We are 71 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).
This week, we will continue our discussion of the functional steps of XBRL. As we mentioned last week, there are three (3) functional areas impacted by this ruling – tagging, filing and publishing. This week, we will cover some additional steps within the“tagging” phase.
Once you have completed the “on-boarding” process, your teams should have experienced the technology and process that will be used during ‘live’ production and should be comfortable moving forward. Whether you are tagging the data in-house or using an external vendor, it is important to remember that the accuracy of the data and corresponding tags is still yours. Therefore, you should always review the XBRL-tagged data before filing with the SEC and publishing to your fund’s website.
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| Native XBRL Language |
As an example, software can isolate the tag and then show you the content that will be included within that tag. For example, the SEC’s “alfalfa” example shows the following tags and corresponding data:
(rr_distributionandservice12b1feesoverassets) 0.28%
(rr_otherexpensesoverassets) 0.13%
By using XBRL software to visually align the tags in a separate column from its respective data, this is one of many ways that a system can organize the XBRL-tagged data in such a way that it is easy for you to read, review and provide feedback.
What should also be included in the review of the XBRL-tagged data is the method to capture changes, questions, etc. This method should be constructed in such a way to expedite the review, feedback and approval steps, as opposed to a manual review process – which would include routing a file to the appropriate people who need to review and provide feedback. A systematic, controlled approach with built-in flexibility will ensure a complete and accurate review of the XBRL-tagged data.
What a web-based solution should do is act as a “gatekeeper” for compiling all feedback as well as reconciling the differences and making the appropriate changes.
For example, Sara logs into the system at 7 AM and makes three comments and requests one change. At 9 AM, Tom logs into the system. If he had not seen Sara’s comments, then he would have repeated 2 of Sara’s 3 comments and missed the change. Instead, he reviews her feedback and takes no additional action. In the end, the process serves as its own "gatekeeper" as the technology allows each user to see the feedback of others.
Once your team has reviewed and approved the XBRL data, the next steps are filing and publishing, which we will discuss in the next week’s post.
As we have said previously, maintaining compliance with respect to XBRL will be one part technology, one part process and one part human expertise. This is why, at Merrill Corporation, we have developed not only a XBRL-solution based on solid technology and processes, but also the Merrill Compliance Services Team to navigate funds through the compliance waters, from the discovery process through “going live."
As always, our overall message is that the time to prepare is now. Don’t be caught off guard and start the on-boarding process approximately 30-45 days before the beginning of the year. This will allow you to 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.
Once your team has reviewed and approved the XBRL data, the next steps are filing and publishing, which we will discuss in the next week’s post.
As we have said previously, maintaining compliance with respect to XBRL will be one part technology, one part process and one part human expertise. This is why, at Merrill Corporation, we have developed not only a XBRL-solution based on solid technology and processes, but also the Merrill Compliance Services Team to navigate funds through the compliance waters, from the discovery process through “going live."
As always, our overall message is that the time to prepare is now. Don’t be caught off guard and start the on-boarding process approximately 30-45 days before the beginning of the year. This will allow you to 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.
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