The Financial Services Authority is to phase in new XBRL-based electronic reporting standards for all UK regulated firms over the next three years.
Mandatory Electronic Reporting (MER) will start on 1 April 2005 for firms coming under the new general insurance and mortgage regulatory regime and for IFAs and other retail investment firms. At the same time electronic filing of complaints data will be introduced for almost all firms. The FSA says it expect to implement MER for other regulated activities concluding with deposit takers in 2007.
The watchdog says the introduction of MER will simplify and streamline the current paper-based process whilst reducing reporting costs to firms. Today's policy statement follows the publication of a consultation paper on the new reporting requirements last September.
A clear concern among many respondents was the security of the information submitted and the ability of the FSA's Integrated Regulatory Returns systems to cope with a large number of users. The FSA is expected to publish authentication and messaging plans shortly.
Chris Wood, financial services committee chairman at IT trade association Intellect says the adoption of XML-based eXtensible Reporting Business Language (XBRL) as a standard reporting format will create new challenges across the industry.
He says: "There is a critical need to establish a common understanding of the XBRL technical standards amongst the Independent Software Vendor community, and of the new software requirements of the financial services firms."
David Kenmir, FSA managing director, regulatory services business unit, says the regulator is working closely with IT and software companies to ensure a smooth transition.
"We will give firms sufficient time to prepare for the changes we are proposing, based on the principle that a firm should have twelve months to implement systems changes," he says.
The FSA has formed a Software Suppliers Advisory Panel to support the introduction of electronic reporting for regulated firms.