Table of Contents

1 Introduction

Rolling out an XBRL reporting programme can often set challenging goals for regulators. A regulator's goal in the XBRL programme is to collect high-quality data on time. To achieve this goal, it is important to gain the support of the filing community and make the whole process easier. This guidance identifies mechanisms and market practices to make the programme roll-out smoother for filers and regulators.

Whilst any change in filing requirements or regime invariably burdens the filer community, the recommendations in this guidance can minimise negative sentiment towards filing, support the filing community, and ensure the realisation of benefits for the regulator. In this guide, each mechanism is discussed briefly, along with its recommendations.

2 Phased introduction by preparer segment

In XBRL programmes, regulators have generally introduced some form of segmentation or phasing of implementation, usually as an introductory or transitional phase. Typically, those measures would require only a part of the market to report initially (for example, based on revenue or capital thresholds), adding more preparers over time until the entire reporting market is covered.

Such measures are intended to give the market time to adapt to the reporting regime changes and introduce different forms of a "soft start". This approach also gives the regulator and the service providers the time to build capability and spread the burden of supporting the new filing regime for the entire market segment. This helps to save the support cost for the regulator and to resolve any issues identified during the first phase of roll-out in time for subsequent phases.

The key downside of a phased roll-out is the delay in data availability in a single format for an entire segment until all filers adopt the new reporting regime. There may also be additional costs for communicating and managing multiple filing channels for different segments of the reporting population.

3 Effective and extensive piloting

A pilot run is deployed during the implementation planning phase before the full launch of the filing programme. A pilot run will engage a relatively small number of preparers filing reports, usually over a short period. This enables the filing processes, reporting platform, software, and solutions ecosystem to be evaluated and improvements to be made to increase the success of the main filing programme. However, the regulator should be aware that data collected during the pilot phase may not be representative of the reporting population as a whole and that a pilot should be adopted in conjunction with a pre-production test strategy to ensure that the solution will scale to its planned volumes.

Data collected during the pilot phase are not treated as live filings; pilot filings are made in addition to filings in the legacy format. Where applicable, the regulator may publish these filings for the consumer community to become familiar with.

4 Developing the filing solution ecosystem

The success of a new electronic reporting system is dependent on support from the software developer and service provider community, as they will need to have working solutions in place ahead of the initial filing deadline. In turn, this support is dependent on positive engagement with these communities to ensure that they are aware of the details of the new filing requirements and have everything they need to meet them. The engagement with the software and service providers could include encouraging them to provide early feedback on the reporting framework and taxonomy, arranging vendor training, and keeping the community updated on the development milestones of the project.

Regulators could facilitate the demonstration and promotion of software offerings to the filer community (without endorsing any specific provider). This will help the filers get acquainted with different offerings available in the market and the new filing requirements.

Regulators should also set up a test filing environment, allowing preparers, software vendors and service providers to submit filings to test the submission process and expected validation results. Often, repeat filings are permitted until the preparer or submitter has confirmed their filing process is working as required. Test filings submitted in this way are not subject to downstream processing by the regulator.

One of the methods to ensure the robustness of the regulators' own reporting platform is implementing a pre-production test strategy. A thorough pre-production test strategy will prove that the filing process works end-to-end and will scale to the planned filing volumes. The pre-production test approach typically also covers failure and exception modes of operation before any implementation.

5 Regulator-provided filing software

Some regulators provide software tools or services that allow preparers and filers to submit reports. This software, which is typically free or subsidised, appears to be a good option for the filer community to start filing. However, it reduces the the market for commercial software solutions, and thus may reduce the number and quality of available products. The regulator needs to be aware of and factor in the cost and time for developing and maintaining this software over the long term.

The software will need to be maintained in order to resolve bugs and update it to accommodate changes in the reporting requirements. This approach may also increase project risk, as any issues in regulator-provided software that prevent or hinder filing may be used by filers as a reason to not comply with the filing requirement, whereas in a purely commercial market it is the responsibility of the filer to select software that is fit for purpose.

Regulator-provided software may initially seem to reduce the cost of reporting for filers, but may actually lead to higher costs in the long term if it discourages the adoption of more integrated approaches to the preparation of XBRL reports.

6 Filer education

The filer community is the major stakeholder in making the new reporting regime successful. The new reporting process may have resistance from the filer community because of the fear of the unknown. The regulator needs to plan an extensive awareness, education and communication programmes to familiarise the filers with the new filing process, requirements, and policy changes. The education programmes needs to be rolled out well before the launch of the reporting programme. There could be multiple channels through which an awareness programme could be delivered, such as webinars, e-learning, user manuals and guides, video demonstrations and FAQs.

7 Engage with the regional or local XBRL communities

The national or regional jurisdiction of the XBRL International consortium is an excellent source of guidance, advice and experience. The lessons learned from previous programme roll-outs in the local region will enhance the programme roll-out of a new reporting regime. An understanding of the local culture, market engagement, established reporting ecosystems, shared resources, and expertise can enhance programme success. Collaboration can also happen amongst the local or regional XBRL communities in the absence of XBRL jurisdiction.

The local XBRL jurisdiction can also often be a neutral facilitator for meetings between regulators, preparers and other stakeholders.

8 Phased coverage (scope of reporting)

This approach phases in the reporting requirements, with more data being collected as filers and collectors become more familiar with the new filing regime. For example, if a stock exchange plans to collect XBRL data, the first roll-out phase may be collecting financial reporting. While the first set of reports is collected, regulators may develop other reports, such as corporate action or corporate governance, and publish additional taxonomies to cover these requirements.

This phasing approach helps regulators to start with minimum reporting requirements so the filers get used to the reporting process,. The following risks need to be mitigated while implementing this approach:

• The data set collected may not be adequate for any meaningful analysis.
• Possibility of getting stuck at the initial reporting requirements and not expanding the filing regime to include other reporting domains.

9 Phased coverage (scope of tagging)

To ease the burden on filers during the initial reporting period, regulators may reduce the scope of tagging. All reporting requirements are covered by the taxonomy; however, only some parts of the report are required to be reported digitally. For example, a reporting programme collecting financial reports in XBRL will have all requirements defined in the taxonomy, but the initial reporting cycle may only mandate that the primary financial statements are tagged, with the tagging of the remainder of the report phased-in in subsequent reporting cycles. Increasing the scope of tagging may not require rolling out new taxonomies as required to increase the 'scope of reporting' discussed above.

This approach reduces the effort required for preparers and filers during the early stages of the implementation. Typically, this is accomplished with a minimum or reduced tagging set communicated to preparers. Having said that, the downside this approach is having a limited set of data initially, which may not be useful for meaningful consumption.

10 Voluntary early adoption

Under this approach, regulators allow voluntary submission of XBRL data under the proposed new filing rules. Voluntary submission may be allowed for a few reporting cycles. This approach gives preparers the flexibility to update their filing processes and can help spread the load of support services for regulators, service providers, and software vendors.

The filings submitted voluntarily are generally considered suitable for compliance, and filers are not required to also submit them in the legacy format. The downsides of this approach is that during the voluntary period, regulators will receive filings in a mixture of formats, and will need to maintain parallel systems.

11 Parallel run

Parallel running is adopted where an existing reporting regime is in place, and an XBRL filing requirement is added in addition to the existing format. This requires the preparer to submit reports in both the existing format, and in XBRL. This approach may appear to be a safe option for regulators as they continue to receive the data in the legacy format whilst any issues with collection in the new format are resolved. However, this requires maintaining two filing systems, which will add to costs, and data quality may be compromised as filers may not take filing under the new system seriously.

12 Summary recommendations

The manner in which an XBRL filing programme is rolled out can have a significant impact on the burden imposed on filers, and the overall success of the project. This guidance gives specific recommendations about common practices implemented by regulators to ease the roll-out process.

This guidance highly recommends a few market practices for a smooth roll-out of the reporting programme, such as effective piloting, development of a solution provider ecosystem, and conducting filer awareness programmes.

This guidance also describes other practices that may be considered: phasing scope of reporting, phasing scope of tagging, voluntary filing period, and providing a free software tool by the regulator. These practices may have value in certain environments, but regulators should be aware of the risks and drawbacks discussed in the sections above.