In a January 10 speech to the American Institute of Certified Public Accountants’ International Issues Conference, SEC Chairman Christopher Cox addressed three major global markets regulation topics: International Financial Reporting Standards (IFRS); universal use of XBRL - Extensible Business Reporting Language - as the corporate reporting data application; and Mutual Recognition. The recent decision by the SEC to accept IFRS financial statements in SEC filings by foreign private issuers was the first step in U.S. implementation of IFRS standards. Chairman Cox stated unequivocally that, “IFRS is coming,” and noted that some 100 nations are working on adopting IFRS and implementing XBRL. XBRL is quickly becoming the standard data application to describe financial information for public and private companies alike. Chairman Cox noted that XBRL is being adopted at a rapid pace across the globe, including in the United States where the application is now available for U.S. reporting companies’ use and has been the subject of a recently concluded two-year study. He also stated that the Commission will consider, this year, whether to require public company reporting to include XBRL data tags. Finally, Chairman Cox addressed the issue of Mutual Recognition to permit U.S. investors to have the benefit of direct access to foreign markets or even broker-dealers, provided those entities are supervised in a foreign jurisdiction with high standards under a securities regulatory regime substantially comparable to that in the U.S. He noted that U.S. trading in foreign securities is over $7.5 trillion, and foreign trading in U.S. securities is over $33 trillion.
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SEC Chairman Cox speaks: international business – an SEC perspective
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