SEC Establishes Joint Data Standards as Required Under the Financial Data Transparency Act of 2022

The U.S. Securities and Exchange Commission finalized joint data standards under the Financial Data Transparency Act of 2022, establishing technical specifications for data submitted to a suite of federal financial regulatory agencies [1]. The final rule sets common identifiers for entities, geographic locations, dates, and certain products and currencies, aiming to promote interoperability of financial regulatory data across the government [1]. Eight additional agencies have established or are expected to act on the joint standards: the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Consumer Financial Protection Bureau, the Department of the Treasury, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration, and the Office of the Comptroller of the Currency [1]. The standards also include a principles-based joint standard for data transmission and schema and taxonomy formats, which would allow financial institutions to submit high-quality, machine-readable data [1]. “The establishment of joint data standards across federal financial regulators will help ensure consistent data collection that will both ease burdens for financial institutions and make data more accessible to investors,” SEC Chairman Paul S. Atkins said [1]. SEC Commissioner Mark T. Uyeda described the action as “a first step towards implementing the Financial Data Transparency Act across federal financial regulatory agencies” and noted that separate rulemaking for agency-specific standards will follow [1]. The push for machine-readable regulatory data arrives more than a decade after the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 reorganized financial oversight in response to the 2007–2008 crisis, which was fueled in part by opaque mortgage-backed securities and deficiencies in regulation [2][4]. The Commodity Futures Trading Commission, one of the agencies named in the joint standards, has been working since Dodd–Frank to bring more transparency to the multitrillion-dollar swaps market [7]. The Financial Data Transparency Act’s emphasis on common identifiers and interoperable formats is designed to address the kind of fragmented data that historically complicated cross-agency monitoring of systemic risk [1][4].