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XBRL: Exchanges & Regulators Brave New Playing Field Paul Phenix Senior Adviser.

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Presentation on theme: "XBRL: Exchanges & Regulators Brave New Playing Field Paul Phenix Senior Adviser."— Presentation transcript:

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3 XBRL: Exchanges & Regulators Brave New Playing Field Paul Phenix Senior Adviser

4 OUTLINE 1.What do Stock Exchanges do? 2.What will Customers need? 3.Brave New World & Radar Screens 4.Pushing Tin: Staying on the Screens 5.Yellow Card: Referees’ whistle

5 What Do Stock Exchanges Do?: 1 1.A necessary Question because not all Exchanges do what people think they do. 2. The answers for each Exchange will determine effect and opportunities of XBRL for each Exchange.

6 What Do Stock Exchanges Do?: 2 -Mechanics –Trading Systems: - All: but some use other Exchanges’ systems –Settlement/Clearing: - Some: others sub contract

7 What Do Stock Exchanges Do?: 3 Customer Relations 3.Approve Listing: Some but getting fewer 4.Regulate Listed Companies: A few & getting fewer 5.Regulate Brokers: A few & getting fewer

8 What Do Stock Exchanges Do?: 4 6.Investors /Analysts a) Provide Information -Listed Company Data All but some give old info only -Trading Data All but some give old info only

9 What Do Stock Exchanges Do?: 5 6.Investors/ Analysts b) Sell Information –Listed Company Data –Most Sell New Information –Some: Sell Repackaged Information –Trading Data: –All: Sell New and Old Information –Some: Sell Repackaged Information

10 XBRL & Customer Needs Listed Companies: –Regulatory Data: or –Market Data Companies will want to provide XBRL Data Especially if they can do so Overseas: (ie Web means weaker national control / monopoly)

11 XBRL & Customer Relations Brokers : –Regulatory Data –Same desire / needs as Listed Companies but no international dimension because of country by country regulation and registration

12 Market Data The Brave New World Dedicated Search Engines/Apps. –Proprietary applications or sites –Pull down menus –To select data by:

13 Brave New Playing Field –Type of Data –(e.g cost of sales; consultancy fees) –Type of Company –(e.g. mining, agriculture: c & i) –Country or Region or World –Minimum/Maximum Size of Company –(e.g. Market Cap >$100m.: Sales >$1bil.)

14 Brave New Playing Field 2 –Search will extract Data from any Company with XBRL Website –Application will then Analyze; Graph; and Pick a “Winners Circle” of Companies which meet Investor’s Benchmarks –ie “Analyst on a Desktop”

15 Penalties –If Exchange’s Data System is not XBRL’d –Exchange drops off the Radar Screens –If Company data is not XBRL’d –Company drops off the Radar Screens

16 Exchanges Typically make 25-35% of Total Revenue from Sale of Data 25-35% of Total Revenue from Sale of Data

17 Crash Test Dummies –If Company is not on Radar: –Price falls and Cost of Capital rises –So: Companies will want to supply data to where it will be seen –Web-based system so Companies not restricted to domestic data vendors

18 Crash Test Dummies 2 –Even if paper filing is required by Law / Regulation: –Companies will still use “Best System” (ie XBRL) in addition to paper system –Investors will use “Best System” ie XBRL

19 Crash Test Dummies 3 Backward Exchanges/Regulators will be stuck with costly, clumsy paper warehouse: Because they will still have to receive and store this Data for regulatory purposes

20 Problems: Referees’ whistle –Validation: Regulators will probably require a Certificate that XBRL Statements same as Printed/Signed Version


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