This new service is significant because to date, no U.S. companies are providing XBRL formatted reports to the SEC, yet the SEC strongly wants them to. “When firms start providing XBRL, the SEC will reap an important advantage -- a lot of manual work that goes into classifying companies will be eliminated at the SEC’s end,” says Raghuvir Mukherji, senior consultant, Financial Securities, Domain Competency Group, Infosys Technologies Ltd. “They can then transmit that data in an automated manner to the other functionaries. So once the quarterly earnings, say, are routed through the stock exchange, from there a copy goes to the SEC, and from there dissemination can take place much more quickly through data aggregators and brokers who are buying that data from the exchange.” Mukherji adds that ultimately XBRL reporting will benefit the companies and mutual funds that adopt it because it will help investors get data quickly. “The reason companies produce glossy annual reports is that they want people to be attracted to them,” he points out. Having data that can be read by software will be a competitive advantage that helps companies and mutual funds attract investors. "Companies and mutual funds have not appreciated this to the full extent, hobbling the progress of this technology," he says.

The SEC voted on June 20 to allow mutual funds to submit data on their risk and return summaries as interactive data, or XBRL. Under the pilot program, fund companies will append their prospectus filings with an exhibit containing the electronically tagged data. Participants do not have to tag all funds; they may tag as few as one fund to participate. Once XBRL data is widely available for mutual funds, investors will be able to use a simple software tool to analyze key points such as the comparative cost of two funds. Under its Voluntary Supplemental Filing program, the SEC is trying to encourage all companies to submit electronically tagged data along with their traditional filings. RR Donnelley filed the first XBRL-formatted mutual fund report, a Form N-Q for Allegiant Funds, in May, 2006. The company is using an auto-mapping engine from Microsoft to tag these reports.

A host of vendors, including Reuters, IBM, SAP, Adobe, Bearing Point, and EDS, and one investment bank – Morgan Stanley – are members of XBRL.org and either offer or are developing XBRL solutions.