The SEC Has a New IDEA

A round of applause for the Securities and Exchange Commission, please. On Tuesday, Chairman Christopher Cox unveiled IDEA, a successor to the EDGAR database that stores filings for thousands of U.S. companies and foreign firms listed on U.S. exchanges.

IDEA -- shorthand for Interactive Data Electronic Applications -- is being built from scratch and will natively read documents encoded in XBRL, a business reporting language that "tags" key data so it can be easily sorted. The implication: IDEA will be customized for each user that encounters it.

We don't yet know what features IDEA will have, but a glimpse is forthcoming. Quoting from the agency's press release:

During the transition to IDEA, investors will be able to take advantage of new interactive, IDEA-like features that will be grafted onto EDGAR in the short run. This will make it possible for investors to tap IDEA's advanced search capabilities, and to use information from EDGAR within spreadsheets and analytical software -- something that was never possible with EDGAR.

That's a quantum leap. At a minimum, it'll change or even eliminate traditional stock screening. "When Congress created the SEC, and even when EDGAR was launched, the markets worked on paper and by mail. Today, the marketplace works online and by email," said SEC-appointed disclosure expert Dr. William Lutz in a statement.

Microsoft (Nasdaq: MSFT) has been a leader in interactive data for years. General Electric (NYSE: GE), Coca-Cola (NYSE: KO), and NYSE Euronext (NYSE: NYX) filed interactive data reports with the SEC in August. Hundreds more will follow by next year if Cox gets his way. I expect that he will.

Rejoice, Foolish investors. A new day is upon you. EDGAR has been good to us, but it's time for a new idea. The SEC has just the thing.

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