Download Brave New Playing Field

XBRL:
Exchanges & Regulators
Brave New Playing Field
Paul Phenix
Senior Adviser
OUTLINE
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What do Stock Exchanges do?
What will Customers need?
Brave New World & Radar Screens
Pushing Tin: Staying on the Screens
Yellow Card: Referees’ whistle
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.
What Do Stock Exchanges
Do?: 2
- Mechanics
– Trading Systems:
All: but some use other Exchanges’
systems
– Settlement/Clearing:
-
Some: others sub contract
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
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
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
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)
XBRL & Customer
Relations
Brokers :
– Regulatory Data
– Same desire / needs as Listed Companies
but no international dimension because of country
by country regulation and registration
Market Data
The Brave New World
Dedicated Search Engines/Apps.
– Proprietary applications or sites
– Pull down menus
– To select data by:
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.)
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”
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
Exchanges Typically make
25-35% of Total Revenue from
Sale of Data
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
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
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
Problems:
Referees’ whistle
– Validation:
Regulators will probably require a
Certificate that XBRL Statements same
as Printed/Signed Version