Electronic Data Gathering, Analysis and Retrieval (EDGAR)
What it is:
EDGAR, the Electronic Data Gathering, Analysis and Retrieval system, is an automated system of submission used by public companies required to file forms with the U.S. Securities and Exchange Commission (SEC)
How it works/Example:
In 1984, EDGAR was created by the SEC to improve the quality and speed of information available to investors and corporations. The automated database accelerates the receipt, acceptance, dissemination and analysis of forms and reports filed with the SEC. Filers enter their companies’ financial reporting information into electronic forms online. The EDGAR system is available to the public.
The SEC is currently implementing a new system to automate the financial disclosure process and move from forms to actual data. The system is called Interactive Data Electronic Applications (IDEA) and will move away from automated forms and create an interactive database. IDEA will allow public access to company data in a wider variety of formats that can be imported into spreadsheets and analytical software.
Why it matters:
A fair and open market relies on information being available to the public so that investors can evaluate and establish the costs and benefits of business risks and potential returns. EDGAR was implemented to improve the free exchange of information to investors and companies so that all are able to base their business decisions on accurate, timely, and publicly available information.