Responses to CESR

The responses to CESR's call for evidence on the use of standard reporting formats are in, and they contain a mixed bag of answers. Of the 33 responses listed, only 31 appear to be valid (one was obviously misplaced, one materially empty). Furthermore, the categorisation of respondents used by CESR looks arbitrary, which is why we've applied our own.

Essentially, we were curious whether respondents supported standard reporting (Q1), and if so, whether XBRL would be fit for the purpose (Q2).

• Q1: Respondents were mostly in favour of standardisation (74%), although a sizeable part (7) of those favourable answers came from the XBRL community. Without them, 67% of responses are still in favour, notably investors, exchanges and service providers. The most outspoken opposition to standardisation comes from the issuers camp, especially (and unsurprisingly) from banking institutions.
• Q2: Respondents were overwhelmingly in favour of XBRL as the most appropriate format (90%, or 88% without XBRL community). Surprisingly, this even holds true for those respondents who were sceptical about standardisation in the first place. 

The responses from issuers (EAPB, EBF, ZKA, DAI) are remarkable in that they focus on the lack of effective standardisation (and thus comparability) in today's corporate accounts across countries and industries, in spite of those accounts being prepared under IFRS. They quote local laws and regulations as inhibitors to effective standardisation, which could not be overcome by simply applying the IFRS taxonomy because it did not provide the necessary local concepts, nor could it be ascertained that nominally identical concepts are materially identical in practice. In my view, these issues are known and need to be addressed by means of an appropriate system of standardised extensions of the IFRS taxonomy.

Eight good reasons to keep tags on XBRL

Likemind has produced a nice write-up of the breakfast meeting to which I was invited to present the investor perspective on XBRL to a group of corporate communications professionals on 24 September in London. The event itself was very pleasant with a lot of questions and discussions among participants, and I think this comes across nicely in the conversational style of the paper.

Here are the slides that you see sitting on the table:

CFA awareness and usage of XBRL up

The results of CFA Institute's 2009 update of its XBRL survey are in! Most importantly, global awareness has inched up from 41% to 45%, and similarly has usage. Here is the summary comparison of the 2009 numbers with the earlier version. On top of the summary, the detailed report allows for a number of interesting observations (margin of error is 2.5% at a 95% confidence interval):

• Awareness has crossed the 50% threshold (52%) for the first time in the Americas. Interestingly, it is highest among the most experienced Charterholders and lowest among new and non-Charterholders. 
• Highest impact of the usage of XBRL continues to be expected from uploading company data and from comparing companies.
• There was a marked shift in the types of assurance expected from an integrated to a separate audit for XBRL instances. Unfortunately, we don't have a regional split of that information. It would be interesting to see whether the shift originated mostly in the US, where sensitivities about XBRL specific audit issues are rising.
• Against my expectations, direct information extraction from source documents is rising at the expense of third party sources. This is consistent with the increased usage of XBRL documents. Too bad we don't have a more detailed analysis of this item.

Those of you who read German may be interested in an article I've written for nspublish INSIDE.

UNCTAD on fair value

I've had the honour of addressing the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting, twenty-sixth session in Geneva yesterday. The subject matter was implementation issues of fair value accounting in an IFRS context. To my great surprise, there was hardly any criticism expressed of the approach, neither from the panel nor from the floor.

No return on closing DB plans

The July/August issue of FAJ has an intriguing article looking at empirical evidence of whether freezing DB pension plans would increase company value. Since cost and volatility impact on earnings are the justifications most often referred to for closing DB plans, the default expectation should be that it would. Yet, the authors cannot find any significant evidence of that.

They have been looking at the price reaction in four different event windows of 82 US announcements of frozen / closed DB plans between 2003 to 2007 in various industries. Interestingly, there seems to be a correlation between closure events and the generic business cyclicality of the firm's industry sector. Event firms exhibited stock market underperformance compared to their peers in the years leading up to the event.

Results indicate no systematic empirical evidence for positive abnormal returns associated with DB plan freezes / closes. Separating freezes and plan closures exhibits a small, yet unexpected diversion: Plan freezes generated a negative abnormal return, whereas the (small) sample of closures (for new employees) produced a more pronounced positive return.

In sum, it seems that DB pension plan closures / freezes tend to be short-term, ineffective measure adopted by managements to counter performance pressure.

Behavioural finance

Behavioural finance is a fashionable topic, of course, and an interesting one at the same time. It is useful to be aware, if that's possible at all, of the cognitive limitations of our decision making processes. Yet, I still have to see a useful active behavioural tool for investing - much of those uses seem to be limited to technical analysis.

This video reminded me of a similar presentation by Richard Thaler at this year's CFA Institute annual conference in Orlando. The biggest surprise in that presentation was that XBRL featured prominently in it as an important tool for improving financial decision making.

P.S. This podcast interview�with Ariely gave me some food for thought. There is probably a fruitful tension between the rational expectations axiom and what Ariely calls predictably irrational. It can be a rational to expect collective irrationality.�

Moving GIPS to the 21st century

Here is an idea that I am currently working to promote to the Global Investment Performance Standard community:

MOVING GIPS TO THE 21ST CENTURY

Context

CFA Institute's�GIPS�are similar to Accounting Standards in that they prescribe in some detail the concepts, requirements and procedures for reporting performance of asset managers' investment vehicles. The purpose of GIPS is to make asset managers' reported performance numbers consistent and comparable across several providers and facilitate manager selection by investors on the basis of the manager's track record. According to the CBRM, financial reporting is made for investors. The same applies to GIPS reporting. Therefore, the same compelling logic that has driven the SEC to mandate the�XBRL�format for business reporting of all listed entities and mutual funds in the US should apply in the case of (voluntary) GIPS reporting, at least in so far as the premises for XBRL reporting of GIPS numbers should be prepared.

In the course of the GIPS 2010 project, it is essential to lay the groundworks for bringing GIPS online, i.e. making GIPS reports even more quickly available and comparable with XBRL.

What is necessary?

As with financial reporting, the key requirement to enable GIPS reporting using XBRL is a�taxonomy. The GIPS taxonomy, like FASB's US GAAP taxonomy or the IASB's IFRS taxonomy, contains all the concepts and relationships of GIPS without impeding the reporting entity's flexibility in disclosing additional items by using its built-in extensibility. Taxonomies are usually created and maintained by cross-sectional working groups of stakeholders under the umbrella of an XBRL jurisdiction. The extent of the effort to build a taxonomy depends on the standard it is intended to represent. In the case of GIPS, it seems natural that CFA Institute takes on the responsibility for creating and maintaining the standard GIPS taxonomy.

What can be achieved?

The availability of a GIPS taxonomy is a necessary, but not a sufficient condition for establishing XBRL GIPS reporting. Preparers and users have to follow suit and establish practice. However, if the example of accounting standards is any indication, it is crucial that the Standard Setter (CFA Institute) endorses XBRL by creating a taxonomy for its standard and thus providing the infrastructure on which usage can be built.�

As�multiple case studies�show, deploying XBRL in the reporting value chain of GIPS will result in smarter, cheaper and faster GIPS reports: They are smarter because the validation procedures built into XBRL taxonomies from the start massively reduces errors in reports, thus also reducing the cost of preparing and verifying them. They are faster because they can be made available online immediately and can be compared automatically without re-keying any information.

Given XBRL's widespread and quickly expanding application in financial reporting, competing IT tools at all stages of the reporting process are already available and are improved continuously. These tools are usually agnostic of the taxonomy they are applied to, thus they are usable on GIPS reporting. It is easily imaginable that the�SEC's Mutual Fund Viewer�could be applied to GIPS reports, provided that they collected in a single location online. Perhaps there is another role for the CFA Institute in this? The ongoing parallel development of IT tools handling XBRL formated financial reporting constitutes a very important synergy that GIPS can take advantage of effortlessly.

"Resistance is futile ..."

And yet, the Borg are�effect-fully�resisted in Star Trek. Clearly, GIPS is a well established global standard�that works. It is therefore not immediately obvious to practitioners in the field why the plumbing of the process should be changed. Incidentally, there is no recognisable�need�to move to XBRL at the present.�

Yet, the transformation of the financial reporting process to XBRL has met and is in the process of overcoming the same resistance globally. The potential gains in transparency and process efficiency are too large to dismiss.�

Finally, there is another factor that makes the case for adopting XBRL in GIPS even more compelling: GIPS is not mandated anywhere (to my knowledge) and thus fully dependent on voluntary adoption as well as market demand. The availability of a GIPS taxonomy and CFA Institute's encouragement of the usage of XBRL in GIPS reporting would send a clear signal about how GIPS is being future proofed and made increasingly transparent and user-friendly.

XBRL - A Guide for Investors

CFA Institute has just published XBRL - A Guide for Investors. The title is pretty much self-explanatory. I'm glad to have contributed to it. Enjoy!�

Also on the XBRL channel: Yesterday, L'Agefi published an article I've written. But when you follow the link, you'll see that it is written in excellent French, which cannot be me. Thanks for the contact and the translation goes to Marc Barbezat, member of XBRL CH!

XBRL presentation in Brussels

Here are the slides of a presentation I gave a few days ago at the Brussels Stock Exchange. That was probably the most splendid place I spoke at to date.

Finance 2.0

View more presentations from SCFAS. (tags: cfa accounting)

In the balance

The latest issue of the CFA Magazine has an article that I penned about accounting politics, meaning the high-risk game that high politics is playing with the international accounting standards setting process. The issue has been dormant during the last few weeks, but is sure to come back with a vengeance shortly, i.e. during the G20 meeting on 2 April in London. Comments, as always, are highly welcome!

Accounting politics

On Saturday, Finanz und Wirtschaft has published an article of mine in which I discuss�the background to the current tensions in accounting politics between the EU and the IASB. To the casual observer, this conflict may look like it is entirely related to the financial crisis, but it is more about the independence of the IASB than anything else. That's where the interest of every investor should come into the equation.

Highlights from XBRL conference

Highlights from the CFA Institute conference XBRL for Investment Professionals, held on 26 September in London, are now available as podcasts from the CFA Institute. They are available for free to CFA Institute Members, just login with your usual credentials.

P.S. They are not free to Members, just to conference participants ... sorry!

XBRL for Investment Professionals

It's nearly a month that said conference took place in London, and I have yet to blog about it ... some of the reasons for that delay probably co?ncide with the reasons why a relatively small group of less than fifty professionals came together for an event that has been organised by CFA Institute, EFFAS and the IASCF, namely current market dislocations. In the face of that, an infrastructure undertaking such as XBRL takes second place with many.

Nevertheless, participants tended to be quite happy with the conference and commented favourably on the quality of the audience as well. The relatively small size of the audience made it possible for the audience to interact with each other and to participate actively in the Q&A session, which is very helpful when you're the moderator ...

Here are the presentation slides. It's a pity that David McGraw's slides are not available, because his and Homi Byramji's presentations struck a strong chord with me. In David's case it was the breadth of the potential applicability within a leading institutional investor's processes, and the challenges that XBRL has to respond to (data governance!), whereas Homi was demonstrating clearly that, other than Encyclopedia Britannica, Thomson Reuters is not going to be asleep on the wheel in the face of the challenge to the middle man posed by XBRL. Personally, I am fairly confident now that XBRL is a sustaining innovation for information intermediaries.�

Shortly before the conference, Finanz und Wirtschaft published an XBRL update that I wrote. And there is one more update: XBRL CH is now officially a provisional Jurisdiction!

Evaluating short extension funds (130/30)

The current issue of the FAJ has a great piece about How variation in signal quality affects performance. On the face of it, the article deals with the generic perception that any relaxation of investment restrictions (read: long only) will invariably result in better performance. This is the selling proposition of currently fashionable 130/30 funds. But it doesn't - or only in the special case of an information coefficient which is stable over time. Managers with unstable ICs will see their performance deteriorate with increasing short positions.�

This approach delineates a way to help evaluating 130/30 funds which do not have a long enough track record in the product (i.e. the majority of vendors), but a more significant one in long only mandates. If that track record were to exhibit an unstable IC in long only portfolios already, then there might be a problem in the short extension.

Prediction markets

Let me be explicit from the start: I have a problem with the judgmental connotations of the term speculation. In my view, there is no meaningful distinction between investing and speculating. Investing as well as speculating is about the assumption of risk in return for the uncertain possibility of reward. There is only inappropriate investment or speculation, but not bad speculation per se.�

The cause for these rather philosophical considerations is my interest for prediction markets such as intrade, where you can effectively trade in all sorts of event probabilities. Literature has it that predictions produced using a bid/ask mechanism with real money will be of significantly better quality than survey forecasts for instance. Naturally, they cannot tell the future, but they will be more efficient at processing all currently available information than any one expert. Therefore, these markets serve two important purposes: If reasonably liquid, they offer high quality, quantified predictions of event probabilities of presidential elections or hurricane landfall severities, and they offer a hedging possibility, although the liquidity is definitely a limiting factor there at this point.

It is very timely that the CFA Institute has just published the results of its last Monthly Question survey about prediction markets. 65% of respondents think that such markets offer valuable information, and a majority of 54% think that they are fit for investment purposes (mostly hedging).

Challenges in Quantitative Management

At last, I got round to finishing Challenges in Quantitative Equity Management, a freely available CFA Institute Research Foundation monograph by Fabozzi, Focardi and Jonas. The book is based on surveys and conversations with practitioners of quant management, capturing the collapse in industry outperformance following the summer of 2007. I was particularly interested to find out whether there would be any attention paid to XBRL, which I suspect should be quite relevant to quant management, but it wasn't even mentioned throughout the book. That's not to say it is considered to be irrelevant: Too many people using similar models and the same data was considered to be one of the major challenges to the quant approach going forward.�

Nevertheless, it is a worth while read for a number of thoughts and discussions, such as the distinction between quantitative and judgmental investment processes, the style correlation of quant management (which tend to be value-driven), the negative correlation between fund capacity and alpha-generation and, last but not least, the adaptive markets hypothesis as opposed to the efficient markets hypothesis.�

CFA Institute Code for Pensions

The CFA Institute has published a Code of Conduct for Members of a Pension Scheme Governing Body. The Code is intended to guide the behaviour of individuals sitting on governing bodies of pension schemes worldwide (ASIP has contributed, among others), which is why its principles are worded rather generically (see IPE story). Go to the comments section for more detailed explanation.

I find Fi360's Periodic Table of Standards of Excellence to provide a great complementary overview of best practice.

Finance 2.0

I've had the great pleasure and privilege of presenting the CFA Institute Comprehensive Business Reporting Modell as well as its position on XBRL to the 17th XBRL Conference in Eindhoven. Needless to say that this was also a great opportunity to share & discuss some thoughts about the future path of financial research with participants.�

The slides of my presentation are available here, but I'm already in the process of reworking them, taking on board new ideas from the peer discussions. My thinking goes along the lines that XBRL will be a disruptive force in finance eventually, but not in the immediate future as data intermediaries are well positioned to leverage their incumbent interfaces with the cheaper and faster fundamental information. For them, XBRL will be sustaining - for a while. That also means that most professional investors - at least those on the sell side - will not care much about XBRL since they are receiving the goods indirectly via improved third party providers. Disruption will come to them by other means, however ... I am looking forward to this conference in the fall, which should firmly establish the debate among investment professionals.

The future of public pensions

Richard Ennis' article�in the current issue of the Financial Analysts Journal may be aimed at the�ailment�of US public pensions, �but its tenets are equally applicable to European (including Swiss) public pension plans as well. A key issue is that of valuation, where current actuarial valuations are traditionally predominant under the pretext of perennial solvency of the state sponsor. Ennis convincingly demonstrates that the "issues are the value of the obligation, the cost to extinguish it, and on whom the burden of that cost falls. In a word, the concern is accountability." From a Public Choice perspective, his tenets are unlikely to be put into action just now, unfortunately. The increasing gulf between public and private pensions will have to get wider before this can be addressed fundamentally.�

XBRL for dummies

Today, the first meeting of the XAC, the XBRL Advisory Council to the IASCF took place in London. It was a very interesting kick-off meeting, indeed! To use an IT�metaphor,�I like to think of Accounting Standard Setting as constructing the Operating System that the economy works on. A principles based system such as IFRS can rely on a certain degree of�fuzziness�and the human factor when preparers and auditors apply the standards. But when this fuzziness actually is being translated into code, then a lot of nitty-gritty stuff appears.�

During the meeting, I first got my hands on a copy of XBRL for dummies, and since the book kindly features this blog (so, it's got to be a really good book, right?), I thought I'd return the favour!

XBRL advisory council

The International Accounting Standards Committee Foundation (a.k.a. IASCF) today announced�the formation of an XBRL advisory council, which I have the honour to say that I am a member of on behalf of the CFA Institute. I am looking forward to contributing my small share to the further establishment of XBRL as a major agent of change in the preparation, dissemination and use of financial reporting.

CFA Institute podcasts

The CFA Institute is revving up its web based offering with interesting educational audio content that you can subscribe to, a.k.a. podcasts. Right now, it's only the audio stream of presentations and articles, but I hope that the presentations will soon be complemented by the slides that the speakers talk about. Here are the links to the RSS feeds in iTunes: Conferences and Events, CFA Institute generated items, CFA Institute Pubs.

Getting to know XBRL

The following is the first guest contribution on this blog. Bob Schneider, its author, is the editor of Data Interactive, a blog sponsored by Hitachi to help financial professionals stay informed about developments in the world of XBRL (eXtensible Business Reporting Language).

In a recent survey by the CFA Institute, some 59% of respondents said they were ?not aware? of XBRL. Even if that understates CFA Charterholders' acquaintance with the data standard, it?s undoubtedly true that many financial professionals still have little knowledge of XBRL or ? as SEC chair Christopher Cox calls it ? ?interactive data.?
As recently as within the past few weeks, XBRL taxonomies have been completed and widespread XBRL adoption is coming into view. Analysts and accountants are eager to gain an understanding of what XBRL is and what it can do.
Where can they turn to for help? Here are five resources that go beyond mere definitions and give users true insight to what XBRL can be.
An excellent place to start is Cheaper, Smarter, Faster: Benefits to Analysts from XBRL written by Christian Dreyer, who writes this blog, and Mike Willis, partner at PwC and a leading XBRL authority. Specifically directed at financial analysts, the article clearly and imaginatively describes XBRL, discusses its progress in various countries, and describes interactive data's various benefits. Although it doesn't contain the latest XBRL developments ? it was published about a year ago ? it is still the single best article on XBRL for financial professionals who are new to interactive data.
One of my favorite XBRL speakers is Liv Watson, VP of Global Strategies at EDGAR Online. Liv is one of those rare speakers who makes the dull seem interesting, and the interesting, exhilarating. In her presentation at the Third Annual XBRL Canada Conference, she uses war stories and fun asides to describe the benefits of XBRL for both external and internal reporting.
For the past year or more the most notable proponent of XBRL has been SEC Chairman Christopher Cox. In March the Commission held an Interactive Data Roundtable that included many key XBRL players, including representatives from companies participating in the Voluntary Filing Program. Ably moderated by Chicago Sun-Times journalist Terry Savage, the webcast provides listeners with an understanding of what implementing XBRL may entail and describes key XBRL issues going forward.
Interactive data comprises both XBRL-FR (for financial reporting) and XBRL-GL (for global ledger). The latter is the subject of the webcasts at GaLaPaGoS (click XBRL GL Webcasts). Two that are especially noteworthy are XBRL and SOA, a superb presentation by Walter Hamscher on why companies will need to adopt XBRL to fulfill their compliance requirements, and Eric Cohen's self-explanatory What Is the Global Ledger Good For? Uses of XBRL GL.
Finally, one more resource I'd like you to be aware of is the recently created archive of XBRL conferences at XBRL.org. Listening or reading the speeches made at these gatherings is perhaps the best way for newcomers to the field to gain an appreciation of what XBRL has to offer, as well as the most important issues in interactive data adoption.

Swiss CFA supports XBRL

The Swiss CFA Society claims to be the world's first association of financial analysts to endorse XBRL by making its own financial reports available in that format. As there is still no XBRL jurisdiction in the Swiss market, such endorsement and awareness building is of the essence.

European pensions in Korea?

CFA Korea Society has been so kind to invite me to talk to them about pan-European pensions and the conclusions to be drawn from European experience in the light of the very recent introduction of occupational pensions in Korea. Here are the slides of that presentation.

Conference presentation

A few days ago, I've had the honour to address the first IASCF conference in Asia in Singapore with a presentation about the CFA Institute's Comprehensive Business Reporting Modell in its final version.

CFA Pension Code of Conduct

The CFA Institute Centre is asking for comments on its Code of Conduct for Members of a Pension Scheme Governing Body until 15 August. The draft has been prepared with the assistance of the OECD and major trade associations from the Hong Kong, the Netherlands, Switzerland, the UK and the USA.

Analysts still unaware of XBRL

The CFA Centre has just given us a preliminary review of 2007 XBRL awareness survey results. From this preliminary review, it is not clear which subset of members have been sampled (yours truly cannot remember having been on it), or what the response ratio was, but a number of interesting points arise, especially in comparison with the results of the May 2006 quick survey.

The majority of analysts is still unaware of XBRL. The percentage reported is even greater than last year, but that's pretty certainly within the margin of error.

Analysts think the convergence of taxonomies - in line with the convergence of reporting standards, presumably - is very important.

Analysts value increasing information granularity, even of details included in footnotes. Just tagging the note will not do.

Analysts are wary of X, i.e. the eXtensibility in so far as they think that preparers' ability to extend the taxonomy ought to be limited and should follow a strict protocol.

As the number of XBRL-aware respondents to the survey (ca. 240) seems to have been quite small, the validity of the answers to the more specific questions may have to be taken with a grain of salt.

Lifetime financial advice

The Research Foundation of the CFA Institute has issued a new monograph on Lifetime Financial Advice - Human Capital, Asset Allocation and Insurance by four distinguished authors: Roger G. Ibbotson, Moshe A. Milevsky, Peng Chen CFA and Kevin X. Zhu. For a summary, let me quote from the foreword:

The largest asset that most human beings have, at least when they are young, is their human capital? that is, the present value of their expected future labor income. Human capital interacts with traditional investments, such as stocks, bonds, and real estate, through the correlation structure. But human capital interacts in even more interesting and profitable ways with life insurance and annuities because these assets have payoffs linked to the holder?s longevity. The authors of Lifetime Financial Advice present a framework for understanding and managing all of these assets holistically.

This complex issue is approached in a systematic, model based fashion from the perspective of the individual investor. It may not, therefore, hold as much interest to the traditional institutional investor managing retirement monies collectively. Private wealth & insurance product managers should be able to find plenty of food for thought, though. But not only them: this short monograph should be essential reading for everyone who needs to be financially literate.

Education & Innovation

On the occasion of the Swiss CFA Society's celebration of the CFA Institute's 60th anniversary, I've been asked to host a panel discussing Education & Innovation in Switzerland. The panel was composed of Prof. Manuel Ammann, Prof. Thorsten Hens and Patrick Odier (right to left). The debate covered topics such as Swiss pragmatism in adopting innovation invented elsewhere, the r�le of intellectual property in financial innovation as well as ways to bridge the gap between academic research and practice. Panelists would like to see increased flexibility in the educational landscape and more interaction between the two quite separate fields.

CFA in Financial Times

While The Economist's gold standard attribution to the CFA designation is still unmatched for sheer quotabiliy, the Financial Times' latest Financial Training Report makes up for volume since it is almost dedicated to the CFA. Here's a little excerpt: The CFA qualification can give the masters of finance degree a run for its money.

Pensions in Russia

On Tuesday this week, I had the pleasure to give a presentation on occupational pensions to the members of CFA Russia in Moscow. The presentation has been recorded and will be made available on their soon to go live website. Meanwhile, the slides are available here.

CFA Institute's XBRL page

The CFA Centre for Financial Market Integrity now has its very own XBRL page (no RSS feed, yet!) to watch. While it's great that the Institute endorses XBRL, one wonders why it is only actively involved with XBRL in one country (where the Institute happens to be domiciled) ...

CFA Institute ups the ante on XBRL

In his April letter to 80'000 Members of the CFA Institute worldwide, CEO Jeff Diermeyer gives another boost to analyst awareness of XBRL. Judge for yourself:

The Time Is Now to Look at XBRL
As I mentioned in my December letter, I am encouraged by the promise that XBRL ? an interactive data-based language that allows the tagging of financial (and potentially non-financial) information ? holds in enhancing the ability of investors to analyze companies. I believe XBRL can significantly improve the accessibility and accuracy of financial statements and, ultimately, the quality of our global capital markets.

Recently, the New York Society of Security Analysts (NYSSA) held a seminar on XBRL at Baruch College. I wish you could have joined me at the seminar where Tom Larsen, CFA, chair of our XBRL working group, delivered an informative presentation (PDF) and I provided an update (PDF) on our involvement in this area.

If you haven't already, it is now time for you to take a good look at this new technology. Fundamental analysts, portfolio managers, credit analysts, quants, risk modelers, and academics should all evaluate how XBRL may change their investment processes. XBRL has developed to a degree where it is worth your while to investigate. We will attempt to deliver this information to your doorstep or desktop, although seeing the live presentations would be most effective.

In addition, in order to accelerate adoption of XBRL by companies, I urge you to ask company management where they stand with XBRL implementation. A little nudge from many of you will pay dividends.

CFA Institute, through its Centre for Financial Market Integrity, has formed an XBRL working group of nine members from diverse investment professional backgrounds, which has been charged with three main tasks: 1) Draft a position paper on the use of XBRL-tagged data in financial reporting from the end-users' perspective; 2) Survey CFA Institute members about the key elements needed to develop and maintain a high-quality XBRL system for delivering information to investors and investment professionals; and 3) Provide detailed implementation feedback to the SEC and to XBRL US Inc., the primary organization for the development of the XBRL taxonomy for financial statements and note disclosures provided for SEC filings.

We will keep you posted of further developments.

We are certainly looking forward to that!

CFA Magazine finds

The CFA Magazine often is a good source of interesting material, written in a competent, yet conversational style. Cases in point are Stephen Brown's article about RIXML, an electronic data format similar to XBRL, but specialising on research information and therefore not quite as pervasive as XBRL, and John Rubino's excellent piece about global liquidity, providing insights into the global yield curve and failing monetary policy in the presence of free flows of capital and the carry trade.

Financial Analysts on Pensions

The January/February issue of the CFA Institute's Financial Analysts Journal is fully dedicated to pensions and retirement provision from an asset management perspective. Essential reading for all subscribers to this blog!