Written by Mike Skutinsky, Jr. Posted on October 3, 2007

Mike Skutinsky Jr. will complete his two-year term as Executive Director of RIXML.org on November 30. His delivery milestones include establishing a Level One specification compliance timeline, release of current specification 2.2, and aligning and establishing RIXML.org as a provisional jurisdiction of XBRL.org.

In my July post I provided a brief overview of XML applications in the financial services world XBRL in general, and RIXML specifically. Both standard groups have great support organizations, with talented and dedicated people involved, and are financially supporting themselves.

But one still has to ask, “Where is the traction?”

In my opinion it’s fairly simple, and I feel there are a lot of true-life scenarios out there to support my premise. In the world of Wall Street, applications and endeavors work much better when they come from the top/down, not bottom/up. If you look at the many Wall Street mergers and acquisitions over the years, the Y2K effort, and the Global Research Analyst Settlement dictates of a few years ago, all were handled and implemented very efficiently and in a timely manner. Why? They were top/down, not bottom/up, efforts. Regulatory stuff gets immediate attention on Wall Street!

While XBRL U.S. does have a great champion in Chairman Cox, the call for filing in XBRL is still voluntary for companies, not mandatory. Wall Street does not like changes or surprises, and I feel that “voluntary” is just not going to make it happen. I have been the Executive Director of the RIXML.org standards effort for over two years, and while we have made inroads (without a champion of the stature of Chairman Cox), progress has been steady but slow.

Research analysts would be eager to use filings in XBRL formats, but they are not going to switch or make the commitment until there is a critical mass of companies filing in XBRL. Ergo, analysts will not be pushing their Directors of Research to lobby for XBRL, and this demand for filings will not go further up the food chain (bottom/up) within a financial services company. In my opinion what is needed is a working group comprising the SEC, sell-side financial services firms, and a handful of companies willing to take the plunge and come on over to the XBRL side. (We now have about 40 U.S. companies filing in XBRL format, but that just isn’t going to make it happen at that level.)

We at RIXML have the same dilemma as our XBRL partners. We have a great schema and fantastic professionals involved from many firms — BUT adoption and traction can be better and happen faster. We also are a bottom/up effort! RIXML joined XBRL International as a provisional jurisdiction this past June, and we are confident that we can make more progress together than we can individually. I feel that by focusing on the vertical forces within our market we can start to make an impact. We have to tell our story to the industry associations such as SIFMA, get involved with the professional certification groups such as the CFA Institute, and possibly take our story to Congress and the applicable financial committee heads. We shall see…

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