XBRL for Mutual Funds – To File or Not to File XBRL? That is the Question.

We are 92 days away from the effective date of the XBRL ruling requiring all open-end mutual funds to file the Risk/Return Summary section in XBRL format as an exhibit, as well as publish the XBRL files to the fund’s website (when one exists).

To date, we have received tremendous feedback on our XBRL blog series outlining the different aspects of the mandate. This week, we will continue our Frequently Asked Questions series. In conjunction with the announcement of the Merrill XBRL Complete solution, we are going to delve a little deeper into specifics of the XBRL mandate of which our clients have inquired:

Q: This whole XBRL thing is confusing to me. How do I know when I have to file XBRL or when I don’t? Do supplements need to file?

A: What everyone should know is that after January 1, 2011, any updates to the Risk/Return Summary Prospectus will need to file with the SEC and publish to the fund’s website in XBRL format including the following:

1. The initial effectiveness of any new fund filed as a Pre-Effective Amendment to the N-1A;
2. The annual update of previously effective funds filed as a Post-Effective Amendment to the N-1A, pursuant to Rule 485(b);
3. Definitive materials, after going effective, and filed within five days of effectiveness, pursuant to Rule 497(c);
4. Supplements (stickers) filed throughout the year, pursuant to Rule 497.

XBRL can file simultaneously with the “traditional” EDGAR materials, or within fifteen business days of the filing. Post-EDGAR (within fifteen business days) allows you to catch your breath after meeting your effectiveness compliance deadline before focusing on the XBRL filing.

In addition to the filing XBRL with the SEC, the XBRL files must also be posted to the fund website and must remain accessible for the entire period of effectiveness of the fund – that is until the next annual update.

Q: How will I do this? How can I stay compliant?

A: Maintaining compliance with respect to XBRL will be one part technology, one part process and one part human expertise. This means that selecting a partner for this endeavor will necessitate finding the ideal match that encompasses all of these components. This is why, at Merrill Corporation, we not only developed a XBRL solution based on solid technology and processes, but also the Merrill Compliance Services Team to navigate funds through the compliance waters - from discovery process to "going live."

Our overall message is that the time to prepare is now. Don't be caught off guard. Understand your tagging and publishing needs well in advance to make the proper business decision. Being prepared is the key to a successful transition to XBRL.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds.

For more information, please click here or call 866-367-9110.

XBRL for Mutual Funds: When the requirement hits will I be ready?

To date our blog series on XBRL for Mutual Funds has covered the background of the XBRL mandate requiring all open-end mutual funds to file the Risk/Return Summary section in XBRL format as an exhibit, as well as publishing the XBRL files to the fund’s website when one exists. Additionally, we have also presented a solution created by industry experts to allow for funds to have a smooth transition. 

The third function of this blog series is to address FAQs. At Merrill Corporation, because of our expertise on the subject, we have been working with our clients on both a broad overview and specifics as it relates to XBRL. To assist others that may have similar inquiries, here are responses to a few of the questions we have been asked: 

Q: What does this all mean to me?  
A: All open-end mutual funds will need to file interactive tagged data (XBRL) of their Risk/Return Summary section during the Prospectus’ annual update or any time a change is made through the year that impacts the Risk/Return Summary. 

Q: When do I “go live”?  
A: Based on the fund’s fiscal year end, the requirement could impact you as early as late-January/mid-February 2011. The September 30th funds will be the first impacted. 

Q: When do I need to start preparing?  
A: As of today, there are 101 total days remaining until this ruling goes into effect. Weekends, the upcoming holidays and vacation schedules push that number even lower. Most fund complexes want to have their funds on-boarded at least 30-45 days in advance of the associated EDGAR filings. For those companies who have funds that will file/publish XBRL in January and/or February, they will want to be “ready” by the end of the fall. 

Q: What will I need to do? 
A: Now is the time to review and select an appropriate vendorto manage the tagging, filing and publishing of your funds. Fund complexes holding approximately 18% of the funds on the market have already selected a vendor and are in the process of on-boarding their funds today. On-boarding your funds in advance will not only ensure that your technology is ready to go, but it is also a great opportunity for your teams to learn and put into practice their roles and responsibilities with the process. The end goal should be “no surprises.” 

Our information and ability to answer these questions comes from our research and development of Merrill XBRL Complete, a robust, end-to-end service offering that produces accurate and reliable tagged through a cost effective and efficient process. Additionally, the Merrill Compliance Services Team has the ability to navigate the compliance waters, guiding those in need through the discovery process, on-boarding/implementation, “going live” and periodic updates.  

Our overall message is that the time to prepare is now. Don’t be caught off guard. Understand your tagging and publishing needs well in advance to make the proper business decision. Being prepared is the key to a successful transition to XBRL.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds.

For more information, please click here or call 866-367-9110.

XBRL for Mutual Funds: Are you ready?

For the past several weeks, this blog has been covering some of the key components of XBRL as it pertains to open-end mutual funds, specifically the requirement to translate the Risk/Return Summary section into XBRL format, as well as to publish the XBRL files to a fund’s website, when one exists.

Merrill Corporation announced its answer to the XBRL question last week – XBRL Complete. This solution provides open-end mutual funds with a robust, end-to-end service offering that produces accurate and reliable data in XBRL format through a cost effective and efficient process.

As we know, starting January 1, 2011, all open-end mutual funds are required to file the Risk/Return Summary section in XBRL format as an exhibit. In addition, the XBRL files must be published to the fund’s website, when one exists. The core functions that are needed to meet these requirements include: tagging, filing and publishing.

This is a simple synopsis of the mandate, and while there are also complex elements to the implementation, when choosing a vendor, there are two basic success factors to be considered:

1. Subject matter experts who are familiar with the ruling and its detailed implications.

• Taxonomy? Element? Dimension? Extension? If these words are not in your vernacular, then an XBRL expert who is focused on U.S. mutual funds (not corporate filings or foreign mutual funds) will be a necessary addition to your team.

2. Systematic process for expeditiously and accurately tagging, filing and publishing your data in XBRL format.

• An automated tagging solution ensures that your data is tagged correctly – the 1st time and every time. In addition, classes are handled with ease in a well-designed tagging platform.
• Once your XBRL-tagged data is ready for filing – it flows seamlessly in our filing engine.
• Afterwards, once the XBRL data is accepted by the SEC, our standard publishing option converts the XBRL data into human-readable, HTML-rendered format. Both the XBRL data as well as the HTML version are published to your fund’s website on the same day that it is filed. The HTML view helps your investors understand the content of the XBRL files.
  

Additionally, because the mandate only requires the XBRL files to be published to your website, few of a fund’s investors will be able to harness the true power of XBRL unless they have access to XBRL-enabled software. An enhanced publishing solution uses the XBRL data within a viewer that allows your investors to compare any combination of your funds – side-by-side – in a matter of seconds.

As of the posting of this blog, there are 108 days remaining until the mandate goes into effect. Are you ready? Over the next several weeks, we will continue to answer some of the critical questions regarding the mandate and solutions that demonstrate how ready you need to be.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds.

For more information, please click here or call 866-367-9110.

XBRL Risk / Return Summary Section

As a comparison for what will be required content for the XBRL Risk / Return Summary Section for the XBRL mandate for mutual funds, here is a chart contrasting it to what is required for the Statutory Prospectus Summary Section:

	Statutory Prospectus Summary Section must include:	Risk/Return Summary Section tagging must include:
Investment objectives	X	X
Costs	X	X
Principal investment strategies, risks and performance	X	X
Investment advisers and portfolio managers	X
Purchase, sale and tax information	X
Financial intermediary compensation	X
Performance availability phone number and website address must be included in tagging		X