition of the XBRL mandate'' was among
companies' top concerns about XBRL compliance). See also Letter from
the ABA Business Law Section (Feb. 15, 2016), available at http://www.sec.gov/comments/disclosure-effectiveness/disclosureeffectiveness-69.pdf (``ABA Letter''); Advisory Committee
on Small and Emerging Companies (ACSEC) Recommendations Regarding
Disclosure and Other Requirements for Smaller Public Companies (Mar.
21, 2013), available at http://www.sec.gov/info/smallbus/acsec/acsec-recommendation-032113-smaller-public-co-ltr.pdf (``ACSEC
Recommendations 2013'') (recommending that ``the Commission revise
its rules to provide an exemption for smaller reporting companies
from the requirement to submit financial information in XBRL format
for periodic reports and other public filings'' in light of the
disproportionate cost and time burden that compliance with financial
statement information XBRL requirements imposes on smaller filers);
ACSEC Recommendations about Expanding Simplified Disclosure for
Smaller Issuers (Sep. 23, 2015), available at http://www.sec.gov/info/smallbus/acsec/acsec-recommendations-expanding-simplified-disclosure-for-smaller-issuers.pdf (``ACSEC Recommendations 2015'')
(recommending that ``the Commission exempt smaller reporting
companies from XBRL tagging''); Recommendations of the Investor
Advisory Committee Regarding the SEC and the Need for the Cost
Effective Retrieval of Information by Investors (Jul. 25, 2013),
available at http://www.sec.gov/spotlight/investor-advisory-committee-2012/data-tagging-resolution-72513.pdf (``IAC
Recommendations'') (recommending that ``the SEC take steps designed
to reduce the costs of providing tagged data, particularly for
smaller issuers and investors''); Letter from Center for Capital
Markets Competitiveness (Jul. 20, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-173.pdf (recommending that
smaller reporting companies be exempted from XBRL tagging); Maryland
State Bar Letter (stating that XBRL imposes a burden on small
registrants); Letter from Prologis (Jul. 21,2016), available at
http://www.sec.gov/comments/s7-06-16/s70616-303.pdf (stating that
XBRL preparation imposes an internal time burden of approximately
one week per quarter in addition to the cost of services of an
outside firm).
    \71\ See AICPA Study; Data Coalition Letter 1. See also Trevor
S. Harris and Suzanne Morsfield, ``An Evaluation of the Current
State and Future of XBRL and Interactive Data for Investors and
Analysts''--``White Paper Number Three,'' Columbia Business School
Center for Excellence in Accounting and Security Analysis (December
2012), available at http://www4.gsb.columbia.edu/filemgr?&file_id=7313146 (``Columbia White Paper''), footnote 34
(finding that, based on FEI's FERF survey data for 2011 and 2012,
XBRL implementation was either not as costly as anticipated, or had
become significantly less costly over time for most filers). See
also Mohini Singh and Sandra Peters (2016) Data and Technology:
Transforming the Financial Information Landscape, CFA Institute,
Codes, Standards and Position Papers, Vol. 2016, Issue 7 (June
2016), available at http://www.cfainstitute.org/learning/products/publications/ccb/Pages/ccb.v2016.n7.1.aspx (``Singh'') (retrieved
Sep. 20, 2016), at 48 (stating that ``SMEs [small and medium-sized
enterprises] should balance the cost of tagging against the cost of
capital'' and that ``XBRL filings make the financial information of
SMEs more accessible to investors and lead to a reduction in the
cost of capital'').
    \72\ See FERF Study, at 18-19.
    \73\ See AICPA Study.
---------------------------------------------------------------------------

    The 2009 Risk/Return Summary Adopting Release estimated the
expected direct cost of compliance with the mutual fund risk/return
summary XBRL requirements.\74\ We have not received comments or further
data that would lead us to update cost estimates for XBRL requirements
pertaining to risk/return summary information.
---------------------------------------------------------------------------

    \74\ See 2009 Risk/Return Summary Adopting Release, at 7769
(estimating direct costs of preparing and submitting interactive
data-formatted risk/return summary information, excluding the cost
of Web site posting, at $23,200 ($3,100) for the first submission
(each subsequent submission) and the cost of Web site posting at
$250).
---------------------------------------------------------------------------

    To facilitate compliance with XBRL requirements, the staff has
taken steps to provide guidance and tools to assist with XBRL
filing.\75\
---------------------------------------------------------------------------

    \75\ See, e.g., Office of Structured Disclosure Staff
Interpretations and FAQs Related to Interactive Data Disclosure,
available at http://www.sec.gov/structureddata/FAQs (``OSD FAQs'').
The Commission also makes available to the public certain tools to
assist with filing. For example, the Previewer can be used by a
filer to see how XBRL submissions would appear on the SEC's Web site
before submission via EDGAR and rendering by the EDGAR Renderer. The
Previewer displays any error and warning messages that EDGAR would
display. See http://www.sec.gov/structureddata/edgarvalandrender.
See also http://www.sec.gov/structureddata/interactive-data-test-suite.
---------------------------------------------------------------------------

2. XBRL Data Use
    There is a wide range of users of XBRL data, including investors,
financial analysts, economic research firms, data aggregators, academic
researchers, and Commission staff. Investors, other market
participants, and other data users access XBRL data in various ways.
XBRL data for individual filings is available on EDGAR and on each
filer's respective Web site. Downloads of XBRL data also are available
from the Commission through Really Simple Syndication (RSS) feeds. The
Commission combines, organizes and posts for bulk download XBRL data
extracted from operating company submissions to facilitate investor
analysis and comparisons of public company information.\76\ A number of
businesses have created open-source software products, which freely
provide XBRL data to investors. Other businesses offer investors
additional analytical software and data feeds for a small license fee.
Data aggregators (i.e., entities that, in general, collect, package and
resell data) have incorporated XBRL data into their products to varying
degrees. Various third-party data providers extract or preview
information contained in XBRL exhibits, offering XBRL analytics tools
or using XBRL data to supplement other reported data based on filer
disclosures.\77\
---------------------------------------------------------------------------

    \76\ See http://www.sec.gov/dera/data/financial-statement-data-sets.html.
    \77\ See, e.g., a discussion of XBRL analytics tools, available
at http://xbrl.us/use/howto/, http://xbrl.us/home/category/productsservices/service/data-aggregation/. See also Mitchell R.
Wenger, Rick Elam, and Kelly L. Williams (2013) A tour of five XBRL
tools, Journal of Accountancy (Apr. 1, 2013), available at http://www.journalofaccountancy.com/issues/2013/apr/20126677.html; Letter
from XBRL US (Nov. 30, 2015), available at http://www.sec.gov/comments/s7-20-15/s72015-29.pdf (``XBRL US Letter 1'') (suggesting
that investment firms often obtain their data through third-party
providers, many of which use the XBRL version of public company
data); Letter from XBRL US (Oct. 6, 2016), available at http://www.sec.gov/comments/s7-15-16/s71516-16.pdf (stating that XBRL
improves productivity by allowing analysts to spend less time on
data collection and enabling deeper analysis); Letter from Data
Coalition (Jul. 21, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-299.pdf (``Data Coalition Letter 2'') (discussing
the availability of tools for XBRL data users). See also note 33.
---------------------------------------------------------------------------

    The Commission staff uses XBRL data to support risk assessment,
rulemaking and enforcement activities. Machine-readable financial
market data, including XBRL-formatted data, enhances the Commission's
rulemaking and market monitoring activities by allowing staff to
efficiently analyze large quantities of information. For example, the
Commission staff uses financial statement information XBRL data in the
Corporate Issuer Risk Assessment (CIRA) program, which provides a
comprehensive overview of the financial reporting environment of filers

and assists the staff in detecting anomalous patterns in financial
statements that may warrant additional inquiry.
    However, some commenters have indicated that XBRL data use has been
limited, in part due to concerns regarding data quality for operating
companies.\78\ Errors may appear in information submitted in XBRL that
affect the quality of the data and its potential use by the public and
the Commission staff. For example, Commission staff has identified
several recurring issues with financial statement information XBRL
data, including errors related to the characterization of a number as
negative when it is positive, incorrect scaling of a number (e.g., in
billions rather than in millions), unnecessary taxonomy extensions
(``custom tags''), incomplete tagging (e.g., a failure to tag numbers
in parentheses) and missing calculations that show relationships
between data (e.g., how subtracting cost of revenue from revenue equals
gross profit).\79\ Staff has provided guidance \80\ to improve the
quality of XBRL data. Some of these data quality issues seem to have
been mitigated over time \81\ while others are recurring.
---------------------------------------------------------------------------

    \78\ See, e.g., Data Coalition Letter 1; Letter from Center for
Capital Markets Competitiveness (Nov. 30, 2015), available at http://www.sec.gov/comments/s7-20-15/s72015-14.pdf; CFA Institute Member
Survey: XBRL (December 2011), available at http://www.cfainstitute.org/ethics/Documents/Research%20Topics%20and%20Positions%20Documents/xbrl_member_survey_report_2011.pdf (retrieved Aug. 30, 2016) (``CFA
Survey'') (finding that, among respondents aware of XBRL, fewer than
20% used information through an XBRL instance document reader/viewer
and fewer than 10% extracted or imported XBRL data directly into
financial analysis models); Columbia White Paper; ACSEC
Recommendations 2013; Final Report of the 2012 SEC Government-
Business Forum on Small Business Capital Formation, available at
http://www.sec.gov/info/smallbus/gbfor31.pdf; Letter from Corporate
Governance Coalition for Investor Value (Jul. 20, 2016), available
at http://www.sec.gov/comments/s7-06-16/s70616-188.pdf; Letter from
Lark Research, Inc. (Jul. 24, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-317.pdf; Letter from Investor
Advisory Committee (Jun. 15, 2016), available at http://www.sec.gov/comments/s7-06-16/s70616-22.pdf (``IAC Letter'') (stating that, as
part of the staff's Disclosure Effectiveness Initiative, the
Commission should take steps to increase the quality of the data
that is filed with the Commission).
    \79\ See note 31 above.
    \80\ See Sample Letter Sent to Public Companies Regarding XBRL
Requirement to Include Calculation Relationships (July 2014),
available at http://www.sec.gov/divisions/corpfin/guidance/xbrl-calculation-0714.htm (``CFO Letter''). See also OSD FAQs.
    \81\ See, e.g., Staff XBRL Observations 2014 (observing a steady
decline in custom tag use by large accelerated filers during the
phase-in period and thereafter, based on an assessment of XBRL
exhibits submitted from 2009 through October 2013). See also Hui Du,
Miklos A. Vasarhelyi, and Xiaochuan Zheng (2013) XBRL mandate:
thousands of filing errors and so what? Journal of Information
Systems, Volume 27, Issue 1, pp. 61-78 (suggesting that filers and
software vendors have learned over time, which resulted in a reduced
rate of XBRL errors); Ariel J. Markelevich, 2016, The quality and
usability of XBRL filings in the US, working paper (Jun. 21, 2016),
available at http://ssrn.com/abstract_id=2798732 (retrieved Aug. 30,
2016) (``Markelevich'') (finding declines in several types of XBRL
errors other than incorrect signs and declines in custom tag rates
during 2012-2015 and also finding a higher incidence of errors among
smaller filers); SEC Filers Decreased Errors by 64 Percent by Using
Data Quality Committee Validation Rules (May 31, 2016), available at
http://xbrl.us/news/dqc-20160531/ (retrieved Aug. 30, 2016)
(analyzing the effects on XBRL data quality of guidance and
validation rules of XBRL US Data Quality Committee that took effect
took effect January 1, 2016 and finding that several types of
errors, including incorrect signs, improper value relationships
between elements, and incorrect dates, declined during the first
quarter of 2016).
---------------------------------------------------------------------------

    Compared to financial statements of operating companies, mutual
fund risk/return summaries have fewer instances in which numeric data
is embedded into text, and data is generally more standardized. As
discussed above,\82\ risk/return summary filers also rely to a
considerable degree on the integrated approach to XBRL preparation.
These factors may suggest that there are fewer data quality issues with
risk/return summary XBRL data. However, we presently lack sufficient
data or other information to assess the quality of risk/return summary
XBRL data.
---------------------------------------------------------------------------

    \82\ See Section II.B.1 above.
---------------------------------------------------------------------------

    While these data quality issues may have multiple potential causes,
we believe that some of these errors may result from the submission of
XBRL tagged information as an exhibit separate from the Related
Official Filing. This requirement creates an additional opportunity for
reporting errors for those companies that first prepare their required
disclosures in the HTML or ASCII format before creating a separate XBRL
exhibit, often via an incremental set of reporting processes and
controls. In particular, tagging information from the Related Official
Filing in a separate XBRL exhibit increases the likelihood of
inconsistently entering the information.\83\ Furthermore, since the
separate XBRL exhibit is subsequently rendered for viewing by readers,
although filers are not required to make the rendered version of XBRL
data look exactly the same as the Related Official Filing,\84\ filers
commonly add unnecessary tags aimed at managing the appearance of the
rendered XBRL data that may contribute to data quality issues.\85\
---------------------------------------------------------------------------

    \83\ See, e.g., XBRL US Letter 1; Letter from XBRL US (Apr. 14,
2016), available at http://www.sec.gov/comments/s7-27-15/s72715-34.pdf (``XBRL US Letter 2''); Letter from XBRL US (Jul. 21, 2016),
available at http://www.sec.gov/comments/s7-06-16/s70616-278.pdf
(``XBRL US Letter 3'') (referencing the translation risk associated
with the preparation of two documents); Data Coalition Letter 2
(stating that Inline XBRL ``reduces the danger that the registrant
will file a correct number in a document but misplace a decimal
point or flip a negative sign in the corresponding structured
data''). See also note 155 below.
    \84\ See Regulation S-T Compliance and Disclosure
Interpretations, Question 130.08 (May 29, 2009), available at http://www.sec.gov/divisions/corpfin/guidance/regs-tinterp.htm (indicating
that an Interactive Data File need not appear identical to the
traditional format financial statements when displayed by a viewer
on the Commission's Web site).
    \85\ See Staff XBRL Observations 2014; Staff XBRL Observations
2011. See also Inline XBRL--saving cost and effort for company
reporting, XBRL UK White Paper, available at http://www.xbrl.org.uk/resources/whitepapers/inlineXBRL-benefits-v1.pdf (retrieved Aug. 30,
2016) (``XBRL White Paper''), at 5; Company reporting in the UK--an
XBRL success story, XBRL UK White Paper, available at http://www.xbrl.org.uk/resources/whitepapers/UKcompanyReporting-XBRL-v1.pdf
(retrieved Aug. 30, 2016) (``XBRL UK Success Story White Paper''),
at 2 and 7.
---------------------------------------------------------------------------

    The 2005 XBRL Voluntary Program for financial statement information
interactive data is currently only available to investment companies
and entities that prepare their financial statements in accordance with
Article 6 of Regulation S-X. Based on an analysis of EDGAR filings, we
estimate that six mutual funds and other permitted participants made
such submissions during calendar years 2008-2010, with no submissions
in 2011-2015.\86\
---------------------------------------------------------------------------

    \86\ Two filers submitted Voluntary Program XBRL exhibits
(EX100) in 2015, but those filings seem to have been made in error.
---------------------------------------------------------------------------

III. Proposed Amendments and Anticipated Economic Effects

A. Overview of Inline XBRL

    In the 2009 Financial Statement Information Adopting Release, the
Commission stated that it ``may consider proposing rules to require a
filing format that integrates HTML with XBRL or eliminate financial
statement reporting in ASCII or HTML format.'' \87\ The 2009 Risk/
Return Summary Adopting Release stated, in the context of the
possibility of embedding interactive data in HTML filings, that it was
necessary to monitor interactive data reporting before attempting
further integration of the interactive data format.\88\ We believe that
current XBRL

embedding technology now is sufficiently developed to propose requiring
its use in Commission filings. In particular, the Inline XBRL
technology \89\ contains a standardized set of requirements for
embedding XBRL data into an HTML version of a filing, which eliminates
the need to copy and tag the required information with XBRL in a
separate exhibit.\90\ The Inline XBRL technology is freely licensed and
made available by XBRL International, a consortium of over 600
organizations representing many aspects of the financial reporting
supply chain community worldwide.\91\
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    \87\ See 2009 Financial Statement Information Adopting Release,
at 6783. When the Commission proposed the XBRL requirements for
financial statement information, it similarly stated that ``we may
consider proposing rules to require a filing format that integrates
ASCII or HTML with XBRL.'' See Release No. 33-8924 (May 30, 2008)
[73 FR 32793], at 32800.
    \88\ See 2009 Risk/Return Summary Adopting Release, at 7755.
When the Commission proposed the XBRL requirements for risk/return
summary information, it similarly stated that ``we may consider
proposing rules to require a filing format that integrates ASCII or
HTML with XBRL.'' See Release No. 33-8929 (Jun. 10, 2008) [73 FR
35441], at 35447.
    \89\ See http://specifications.xbrl.org/spec-group-index-inline-xbrl.html (retrieved Aug. 30, 2016).
    \90\ See http://specifications.xbrl.org/presentation.html
(retrieved Aug. 30, 2016).
    \91\ See http://www.xbrl.org/the-consortium/about/ (retrieved
Aug. 30, 2016).
---------------------------------------------------------------------------

    With Inline XBRL, similar to existing practices, filers or filing
agents would need to tag the required disclosures using the applicable
taxonomy. However, the tagging of information would be performed within
the HTML document instead of a separate XBRL exhibit.\92\ Inline XBRL
also would give the preparer full control over the presentation of
filer disclosures because the XBRL data would be displayed within the
HTML filing in a browser.\93\ Inline XBRL thus yields a single document
that is both human-readable and enables the automated extraction and
analysis of embedded XBRL data by the user's XBRL extraction software.
---------------------------------------------------------------------------

    \92\ See note 159 below.
    \93\ In an Inline XBRL document, data values are nested within
Inline XBRL elements which are themselves nested within HTML or
XHTML elements (``Markup Elements''). The browser ignores the Inline
XBRL elements and displays the data values as though they were
textual content of the Markup Elements, enabling presentation in a
human-readable format. See Inline XBRL Part 0: Primer 1.1, available
at http://www.xbrl.org/WGN/inlineXBRL-part0/WGN-2015-12-09/inlineXBRL-part0-WGN-2015-12-09.html (retrieved Aug. 30, 2016).
---------------------------------------------------------------------------

    The Inline XBRL technology is currently used in several other
jurisdictions for a variety of regulatory purposes and has been
proposed for required use in another.\94\ As a result, some filers that
are subject to Inline XBRL reporting requirements in other countries,
as well as vendors with customers in these same countries, may already
have Inline XBRL capabilities,\95\ although their experience with
Inline XBRL may be based on information unrelated to financial
statements or mutual fund risk/return summaries. We request comment and
input from filing agents, software vendors, investors, other market
participants, and other data users about their current ability to
accommodate Inline XBRL.\96\
---------------------------------------------------------------------------

    \94\ For example, in the United Kingdom, the ``accounts and
computations'' part of a ``Company Tax Return'' must be submitted to
HM Revenue and Customs using Inline XBRL (http://www.gov.uk/government/publications/xbrl-tagging-when-what-and-how-to-tag,
retrieved Aug. 30, 2016). See also XBRL UK Success Story White
Paper. Other examples can be found in regulations permitting or
requiring the use of Inline XBRL in Australia (http://asic.gov.au/about-asic/media-centre/find-a-media-release/2015-releases/15-104mr-asic-introduces-format-for-improved-communication-of-financial-information/, retrieved Aug. 30, 2016); Ireland (http://www.revenue.ie/en/online/ros/ixbrl/index.html, retrieved Aug. 30,
2016); Denmark and Japan (http://www.xbrl.org/the-standard/why/who-else-uses-xbrl/, retrieved Aug. 30, 2016). We note that the specific
disclosure regimes in these countries may differ from that in the
United States.
     According to one commenter, Inline XBRL is used in the UK by
approximately 2 million companies for reporting tax information to
HMRC Tax Service Online. The commenter notes that ``[a]ccording to
the HMRC's former Strategy Architect for the Company Tax online
service, an estimated 90% of filings are at zero cost to the issuer
because most companies (continue to) use packaged tax and accounting
software to which the vendors added inline XBRL production
capability as an alternative to printed output'' while ``[t]he
remaining 10% of companies outsource their inline XBRL conversion to
accounting firms with estimated annual costs ranging from as low as
$135 to as high as $4200.'' See XBRL US Letter 2.
     The European Securities and Markets Authority recently proposed
to require issuers in the European Union to prepare their annual
financial reports containing IFRS financial statements in the Inline
XBRL format using the IFRS taxonomy from January 1, 2020. See ESMA
proposes new digital format for issuers' financial reporting,
available at http://www.esma.europa.eu/press-news/esma-news/esma-proposes-new-digital-format-issuers%E2%80%99-financial-reporting
(retrieved Jan. 31, 2017); ESMA Feedback Statement on the
Consultation Paper on the Regulatory Technical Standard on the
European Single Electronic Format (ESEF), Dec. 21, 2016, available
at http://www.esma.europa.eu/sites/default/files/library/2016-1668_esma_feedback_statement_on_the_rts_on_esef_0.pdf (retrieved
Jan. 31, 2017).
    \95\ In the United States, some XBRL filing agents and software
vendors have stated on their Web sites, in press releases or in user
documentation that they have or will have in the future the
capability to generate Inline XBRL filings.
    \96\ See Section III.B.5 below.
---------------------------------------------------------------------------

B. Proposed Amendments

1. Inline XBRL Requirements
a. Use of Inline XBRL Format
    We propose to require the use of Inline XBRL for operating company
financial information and mutual fund risk/return summaries by amending
the rules that specify certain content and format requirements for the
Interactive Data File. Currently, the requirement to submit and post
information in XBRL applies through the exhibit requirements of Item
601(b)(101) of Regulation S-K \97\ and Forms F-10,\98\ 20-F,\99\ 40-F
\100\ and 6-K \101\ with regard to financial statement information.
Similar requirements for mutual funds to submit and post risk/return
summary information in XBRL apply through the exhibit requirements of
Form N-1A \102\ and Rule 497.\103\ These exhibit requirements specify
when information in the Related Official Filing triggers the
requirement to submit and post an Interactive Data File in the manner
provided by Rule 405 of Regulation S-T.\104\ Rule 405 sets forth the
basic content, format, submission and posting requirements for the
Interactive Data File, such as the requirement to submit the
Interactive Data File as an exhibit to the Related Official
Filing.\105\ Rule 405 also requires that an Interactive Data File be
submitted in accordance with the EDGAR Filer Manual.\106\ The EDGAR
Filer Manual contains additional formatting and submission requirements
for the Interactive Data File.
---------------------------------------------------------------------------

    \97\ The exhibit requirements of Item 601(b)(101) relate to
Forms S-1, S-3, S-4, S-11, F-1, F-3, F-4, 8-K, 10-Q and 10-K.
    \98\ Paragraph (101) of Part II--Information Not Required to be
Delivered to Offerees or Purchasers of Form F-10.
    \99\ Paragraph 101 of the Instructions as to Exhibits of Form
20-F.
    \100\ Paragraph B.(15) of the General Instructions to Form 40-F.
    \101\ Paragraph C.(6) of the General Instructions to Form 6-K.
    \102\ See General Instruction C.3(g) to Form N-1A.
    \103\ See Rule 497(c) and (e).
    \104\ The exhibit provisions that specify when an Interactive
Data File is required for financial information also specify when it
is optional and when it is prohibited.
    \105\ See Rule 405(a)(2) for the exhibit requirement.
    \106\ See Rule 405(a)(3).
---------------------------------------------------------------------------

    The amendments we are proposing today would revise Rule 405 to
require filers to submit the Interactive Data File using Inline XBRL.
The proposed amendments would require filers, on a phased in basis, to
embed a part of the Interactive Data File within an HTML document using
Inline XBRL and to include the rest in an exhibit to that document. The
portion filed as an exhibit to the form would contain contextual
information about the XBRL tags embedded in the filing. The information
as tagged would continue to be required to satisfy all other
requirements of Rule 405, including the technical requirements in the
EDGAR Filer Manual.\107\
---------------------------------------------------------------------------

    \107\ Information presented in multiple locations within the
financial statements must be tagged in all those locations.
---------------------------------------------------------------------------

    We note that Inline XBRL is not compatible with the ASCII format.
Thus, filers that currently prepare the Related Official Filing in the
ASCII format

would need to switch to HTML unless they already have done so to comply
with the amendments adopted in the Hyperlinks Adopting Release. We do
not expect this to affect many filers, as the vast majority currently
file in HTML.\108\ While the filers that use ASCII that would be
affected by the proposal to require HTML are primarily small entities
and may incur a disproportionately greater burden,\109\ we expect the
impact on smaller filers to be partly mitigated by the proposed phase-
in. We further expect that the average costs of switching to HTML would
not be large because the cost of software with built-in HTML features
is minimal. Overall, given the modest costs involved, we do not expect
that the proposed amendments would have significant competitive effects
for filers. We also note the advantages of HTML for the presentation of
information from the standpoint of filers and users. Unlike ASCII
documents, HTML documents can include graphics, varied fonts and other
visual displays that filers use when they create Internet presentations
or material for distribution to shareholders and other investors.\110\
In prior rulemakings, the Commission has noted the possibility of HTML
eventually replacing ASCII.\111\ Furthermore, as discussed above, the
Commission has adopted amendments to eliminate the ASCII format for
registration statements and periodic and current reports that are
subject to the exhibit requirements under Item 601 of Regulation S-K
and for Forms F-10 and 20-F.\112\ These amendments should further
reduce the portion of the cost of operating company ASCII filers
switching to HTML that is incremental to the proposed rule.
---------------------------------------------------------------------------

    \108\ See note 36 above.
    \109\ Some commenters on the Hyperlinks Proposing Release
expressed concern about the cost of switching from ASCII to HTML but
have not provided specific estimates. See, e.g., Letter from
Corporate Governance Coalition for Investor Value (Oct. 27, 2016),
available at http://www.sec.gov/comments/s7-15-16/s71516-34.pdf;
Letter from Center for Capital Markets Competitiveness (Oct. 27,
2016), available at http://www.sec.gov/comments/s7-15-16/s71516-33.pdf.
    \110\ Plain text submissions may not include certain characters
that are not in the standard ASCII character set, such as certain
foreign characters and special characters for currencies, as well as
characters associated with document style and format that may be
introduced by standard word processing software. Submissions must
not exceed 80 characters per line. Additionally, the conversion of
tabular, columnar or footnote material created in standard word
processing software into ASCII may pose formatting challenges and
require some information to be formatted manually. See EDGAR Filer
Manual, Volume II, Section <IP_ADDRESS>, available at http://www.sec.gov/info/edgar/edmanuals.htm. See also http://www.sec.gov/info/edgar/quick-reference/create-ascii-files.pdf.
    \111\ See Release No. 33-7855 (Apr. 24, 2000) [65 FR 24787], at
24789 and Release No. 33-7684 (May 17, 1999) [64 FR 27888], at 27889
(stating that ``we expect that HTML will eventually replace ASCII
for most filings'').
    \112\ See Hyperlinks Adopting Release.
---------------------------------------------------------------------------

b. Timing of Submission of Interactive Data File
    We are not proposing changes to the timing of the submission of the
Interactive Data File for operating company financial statement
information. Operating company filers would continue to be generally
required to submit the Interactive Data File with the filing.\113\
---------------------------------------------------------------------------

    \113\ An operating company may submit its first Interactive Data
File as an amendment to the filing. See Rule 405(a) of Regulation S-
T.
---------------------------------------------------------------------------

    In contrast, for mutual funds, we are proposing changes to the
General Instructions to Form N-1A that would change the timing
requirements for the submission of the Interactive Data File. First, we
are proposing to permit mutual funds to submit Interactive Data Files
concurrently with certain post-effective amendments filed pursuant to
paragraph (b) of Rule 485 under the Securities Act.\114\ Second, we are
proposing to eliminate the current 15 business day filing period
accorded to all mutual fund filings containing risk/return summaries,
including initial registration statements, post-effective amendments,
and forms of prospectuses filed pursuant to paragraphs (c) and (e) of
Rule 497. In the case of initial registration statements and post-
effective amendments, the Interactive Data File would be required to be
submitted no later than the effective date of those filings. In the
case of forms of prospectuses filed pursuant to Rule 497, the
Interactive Data File would be required to be submitted concurrently
with the filing.
---------------------------------------------------------------------------

    \114\ A post-effective amendment filed under Rule 485(b) may
become effective immediately upon filing, or at a later date
designated on the facing sheet of the amendment of generally up to
30 days after the date on which the amendment is filed. A post-
effective amendment may only be filed under Rule 485(b) if it is
filed for one or more specified purposes, including to make non-
material changes to the registration statement.
---------------------------------------------------------------------------

    Currently, an Interactive Data File for a Form N-1A filing, whether
the filing is an initial registration statement or a post-effective
amendment thereto, must be submitted as an amendment to the
registration statement to which the Interactive Data File relates.\115\
That amendment with the Interactive Data File also must be submitted
after the registration statement or post-effective amendment that
contains the related information becomes effective but not later than
15 business days after the effective date of that registration
statement or post-effective amendment.\116\ As we noted in the 2009
Risk/Return Summary Adopting Release, the period of 15 business days
was intended both to provide funds with adequate time to prepare the
exhibit and to make the interactive data available promptly.\117\ We
understand that questions have been raised as to whether this 15
business day filing period remains necessary in light of the
development of, and resulting efficiencies from, integrated solutions
in the XBRL preparation process in use today and the proposed
implementation of Inline XBRL.
---------------------------------------------------------------------------

    \115\ General Instruction C.3(g)(i) to Form N-1A.
    \116\ Id. Filings on Form N-1A, which contain mutual fund
registration statements (or amendments thereto), are often subject
to revision prior to effectiveness. For example, initial
registration statements and post-effective amendments filed under
Rule 485(a) are subject to Commission staff review, and revisions to
the registration statement may be made in connection with the staff
review process.
    \117\ See 2009 Risk/Return Summary Adopting Release, footnote 97
and accompanying and following text. For example, mutual funds may
require additional time after making the related filing to prepare
and file in a subsequent amendment the Interactive Data File due to
the staff comment process or otherwise.
---------------------------------------------------------------------------

    Mutual funds also are required to submit an Interactive Data File
for any form of prospectus filed pursuant to Rule 497(c) or (e) under
the Securities Act that includes information provided in response to
Items 2, 3, or 4 of Form N-1A that varies from the registration
statement.\118\ In the case of those filings, however, mutual funds are
permitted to file the Interactive Data File concurrently with the
filing or up to 15 business days subsequent to the filing.\119\
---------------------------------------------------------------------------

    \118\ See General Instruction C.3(g)(ii) to Form N-1A.
    \119\ Id.
---------------------------------------------------------------------------

    To help facilitate efficiencies in the mutual fund post-effective
amendment filing process, we are proposing to amend the General
Instructions to Form N-1A to permit mutual funds to submit Interactive
Data Files concurrently with post-effective amendments filed pursuant
to paragraphs (b)(1)(i),\120\

(ii),\121\ (v),\122\ or (vii) \123\ of Rule 485 under the Securities
Act.\124\ We are proposing this change in recognition of the fact that,
in our experience, post-effective amendments filed pursuant to these
paragraphs of Rule 485 generally are not subject to further
revision.\125\
---------------------------------------------------------------------------

    \120\ Subparagraph (i) of Rule 485(b)(1) permits a post-
effective amendment filing for the purpose of bringing the financial
statements up to date under Section 10(a)(3) of the Securities Act
or Rules 3-12 or 3-18 of Regulation S-X. 17 CFR 210.3-12 and 210.3-
18.
    \121\ Subparagraph (ii) of Rule 485(b)(1) permits a post-
effective amendment filing for the purpose of complying with an
undertaking to file an amendment containing financial statements,
which may be unaudited, within four to six months after the
effective date of the registrant's registration statement under the
Securities Act.
    \122\ Subparagraph (v) of Rule 485(b)(1) permits a post-
effective amendment filing for the purpose of making any non-
material changes which the registrant deems appropriate.
    \123\ Subparagraph (vii) of Rule 485(b)(1) permits a post-
effective amendment filing for any other purpose which the
Commission shall approve.
    \124\ See proposed General Instruction C.3(g)(i)(B) to Form N-
1A.
    \125\ With the exception of post-effective amendments filed
pursuant to Rule 485(b)(1)(iii), a post-effective amendment filed
under Rule 485(b)(1) may become effective immediately upon filing.
---------------------------------------------------------------------------

    With respect to all filings by mutual funds containing risk/return
summaries (initial registration statements, post-effective amendments,
and forms of prospectuses pursuant to Rule 497), we are proposing to
eliminate the current 15 business day period during which mutual funds
must submit Interactive Data Files. Inline XBRL involves embedding XBRL
data directly into the filing. We believe that most mutual fund risk/
return summary XBRL submissions today are created using integrated
solutions.\126\ Therefore, in order to improve the timeliness of the
availability of risk/return summary XBRL information, we are proposing
that Interactive Date Files be submitted to the Commission as follows:
---------------------------------------------------------------------------

    \126\ See note 66 above and accompanying text (noting that
during 2015 and the first half of 2016, at least 80% of mutual fund
risk/return summary XBRL submissions were created using integrated
solutions).
---------------------------------------------------------------------------

     For post-effective amendments filed pursuant to paragraphs
(b)(1)(i), (ii), (v), or (vii) of Rule 485, Interactive Data Files must
be filed either concurrently with the filing or in a subsequent
amendment that is filed on or before the date that the post-effective
amendment that contains the related information becomes effective;
\127\
---------------------------------------------------------------------------

    \127\ See proposed General Instruction C.3(g)(i)(B) to Form N-
1A.
---------------------------------------------------------------------------

     For initial registration statements and post-effective
amendments filed other than pursuant to paragraphs (b)(1)(i), (ii),
(v), or (vii) of Rule 485, Interactive Data Files must be filed in a
subsequent amendment filed on or before the date the registration
statement or post-effective amendment that contains the related
information becomes effective; \128\ and
---------------------------------------------------------------------------

    \128\ See proposed General Instruction C.3(g)(i)(A) to Form N-
1A.
---------------------------------------------------------------------------

     For any form of prospectus filed pursuant to Rule 497(c)
or (e), mutual funds would be required to submit the Interactive Data
File concurrently with the filing.\129\
---------------------------------------------------------------------------

    \129\ See proposed General Instruction C.3(g)(ii) to Form N-1A.
---------------------------------------------------------------------------

c. Phase-in of Inline XBRL Requirements
    We propose to phase in the Inline XBRL requirements for operating
companies in annual increments based on the category of filer status.
Large accelerated filers that prepare their financial statements in
accordance with U.S. GAAP would be required to comply with Inline XBRL
requirements for financial statement information in the second year
after the rule is effective, followed by accelerated filers that
prepare their financial statements in accordance with U.S. GAAP in the
third year and all other operating company filers that are required to
submit Interactive Data Files in the fourth year.\130\ This phase-in
approach is broadly consistent with the approach in the 2009 Financial
Statement Information Adopting Release and is intended to ease the cost
of transition for smaller filers and those filers that use IFRS as
issued by the IASB. Given that any fixed cost of initial transition
would disproportionately burden smaller filers, this approach would
give such filers time to develop related expertise, as well as the
opportunity to benefit from the experience of larger filers with Inline
XBRL. The proposed phase-in might also provide filing agents and
software vendors whose main customers are smaller filers with
additional time to adopt the Inline XBRL technology and develop related
expertise. Filers would be permitted to file using Inline XBRL prior to
the compliance date for each category of filers; otherwise, prior to
the applicable compliance date, filers that do not file using Inline
XBRL would continue to be required to submit the entire Interactive
Data File as an exhibit, as they do currently.\131\
---------------------------------------------------------------------------

    \130\ See proposed Rule 405(f)(1)(i).
    \131\ See proposed Rule 405(f)(2).
---------------------------------------------------------------------------

    Similarly, we propose a phase-in for mutual funds based on net
asset size. Specifically, for larger entities (i.e., mutual funds that
together with other investment companies in the same ``group of related
investment companies'' \132\ have net assets of $1 billion or more as
of the end of the most recent fiscal year) we are proposing a
compliance date of one year after the effective date to comply with the
new reporting requirements. For smaller entities (i.e., mutual funds
that together with other investment companies in the same ``group of
related investment companies'' have net assets of less than $1 billion
as of the end of the most recent fiscal year), we are proposing to
provide for an additional year to comply with the new reporting
requirements.\133\ Mutual funds would be permitted to file using Inline
XBRL prior to the compliance date for each category of filers;
otherwise, prior to their applicable compliance date, filers that do
not file using Inline XBRL would continue to be required to submit
their Interactive Data File as an exhibit to their filing, as they do
currently and under the current timing requirements.
---------------------------------------------------------------------------

    \132\ For these purposes, we expect that the threshold would be
based on the definition of a ``group of related investment
companies,'' as such term is defined in Rule 0-10 under the
Investment Company Act. Rule 0-10 defines the term as applied to
management investment companies as two or more management companies
(including series thereof) that: (i) Hold themselves out to
investors as related companies for purposes of investment and
investor services; and (ii) either: (A) Have a common investment
adviser or have investment advisers that are affiliated persons of
each other; or (B) have a common administrator. 17 CFR 270.0-
10(a)(1). We believe that this broad definition would encompass most
types of fund complexes and therefore is an appropriate definition
for compliance date purposes.
    \133\ When the risk/return summary information XBRL requirements
were adopted on February 11, 2009, all filers had approximately two
years to comply (until January 1, 2011). We do not believe that a
similarly extended period would be necessary for larger filers to
comply with the proposed Inline XBRL requirements due to the
incremental nature of the changes required for the transition to
Inline XBRL compared to the initial introduction of XBRL. However,
we believe that smaller mutual fund filers may on the margin benefit
from the additional time to comply with the Inline XBRL
requirements.
---------------------------------------------------------------------------

d. Categories of Filers Subject to Inline XBRL Requirements
    The proposed Inline XBRL requirements for financial statement
information would apply to all operating company filers, including
smaller reporting companies (SRCs),\134\ emerging growth companies
(EGCs) \135\ and FPIs,\136\ that currently are required to submit
financial statement information in XBRL. Similarly, the proposed Inline
XBRL requirements for risk/return summary information would apply to
all mutual fund filers that currently are required to submit risk/

return summary information in XBRL. At this time, we are not proposing
changes to the categories of filers subject to XBRL requirements or the
scope of information that is subject to XBRL requirements.\137\
---------------------------------------------------------------------------

    \134\ Rule 405 under the Securities Act [17 CFR 230.405], Rule
12b-2 of the Exchange Act [17 CFR 240.12b-2] and Item 10(f) of the
Regulation S-K [17 CFR 229.10(f)].
    \135\ Section 2(a)(19) of the Securities Act [15 U.S.C.
77b(a)(19)] and Section 3(a)(80) of the Exchange Act [15 U.S.C.
78c(a)(80)].
    \136\ Rule 3b-4(c) [17 CFR 240.3b-4(c)].
    \137\ When the Commission adopted the financial statement
information XBRL requirements in 2009, after considering public
comments, the Commission stated that a partial or complete exemption
would detract from the long-term completeness and uniformity of XBRL
financial information and would be inconsistent with the
Commission's goal of making financial information easier for
investors to analyze while assisting in automating regulatory
filings and business information processing. We continue to believe
that to be the case. See note 169 below. We recognize, however, that
some commenters have expressed concerns about the cost of XBRL for
smaller filers. See note 70 above. As part of our recent concept
release on modernizing certain business and financial disclosure
requirements in Regulation S-K, we solicited comment about whether
we should eliminate or reduce any of the XBRL tagging requirements
for SRCs. See Release No. 33-10064 (Apr. 13, 2016) [81 FR 23915]
(``Regulation S-K Concept Release'').
---------------------------------------------------------------------------

    In formulating the current proposals, we considered exempting SRCs
from the Inline XBRL requirements.\138\ As discussed below,\139\ we do
not expect Inline XBRL to significantly affect the overall costs of
compliance with XBRL requirements. We expect that while filers may
incur a small initial transition cost, filers also may realize
reductions in ongoing costs of compliance with XBRL requirements due to
the elimination of the effort associated with the creation of a
separate exhibit. In addition, exempting smaller filers could result in
a reduction of the aggregate data quality benefits, which would affect
the usefulness of the information for investors, analysts, other users
and the Commission.\140\
---------------------------------------------------------------------------

    \138\ The Commission has recently proposed to amend the SRC
definition. Under the proposed amendments, registrants with a public
float of less than $250 million and registrants with a public float
of zero and annual revenues of less than $100 million would qualify
as SRCs. See Release No. 33-10107 (Jun. 27, 2016) [81 FR 43130], at
43134 and 43139.
    \139\ See Section III.C.2 below.
    \140\ See Section III.C.1 below. Inline XBRL may offer greater
benefits to smaller filers since they tend to have more XBRL data
errors. See Markelevich.
---------------------------------------------------------------------------

2. Elimination of Web Site Posting Requirement
    The amendments we are proposing also would eliminate the existing
requirement to post the Interactive Data File on the filer's Web site
for both operating companies and mutual funds.\141\ In the 2009
Financial Statement Information Adopting Release, the Commission stated
that it thought that the Web site availability of the interactive data
would encourage its widespread dissemination, make it easier and faster
for investors to collect information on a particular filer, enable
search engines and other data aggregators to more quickly and cheaply
aggregate the data and make them available to investors and potentially
increase the reliability of data availability to the public.\142\
However, the Commission also noted that this benefit could be limited
since investors seeking to aggregate machine-readable XBRL data across
companies, manually or through an automated process, may find XBRL
exhibits posted on filers' Web sites less useful.\143\
---------------------------------------------------------------------------

    \141\ See Rule 405(g) and General Instruction C.3(g) to Form N-
1A.
    \142\ See 2009 Financial Statement Information Adopting Release,
at 6791-6792. Similarly, in adopting the Web site posting
requirement for risk/return summary information, the Commission
stated that Web site availability of the interactive data would
encourage its widespread dissemination, contributing to lower access
costs for users. See 2009 Risk/Return Summary Adopting Release,
footnote 263.
    \143\ See 2009 Financial Statement Information Adopting Release,
at 6807. See also 2009 Risk/Return Summary Adopting Release,
footnote 263 (``We believe the benefits will stem primarily from the
requirement to submit interactive data to the Commission and the
Commission's disseminating that data.'').
---------------------------------------------------------------------------

    Since the adoption of the Web site posting requirement, industry
commenters have observed very limited use of XBRL data from corporate
Web sites.\144\ Based on our experience, we do not believe that users
of XBRL data generally seek the information directly from filers' Web
sites; rather, they obtain the data from the Commission's EDGAR system
or third-party aggregators. We believe that access to XBRL data for
purposes of aggregation and processing, whether by data aggregators or
individual users, is most efficiently achieved when such machine-
readable data is consistently organized (e.g., with respect to
directory structure) and made available at a single source. We further
believe that, based on our experience since we adopted the Web site
posting requirement in 2009, potential data users can obtain
sufficiently reliable access to XBRL data through EDGAR and do not need
the backup of a Web site posting on a filer's Web site to access the
XBRL data. Thus, we do not expect data users to incur significant costs
from the elimination of the requirement to post the XBRL data on
filers' Web sites. We expect filers to recognize a modest benefit from
the elimination of this requirement, as discussed in greater detail
below.\145\
---------------------------------------------------------------------------

    \144\ See, e.g., Columbia White Paper, at 21 (suggesting that
none of the data users the authors surveyed reported accessing XBRL
files from filers' Web sites).
     We have not received comments or information about the extent
of use by investors of XBRL risk/return summary information on
mutual fund Web sites after the adoption of the risk/return summary
information XBRL requirements. Some of the commenters on the 2008
proposal stated that the Web site posting requirement for risk/
return summary XBRL data was unnecessary. See, e.g., Letter from T.
Rowe Price Associates, Inc. (Aug. 1, 2008), available at http://www.sec.gov/comments/s7-12-08/s71208-15.pdf; Letter from Investment
Company Institute (Aug. 1, 2008), available at http://www.sec.gov/comments/s7-12-08/s71208-13.pdf; Letter from L. A. Schnase (Jul. 25,
2008), available at http://www.sec.gov/comments/s7-12-08/s71208-7.pdf (Schnase Letter). See also 2009 Risk/Return Summary Adopting
Release, at 7755.
    \145\ See Section III.C.1 below.
---------------------------------------------------------------------------

3. Termination of the 2005 XBRL Voluntary Program
    Finally, we propose to terminate the 2005 XBRL Voluntary Program
for financial statement information interactive data.\146\ Subsequent
to the adoption of the interactive data requirements for financial
statement information for operating companies in 2009, the only filers
that remain eligible for the program are registered investment
companies, business development companies, and entities that report
under the Exchange Act and prepare their financial statements in
accordance with Article 6 of Regulation S-X. The 2005 XBRL Voluntary
Program is used very infrequently and thus, we do not believe that its
continued existence would provide significant benefits.
---------------------------------------------------------------------------

    \146\ See Rule 401 of Regulation S-T.
---------------------------------------------------------------------------

4. Proposed Technical Amendments
    We are proposing to make certain technical, conforming changes to
the rules for hardship exemptions, current public information under
Rule 144(c)(1) of the Securities Act and form eligibility, consistent
with the proposed changes in format to the Interactive Data File and
elimination of the Web site posting requirement. We propose to delete
the definition of ``promptly'' from Rule 11 because it was only used in
Rule 406T, which has expired, and references to Forms S-2 and F-2
because the forms have been eliminated.
5. Request for Comment
    We request and encourage any interested person to submit comments
regarding the proposed amendments, specific issues discussed in this
release and other matters that may have an effect on the proposed
amendments. We request comment from the point of view of filers, filing
agents, and software vendors as well as investors, other market
participants, data aggregators, and other data users. With regard to
any comments, we note that such comments are of particular assistance
to us if accompanied by supporting data and analysis of the issues
addressed in those

comments. Commenters are urged to be as specific as possible.
    1. Should operating companies be required to submit financial
statement information using Inline XBRL, as proposed? Why or why not?
    2. Should mutual funds be required to submit risk/return summary
information using Inline XBRL, as proposed? Why or why not? In this
regard, do mutual funds present different issues and considerations
from operating companies? If so, how?
    3. The Inline XBRL Viewer is now freely available as an open source
application.\147\ What future enhancements to the Inline Viewer would
help to improve data quality or facilitate the implementation of Inline
XBRL?
---------------------------------------------------------------------------

    \147\ See http://arelle.org/2016/03/08/edgar-update/ (retrieved
Sep. 20, 2016).
---------------------------------------------------------------------------

    4. Would requiring the submission of information in Inline XBRL
affect the quality and use of XBRL interactive data? If so, in what
way?
    5. Is the Inline XBRL technology sufficiently developed to require
its use in Commission filings?
    6. To what extent can filing agents and software vendors currently
provide filers with the Inline XBRL functionality? For those filing
agents and vendors that cannot currently provide this functionality,
can it be readily developed in the future?
    7. Are vendors likely to develop and make commercially available
software applications or Internet products that would extract and/or
analyze XBRL data from submissions in Inline XBRL?
    8. Should any category of filers that is presently subject to
financial statement information XBRL requirements, such as SRCs or
EGCs, be exempt from the Inline XBRL requirements? Why or why not? If
we were to exempt any such filers from the Inline XBRL requirements,
should they be permitted to voluntarily submit their interactive data
in the Inline XBRL format? What are the costs to investors, other
market participants, and other data users, for instance, due to lower
data quality, associated with exempting such filers from the Inline
XBRL requirements?
    9. Should we adopt a phase-in schedule for the implementation of
Inline XBRL for operating company financial statement information, as
proposed? Why or why not? Would the proposed phase-in schedule for the
submission of financial statement information in Inline XBRL allow
sufficient time for vendors and filers to develop and efficiently apply
the Inline XBRL technology? If not, what schedule would better provide
for this? Are there other factors, besides filer size and accounting
principles used, that we should consider for purposes of a phase-in
schedule for operating companies?
    10. Would the proposed Inline XBRL requirements impose significant
costs on ASCII filers? Why or why not?
    11. In the case of post-effective amendment filings made pursuant
to paragraphs (b)(1)(i), (ii),(v), or (vii) of Rule 485 under the
Securities Act, should we, as proposed, permit mutual funds to submit
interactive data information concurrently with the related filing? Why
or why not? For example, is there a risk that investors may be confused
by interactive data information that is filed before effectiveness of
the related filing? Should we permit concurrent submission with filings
made pursuant to other paragraphs of Rule 485? Conversely, should we
not permit concurrent submission with filings made pursuant to one or
more of paragraphs (b)(1)(i), (ii), (v), or (vii)? Should we also
permit mutual funds to submit interactive data information concurrently
with the related filing in the case of initial registration statements
and post-effective amendments made pursuant to other paragraphs of Rule
485? Why or why not? Should we instead maintain the current requirement
that Interactive Data Files be submitted in a subsequent amendment to
the initial registration statement or any post-effective amendment? Why
or why not?
    12. We are proposing to eliminate the 15 business day filing period
currently accorded to all mutual fund filings containing risk/return
summaries, including initial registration statements, post-effective
amendments, and forms of prospectuses filed pursuant to paragraphs (c)
and (e) of Rule 497. Should we instead maintain some filing period
after the related filing is made? Why or why not? If we maintain a
filing period after the related filing is made, is the current period
of 15 business days an appropriate time period for mutual funds to
submit the interactive data, or should the time period be shorter or
longer (e.g., 1 day, 5 days, 10 days, 20 days, 30 days)? Are there
costs or other burdens that may be incurred by filers if the current 15
business day filing period is eliminated?
    13. We are proposing that for post-effective amendments filed
pursuant to paragraphs (b)(1)(i), (ii), (v), or (vii) of Rule 485,
Interactive Data Files must be submitted either concurrently with the
filing or in a subsequent amendment that is filed on or before the date
that the post-effective amendment that contains the related information
becomes effective. Should we instead require that the Interactive Data
Files be filed concurrently with the filing? Why or why not? Are there
instances in which mutual fund filers would prefer to submit the
Interactive Data File in a subsequent amendment? For example, in post-
effective amendment filings designating a future effective date, would
filers be more likely to submit the Interactive Data File concurrently
with the filing or in a subsequent amendment? Should we extend the
proposed filing requirements described above to filings made pursuant
to other paragraphs of Rule 485? Instead, should different filing
requirements extend to filings made pursuant to one or more of
paragraphs (b)(1)(i), (ii), (v), or (vii)?
    14. Would the proposed phase-in schedule for the submission of
risk/return summary information in Inline XBRL allow sufficient time
for vendors and filers to develop and efficiently apply the Inline XBRL
technology? Is a threshold of $1 billion based on the net assets of
mutual funds together with other investment companies in the same
``group of related investment companies'' as of the end of the most
recent fiscal year appropriate? Should the threshold include
aggregation of net assets with other investment companies in the same
``group of related investment companies''? Why or why not? In lieu of
``group of related investment companies,'' should aggregation be based
on a different set of related companies? For example, should aggregate
assets be based on ``family of investment companies,'' as such term
defined in instruction 1(a) to Item 17 of Form N-1A or ``fund complex''
as defined in instruction 1(b) to Item 17 of Form N-1A? Should we
require administrator-sponsored funds to aggregate assets for purposes
of this threshold regardless of whether the individual funds (or series
thereof) do not hold themselves out to investors as related companies
for purposes of investment and investor services? Why or why not?
    15. Does the proposed phase-in schedule provide sufficient time for
compliance for larger mutual fund filers? If not, what length of time
would be appropriate for compliance? Is our 12-month extension of the
compliance period for smaller entities appropriate? If not, what length
of time would be appropriate for the extension of the compliance period
for smaller entities?
    16. To what extent do investors and other users of risk/return
summary information find tagged risk/return summary information useful
for analytical purposes? Is tagged risk/return summary information that
is

narrative, rather than numerical, useful as an analytical tool?
    17. Are any other amendments necessary or appropriate to require
the submission of financial statement and risk/return summary
information in Inline XBRL? If so, what are they?
    18. Should we eliminate the requirement to post financial statement
information in XBRL on corporate filer Web sites, as proposed? Would
operating company filers benefit from the elimination of the XBRL Web
site posting requirement? To what extent do operating company investors
access financial statement information XBRL data on filer Web sites?
Would eliminating the requirement impede their efforts to access the
information? Why or why not?
    19. Should we eliminate the XBRL Web site posting requirement for
risk/return summary information, as proposed? Would mutual fund filers
benefit from the elimination of the XBRL Web site posting requirement?
To what extent do mutual fund investors access risk/return summary XBRL
data on mutual fund Web sites? Please provide any related data. Would
eliminating the Web site posting requirement impede mutual fund
investor efforts to access the information? Why or why not?
    20. In what ways might the Commission enhance the access to Inline
XBRL data submitted by filers?
    21. Should the Commission terminate the 2005 XBRL Voluntary
Program, as proposed? Why or why not?
    22. Should the Commission consider rulemaking to require other
types of information to be submitted in the Inline XBRL format? If so,
what other types of information would be suitable for the Inline XBRL
format and why? Are there other means of embedding structured data into
the human-readable format of filings that we should consider?

C. Potential Economic Effects of the Proposed Amendments

    We are mindful of the costs imposed by and the benefits obtained
from our rules. Securities Act Section 2(b),\148\ Exchange Act Section
3(f) \149\ and Investment Company Act Section 2(c) \150\ require us,
when engaging in rulemaking that requires us to consider or determine
whether an action is necessary or appropriate in the public interest,
to consider, in addition to the protection of investors, whether the
action will promote efficiency, competition and capital formation.
Additionally, Exchange Act Section 23(a)(2) requires us, when adopting
rules under the Exchange Act, to consider the impact that any new rule
would have on competition and not to adopt any rule that would impose a
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Exchange Act.\151\
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    \148\ 15 U.S.C. 77b(b).
    \149\ 15 U.S.C. 78c(f).
    \150\ 15 U.S.C. 80a-2(c).
    \151\ 15 U.S.C. 78w(a)(2).
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    The proposed amendments aim to increase the efficiency and lower
the cost of compliance with the existing XBRL requirements applicable
to operating companies and mutual funds through process improvements
associated with Inline XBRL, thereby potentially improving the quality
of XBRL data available to users. The discussion below addresses the
potential economic effects of the proposed amendments, including their
likely costs and benefits as well as the likely effects of the proposed
amendments on efficiency, competition and capital formation, relative
to the economic baseline, which is comprised of XBRL practices in
existence today.\152\
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    \152\ See Section II.B above.
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    At the outset, we note that, where possible, we have attempted to
quantify the costs and benefits expected to result from the proposed
amendments to the XBRL requirements. However, in some cases we have
been unable to quantify the economic effects because we lack the
information necessary to provide a reasonable estimate. For example, it
is difficult to assess the extent to which the transition to Inline
XBRL would result in an initial cost of switching, future savings of
XBRL preparation cost and time or potential decreases in the incidence
of XBRL data errors. Similarly, it is difficult to quantify the extent
to which Inline XBRL would enhance the quality of XBRL data and, if so,
whether it would increase XBRL data use. We encourage commenters to
provide data that may be relevant for quantifying these impacts.
    As operating company filers begin to use Inline XBRL on a voluntary
basis pursuant to our recently issued Exemptive Order,\153\ we expect
to be able to obtain additional information about the effects of Inline
XBRL on the quality of XBRL data submitted by filers as well as any
reduction in preparation time or costs. We encourage such voluntary
filers to provide us information and data from their experiences.
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    \153\ See note 58 above.
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    Voluntary transition to Inline XBRL could accelerate the economic
effects of Inline XBRL and allow filers that are able to file in Inline
XBRL or that rely on service providers that already have or are close
to developing Inline XBRL capability to realize the benefits of Inline
XBRL sooner. The expertise gained by software vendors and filing agents
from a voluntary transition to Inline XBRL may facilitate the
transition to Inline XBRL by subsequent adopters. Filer demand for
Inline XBRL filing under the voluntary program pursuant to the
Exemptive Order may also lead filing agents and software vendors to
accelerate the development of Inline XBRL filing solutions and
accumulate associated expertise, which could potentially lower initial
costs per filer should the proposal for mandatory Inline XBRL filing be
adopted.
1. Benefits
    We believe that filing information with Inline XBRL has the
potential to provide a number of benefits to both filers and users of
this information. In particular, we believe that the use of Inline XBRL
may reduce the time and effort associated with preparing XBRL filings,
simplify the review process for filers, and improve the quality of
structured data and, by improving data quality, increase the use of
XBRL data by investors, other market participants, and other data
users.\154\
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    \154\ See Letter from CFA Institute (Oct. 6, 2016), available at
http://www.sec.gov/comments/s7-06-16/s70616-375.pdf; IAC
Recommendations (recommending consideration of the use of Inline
XBRL to promote standardization and facilitate recovery of data
filed with the Commission); IAC Letter (recommending accelerated
development and implementation of Inline XBRL); Letter from
California State Teachers' Retirement System (Jul. 21, 2016),
available at http://www.sec.gov/comments/s7-06-16/s70616-226.pdf
(stating that the development and implementation of technology such
as Inline XBRL should be accelerated ``to provide needed information
in a format where investors can drill-down and contrast peer
information through robust technology''). See also notes 155 and 162
below.
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    Embedding XBRL data in an HTML document rather than tagging a copy
of the data to create a separate XBRL exhibit should increase the
efficiency and effectiveness of the filing preparation process and, by
saving time and effort spent on the filing process, may, over time,
reduce the cost of compliance with existing XBRL requirements.
Commenters and other sources have noted these potential benefits of
Inline XBRL both in the operating company context \155\ and in

the mutual fund context.\156\ Inline XBRL eliminates the need to create
a separate XBRL instance document, which can reduce the incidence of
those re-keying errors that are associated with the presence of
separate documents.\157\ Inline XBRL also makes it possible for filers
or filing agents to view XBRL meta data \158\ within the HTML document,
which can facilitate the review of XBRL data and better equip filers to
detect XBRL errors. Further, filers or filing agents can use tools like
the open source Inline XBRL Viewer to review the Interactive Data File
and more efficiently filter and identify errors. Thus, by facilitating
the preparation and review of XBRL data, Inline XBRL can decrease the
overall time and cost required by filers to comply with the existing
XBRL requirements.
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    \155\ See XBRL US Letter 1 (stating that ``In-line XBRL would
reduce filing costs for US companies because they would be required
to file only one document--not two . . . [and] would also eliminate
the translation risk companies bear preparing two documents
reporting the same information''); XBRL US Letter 2 (stating that
the current process of submitting both an HTML and XBRL version of
financial statement information results in companies filing
duplicated data and that the burden on reporting entities can be
further reduced by leveraging Inline XBRL technology, which combines
an HTML and an XBRL file into a single document); XBRL US Letter 3
(stating that ``the disclosure process overall will be further
streamlined now that the SEC allows the use of inline XBRL, which
eliminates the need to create duplicate versions of the filing'');
Letter from XBRL US to Members of the U.S. House of Representatives
(Feb. 3, 2016), available at http://xbrl.us/wp-content/uploads/2016/02/XBRL-US-Letter-to-U-S-House-of-Representatives-2-3-16.pdf
(stating that ``[I]nline XBRL will enable companies to streamline
their current process significantly, further reducing the cost of
disclosure . . . and would also improve the efficiency and
effectiveness of the current SEC reporting program''); Data
Coalition Letter 2 (stating that Inline XBRL ``reduces the danger
that the registrant will file a correct number in a document but
misplace a decimal point or flip a negative sign in the
corresponding structured data'' and that Inline XBRL is a
``significant step toward better quality and predictability'');
Letter from Pfizer (Dec. 7, 2015), available at http://www.sec.gov/comments/s7-20-15/s72015-44.pdf (observing that duplication due to
the current requirement that both the HTML and XBRL document be
filed is not beneficial to investors or registrants and recommending
that the Commission avoid imposing certain of the existing machine-
readable filing requirements that result in unnecessary
duplication); ABA Letter (referencing ``unnecessary duplication'' in
the current data tagging framework). See also XBRL White Paper, at 4
(discussing the ease of assessing XBRL tags in an Inline XBRL
document); Kamile Asli Basoglu, Clinton E. (Skip) White, Jr. (2015)
Inline XBRL versus XBRL for SEC Reporting, Journal of Emerging
Technologies in Accounting, Volume 12, Issue 1, pp. 189-199
(discussing the technical advantages of Inline XBRL).
    \156\ While we are not aware of comment letters or data from
other sources specifically addressing Inline XBRL in the context of
mutual fund risk/return summary information after the adoption of
the risk/return summary information XBRL requirements in 2009, we
note that, in the context of the 2008 risk/return summary
information proposal, one commenter stated that ``XBRL tags can be
embedded seamlessly in the body of the official traditional filing--
or the entire filing can be formatted in XBRL--so that funds will
not have to create and bear potential liability for stand-alone
submissions containing only XBRL data taken out of context, or have
to grapple with portions of their information being required in 2 or
3 different formats'' and that many of the added costs of the XBRL
requirement for risk/return summary information ``stem from the fact
that the tagged data will appear in a separately created document,
rather than embedded seamlessly into the traditional Related
Official Filing.'' The commenter also acknowledged that, at the
time, ``there may be technological obstacles to embedded tagging.''
See Schnase Letter. Another commenter stated that ``[w]ith respect
to the integration of XBRL tagging with HTML, this technology has
not yet been fully developed and it would be premature to propose
such.'' See Letter from Data Communiqu[eacute] (Jul. 31, 2008),
available at http://www.sec.gov/comments/s7-12-08/s71208-11.pdf. As
discussed above, we believe that current XBRL embedding technology
now is sufficiently developed to propose requiring its use in
submitting information to the Commission.
    \157\ See Section III.A above.
    \158\ Such meta data include, for example, definitions,
reporting period information, data type and related references.
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    We expect the benefit of savings in ongoing XBRL preparation and
filing costs due to Inline XBRL to be smaller for filers that presently
rely on the integrated XBRL preparation approach, which generally
involves fewer re-keying issues. To the extent that the integrated XBRL
preparation approach is more prevalent among mutual fund filers than
operating companies, such filers may realize smaller benefits. However,
filers that use the integrated XBRL preparation approach may
nonetheless realize incremental time savings and/or efficiencies in the
filing process from Inline XBRL.\159\ Additionally, those filers that
currently choose XBRL tags so that the data looks similar to the HTML
document when rendered by software into a human-readable presentation
would have less of an incentive to do so because Inline XBRL would
embed XBRL tags into the HTML document. This may result in higher-
quality tagged data at a lower cost.
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    \159\ Software vendors and filing agents that currently use the
integrated XBRL preparation approach, combining the processes of
creating interactive data tags and an HTML document, cannot
presently take full advantage of the resulting efficiency because of
current requirements. At present, filing agents and/or filers that
use integrated XBRL solutions must expend the effort, albeit
minimal, to split out the interactive data and save it to a separate
instance document for filing.
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    While we are currently unable to quantify these potential gains in
the effectiveness and efficiency of the filing preparation process and
the resulting reductions in the ongoing cost of compliance with the
XBRL requirements, we believe that the experience of operating company
filers using Inline XBRL under the voluntary program pursuant to the
Exemptive Order may help provide useful information and data that will
help inform any final decision on the proposed rules.\160\ We are also
requesting comment on the anticipated effects of adopting Inline XBRL
on the efficiency of the XBRL filing process.\161\
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    \160\ We recognize that the experience of operating companies
that elect to file in Inline XBRL pursuant to the Exemptive Order
may not be fully representative of all operating company filers or
of mutual fund filers.
    \161\ See Section III.C.5 below.
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    The use of Inline XBRL may also improve XBRL data quality.\162\
When XBRL is embedded directly into the HTML document, the filer
prepares and reviews a single document, rather than separate
documents--as is the case with the current reporting requirement--which
should enable a reduction in data errors, particularly for those filers
that currently use the standalone XBRL preparation approach.\163\
Further, filers or filing agents can use review tools like the open
source Inline XBRL Viewer to more readily filter and identify errors.
To the extent that Inline XBRL technology can reduce the rate of XBRL
errors that are not detected by filers with the current XBRL filing
practices and technology, Inline XBRL could incrementally improve XBRL
data quality and thus potentially benefit data users.\164\
Additionally, since Inline XBRL filers would have less of an incentive
to create custom XBRL tags solely to mimic the appearance of an HTML
filing, Inline XBRL could increase the ability of investors, other
market participants, and other data users to compare information across
filers for those filers that currently

engage in such tagging practices.\165\ Due to greater standardization
of presentation of mutual fund risk/return summary XBRL information, we
do not expect the latter benefit of Inline XBRL to extend to mutual
fund risk/return summaries.
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    \162\ See Columbia White Paper, at 42 and footnote 48 (arguing
that one way to help improve the quality of XBRL data, as well as to
make the data more useful and accessible to users, is ``for issuers
to move to `Inline XBRL' which ensures that XBRL and HTML data are
the same, and which can ease the preparation burden for filers'').
See also IAC Recommendations (suggesting that the use of Inline XBRL
be considered as one of the means to promote standardization and
facilitate recovery of data by investors).
    \163\ See note 83 above.
    \164\ Existing format requirements for Interactive Data Files
include the element accuracy requirement, which provides that each
data element (i.e., all text, line item names, monetary values,
percentages, numbers, dates and other labels) contained in the
Interactive Data File must reflect the same information in the
corresponding data in the Related Official Filing. See Rule
405(c)(1)(i) of Regulation S-T.
    We also note that the incremental effects of Inline XBRL on the
reduction in XBRL errors would be smaller if other initiatives
result in a reduction in XBRL data errors. For example, the XBRL US
Data Quality Committee has published validation rules to help public
companies detect inconsistencies or errors in their XBRL-formatted
financial data, such as incorrect negative values, improper
relationships between elements and incorrect dates associated with
certain data. See http://xbrl.us/data-quality/rules-guidance/. See
also XBRL US Letter 3 (stating that the ``XBRL US Data Quality
Committee is developing a Framework for Element Selection and
Extension Use to help issuers make decisions that will improve the
consistency of reported data''). See also note 80 above.
    \165\ See notes 84, 85 and 93 and accompanying text above.
Inline XBRL filers may still use custom tags to represent certain
company-specific data.
---------------------------------------------------------------------------

    To the extent that Inline XBRL might improve data quality, it may
contribute to wider use of XBRL data by investors, other market
participants, and other data users and may enhance the benefits that
are associated with XBRL more generally for filers that presently
submit interactive data using the XBRL format. In the 2009 Financial
Statement Information Adopting Release, the Commission stated that
requiring filers to submit their financial statement information in
XBRL would enable investors, analysts and the Commission staff to
capture and analyze that information more quickly and at a lower cost;
enable investors and others to search and analyze the financial
information dynamically; and facilitate comparison of financial and
business performance across filers, reporting periods and
industries.\166\ The 2009 Financial Statement Information Adopting
Release also referenced potential gains in the efficiency of capital
formation and allocation, suggesting that, if interactive data, through
increased availability or reduced cost of collecting and analyzing
corporate financial data, were to reduce the information barriers faced
by investors, which make it costly for companies to find appropriate
sources of finance, it would lower the cost of capital and increase the
efficiency of capital formation, particularly for smaller public
companies.\167\ Similarly, in the 2009 Risk/Return Summary Adopting
Release, we noted that requiring mutual funds to file their risk/return
summary information using the interactive data format would enable
investors, third-party information providers and the Commission staff
to capture and analyze that information more quickly and at a lower
cost than is possible using the same information provided in a static
format, facilitate comparisons of mutual fund costs, performance and
other information across classes of securities and across funds and
help investors make more well-informed investment decisions.\168\ Thus,
to the extent that Inline XBRL contributes to an increase in XBRL data
quality and XBRL data use by investors, other market participants, and
other data users, it could potentially increase the informational
efficiency of prices and the efficiency of capital formation and
allocation and potentially decrease the cost of capital.
---------------------------------------------------------------------------

    \166\ See 2009 Financial Statement Information Adopting Release,
at 6777.
    \167\ See 2009 Financial Statement Information Adopting Release,
at 6807-6808.
    \168\ See 2009 Risk/Return Summary Adopting Release, at 7766-
7768.
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    Based on our experience with XBRL so far, we believe that the XBRL
requirements are providing these benefits,\169\ including to smaller
filers. The realization of these benefits of XBRL is conditional on the
quality and use of interactive data. Thus, to the extent that Inline
XBRL results in an improvement in XBRL data quality and in increased
use of XBRL data, we expect that these benefits would be enhanced. We
note, however, that because the proposed Inline XBRL requirements would
not modify the scope and substance of existing XBRL requirements or the
categories of filers subject to the requirements, both the improvement
in data quality due to Inline XBRL and the associated economic benefits
that are incremental to Inline XBRL likely would be smaller than the
benefits of the XBRL requirements more generally. To the extent that
risk/return summary XBRL data might be associated with fewer data
quality issues, the data quality benefits incremental to Inline XBRL
might be smaller for risk/return summary information than for financial
statement information.
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    \169\ For academic research on the benefits of XBRL, see, e.g.,
Yi Dong, Oliver Zhen Li, Yupeng Lin, and Chenkai Ni (2016) Does
information processing cost affect firm-specific information
acquisition? Evidence from XBRL adoption, Journal of Financial and
Quantitative Analysis, Volume 51, Issue 2, pp. 435-462; Chunhui Liu,
Tawei Wang, and Lee J. Yao (2014) XBRL's impact on analyst forecast
behavior: An empirical study, Journal of Accounting and Public
Policy, Volume 33, Issue 1, pp. 69-82; Kosal Ly (2012) Extensible
Business Reporting Language for Financial Reporting (XBRL-FR) and
financial analysts' activity: early evidence, Academy of Accounting
and Financial Studies Journal, Volume 16, Issue 2, pp. 25-44; Yu
Cong, Jia Hao, and Lin Zou (2014) The impact of XBRL reporting on
market efficiency, Journal of Information Systems, Volume 28, Issue
2, pp. 181-207; Lizhong Hao and Mark J. Kohlbeck (2013) The market
impact of mandatory interactive data: Evidence from bank regulatory
XBRL filings, Journal of Emerging Technologies in Accounting, Volume
10, Issue 1, pp. 41-62; Ariel Markelevich, Tracey Riley, and Lewis
Shaw (2015) Towards harmonizing reporting standards and
communication of international financial information: The status and
the role of IFRS and XBRL, Journal of Knowledge Globalization Volume
8, Issue 2; Elizabeth Blankespoor (2012) The impact of investor
information processing costs on firm disclosure choice: evidence
from the XBRL mandate, working paper, available at http://fisher.osu.edu/supplements/10/11702/Job%20Market%20Paper_Blakespoor_12-4-11(2).pdf (retrieved Aug. 30,
2016); Jeff Zeyun Chen, Hyun A. Hong, Jeong-Bon Kim, and Ji Woo Ryou
(2016) Information processing costs and corporate tax
aggressiveness: Evidence from the SEC's XBRL mandate, working paper,
available at http://ssrn.com/abstract_id=2754427 (retrieved Aug. 30,