The European Union is pressing the economic zone’s 27 different national securities regulators to ensure that financial data is reported under a single harmonized format.However, it’s been a slow build.

The regulatory spotlight is focused squarely on the national regulators, but the intramural squabbling between them has skeptics projecting that the single format probably won’t be in place much before 2011.

As a result, capital market inflows into the areas of the EU using euros are lower than they could be. Nevertheless, other global economies are quickly grabbing the opportunity to provide information in a harmonized format to international investors.

In the U.S., for example, roughly 40 large entities voluntarily make their financials available via XBRL- the Extensible Business Reporting Language. Meanwhile Japan’s securities regulator will be making the financial data from its nation’s listed companies available online in XBRL beginning in April.

An XML-based format, XBRL communicates business and financial information via interactive data tags and taxonomies throughout the financial reporting chain. Currently the format is governed and marketed by a international consortium - XBRL International - comprised of roughly 600 organizations, including companies, regulators, government agencies and software vendors.

Also among those joining the XBRL fray is China, where Shang Fulin, chairman of the China Securities Regulatory Commission, pointed out how his country was the first in the world to have mandated XBRL reporting. Since 2003, China has required interactive data filing for the full financials of all listed companies under the rules of both the SCRC and the Shanghai Stock Exchange. The XBRL program has now grown to include more than 800 companies.

Korea took up a voluntary XBRL filing program in 2006. By October 2007, all publicly held companies were required to file financial statements using XBRL on the electronic filing system of its Financial Supervisory Service. Australia’s implementation of interactive data for financial reporting is scheduled for mid-2010, with pilots and proofs-of-concept beginning this year. Israel is slated to come on board with XBRL filing sometime in 2008.

In the EU, only the Spanish national securities regulator collects data and then publishes it in XBRL online, making Spain the XBRL leader in Europe by default. However, there are piecemeal XBRL adoptions, such as the Belgian National Bank, which introduced the system in 2004. In the U.K., XBRL will be compulsory after March 31, 2010.

However, pressure is building from the European Parliament for a cohesive EU approach to XBRL.

Ieke van den Burg, a member of the parliament’s important Economic & Monetary Affairs Committee, or Econ, recently forwarded a suggestion to promote XBRL, proposing that, “It should be made easier for companies to register and to prepare, file and publish statutory information.” She recommended that this be done “electronically, in interoperable business regions [and] strongly promotes the used of a new technology such as XBRL.”

She emphasized that such information should be easily accessible for investors, creditors and employees. She said that there’s enthusiasm in the European Parliament to streamline that flow, but some companies remain resistant.

Furthermore, banks complying with the Basel II legislative program still have to report capital figures under the 27 different national formats.

In October, the European Commission recommended that “the storage mechanisms are able to interconnect electronically to each other, so that investors can easily accede to financial information on listed companies.”

The EU’s Transparency Directive had been scheduled for implementation into all 27 national legislations by January 2007. That directive strives to enhance transparency in EU capital markets, improving investor protection and market efficiency. It established rules for the disclosure of periodic financial reports and of major shareholdings for companies whose securities are trading on regulated EU markets.

However, in 2008, those still noncompliant include Cyprus, the Czech Republic, Hungary, Luxembourg, the Netherlands and Poland.

Under the directive, no longer could a finance director hold back until the next quarterly report is due. Under upgrade rules of disclosure, there’s a requirement to report on a “timely basis.”

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