Interactive Data Supporting Statement.Final

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION SUBMISSION
FOR INTERACTIVE DATA

A.

JUSTIFICATION
1.

Circumstances Making the Collection of Information Necessary

The Securities Act of 1933 (“Securities Act”) and Securities Exchange Act of 1934
(“Exchange Act”), in general, require companies to file financial information with the Securities
and Exchange Commission (“Commission”) in registration statements when they publicly offer
securities and in reports when they have securities publicly held, respectively. The “Interactive
Data” collection of information requires issuers filing these registration statements and reports to
submit specified financial information to the Commission in interactive data format using
eXtensible Business Reporting Language (XBRL). This collection of information is located
primarily in:
•
•

registration statement and report exhibit provisions, which require interactive data;
and
Rule 405 of Regulation S-T (17 CFR 232.405), which specifies how to submit
interactive data.

The exhibit provisions are in Item 601(b)(101) of Regulation S-K (17 CFR 229.601(b)(101)),
Form F-10 under the Securities Act (17 CFR 239.40), and Forms 20-F, 40-F, and 6-K under the
Exchange Act (17 CFR 249.220f, 17 CFR 249.240f, and 17 CFR 249.306).
In interactive data format, financial information can be downloaded directly into
spreedsheets and analyzed in a variety of ways using commercial off-the-shelf software. The
specified financial information already is and will continue to be required to be submitted to the
Commission in traditional format (i.e., HyperText Markup Language (HTML)) under existing
requirements.
2.

Purpose and Use of the Information Collection

The purpose of the interactive data requirement is to make financial information easier
for investors to analyze and assist issuers in automating regulatory filings and business
information processing. The interactive data can be used by investors and others interested in
such information.
3.

Consideration Given to Information Technology

Responses under the interactive data requirements are submitted to the Commission
electronically on its Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system in
XBRL format.

4.

Duplication of Information

Interactive data format financial information already is and will continue to be required to
be submitted to the Commission in traditional human-readable format under existing
requirements. When the information is in traditional format, it cannot be used as effectively as
when in an interactive data format that a variety of software applications can recognize and
process. Interactive data format facilitates investor analysis of financial information and assists
issuers in automating regulatory filings and business information processing.
5.

Reducing the Burden on Small Entities

EDGAR is designed to provide all issuers, including small entities, with greater
efficiencies in filing information with the Commission. Required electronic submission of
interactive data on EDGAR imposes some costs on all issuers that submit interactive data,
including those that are small entities. Small entities, however, as with all other issuers, have a
30-day grace period to make their initial interactive data submission.
6.

Consequences of Not Conducting Collection

If the specified financial information were not required in interactive data format, the
information would be available through the Commission only in the traditional format. Providing
financial information in an interactive data format facilitates investor analysis of financial
information. In addition, the use of interactive data format assists issuers in automating
regulatory filings and business information processing. If interactive data format information
were required less frequently, less information would appear in that format and, as a result, the
interactive data requirement would be less likely to facilitate its intended purposes and achieve
its expected benefits.
7.

Special Circumstances

There are no special circumstances.
8.

Consultations with Persons Outside the Agency

The interactive data extension request was proposed for public comment. We received
one comment from the U.S. jurisdiction of the non-profit consortium responsible for developing
and maintaining the technical specifications for XBRL. We also received a comment from a
digital insurance services firm.
•

Whether this proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the information will
have practical utility

Both commenters addressed the practical utility of interactive data format information.
The consortium stated that “corporate disclosures . . . prepared in XBRL format, [produce]
structured data that is more useful, accessible, granular, and more consistent than data in
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unstructured format for regulators, investors, researchers, and other data consumers.” It cited,
among other things, ease of error checking, timely availability, authoritativeness, and suitability
as a source for artificial intelligence platforms. The firm stated that “[t]he practical utility of
XBRL over any other digital option is data capture commences early, can encompass all
counterparties and supply chain and remains throughout the lifecycle of assets being reported.”
•

The accuracy of the agency’s estimate of the burden imposed by the collection of
information

Similarly, both commenters addressed the accuracy of the Commission’s internal
reporting burden estimate of 53.11111 hours per response.
The consortium expressed its belief that the internal burden estimate is too high. It stated
that, historically, companies used bolt-on tools to convert data into XBRL without changing any
other aspect of their workflow but that, over time, companies have replaced this process with
disclosure management tools that streamline creating, managing, and delivering information.
The consortium further stated, however, that “[b]ecause disclosure management tools have a
wide range of features, streamlining [that] process . . . , it is impossible to accurately pinpoint the
cost of a single component such as XBRL preparation.” Consequently, “[t]o better assess the
burden on issuers, [the consortium] conducted a survey about the XBRL preparation process and
gathered information from 26 issuers.” The surveyed issuers prepared their XBRL as follows
(with rounding):
•

20% totally in-house;

•

40% partly in-house with vendor assistance; and

•

40% totally outsourced to vendors.

Based on the survey, the consortium estimated the average issuer internal burden is about 22
hours per response.
The firm stated that “[t]he accuracy of the time burden for data sent to [the] SEC is
wrong” and that “[i]t does not properly reflect the internal time saving of implementing XBRL
because it fails to recognize the time saved by importing XBRL data.” The firm did not,
however, provide a specific estimate.
We acknowledge these comments asserting a lower internal burden than our estimate.
We do not find them to be reason to adjust our internal burden estimate at this time, however,
because they may not be representative of the average respondent to which our estimate is
directed. Further, as noted below, although we estimate that that the Interactive Data collection
takes approximately 53.11111 hours per response to comply with annually, this estimate is made
solely for purposes of the Paperwork Reduction Act (“PRA”), and we believe that the actual
burdens will likely vary among individual companies based on the size and complexity of their
organization and the nature of their operations. Nonetheless, we intend to consider these
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comments further in light of any additional comments we receive on our internal burden
estimate.
•

Ways to enhance the quality, utility, and clarity of the information collected

Both commenters also addressed enhancing the information collected. The consortium
asserted that the “SEC can improve the quality and usefulness of reported data by continuing to
incorporate . . . into the EDGAR submission process” all validation rules issued by the Center for
Data Quality’s Data Quality Committee composed of “filing agents, data aggregators, and
investors” and supplemented by permanent observers from the Financial Accounting Standards
Board and the International Accounting Standards Board. The firm suggested that the
Commission “[e]ncourage public and private entities to continue implementing XBRL for
engaging in digital ecosystems so that data generated by importing aligns with the data exported
to [the Commission].”
•

Ways to minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques or other forms of
information technology.

In addition, both commenters addressed ways to minimize the burden of the information
collection. The consortium noted that its survey also asked “about the ongoing challenges with
XBRL preparation and how regulators and vendors could better support the process.” The
consortium reported that “[r]espondents cited challenges in formatting new disclosures correctly
when there appear to be multiple options, and in understanding SEC requirements correctly” and
the respondents “noted that regulators could improve the process through
•

Offer[ring] more training and education with ‘plain English’ explanations.

•

Provid[ing] a consolidated listing of requirements that would be easy for
accountants to navigate and understand.

•

Reduc[ing] the number of changes year to year.

•

Provid[ing] more examples of proper tagging and ways to clear data quality
errors.”

The firm stated that “[t]he acceleration to digital platforms that can engage in digital ecosystems
enabled by XBRL will provide system developers the ability to innovate next generation
platforms for a next generation economy.”
We acknowledge these comments regarding ways to minimize burdens. We note that the
Commission makes available various tools to assist XBRL filers. With respect to filing fees, for
example, the Commission provides on its website the following to help filers structure filing fee
information in XBRL:

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9.

•

the option to use the Fee Exhibit Preparation Tool (“FEPT”), which includes
features such as prompts, explanations, and automated calculations, to help filers
calculate, disclose, and construct structured filing fee information and produce a
filing fee exhibit in submission-ready format;

•

an EDGAR Filing Fee Interface Courtesy Guide which provides information on
how to use the FEPT; and

•

an EDGAR Filing Fee Modernization: Topics of Frequent Inquiry page.
Payment or Gift to Respondents

No payment or gift has been provided to any respondents.
10.

Confidentiality

Interactive Data information is available to the public for review.

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11.

Sensitive Questions

The information collection does not collect personally identifiable information. A system
of records notice and a privacy impact assessment are not required in connection with the
collection of information.
12.

Estimate of Respondent Reporting Burden
Estimated Reporting Burden
Information
Collection
Title
Interactive
Data

OMB Control
Number

Number of
Responses

Burden
Hours

3235-0645

36,981

1,964,102

For purposes of the PRA, we estimate that in order to comply with the “Interactive Data”
collection requirements, approximately 8,218 respondents per year would each submit an
average of approximately 4.5 responses per year for an estimated total of 36,981 responses
annually (calculated for period 2022 through 2024). We further estimate that the Interactive
Data collection takes approximately 53.11111 hours per response to comply. Based on our
estimates, we calculate the total internal reporting burden to be 1,964,102 hours (53.11111 hours
per response x 36,981 responses).
We derived our burden hour estimates by estimating the average number of hours it
would take an issuer to compile the necessary information and data, prepare and review
disclosure, file documents and retain records. In connection with amendments to the Interactive
Data collection, we occasionally receive PRA estimates from public commenters about
incremental burdens that are used in our burden estimates. We believe that the actual burdens
will likely vary among individual companies based on the size and complexity of their
organization and the nature of their operations. For administrative convenience, the paperwork
burden hours have been rounded to the nearest whole number. The burden estimate for the hours
is made solely for the purpose of the PRA.

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13.

Estimate of Total Annualized Cost Burden
Estimated Cost Burden
Information
Collection
Title
Interactive
Data

OMB Control
Number

Number of
Responses

Cost
Burden

3235-0645

36,981

$228,357,675

We estimate that approximately 8,218 respondents per year will each submit an average
of approximately 4.5 responses per year for an estimated total of 36,981 responses at an
estimated external cost of $6,175 per response for software and/or filing agent services for an
estimated total external cost of $228,357,675 (36,981 responses x $6,175 per response).
Our estimates reflect average burdens, and therefore, some companies may experience
costs in excess of our estimates and some companies may experience costs that are lower than
our estimates. For administrative convenience, the cost totals have been rounded to the nearest
dollar. The cost estimate is made solely for the purpose of the PRA.
14.

Costs to Federal Government

The annual cost of reviewing and processing disclosure documents, including registration
statements, post-effective amendments, proxy statements, annual reports, and other filings of
operating companies amounted to approximately $131,724,880 in fiscal year 2023, based on the
Commission’s computation of the value of staff time devoted to this activity and related
overhead.
15.

Reason for Change in Burden
Summary of the Change in Burden Hours and Cost Burden
Annual No. of Responses

IC Title

Interactive
Data

Previousl
y
Approved

Requeste
d

34,173

36,981

Increase
In
Response
s
2,808

Annual Time Burden (Hours)
Previousl
y
Approved

Requeste
d

1,814,966

1,964,102

Increas
e
In
Burden
149,136

Annual Cost Burden ($)
Previously
Approved

Requested

Increase
In Cost
Burden

211,018,27
5

228,357,67
5

17,339,40
0

The increases in time burden of 149,136 hours and cost burden of $17,339,400 are due to
an updated higher estimate of the number of respondents based on more recent information.
16.

Information Collection Planned for Statistical Purposes

The information collection is not planned for statistical purposes.

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17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to omit the expiration date.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

There are no exceptions to certification for PRA submissions.
B.

STATISTICAL METHODS
The information collection does not employ statistical methods.

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