fOcus ON EMEA: UaE

SCA ESTabLiSHES XBRL TaxONOmY

By SHwETa GUPTa aND BaLaji KRiSHNaPRaSaD, IRIS

REGIONAl LEAdERs:

SHwETa GUPTa aND BaLaji KRiSHNaPRaSaD Of IRIS TRaCE THE DEvELOPmENT Of THE XBRL TaxONOmY fOR THE EmiRaTES SECURiTiES aND COmmODiTiES AUTHORiTY aND ExamiNE iTS bENEfiTS fOR USERS.
The Emirates Securities and Commodities Authority (SCA) was established in 20001 by the UAE government to legislate, regulate and enable the efcient functioning of UAE nancial markets. The SCA is also responsible for ensuring transparency in reporting the nancial status of companies to help investors make informed decisions. The SCA has always been a frontrunner in the adoption and implementation of new standards in nancial reporting, regulation and compliance. The SCA was granted a provisional XBRL jurisdiction status in 20062 the rst in the Middle East to be granted this status and became a permanent XBRL jurisdiction in 2009. With globalization and accelerated economic growth, it has become extremely complex for regulators to manage and monitor scal
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SOURCE: SECURiTiES aND COmmODiTiES wEbSiTE (HTTP://www.SCa.GOv.aE/ ENGLiSH/SCa/PaGES/ESTabLiSHmENT.aSPx)

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compliance. Another pertinent issue for regulators is to balance the ever growing demands and complexity of business reporting while ensuring that companies are not burdened with tedious and time consuming ling requirements. In order to achieve this, regulators need a highly effective and efcient nancial reporting system and a globally acceptable accounting standard. This was the objective of the SCA when they embarked on an ambitious rst-of-its-kind project in the Middle East: to implement a reporting platform using IFRS 2011 taxonomy as the base taxonomy and XBRL as the reporting standard, for companies listed in the Dubai Financial Market (DFM) and on the Abu Dhabi Securities Exchange (ADX). An agreement to this effect was signed by H.E. Mr. Abdullah Al-Turi, Chief Executive, SCA, Mr. Rashid Al-Baloushi, Deputy CEO and Director of Operations of Abu Dhabi Securities Exchange and Mr. Essa Kazim, Executive Chairman of Dubai Financial Market.

cater to ten different industry sectors. Companies also have the ability to extend the taxonomy to fit their unique reporting requirements, with approval from SCA. KEy PERsONNEl H.E Mohammed Al Hadari, the Deputy CEO for Organizational & Supporting Services at SCA is the project owner. H.E. Mr. Al Hadari envisioned this project to help UAE become a global powerhouse in the nancial domain. As the Project Director, Dr. Ryan Lemand, Economic Advisor and the Head of Risk Management at SCA, has the responsibility of dening the key requirements, providing direction to the project and managing the expectations of SCA, DFM and ADX. Project Manager Mr. Yaseer Al-Hosani is responsible for interfacing with the various units within SCA, DFM and ADX as well as the vendor, Fin-X Solutions to ensure an on-time and successful delivery of the project. AudITORs Auditors play a key role in certifying the compliance of the submitted data. This is a unique requirement implemented by SCA to guarantee the integrity of the led audited data.

This project to build the rst end-to-end XBRLbased electronic ling platform (FIX) for the UAE market was awarded to Fin-X Solutions (a wholly owned subsidiary of IRIS Business Services Ltd, India). The FIX platform was built using the IRIS iFile Framework which has been adopted successfully by various global jurisdictions. Fin-X Solutions studied the nancial reports (quarterly and annual) led Regulators with DFM and ADX, conducted studies to need a highly understand the local reporting requirements and how they differed from IFRS reporting effective and standards, they then analysed the current efcient nancial reporting platform of both exchanges and came up with the proposed platform. reporting system Business rules were customised for SCA, DFM and a globally and ADX specications. Fin-X Solutions utilised the expertise of a senior consultant from one of the Big4 firms during the design phase of the new UAE taxonomy. The UAE taxonomy has been designed using IFRS 2011 taxonomy to
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SHWETA GUPTA, iRiS

acceptable accounting standard.

SOURCE: XBRL wEbSiTE (HTTP://www.xbRL.ORG/NEwS/UNiTEDaRab-EmiRaTES-SETS-fiRST-xbRL-jURiSDiCTiON-miDDLE-EaST)

BaLaji KRiSHNaPRaSaD, iRiS

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INvEsTmENT COmmuNITy This initiative by SCA provides the investment community (like nancial institutions and investors-at-large) with the opportunity to search for and download information about companies for further analysis, that has been veried by the regulator. Since the data is in XBRL format, it can be consumed easily by their internal systems. The resulting comparability, transparency and accuracy in reporting the nancial information will give the UAE markets the credibility, attention and trust of the global investment community. STOck ExchANGEs Both DFM and ADX stand to benefit by having the data collection mechanism handled by the regulatory authority (SCA) as it guarantees the reliability and comprehensiveness of the filed data. The exchanges will also be able to customize the validation rules applied on the financial information submitted by the companies listed on the respective exchanges. The aim of this is to reduce the burden of collection and verification of data by the exchanges and allow them to reallocate resources to other activities like data modelling, analysis, reports, product design etc. BANks Banks will be able to use this data to analyse the financial strength of the companies compared to others within the same sector. This information can also be used to evaluate the credit worthiness of companies. REGulATOR This solution will help SCA collect nancial information from companies, analyse the data, make regulatory recommendations and enforce nancial integrity in the UAE markets. CONsumERs Of FINANcIAl DATA Consumers of nancial data stand to benet from the new system in several ways: from having access to data in a globally acceptable format, to being able to perform customized analysis of nancial information submitted by the companies that has been veried and certied by SCA.

SOluTION OvERvIEw The objective of the IRIS iFile FIX platform is to provide an end-to-end ling solution that accepts, validates and stores data in XBRL format. SCA also want to ensure that the system will be designed to allow lings by users with minimal or no knowledge of XBRL as well as to provide an opportunity for advanced users (with prior knowledge of XBRL) to explore and utilise the benets of XBRL provided by the system. The IRIS iFile FIX platform is made up of the UAE Financial Reporting Taxonomy and the Reporting Application, while the reporting platform consists of the desktop-based preparation tool and the online portal for submitting the generated XBRL instance document. The portal will validate and ag any inconsistencies in the ling and automate the process of routing the ling to the respective exchange in which the company is listed (see Figure 5 in this article). The list below identies the reports that the companies (listed with the ADX and DFM) and brokers would be able to le with SCA using the new system. LIsTEd COmPANIEs Financial Reports (quarterly/annual) Unaudited, Audited, Provisional and Preliminary Reports. Corporate announcements. Corporate Governance Reports. BROkERs Capital Adequacy Reports. Segregation Reports. Ageing Reports. ThE UAE FINANcIAl REPORTING TAxONOmy Taxonomy is the core of any XBRL-based project. UAE nancial report taxonomy architecture is based on the IFRS 2011 Taxonomy Architecture, which was released on 25 March 2011. A clean approach has been followed for extending the IFRS 2011 taxonomy, meaning that only the concepts, labels and references are imported into the UAE nancial report taxonomy while the relationships are dened as per the practices approved by SCA and followed by listed companies in DFM and ADX.The extended links are similar to the IFRS 2011 taxonomy and new industry/sector specic elements have been added where needed.

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Each sector has a separate entry-point, although users can access the entire set of elements from the schema. There are close to 4,000 elements in the taxonomy. The following chart depicts the hierarchy in the taxonomy structure.

Registered users can download the iFile installer from the iFile FIX portal. Based on the sector selected during installation, the corresponding taxonomy will be loaded when iFile is opened. The user will have the option to select a language (English/Arabic) based on which of the element labels and orientation will be updated. The reporting templates will be generated in real time based on the answers provided by the user to the scoping questions. The user will be able to select the sections to enter optional nancial information in addition to the sections mandated by SCA. Once the required information has been entered and the data has passed all the mandatory validation rules, the lers will be able to generate the XBRL instance document. This will then be uploaded to the iFile FIX portal for validation, acceptance and further analysis by SCA. AdmIN COmPONENT The admin component of the iFile tool allows SCA administrators to manage the templates that users will complete. An overview of the administration of the template is given in Figure 3 below.

FIGURe 1 TAXONOMY

LAYeRS

DEskTOP PREPARATION TOOl (iFile) iFile is an ExcelTM add-on tool. Once installed, data entry templates are generated based on the selected entry point. Templates are designed in a similar style and format to the Excel interface and given ExcelTMs familiarity among most lers should enable a smooth transition and greater acceptance rate. The iFile tool is further divided into two components: Client component. Admin component. ClIENT COmPONENT The client component of iFile allows the user to prepare and generate an XBRL instance document that can then be uploaded to the iFile FIX Portal. An overview of the ling process using the iFile tool is presented in Figure 2 below.

FIGURe 3

IFILe ADMIN PROCeSS OVeRVIew

FIGURe 2

FILING PROCeSS OVeRVIew

SCA administrators can load the new taxonomy into the iFile admin component. The tool will display the taxonomy hierarchy, from which the administrator can create a new template. Once the template has been created, the administrator can create a package containing the taxonomy and template. This package will be uploaded to the iFile FIX portal and will be made available for users to download.

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R EG I O N Al L E A d ER s: SCA E S Tab L iS H E S XBRL TaxO N O m Y

iFIlE FIX PORTAl FIX Portal is the online component of the IRIS iFile FIX platform. The web portal will allow companies to upload their XBRL instance document and extension taxonomies (if available) created by the desktop preparation tool or any third party software application. The portal will run validations to ensure that the ling is XBRL compliant. The portal will also make sure the data conforms to the business rules associated with the selected taxonomy. The FIX portal has various features which will be available based on the group membership of the user. A sample list of the features available based on the group membership is given below. DEscRIPTION Of KEy FEATuREs Of FIX PORTAl MAkER ChEckER WORkflOw: This feature helps to enforce the integrity of the document by checking the uploaded le by the same auditor who audited the company nancial information. The system requires the company checker to review and accept the ling before it can be accepted for further processing. AudITOR VERIfIcATION: A new feature that has been implemented for the rst time in any jurisdiction. It requires the audited lings to be veried by the auditor of the company after the ling has been uploaded by the company. Once veried and approved by the auditor, the ling will be sent back to the company to be led with the respective exchange. The verication by the auditor proves the authenticity of the document and helps analysts and decision makers to trust the submitted information. Figure 4 below shows the auditor check workow.

Web rendering and data export: This feature helps produce a human readable output from the XBRL instance document. The generated output can be exported into Word, Excel and PDF.

FIGURe 5

OUTLINe OF PROPOSeD SOLUTION

FIGURe 4

FIX PORTAL AUDITOR CHeCk wORkFLOw

PROjEcT mIlEsTONEs ANd AchIEvEmENTs: Arabic language support provided in the preparation tool The rst active use of Arabic labels by a Capital Markets Regulator First jurisdiction to implement IFRS 2011 taxonomy Company specic extensions with the approval of SCA Top 20 companies from DFM & ADX were involved in providing feedback regarding the feature list required in the system Multiple exchanges (DFM & ADX) collaborating with regulator (SCA) to promote this common platform to ensure compliance as well as efcient data collection and reporting Feature requiring the auditors to certify that the lings are the same as the audited copy Helpdesk provided by ADX, SCA, DSM and supported by Fin-X Solutions Trial lings by the top 20 listed companies have begun

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