Extension of Interactive Data Voluntary Reporting Program on the EDGAR System to Include Mutual Fund Risk/Return Summary Information1
Introduction
The Securities and Exchange Commission has adopted rule amendments to rule 401 of Regulation S-T and rule 8b-33 under the Investment Company Act of 1940 to enable mutual funds to voluntarily submit risk/return summary section of their prospectuses. using tagged data under the Commission's voluntary interactive data program.
Data tagging uses standard definitions (or data tags) to translate text-based information into data that is "interactive," that is, data that can be retrieved, searched, and analyzed through automated means. Tags are defined in taxonomies, which are essentially data dictionaries that describe individual items of information and mathematical and definitional relationships among the items.
The rule amendments permit mutual funds to submit tagged risk/return summary information using a taxonomy developed by the Investment Company Institute. The taxonomy received acknowledgement as an eXtensible Business Reporting Language — or XBRL — taxonomy by XBRL International. XBRL is an open source specification that describes a standard format for tagging financial and other information that was developed and continues to be supported by XBRL International, a collaborative consortium of organizations representing many perspectives in the financial reporting community.
Specifics of Risk/Return Tagging
Under the voluntary program, filers choosing to furnish XBRL data for the risk/return summary information set forth in Items 2 and 3 of Form N-1A may tag a complete set of risk/return summary information for any one or more series. For example, if a filing contains information about four series, a filer could tag information for one, two, three, or four series. Filers who choose to tag the information for a particular series are required to tag all the information for that series, including the information for each class of the series. Class-specific information, such as expenses and performance, is required to be separately identified by class. Information that is not class-specific, such as investment objectives, is not required to be separately identified by class.
As with all tagged exhibits under the voluntary program, submission of tagged exhibits containing risk/return summary information is supplemental and does not replace the required HTML or ASCII version of the information called for in Form N-1A. Volunteers are required to file their complete official registration statements to ensure that all investors have access to information upon which to base their investment decisions.
Mutual funds submitting tagged risk/return summary information must include this information as an exhibit to an amendment to a previous filing on Form N-1A. The rules provide that a tagged exhibit to a Form N 1A filing, whether the filing is an initial registration statement or an amendment thereto, may be submitted only as an amendment to the filing to which the tagged exhibit relates and only after the effective date of such filing. An exhibit containing tagged risk/return summary information may be submitted under rule 485(b) of the Securities Act, which provides for immediate effectiveness of amendments that make non-material changes, and will only need to contain the new exhibit, a facing page, a signature page, a cover letter explaining the nature of the amendment, and a revised exhibit index.
The voluntary program requires all volunteers to use the appropriate version of a standard taxonomy, supplemented with extension taxonomies as specified by the EDGAR Filer Manual. Filers submitting tagged risk/return summary information should not include the risk/return summary taxonomy in their submissions as this taxonomy is stored as a part of the EDGAR system. Section 5.2.4 of the EDGARLink Filer Manual (Volume II): "EDGAR Filing" provides instructions and guidance on the preparation, submission, and validation of EDGAR-acceptable electronic filings with attached tagged risk/return summary information.
Volunteers are free to submit tagged risk/return summary information regularly or from time to time, and volunteers may stop and start as they choose. Participating in the voluntary program does not create a continuing obligation for a volunteer to submit tagged risk/return summary information as an exhibit to a subsequent post-effective amendment. A volunteer is, however, required to amend any tagged risk/return summary exhibits that do not comply with the content and format requirements of rule 401, e.g., because they do not reflect the same information as the corresponding official filing.
The exhibit index of any Form N-1A filing that includes a tagged exhibit must disclose that the purpose of submitting the tagged exhibit is to test the related format and technology and, as a result, investors should not rely on the exhibit in making investment decisions. In addition, this disclosure must appear within a tagged exhibit.
Other Resources
The adopting release for the new interactive data voluntary reporting program for mutual fund risk/return summary information can be found on the SEC's website at http://www.sec.gov/rules/final/2007/33-8823.pdf.
Regulation S-T can be accessed through the "Corporation Finance" section of the SEC's website at http://www.sec.gov/divisions/corpfin/ecfrlinks.shtml.
Rule 8b-33 and Form N-1A can be accessed through the "Investment Management" section of the SEC's website at http://www.sec.gov/divisions/investment.shtml.
The Commission's EDGAR Filer Manual is available at http://www.sec.gov/info/edgar.shtml.
Additional materials regarding interactive data generally are available at http://www.sec.gov/spotlight/xbrl.shtml.
Contacting the SEC
The SEC's Division of Investment Management is happy to assist small companies with questions regarding the new interactive data voluntary reporting program for mutual fund risk/return summary information. The Division's Office of Chief Counsel answers questions submitted by e-mail and telephone. You can submit a question by e-mail to imocc@sec.gov and a staff member of the office will call you to discuss your question. In addition, you can contact the Office of Chief Counsel at (202) 551-6825.
Footnotes
1
This guide was prepared by the staff of the U.S. Securities and Exchange Commission as a "small entity compliance guide" under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended. The guide summarizes and explains rules adopted by the SEC, but is not a substitute for any rule itself. Only the rule itself can provide complete and definitive information regarding its requirements.