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.