2. XBRL in the investment funds market: The role of private institutions Rubén Lara rlara@afi.es Grupo Analistas

3. Context 1)Grupo Analistas is a leading group in the provision of analytical information in the Spanish investment funds market 2) Provision of analytical information requires: -Availability of homogeneous information (from the market) -Descriptive aspects of funds subject of analysis -Other market information -Generation of added-value information (to the market) -Rentability, performance measures, rating… Grupo Analistas

4. Context – from the market -Different sources of information -Supervisor: Regulatory information -Fund management firms: NAV, unit holders -Stock markets: NAV, other market information -Different information models and exchange formats -Ad-hoc validation and integration procedures -Costly and error-prone maintenance Grupo Analistas

5. Context – from the market Grupo Analistas Mgmt. firm Aggregated information NAV Validation and conversion Regulatory information Aggregation NAV Heterogeneity!

6. Context – to the market -Analytical information -More than 5000 investment funds (Spanish market + major foreign funds) -Information such as: -Rentability/risk relation -Performance measures -Ranking -… -Different customer profiles -Search, comparison and personalization capabilities -Recommendations Grupo Analistas

7. Context – to the market

8. Aggregated information Analysis Added-value information Mgmt. firms Sellers Potential Investors Unit holders

9. The problem -Lack of agreed, explicit models that cover the compete information life-cycle -Lack of automated validation -Ad-hoc processing -Costly and error-prone maintenance -Ingredients for a solution -Common language -Appropriate expressivity -Mechanization support -Platform-independent -Common information model -Consensus required! Grupo Analistas

10. Ingredient 1: XBRL Grupo Analistas Mgmt. firm Aggregated information NAV Validation and conversion Regulatory information Aggregation

11. Ingredient 1: XBRL Aggregated information Analysis Added-value information Mgmt. firms Sellers … Unit holders

12. Ingredient 1: XBRL 1)Uniform processing and validation 2)Cost and error reduction 3)Gain in information quality 4)Improved market transparency 5)Increase in investor confidence Grupo Analistas

13. Ingredient 1: XBRL -XBRL gaining momentum in Spain -Backed by regulators and supervisors e.g. Bank of Spain and CNMV -Increasing attention from financial institutions -Results in 2005: -DGI taxonomy -IPP taxonomy -ES-BE-FS taxonomy -PGC-90 taxonomy -COREP taxonomy (international) Grupo Analistas

14. Ingredient 1: XBRL -The role of regulators in the Spanish market -XBRL early adopters -Taxonomy definition -Information reception -XBRL promotion -XBRL prescriptors -Provision of solid bases for the definition of taxonomies in the private sector -Compulsory use of regulators’ and supervisors’ taxonomies. High- quality information base. -Initial public information Grupo Analistas

15. Ingredient 2: Common info model -Grupo analistas is working on an initial model -In cooperation with Universidad Autónoma de Madrid and Gestifonsa -Dependent on the (possible) future information model from CNMV -Extension to include analytical information -Full coverage of funds information life-cycle -Beyond supervisor and regulators competency! -Proof-of-concept model -Evolving -Simulation of usage in progress Grupo Analistas

16. Ingredient 2: Common info model -DGI taxonomy reused -Description of institutions e.g. funds management firms Grupo Analistas

17. Ingredient 2: Common info model -Four main information groups 1)Funds descriptive information 2)Relevant facts 3)Periodic descriptive values 4)Analytical information - Different nature, sources, and periodicity Grupo Analistas

18. Ingredient 2: Common info model -Partial example: analytical information Grupo Analistas

19. Ingredient 2: Common info model -Challenges -Consensus among market agents -Adoption -Opportunities -Solid ground set by supervisors and regulators -Sufficient awareness (?) -Improved efficiency in information exchange Grupo Analistas

20. XBRL: future directions -Increasing awareness -Increasing adoption But -Limitations in expressivity (calculation links) -Formal semantics? -XBRL could be influenced by other languages e.g. OWL -Formalization of validation rules using e.g. RIF (to come) -Improved validation possibilities and new applications Grupo Analistas

21. XBRL vs OWL -Ontologies: Formal, explicit, and shared conceptualizations of a domain of application -Automatic translation mechanism of XBRL taxonomies into OWL ontologies -Comparison in progress -Possible application e.g. automatic funds classification Grupo Analistas

22. XBRL vs OWL -OWL has a formal basis (Description Logics) -Allows for inferences e.g. characterization of funds a given investor is interested in Grupo Analistas

23. </ XBRL in the investment funds market: The role of private institutions> Grupo Analistas