On August 2, 2024, the SEC and eight federal agencies jointly issued a proposal establishing technical standards for future data submissions fulfilling requirements of the 2022 Financial Data Transparency Act (FDTA). The proposal addresses only how data is to be submitted using common identifiers and open-source data standards—no new disclosures are required. Each agency must independently adopt final data standards by December 2024. Comments are due by October 22, 2024 following Federal Register publication.
Background
The FDTA requires financial regulators to adopt more uniform and accessible data standards for information collection and is intended to provide more useful information to investors and make it easier for companies to file reports across multiple agencies. The nine regulators covered by the FDTA include the U.S. Department of the Treasury, FDIC, Office of the Comptroller of the Currency, Federal Reserve, Consumer Financial Protection Bureau, Commodity Futures Trading Commission, SEC, Federal Housing Finance Agency, and the National Credit Union Administration.
This joint proposal establishes data standards for each agency to adopt in subsequent rulemaking. Individual agency proposals will follow after agreement on joint standards. Regulator-specific data standards must incorporate and be compatible with the joint data standards. Each agency has the authority to scale data reporting requirements to reduce burdens on smaller entities and must minimize disruptive changes.
The Financial Stability Oversight Committee (FSOC) catalogs data collected by FSOC member agencies (which aligns with the agencies covered by FDTA). The June 2024 Data Inventory indicates the greatest volume of data collected resulted from bank examinations, submission of financial statements in 10-Q and 10-K filings, and data from applications submitted by regulated banks and other firms related to mergers, acquisitions, branch openings, or other activities. Other data collected includes anti-money laundering and know-your-customer requirements and Truth in Lending Act and Fair Credit Reporting Act requirements.
FDTA Milestones
FDTA Milestones. FDTA Signed Into Law, June 2024 Proposals Deadline, Dec. 2024 Final Rules, Dec. 2026 Compliance.
Proposed Joint Data Standards
Common Identifiers
The proposal would establish the following common identifiers as joint standards:
- Legal Entity Identifier. International Organization for Standardization (ISO) 17442 - Legal Entity Identifier (LEI)
- Swaps & Security-Based Swaps. ISO 4914 – Financial services – Unique product identifier (UPI)
- Other Financial Instruments. ISO 10962 – Securities and related financial instruments – Classification of financial instruments (CFI) code
- Financial Instruments. Financial Instrument Global Identifier (FIGI) established by the Object Management Group
- Dates. ISO 8601 – Date and time format, using the Basic format option
- States. U.S. Postal Service Abbreviations as published in Appendix B of Publication 28, Postal Addressing Standards
- Countries. Geopolitical Entities, Names, and Codes (GENC) standard (country codes)
- Currency. ISO 4217 – Currency Codes
Both CUSIP and ISIN were excluded since they are proprietary and not available under an open license in the U.S. as required by the data transmission criteria below.
Data Transmission
The proposal would establish a principles-based joint standard for data transmission, structuring, and formatting that would:
- Render data fully searchable and machine-readable
- Enable high-quality data through schemas, with accompanying metadata, which clearly define the semantic meaning of the data
- Ensure data that exists to satisfy an underlying regulatory information requirement be consistently identified as such in machine-readable metadata
- Be nonproprietary or available under an open license
The proposal is technology neutral; any taxonomy format that meets the above criteria would be permitted, e.g., eXtensible Markup Language (XML) or eXtensible Business Reporting Language (XBRL). Agencies can adopt new open-source file formats as they are developed without amending the joint standards to include new formats.
Both CUSIP and ISIN were excluded since they are proprietary and not available under an open license in the U.S. as required by the data transmission criteria below.
Collection of Information
Each agency must establish data standards for “collections of information reported by financial entities under the jurisdiction” of each agency. Information excluded from this scope includes:
- Information that does not include reporting requirements, e.g., record-keeping and third-party disclosure collections
- Information not regularly reported to an agency
- Monetary policy exception for policy proposed or implemented by the Federal Reserve or Federal Open Market Committee
Each agency may choose to apply the joint standards to other collections of information at its discretion.
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