Understanding the Filing Fee Disclosure (FFD) Taxonomy

1. Introduction to Filing Fee Disclosure (FFD) Taxonomy

The Filing Fee Disclosure (FFD) Taxonomy is a standardised set of elements for tagging disclosures related to filing fee information. It provides a structured way to present and analyse data related to filing fees. The U.S. Securities and Exchange Commission (SEC) announced the 2024 FFD Taxonomy, which supports the tagging of disclosures related to filing fees. This taxonomy is part of the SEC’s efforts to modernise and enhance the transparency of fee disclosure and payment methods. The FFD Taxonomy is integrated into the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system, which is the primary system for submissions by companies and others who are required to file forms with the SEC. The FFD Taxonomy is an important development for standardising and improving the accessibility of filing fee information.

The Securities and Exchange Commission (SEC) is amending most of its fee-bearing forms and schedules to require filers to present the information required for filing fee calculation in a separate exhibit structured in Inline eXtensible Business Reporting Language.

The Commission assesses filing fees on operating companies and investment companies (funds) that engage in certain transactions involving publicly offered securities, including registered securities offerings, tender offers, and mergers and acquisitions. The current methods to process and validate filing fee information are highly manual. The information generally is not machine readable, and filers are not always required to report the underlying components of the fee calculation. Calculations can be difficult and prone to error. Correcting errors or reconciling inconsistencies in filing fee calculations can increase burdens on both the filer and SEC staff. The final amendments update and improve the filing fee preparation to provide more certainty to filers that they have accurately calculated and paid the proper filing fee amount. The amendments will make the filing fee payment validation process more efficient by enabling Commission staff to use automated tools to help validate payment information.

Detailed link for the FFD :
Filing Fee Disclosure and Payment Methods Modernization (sec.gov)

2. The Purpose of FFD Taxonomy

Standardisation : The FFD Taxonomy provides a standardised framework for tagging filing fee disclosures.
Efficiency : It enhances the efficiency of data processing and analysis.
Transparency : By tagging the filing fee disclosures, it increases the transparency of financial data.
Usability : The tagged data is more usable for various stakeholders including investors, regulators, and analysts.
Compliance : It helps companies comply with the SEC’s requirements for filing fee disclosures.

3. The Role of SEC in FFD Taxonomy

Development : The SEC’s Office of Structured Disclosure is responsible for the development of the FFD Taxonomy.
Implementation : The SEC oversees the implementation of the taxonomy in financial reporting.
Updates : The SEC regularly updates the taxonomy to reflect changes in accounting standards and disclosure requirements.
Guidance : The SEC provides guidance to companies on how to use the taxonomy.
Enforcement : The SEC enforces compliance with the requirements of the taxonomy.

Compliance Date :

Applicable Forms :

The amendments will affect most fee-bearing forms, schedules and statements filed under either the Securities Act of 1933, as amended (including Forms S-1, S-3, S-4, S-8, S-11, F-1, F-3 and F-10), the Securities Exchange Act of 1934, as amended (including Schedules 13E-3, 13E-4F, 14A, 14C, TO and 14D1-F), and the Investment Company Act of 1940, as amended (including Forms N-2, N-5 and N-14).
https://www.sec.gov/files/rules/final/2021/33-10997.pdf

4. The Release of FFD Taxonomy

The Filing Fee Disclosure (FFD) Taxonomy was released as part of the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system’s interim release 24.0.1 on January 26, 2024. This taxonomy provides a standardised set of elements for tagging disclosures related to filing fee information. It is integrated into the SEC’s EDGAR system, which is the primary system for submissions by companies and others who are required to file forms with the SEC. The FFD Taxonomy is an important development for standardising and improving the accessibility of filing fee information. More information about the FFD Taxonomy can be found on the SEC’s official website and developer resources.

Please refer below link of FFD taxonomy package for reference:
https://xbrl.sec.gov/ffd/2024/ffd-2024.zip

5. The Importance of FFD Taxonomy :

Filers’ presentation of filing fee-related information in one location in a structured format will help filers and Commission staff quickly identify and correct errors, as the Commission’s electronic filing system (EDGAR) will automatically check the structured filing fee-related information for internal consistency. It also will eliminate filers’ need to enter duplicate filing fee information in the header and the body of the filing, thereby avoiding the possibility of entering inconsistent data.

Accuracy : Using the most recent version of the taxonomy ensures the accuracy of the tagged data.
Relevance : The latest version of the taxonomy reflects the most current accounting standards and disclosure requirements.
Compliance : Updating to the latest version helps companies stay compliant with SEC requirements.
Efficiency : The latest version often includes improvements that make the tagging process more efficient.
Interoperability : Using the latest version enhances the interoperability of the data with various XBRL processors and analysis tools.

6. Conclusion

The Filing Fee Disclosure (FFD) Taxonomy represents a significant step forward in the standardisation and accessibility of financial data. By providing a standardised framework for tagging filing fee disclosures, the FFD Taxonomy enhances the transparency and comparability of financial information, thereby promoting greater accountability and integrity in financial reporting.