Implementing XBRL at SSE

Gang Zheng Director, IT Center Shanghai Stock Exchange 5/16/2005

Agenda

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Brief Introduction of Shanghai Stock Exchange (SSE)

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XBRL Implementation at SSE

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XBRL-Based Information Product Business Model

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Next Step

Brief Introduction of SSE (1)

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Market Overview

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Number of listed companies: 832

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Market capitalization: about RMB 2.5 trillion

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Number of investors: 36.57 million By the end of Date 2006-4-12

Brief Introduction of SSE (2)

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Products

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Stocks (A-shares & B-shares), Treasury Bonds, Corporate Bonds

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Recent products and services

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ETF

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Warrants

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Mutual Funds Distribution Channel

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Open end Bond Repo

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Market data service

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Indices

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SHSE-SZSE 300, SSE 180, SSE 50, SSE Composite, New SSE Composite, SSE Dividend …… As of 2006-2-7

Brief Introduction of SSE (3)

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Technology Innovation

Brief Introduction of SSE (4)

A good location for investment

 40 Qualified Foreign Institutional Investors (QFII), with combined investment worth US$63.2 billion (as of 2006 4-23)  66% of the listed companies at SSE have commenced share reform,which involves 67.85% of the overall market capitalization value  The introduction of Qualified Domestic Institutional Investors (QDII) scheme will further facilitate China capital market development

Brief Introduction of SSE (5)

2006-1-1 SSE Composite Closed at 1169.86

2006-5-10 SSE Composite Closed at 1545.69

Agenda

 Brief Introduction of Shanghai Stock Exchange (SSE) 

XBRL Implementation at SSE

 XBRL-Based Information Product Business Model  Next Step

XBRL Implementation at SSE

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XBRL Pilot

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XBRL pilot project for listed company’s 2003 annual report information disclosure

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XBRL Implementation Phase-1

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XBRL application support text format of annual report

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SSE submitted the application as the Direct Participant application and obtained approved

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China Listed Company Information Disclosure Taxonomies developed by SSE is granted “Acknowledged” status by XBRL International

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Subsequent XBRL Implementation Phases

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XBRL application for fund industry XBRL-based application in Data Warehouse

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Web-based XBRL Instance documents query and a

nalysis

Background

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More than 10 years of listed companies disclosure data

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Most data are in the format of hard copy, or Word (doc), Excel (xls) and pdf files format

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Difficult to access these information

Background

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Regulatory requirements

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Requirements from market participants

 A efficient way to transfer and exchange information  High quality, reusable data 

Requirements from foreign investors

 Data Access  Data Analysis

Background



Objectives of Project

 Establish China’s Taxonomy for all listed companies  Increase market transparency  Enhance market efficiency  Improve investor relationship and protect investor interest  Establish a common language for the financial statement

Background

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Government support, especially from China Securities Regulatory Commission

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External Support

 XBRL International  XBRL symposium in Shanghai On August 18,2004  Consultation and training from Mr. Walter Hamscher  Lido  Project Vendor  Pwc  Agreement with PwC to evaluate project  Fujitsu  On site visit to Japan and collaboration with Fujitsu on XBRL application

XBRL Pilot Project

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Step by step application

 Listed Company template (fill in the original data)  Exchange’s conversion and check tools (screen out errors and convert the data)  Instance document presentation and analysis tool (provide investors an easy way to analyze financial reports)

XBRL Pilot Project

XBRL Pilot Project

Public Company XBRL DOC SSE e-Filing System XBRL DOC Check Result SSE Work Flow DOC SSE Web Site PDF XBRL XBRL Public Media XBRL PDF Investors

Data Warehouse

XBRL Implementation Phase-1

XBRL-based Listed Company Information Disclosure Year 2003 annual report summary Year 2004 Q1 report Year 2004 half annual report summar y Year 2004 Q3 report Year 2004 Comprehen sive annual report Year 2005 Q1 report Year 2005 Comprehe nsive half year annual report Year 2005 Q3 report Year 2005 Comprehen sive annual report Year 2006 Q1 report

XBRL Implementation Phase-1

XBRL-based Listed Company Information Disclosure (7485 XBRL Instance Documents)

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118 instance documents on annual report of 2003

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742 instance documents on 1 st quarter report of 2004

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832 instance documents on

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summary half-annual report of 2004 800 instance documents on 3 rd quarter report of 2004

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839 instance documents on comprehensive annual report of

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2004 837 instance documents on 1 st quarter report of 2005

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831 instance documents on comprehensive half-annual report

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of 2004 824 instance documents on 3 rd quarter report of 2005

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831 instance documents on comprehensive annual report of 2005

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831 instance documents on 1 st quarter report of 2006

XBRL Implementation Phase-1

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Solicited feedback from Listed Companies (based on Q1 report of Year 2004)

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Based on the acceptance of listed companies, XBRL instance document will be adopted from Q1 of Year 2006

0% 13% 34% Very Satisfied Acceptable 63% Satisfied Unsatisfactory

XBRL Implementation Phase-1

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The XBRL International Executive Committee reviewed and approved the Direct Participant application submitted by the Shanghai Stock Exchange. It is the first time that a Chinese organization joined XBRL International within the securities industry.

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XBRL International has granted Acknowledged status to the China Listed Company Information Disclosure Taxonomies developed by the Shanghai Stock Exchange. It is the first taxonomy with the “Acknowledged” status in China.

Subsequent XBRL Implementation Phases

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Making XBRL Fund Data Available http://fund.sseinfonet.com/xbrl.shtml

XBRL-based fund data analysis tools

Subsequent XBRL Implementation Phases

XBRL-based application in Data Warehouse

Subsequent XBRL Implementation Phases

Web-based XBRL Instance documents query and analysis tool http://www.sse.com.cn/sseportal/ps/zhs/fwzc/scfw/xbrl.shtml

SSE’s Efforts and Progresses in XBRL Implementation

Template-based XBRL data collection value-added XBRL application and service Listed Company Regulators Listed Company Mutual funds Mutual funds International XBRL community Direct membership SSE Semi-structured data management and analysis XBRL repository Analysts Investors Information Service providers XBRL v2.1 based Taxonomy for the whole industry

Agenda

 Brief Introduction of Shanghai Stock Exchange (SSE)  XBRL Implementation at SSE 

XBRL-Based Information Product Business Model

 Next Step

Who is SSE INFONET ?

SSE Infonet is responsible for planning and implementing SSE’s Internet strategy, undertaking a supporting role during the course of SSE’s informatization journey, maintaining operational rights for proprietary information of the SSE and developing value-added information services.

Listed Company Information Product Based On XBRL

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Features

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Include Annual, Half-Year and Quarterly reports

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Both Shanghai Stock Exchange and Shenzhen Stock Exchange

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From 2000 to 2006

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Benefits

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Fully automated

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Cost effective

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Faster turnaround time

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More Reliable and More Accurate

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Improved analysis and better quality of information to support decision-making

Target Client

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Information Vendors

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Moved away from costly manual processes

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Cost effective

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Institutional Clients

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Moved away from typically time-consuming comparison, assembly and re-entry of data

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Able to focus on information analysis

Business Model

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For vendors

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Develop value-added products and services

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Fee structure ( License fee + Terminal fee)

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Practical User management (with periodic feedback on users)

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For Institutional Clients

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Provide direct XBRL data

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Analysis application will not be included

Agenda

 Brief Introduction of Shanghai Stock Exchange (SSE)  XBRL Implementation at SSE  XBRL-Based Information Product Business Model 

Next Step

Next Step



Strengthen corporation with XBRL International

 Seek approval for the listed companies Taxonomy from XBRL International  Apply for the “Acknowledge” status for Fund Taxonomy from XBRL international

Next Step



Develop XBRL-Based Information Product Business

 Commercialize XBRL data  Develop advanced application for end user

Next Step



Embrace advance XBRL application within SSE

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XBRL application for ad hoc report

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Further develop XBRL usage for mutual fund information

Thanks

！

http://www.sse.com.cn