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.