XBRL US has introduced a new taxonomy for reporting on corporate actions, such as mergers, dividends, stock splits and other events, using the Extensible Business Reporting Language data-tagging format.
The Corporate Actions Taxonomy was developed as part of a collaborative industry effort by XBRL US with the Depository Trust & Clearing Corporation, or DTCC, which provides clearance, settlement and information services for financial instruments, and the Society for Worldwide international Financial Telecommunication, or SWIFT, which provides banks, financial services firms, and their customers with the ability to engage in financial transactions around the globe.
The Corporate Actions Taxonomy has 550 base elements, in contrast to the U.S. GAAP Financial Reporting Taxonomy used by public companies today for SEC reporting, which has more than 18,000 elements. The Corporate Actions Taxonomy covers 94 types of corporate action events
Today's corporate actions processing requires public company issuers to submit text-formatted documents such as news releases and regulatory filings for each corporate action which are then interpreted and rekeyed by stock markets, issuer agents and data intermediaries before the time-sensitive information is available to shareholders. The Corporate Actions Taxonomy standardizes this free-form text into electronic documents that can be used by issuers to ensure written words hold the same meaning for all parties throughout the corporate actions lifecycle.
Having issuers electronically tag corporate actions data in XBRL allows it to be delivered straight from the issuer to the investor without rekeying or interpretation through multiple interfaces.
“The goal all along has been to make it easy and inexpensive for issuers to identify and tag key data as they prepare documents for a corporate action,” said DTCC president and CEO Donald F. Donahue in a statement. “Completion of the corporate actions taxonomy represents a significant milestone in this undertaking and moves us a step closer to straight-through-processing. As we move ahead on this initiative, we look forward to demonstrating how XBRL helps reduce risk, boost efficiencies and cut cost in corporate actions processing.”
In conjunction with this initiative, Citi is working with XBRL US on a pilot program to demonstrate the costs and benefits of using XBRL in the corporate actions processing of dividend payment announcements for American Depositary Receipts, or ADRs. XBRL US revised the taxonomy based on input from Citi's technology group on various corporate action notices.
The pilot program will help determine the feasibility of moving to XBRL processing and its impact on downstream consumption of XBRL data. Forty XBRL-formatted dividend announcements have been created through that pilot program. To support the downstream corporate actions flows from the depository to custodians, DTCC is now running a pilot over SWIFT using new ISO 20022 corporate actions messages. The pilot includes a handful of custodians and is expected to run through November 2011.
A business case describing the impact of XBRL on the corporate actions process has been published and is available at http://xbrl.us/i2i/pages/businesscase.aspx. The Corporate Actions Taxonomy can be downloaded and viewed at http://xbrl.us/taxonomies/Pages/2010corpactions.aspx.
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