2012. 1
Introduction on Electronic Disclosure System DART
Overview
1. What is DART?
2. Before DART
3. DART Development History
4. Key Features and Benefits
5. Personnel and Budget
6. XBRL
7. Conclusion
1
What is DART?
DART (Data Analysis, Retrieval, and Transfer) System
is an integrated corporate disclosure system and aims:
11. to provide a web-based disclosure submission platform
for publicly-held and other relevant companies; and
22. to offer disclosure data search services for end-users
such as investors via the internet
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1
What is DART?
Joong Ang Daily, October 26th, 2007
Warren Buffett Admires DART ;
DART Gains ISO 20000 Certification
Recently, DART, the FSS’s electronic corporate disclosure system (dart.fss.or.kr), gained ISO 20000
certification from the International Organization for Standardization (ISO). ISO 20000 is the
international standard for IT service management. During his visit to Korea on October 25, 2007,
Warrant Buffett, the world’s most famous investor, also made some comments on DART.
His hobby is to read corporate analysis reports, and he is famous for analyzing corporate information
thoroughly and investing in companies which look promising from a long-term perspective. Buffett
said that his high return on Korean companies such as POSCO is partly attributable to DART.
During a conference early this year, Buffett spoke highly of DART, citing his investment experience in
Korea.
“Other than Korea, there is no country in the world that investors
can obtain information very easily on the internet. Korea offers
corporate information in a more accessible manner than the U.S.”
Overseas DART users such as Warren Buffett who connect to DART to obtain information on Korean
companies account for 12 percent or 2,700 of all DART users.
Using DART, investors may search 510 types of reports filed by more than 28,000 companies. On
average, companies file around 138,000 reports every year.
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1
What is DART?
Electronic Disclosure-Related Laws
Regulatory steps taken to introduce electronic filings
• A legal
basis that allows filers to submit their filings in an electronic manner
• Introduction
of electronic signature to ensure the security of electronic filings
• Legal provisions
that prescribe electronic filing procedures and methods
Laws and regulations on electronic filings
• Article 436,
Financial Investment Services and Capital Markets Act
• Article 385,
Enforcement Decree of the Financial Investment Services and Capital Markets Act
• Chapter 6, Regulation
on Securities Issuance and Disclosure
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1
What is DART?
DART System
DR Center (Anyang)
Submission of
disclosure
documents
Local users
Disclosure
documents
Companies
Foreign users
Transfer
FSS examiners
“One Stop Filings”
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1
What is DART?
DART for Foreign Investors
The English version of DART services is available for the convenience of foreign investors. Publicly-held
companies may prepare and file disclosures in English on a voluntary basis
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2
Before DART
Submit Disclosures
Maintain Documents
Visit / View
FSS
Investors
Disclosure
documents
Companies
Companies &
investors
Securities regulator
•Companies: Visit FSS to submit disclosures
•Investors: Visit FSS to view disclosures
Limited access to disclosure data
•Growing volume of disclosure documents
- Rapid growth of capital market
- Strengthened disclosure regulations
Insufficient resources for maintenance
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3
Dart Development History
May. 1998
Established a comprehensive plan
Aug. 1998
Developed DART System
Mar. 1999
Launched DART (online and offline filings)
Jan.
2001
DART became mandatory (no offline filings)
Nov. 2006
Selected as “Leading Government Brand”
Feb. 2007
Launched English DART
Oct. 2007
Full operation of XBRL System
Feb. 2009
DART System upgrade & changes to reflect the Financial
Investment Services and Capital Markets Act
Jan. 2011
Launched Integrated Search Service
May. 2011
Launched IFRS-based XBRL Disclosure System
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4
Key Features and Benefits
Accessibility
Electronic fillings and disclosures
subject to disclosure: 59,240
- Listed companies: 1,800
- Companies subject to external audit: 31,800
- Individual shareholders: 25,640
• Companies/individuals
• Disclosure
documents: 890 types
Available online anytime
• No time and space
restrictions
More effective oversight of capital market
• Real-time supervision
of companies
• Open and transparent
management
More effective use of resources
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4
Key Features and Benefits
Benefits: Reduced Burden on Firms
• Reduced disclosure
One-stop
online filing
burden
- Visit to FSS for paper filings no longer necessary
- Saving time and costs
• Disclosures
• 73,000
Growing
number of
required filings
available to the public on a real-time basis
in 2001
134,000 in 2010
Annual filings
Daily average filings
116K
121K
116K
119K
127K
109K
98K
73K
460
330
Easier
maintenance of
documents
Market growth
230
01
02
370
03
390
400
04
05
06
480
07
510
08
141K
134K
550
530
09
10
• 2.5 mil. documents
filed from 1999 to 2010
- 60 eight-ton truck load of documents
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4
Key Features and Benefits
Benefits: Increased Document Viewings
Increasing
number of
document
viewings
• 26 mil. in 2001
389 mil. in 2010
Over fourteen-fold increase
• Average number
of users per day: 70,000
• Average number
of viewings per day: over 1.36 mil.
※ The highest viewings so far: 2 mil. viewings per day
Viewings per year
Average daily viewings
305M
350M
358M
360M
389M
194M
148M
98M
61M
26M
1120K
1290K
1320K
1320K
08
09
1360K
720K
210K
360K
550K
70K
01
02
03
04
05
06
07
10
11
4
Key Features and Benefits
Easy and Powerful Search
Useful and powerful
search system
•Search by company name, type of document, industry,
securities ID number, etc.
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4
Key Features and Benefits
Benefits: Quality Information
Resourceful site
for analysts and
researchers
•Information warehouse for foreign investors
- Companies: 33,600
- Disclosure documents: 890 types
- Documents: 2.2 mil.
(A4-sized documents laid end to end will circle the earth 3.4 times)
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4
Key Features and Benefits
Enhanced Supervision
Automated review & analysis process
• Automatic
assignment of FSS staff employees for review; automatic review procedures
Disclosures shared with Financial Supervisory Information Systems
• Information
Management System for Equity Holdings and Company Information System
• Securities Investigation
Support System
Real-time transfer
DART System
Financial Supervisory Information Systems
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4
Key Features and Benefits
Benefits: Market Transparency
Improved market discipline
• Better informed supervisors
- Automated disclosure system helps improve the oversight of the capital market
• Better informed investors
- Users could search for information on companies anywhere anytime
- Market transparency improves as a result of real-time supervision
Improved governance and transparency
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5
Personnel and Budget
FSS IT-Related Departments
• Establish IT policies for financial companies and conduct supervision
IT Supervision Department • Assess the computing systems of financial companies
• Supervise IT-related works in the financial services sector
Information Strategy
Office
Electronic Disclosure
Team, Disclosure
Supervision Department
• Support the overall IT operations of FSS
• Operate the internal systems of FSS
• Plan an internal computing policy for FSS
• Conduct general tasks associated with electronic disclosure
• Develop and plan the electronic disclosure system
• Operate the electronic disclosure system
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5
Personnel and Budget
DART-Related Parties
Corporate Disclosure
Committee
(Electronic Disclosure Team)
• Establish long- & short-term DART system development & maintenance plans
• Plan the operation of the electronic disclosure system
• Operate electronic disclosure unit systems
Corporate Disclosure
Committee
• Revise disclosure forms provided in capital market regulations
• Work on general systems for periodical and securities issuance disclosures
• Review equity ownership disclosures
Corporate Disclosure
Department
• Review disclosure documents
Other Relevant
Departments
Outsourcing
• Review certain disclosure documents (i.e., the issuance of structured derivative
securities, collective investment securities, etc.)
• Review disclosure documents regarding asset securitization
• Maintenance of the electronic disclosure system’s hardware & software
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5
Personnel and Budget
Cost of Bulding and
Operating
DART, Related People
Costs
& Personnel
Initial development
costs &
annual operating costs
Electronic disclosure
operating personnel
• Initial development costs :
KRW2.7 billions (H/W purchase cost), KRW1.8 billions (S/W development cost)
• Annual operating costs : Approximately KRW3.8 billion s
• Electronic Disclosure Team
5 staff (in charge of electronic disclosure development and operation)
• Outsourced operations
14 staff (electronic disclosure system operator and the DR center staff)
• Electronic disclosure system : 20 staff
• Electronic disclosure review : Approximately 50 staff
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6
XBRL - Background and Coverage
To enhance accounting transparency and international credibility through standardization, secure disclosure
information reliability and reinforce review capacity, the FSS implemented XBRL, DART System’s international
standardized computing language (2007)
Accounting Transparency &
International Credibility
Enhanced
Supervision
Capacity
Financial
Information
Standardization
Disclosure
Reliability
Accept Global Standards
Construct National Infra
for Financial Information
Introduce XBRL
(Corporate information internationaly using & prompt D/B for constructing XBRL international standards, computerized language)
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6
XBRL - Background and Coverage
XBRL?
• Technology which creates standardized promises to share information and express those promises
• Designed company’s reporting language which a computer can automatically recognize the data’s meaning and interrelationships, etc.
and can validate its accuracy, analysis and comparison.
XBRL Taxonomy
Information production/sharing/utilization
Maximize the effectiveness and efficiency
XBRL Document
Promise on
information
Fulfilled
information on
promise
XBRL Solution
System
understands
promise
Create
(Disclosure/
Report
company)
Financial work report
Business/audit/quarter
/semiannual reports,
other reports
 Ensure interoperability
between platforms
 Develop efficient information
distribution system
 Effective integration on external
data
Information
distribute based
on XBRL
Gathering and
distributing
(Regulators)
Utilizing XBRL Data
 Efficient information production and
distribution
Provide timely information,
enhance capital market transparency
and corporate value
IR Report
Other report
Utilizing
(Regulators,
stockholders,
etc.)
 Effective data collection
 Select accurate
information
 Rapid information
analysis/processing
and redistribution
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6
XBRL - Background and Coverage
Coverage
Overview
• Starting in 2011,
listed companies and financial firms must disclose K-IFRS financial
statements
IFRS: International
Financial Reporting Standards
• Shifting from the current electronic
disclosure system based on
K-GAAP to a new system for international standards
K-GAAP: Korea’s
Generally Accepted Accounting Principles
Affected Companies
• Starting in 2011,
it is mandatory to apply IFRS
Affected companies:
Affected reports:
Listed companies (about 1,800)
Financial statements in business reports (including quarterly/semiannual reports)
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6
XBRL- Electronic Disclosure System
Uses disclosure files created by electronic document editors and XBRL creators in an effective manner and
transfers them to the Disclosure & Review Analysis System and related organizations through the receipt system
Related institutes
Electronic
Document
Editor
Format
Electronic
Document
Instance
Taxonomy
(. ixd)
Distribute
Disclosure
Transfer
File
General User
Transfer
File
Taxonomy
Create
Transfer file
Certificate
Receipt
System
Taxonomy
Transfer
File
( .DRT)
Taxonomy
Taxonomy
XBRL
Creator
Taxonomy
Management
Transfer
File
Review
Analysis
System
Operator
Reviewer
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6
XBRL- Electronic Disclosure System
XBRL systematically compiles information such as standard accounts of the subject component system, the name of the account
subject to accounting standards, calculation, display order, relations between account subjects, accounting base standards
~
200
400
~
500
100
~
Not able to verify its account or attributes with
amount data only
50
400
Able to use data more efficiently by treating it as a set of data
by adding additional attribute information such as unit or
period
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6
XBRL- Electronic Disclosure System
K-IFRS Taxonomy Procedures
IASB
(International standard
taxonomy)
Configure with IFRS adopters’
commonly used account items
- Use general Taxonomy without separating industry type
- Applied to not only financial statements but also to thier
notes
(Limits) Limits to reflect each country’s unique
situation
- Consolidated financial reporting is a rule
KOREA XBRL HQ
(Convert into Korean)
International standard
Taxonomy
(in Korean)
Add account items that meet the
needs of Korea (540)
Consider Korea’s unique
circumstances and add
account items
DART (K-IFRS) Taxonomy
Add accounts most commonly used by early
adopters and reflect comments from other
stakeholders
K-GAAP
(Manufacturing
Standard)
Number of actually used
account items
(Average of early adopters)
K-IFRS standard accounts for disclosure
International
Standard
(IASB)
DART
additional
development
Total
K-GAAP
IFRS
Balance Sheet
Income Statement
Cash Flow Statement
Changes in Equity
Note
412
213
240
26
-
53
51
74
31
42
221
61
241
7
10
274
112
315
38
52
93
67
83
26
44
28
59
36
Total
891
251
540
791
269
167
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6
XBRL- Benefits of XBRL
XBRL Disclosure System Based on IFRS
Information Creator
1. Improve reliability of
financial statements
Information User
Regulators
1. Real-time financial DB
1. Enhanced efficiency of
market supervision
2. Cost reduction in
analysis
3. Improved easy access
to financial statements
for foreigners
2. National infrastructure
for financial information
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7
Conclusion
Vision
of DART
•Repository of Korea’s corporate filings; core infrastructure of the capital
market
•Emerge as a globally leading system
Future
Challenges
Lessons
Learned
•Improve awareness in senior management of the importance of disclosure
•Improve investor education to help them make sound investment decisions
•Full, timely and fair disclosure is key to investor protection and capital
market transparency
Best solution is an electronic disclosure system
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