Edgar Online: Redefining Data
IMD:
You came to Edgar Online just over a year ago from various venture capital entrepreneur-in-residence roles, including at Safeguard Scientifics. What changes have you made during your first year as president-and more recently as CEO-and what further changes do you plan in the future?Moyer:
When I came in, it was easy to see that Edgar Online had a huge opportunity to redefine the definition of a data company. The company had a great brand that had traditionally been focused around end-user subscription tools for US equities-a crowded market with well-capitalized competitors. However, Edgar Online possessed an unmatched expertise in XBRL and an unmatched software platform for creating, collecting, and distributing highly detailed data. We were quietly producing one of the most detailed and fundamental datasets in the world, but we were locked into a very traditional model for delivering that data-through our subscribers. Our management team made a decision to become the best raw materials provider in the world, across all asset classes, and to partner with organizations of all sizes to power their solutions. As a result, we have found ourselves at the center of the movement to open standards for financial data. Today, we do everything from creating XBRL filings for reporting companies to integration of XBRL data and tools into other financial information providers. We are really redefining what it means to be a data company-moving right to the source of where data is first created-and ensuring its purity and transparency.IMD:
How have you leveraged your past experience at Microsoft and Safeguard Scientifics in your role at Edgar Online?Moyer:
Microsoft taught me the power of open standards and the value of being a good partner. When I first joined Microsoft, everyone had their own proprietary networking systems from top to bottom. IBM had Token Ring, there was AppleTalk, Digital Pathworks and Novell IPX/SPX. Microsoft & 3COM had Lan Manager/Netbui and there was Banyan Vines. These were big, multi-billion dollar businesses built on proprietary hardware, software and network technologies.All of those businesses have completely disappeared. TCP/IP and the Internet connect most of the world's computers today. I believe the same thing is about to happen in financial data. We need accounting and data standards that allow information about assets to flow directly to investors that analyze and trade these assets. I've watched these kinds of standards emerge across so many industries. My experience at Microsoft will ensure that Edgar Online is at that heart of this transformation in the financial industry-and that we are smart about being a good partner with other companies in the process.
IMD:
Edgar Online uses XBRL tags to improve analysis of financial data. What are the benefits of adopting XBRL for financial analysts and for companies filing statements in XBRL?Moyer:
Since 1934, when the SEC first started requiring companies to file a report on the state of their company, there has been almost no innovation in fundamental data. An investor or analyst gets the SEC document and re-keys the information into their particular financial model by hand. In some cases, data companies do some of the data entry, but you always have the problem of how they come up with a number and finding errors in the data. While this was a manageable problem when there were a few thousand public companies and a few hundred bonds, the complexity of assets, the detailed level of reporting and the sophistication of trading software has far surpassed the market's ability to understand the assets that are being traded. This is primarily because we simply cannot re-key all the information from all of those documents fast enough and then actually perform meaningful analysis.Railroads, plumbing, electricity-all needed standards to be able to connect. Financial information is the same: standards create connections directly from the asset to the investor that allows the cleanest, most detailed information to flow, providing the transparency investors need to make good decisions.
The XBRL specification released by the SEC has over 3,000 elements for the primary financials and close to 10,000 elements defined for the footnotes. This detailed information is already being reported by public companies, but everyone is re-keying this data for their own models. XBRL will dramatically increase the amount of information available to analysts and ultimately improve the ability for companies to get their story across.
IMD:
Given the potential benefits, why are so many financial regulators around the world having to actively promote the use of XBRL for financial filings?Moyer:
Today we have an environment where everyone is reporting something different, and the interpretations and re-keying models vary widely. No-one is willing to adopt their competitor's reporting model... So you end up with the Tower of Babel we have today.Since government generally regulates markets and the reporting required of participants, it's a good place to pull together commonalities and to drive a single standard within a country. What's exciting is countries like The Netherlands and Australia, where every single government entity will move to XBRL for their reporting requirement-imagine the efficiencies for companies that do business in those countries: Instead of filling out endless forms, they can produce data in a common format.
IMD:
Currently Edgar Online only provides data for North America, Chinese and Japanese filing companies. How would you describe client demand for international datasets and what other sets do you have planned?Moyer:
We've received positive feedback about the Chinese data from those organizations that are actively using it, and we are seeing an increase in demand for non-US coverage. That's why we're strategically selecting XBRL data like the South Korean data we announced in May. Our goal is to cover at least 75 percent of market cap worldwide, and we are well on our way.IMD:
What is involved in collecting data from new countries and regions and how long does this process typically take? When will we see Edgar Online roll out more international data?Moyer:
Our proprietary XBRL-enabled software enables us to go into countries more rapidly than other data providers, and we are able to provide "link-back" to the source document for every single data element. We look for markets where we can provide highly granular data that can be traced back to the source.IMD:
Edgar Online has previously stated its intention to expand coverage to mutual funds. What other types of new asset classes could Edgar Online also provide data for?Moyer:
As you may know, the SEC has proposed that Risk/Return Summaries be filed with the SEC in XBRL format next year. This is a great extension of the XBRL mandates under review for public companies. We've already begun working with the mutual fund summaries as well as 144A filings and look forward to a longer-term move into asset-backed securities and municipal bonds markets.IMD:
Edgar Online recently announced a partnership with Nasdaq OMX's Portal Market to build a database for 144A securities. What data elements associated with 144A securities would be provided through the database and when will the database become available?Moyer:
We have not released full detail on the elements to be included in the Nasdaq 144A dataset, but the data processing is well under way and we hope to have a dataset on the market sometime within the next year.IMD:
In the future, might we see Edgar Online provide data on hard-to-value securities such as collateralized debt obligations? How do these potential asset classes differ in terms of the data that Edgar can provide to bring more transparency to exotic securities?Moyer:
We haven't announced anything yet in the CDO market. However, it is not a leap to think that sometime in the future our automated processing capabilities could add a lot of value to this market. The filings in this market are voluminous. The need for timely lifecycle data for these assets is clearly not being met.IMD:
Are you seeing more demand for data on these types of instruments as a result of the recent credit market turmoil and economic downturn? What impact have these events had on client demand for data from Edgar Online?Moyer:
You can't open a newspaper without seeing ongoing coverage of the impact of the credit crisis. What we've seen is that the majority of people trading residential mortgage-backed securities did not have any details on the loans that were actually in the security-their quality or their distribution. I'd say that this past year has proven that trading systems have surpassed our ability to understand the assets that we are trading. So the short answer is yes, we see demand. Because we pride ourselves on creating the most detailed fundamental data, we are seeing great interest in our datasets and our data processing capability.IMD:
Are you seeing demand from broker-dealers and hedge funds to be able to use fundamental company data provided by Edgar Online for algorithmic trading? How can firms incorporate this data into algo-trading strategies?Moyer:
Yes, we believe that the next frontier of algorithmic trading will be in mixing the disciplines of quantitative analysis and fundamental analysis. For this to occur, trading organizations need real-time pricing and fundamental feeds, with high levels of detail and accuracy. Edgar Online and XBRL intend to be the plumbing that powers this next generation of traders.IMD:
In March, Edgar Online was the first public company to simultaneously submit a 10-K and XBRL-tagged financial statements to the SEC using the latest taxonomies, in partnership with print services provider RR Donnelley & Sons. Can you describe the partnership between Edgar Online and RR Donnelley, and explain how the combination of the two companies' technologies makes the filing of financial statements using XBRL tags easier?Moyer:
Edgar Online and RR Donnelley have created the fastest, lowest-cost and most detailed XBRL filing solution in the US. RRD is regarded as the worldwide market leader in financial printing, with a long history of managing regulatory complexities on behalf of its clients. Edgar Online has built the most detailed XBRL tagging system in the world and the only historical database of XBRL data for 10 years of all US equities.The software we use to build our database creates a tagged statement directly from a customer's quarterly Edgar filing or from their primary financials. We then provide the customer with a historical view of their own filings along with our observations of what they may want to optimize. We work with the customer to adjust or edit any of the tags, and once the client is happy with the final product, we validate and file the XBRL with the SEC. It couldn't be easier-or lower-cost.
We estimate we've taken a process that typically takes about 80 to 100 man-hours and reduced it to a few hours. This is the reason we filed more XBRL filings in the voluntary program than any other single solution. In addition, we launched www.tryxbrl.com, which offers every US public company a portion of their income statement already tagged in XBRL to prove how powerful our solution is. No other filing solution even comes close to the experience we have across the US market cap-no-one else could propose to offer every US public company their most recent filing already tagged.
Our goal is simple: we want to transform the world of fundamental reporting.
CEO Confidential Name : Philip MoyerBirth Date : 1965Hometown : Reading, Pa.Education : University of Pittsburgh, B.S. in Computer ScienceCurrent Home : New York CityFamily : Married with two sonsWhich book are you currently reading? The System of the World-The Baroque Cycle by Neil StephensonWhich CD are you listening to now? U2, Fiction Plane, Rage Against the Machine, Coldplay and Sia What is the last movie you saw? Speed Racer Which sports teams do you root for? Philadelphia Eagles, Flyers, Phillies What's your favorite city or place to visit and why? Italy. The food, the wine, and the lifestyle-there is no better place in the world to appreciate life What newspapers or magazines do you read? Inside Market Data , of course, along with The Wall Street Journal and Trader MonthlyWhat was your first paying job and how old were you? My grandfather paid me to help him on his farm during the summer when I was 10 years old If you could have dinner with any person, real or fictional, dead or alive, who would it be and why? Steve Jobs-the Leonardo Da Vinci of our generation. He has an incredible ability to make super-complex ideas easy to use by the average person, then commercialize them How much sleep do you get each night? Five to six hours |
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