JFSA XBRL Project

Dec 3, 2007

Hirofumi Gomi

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The role of JFSA

Planning and policymaking in relation to the financial system

Inspection and supervision of private sector financial institutions

Establishment of rules for trading and disclosure in securities markets

Surveillance of compliance of rules in securities markets, etc.

Planning and policymaking in relation to the financial system

Inspection and supervision of private sector financial institutions

Establishment of rules for trading and disclosure in securities markets

Surveillance of compliance of rules in securities markets, etc.

The role of “watchdog” to ensure the sound development of the financial and securities markets

The role of “watchdog” to ensure the sound development of the financial and securities markets

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Measures to ensure confidence of the market

Introduction of an administrative civil money penalty system

Enhancement of framework for reviewing statutory disclosure documents

Enhancement of audit system

Expansion of information disclosure system

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Disclosure System

Revitalization of the market by disclosure system

Information in sufficient quantity and high quality－ Development of disclosure regulations and accounting standards

Valuable and circulative information － Establishment of technological environment

fair, transparen

t and vibrant market

fair, transparen

t and vibrant market

XBRLXBRL

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XBRL-based Disclosure

CompaniesCompanies InvestorsInvestors

－ Enabling companies to directly provide management information to market

－ Enabling investors to directly utilize the disclosed information

XBRLXBRL

Interactive effect through disclosed informationInteractive effect through disclosed information

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Impact of XBRL

From “Readable Information”

To ”Usable Information”

Bringing information on the 5-trillion-dollar Japanese market to the world

Bringing information on the 5-trillion-dollar Japanese market to the world

Paradigm Shift

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Outline of EDINET

Electronic Disclosure for Investors’ NETwork

•Electronic disclosure system under the Financial Instruments and Exchange Act

–Used for Annual Reports, Semi-annual Reports, Quarterly Reports, Securities Registration Statements, etc.

•Launched in June 2001

•Number of issuers (Annual Report):–About 5,000 companies (mainly listed companies)–About 3,000 investment funds

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Issues of current EDINET

• No function for downloading reusable data

• Investors can browse information on Web browsers but need to retype data when conducting analysis thereof.

HTML HTML

Browse Analysis

HTML format

RetypeRetype

CompaniesCompanies InvestorsInvestorsCurrent EDINET

Current EDINET

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EDINET Renovation Project

• By introducing the XBRL download function, investors can analyze the financial information efficiently.

XBRL format

XBRL HTML

XBRL

Browse

Analysis

CompaniesCompanies InvestorsInvestorsNewEDINET

NewEDINET

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New EDINET –(1)

• Schedule

– Apr 2008 　 Launch new system

– Jul 2008 　 Start XBRL filing

• Scope of XBRL

– Financial Statementscontained in

•Quarterly Reports

•Semi-annual Reports•Annual Reports

•Securities Registration Statements

(1st quarter of FY 2008 (Apr - Mar))

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New EDINET –(2)

• XBRL filing of financial statements will be mandated in principle.

One of the largest XBRL system in the world

One of the largest XBRL system in the world

- Financial statements of all 5,000 companies and all 3,000 investment funds will be XBRLized

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Introduction Process

– This council has been established to make collaborative efforts with EDINET stakeholders.

– Members: industry, CPA, analysts, stock exchanges and others.

– Many industry groups and companies cooperated to review the draft taxonomy.

– Two pilot programs were held in January and July 2007.

EDINET Advancement Council (2004-)

Cooperation with industry

Pilot Program

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XBRL Pilot Program

The 2nd voluntary pilot program was held in July 2007 in order to facilitate the introduction of full-fledged XBRL.

•Term of program ：

July - August 2007

•Number of participants:

about 1,200 companies

＜ Overview＞

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Improving the efficiency and effectiveness of their analysis

Improving the efficiency and effectiveness of their analysis

Expectation for XBRL –(1)

• As “Usable Information”, XBRL should– make all market stakeholders’ activities more efficient.– increase the transparency of companies

- Improving efficiency of their disclosure process- Reflecting corporate value to the markets dynamically - Innovating management strategy

- Improving efficiency of their disclosure process- Reflecting corporate value to the markets dynamically - Innovating management strategy

Improving the efficiency and effectiveness of their functions

Improving the efficiency and effectiveness of their functions

Companies: Investors:

Regulators:

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Expectation for XBRL –(2)

• As a global language, XBRL should enable the global use of financial information.

Japanese companies can easily participate in foreign markets

Foreign Markets

Foreign investors can easily use information from Japanese market

Foreign Investors

JapaneseMarket

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To make XBRL a truly global infrastructure –(1)

• To establish a global market, corporate financial information in all countries should be used in a cross-border fashion

• Differences in data formats for financial information among countries may interfere with global usage.

Are there any problems in introducing XBRL in any specific countries?

Are there any problems in introducing XBRL in any specific countries?

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To make XBRL a truly global infrastructure –(2)

• To maximize the benefits of XBRL as global infrastructure,

• It is necessary to ensure interoperability and comparability of XBRL through global cooperation.

Cooperation among JFSA, SEC, IASCF has begun.

Cooperation among JFSA, SEC, IASCF has begun.

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– We are ready to share the knowledge that we have gained from our leading project.

– We will promote international cooperation aimed at global interoperability.

Thank you.