New APIs (Application Programming Interfaces) from the SEC will make the financial disclosure data of EDGAR® companies more readily accessible to the public, which could accelerate stakeholder and consumer scrutiny of key topics including executive pay.
On August 19, the Securities and Exchange Commission (SEC) announced open data enhancements utilizing APIs to create more access for the public to the financial disclosure data of publicly traded companies. Specifically, such data would include financial statements and other disclosures of the company. The new enhancements apply only to companies that are already part of the Electronic Data Gathering, Analysis, and Retrieval system (EDGAR®).
But First, What Exactly is an API?
An API is an Application Programming Interface. Essentially, an API functions as a shared language between two unrelated applications enabling the applications to exchange information. As an example, when a website, where you don’t have an account or login, offers to let you log in using your existing Google account or your Facebook account instead, you have an API to thank for making the connection possible.
The SEC’s Use of APIs to Exchange Financial Disclosure Data
Jed Hickman, Director, EDGAR Business Office, said, “These new APIs make important information about public companies more accessible and usable than ever before. This marks another important milestone in the SEC’s continuing efforts to facilitate innovation and make financial disclosure data accessible to all market participants.”
The intended function of the APIs is that they will make aggregating financial statement data quicker and thereby make corporate disclosures easier and faster for developers and third-party services to use, and for the public
For now, the free APIs will provide access to EDGAR submission history by filer including eXtensible Business Reporting Language (XBRL) data from financial statements, such as quarterly and annual reports and Forms 8-K, 20-F, 40-F, and 6-K. Plus, the SEC plans to add access to additional datasets in the future.
The new APIs will update data in Realtime throughout the day as EDGAR submissions are released to the public. They also will bundle a daily update which will be compiled as a ZIP file and updated nightly.
Financial Disclosure and Executive Pay
As current directions trend toward increasing scrutiny of corporate financials and protocols, with more regulations promised for the future, publicly held companies may be pushed to find a balance between satisfying shareholders and consumers while still staying competitive for top talent. Creatively structuring executive pay, which includes all aspects of executive compensation, to serve both objectives can be a key difference maker.
View 2021-159 SEC Enhances Access to Financial Disclosure Data
- Information about the beta-test phase of the APIs is available at https://www.sec.gov/page/sec-api-documentation.
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