The SEC’s Plans to Reinvent EDGAR

October 16, 2006 by Marydee Ojala, infotoday.com

In its ongoing quest to modernize its EDGAR (Electronic Data Gathering Analysis and Retrieval) system, the SEC (Securities and Exchange Commission; http://www.sec.gov) has awarded three contracts worth a total of $54 million to upgrade the system into a “dynamic real-time search tool with interactive capabilities.” The concept is certainly past due, as the SEC’s EDGAR in its present incarnation is a throwback to a much earlier technological time. When originally created a decade ago, the notion of making corporate financial filings publicly available for free was extraordinarily controversial. Government resistance was strong. That may provide one reason why the resulting system was not, technologically speaking, state-of-the-art even then. Private companies, such as 10-K Wizard; EDGAR Online, Inc.; and Global Securities Information (now owned by Thomson); jumped in to add the functionality required by sophisticated searchers. Of course, those companies did not provide the data for free.

… Cox is a strong proponent of interactive data. He believes it will make comparing the financial positions of companies much easier for individual investors. In fact, it will also make it easier for analysts and information professionals, if the end result optimally implements XBRL as envisioned. Amelia Kassel, an independent researcher who wrote “The Many Faces of EDGAR” in the May/June 2005 issue of ONLINE (http://www.infotoday.com/online), believes that taxonomies make SEC data vastly more useful. The need for taxonomies is her primary reason for using third-party vendors of SEC reports rather than SEC EDGAR now. She cautions, however, that the taxonomies must be of high quality to be a boon to searchers. She also speculated about the effect of the SEC’s EDGAR transformation on those third-party vendors.