XBRL for Mutual Funds: Are You Ready.....yet

2 1/2 months ago, we asked if you were ready for 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 publish the XBRL files to the fund’s website (when one exists). Since then, we have been providing a list of FAQ's and technical details regarding what will be needed come January 1, 2011.

With 30 days left, we wanted to republish our thoughts on what needs to be considered when choosing a vendor: 

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. 

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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: Time to Make a Decision

We are 43 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). 

As we have said in all of our XBRL posts over the past several months, the on-boarding process should be started approximately 30-45 days before the beginning of the year in order to understand and get comfortable with the tagging and publishing needs well in advance. Therefore, this is our first post that falls within that window, and based on industry analysis, only about 46% of the market has made a decision on how they will comply with this ruling. Of the 46%, only 5% have decided to handle this work themselves “in-house.” The rest have selected Merrill Corp. or another vendor.

While we have been posting weekly news, information and FAQs on the XBRL mandate, in general, there has been very little mainstream content published on the impending mandate. However, Tom Steiner-Threlkeld recently published a piece entitled, XBRL: To Insource Or To Outsource? which provides an objective perspective on XBRL as it pertains to mutual funds. For this week's post, we wanted to provide a couple excerpts from that piece:

"No matter what, before you decide whether to handle the task in-house or hire a service, get yourself a team that you trust to help make the decision and work through the process."

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"Allow yourself two or three months to get prepared. Give yourself time to evaluate your alternatives, understand the process, establish tags and gather or convert the information from existing sources to get ready to deliver them in the XBRL format to the SEC."

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"In the mutual fund case, the task looks a lot simpler than in making corporate financial statements interactive. There are only 250 reporting elements to deal with in the taxonomy for mutual fund summaries, compared to 17,000 elements in the taxonomy for financial reporting by public companies."

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"The question on insourcing versus outsourcing the tagging, filing and publishing tasks boils down, [said Guy Stanzione, SEC compliance services manager for Merrill Corporation], to whether a company wants to spend the money. The money not just to train staff up front, but to retrain staff as taxonomies change, to add or supplement staff as needed and to keep up to date with all changes made, over time, by the SEC, in its requirements."

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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 – Filing and Publishing Considerations (Part 2)

We are 51 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 by including Part Two of the filing and publishing steps. Remember, until you file or publish your XBRL-tagged data, it does not exist to the SEC. So, this article will focus on these important final steps in the process.

 

As we have mentioned in previous blog posts, the XBRL data is not intended for humans to read. However, because it will be important to share information with your investors, having different publishing options becomes more important.

 

For this reason, the Merrill XBRL Complete product has incorporated into it three different publishing options to fit how you want to publish and share this information with your investors.

• Option 1: A simple publish of the XBRL data to your fund’s website. 

You can stop there as this is the only requirement of the ruling. However, a number of funds are interested in taking extra steps to ensure that their investors understand what is included in the XBRL-tagged file, so that leads us to ...

• Option 2: A simple publish the XBRL-tagged data to your fund's website, as well as an HTML-rendering of that data so your investors can have a human-readable version of only the data included in the XBRL file. 

However, in order to harness the true power of XBRL to the advantage of your investors, we have...

• Option 3: A viewer that is similar to the SEC's Interactive Risk & Return Summary Report Viewer, but with a special twist. Instead of the SEC’s branding at the top of the website, it will contain your logo, branding, colors, etc. In addition, it will be anchored to your fund’s website so that your investors remain within your site (as opposed to navigating away to the SEC or other site). Further, your investors will be able to do side-by-side comparisons of only your funds or compare your funds against the entire universe of funds.

No matter which option you choose, because of the automated, systematic approach we have developed, the XBRL-tagged data will be published within the “same day” that it is filed with the SEC.

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 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.

XBRL for Mutual Funds – Filing and Publishing Considerations

We are 59 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 by covering the filing and publishing steps. With so much focus on the mechanics of 'tagging' the data in XBRL, filing and publishing seem to be after-thoughts when in fact they are where the “rubber meets the road.” Remember, until you file or publish your XBRL-tagged data, it does not exist to the SEC. So, this article will focus on these important final steps in the process.

In the end, the XBRL data needs to be filed and published to your fund’s website on the “same day.” If you have multiple funds filing and publishing on or around the same day, then it will be critical to have a structured, systematic process for both of these steps. A reputable vendor who offers XBRL tagging-filing-publishing services must be structured to scale and support many funds on any given day. When considering a vendor, you should carefully discuss each step in the process as well as the hand-off between each of the steps to ensure that the “same day” aspect of the ruling can be met. Look for manual steps in the process or hand-off as they will slow the process and introduce risk.

For example, at Merrill Corp, we simply modified our existing, time-proven process for filing EDGAR to fit the specific requirements for XBRL.

For publishing, we followed a similar approach as we used for tagging. To ensure that the published data is identical to the filed data – we, again pull it from the SEC. We call the data that is filed, accepted and stored by the SEC  “golden data.” By pulling the golden data, we ensure that any last second changes to the XBRL data that was filed is included in the published data, too.

Now, the Interactive Data ruling requires only the XBRL-tagged data is to be published to the fund’s website. Here’s an example of XBRL-tagged data that your investors would see if they opened up that file:

As you and I know (and we have mentioned in previous blog posts), this data is not intended for humans to read. However, how you plan to convey this information to your investors is important. The XBRL Complete product has responded with three different publishing options to fit how you want to publish and share this information with your investors. We will explain these three options in our next post.

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.