SEC finalises joint data standards to boost regulatory interoperability

The U.S. Securities and Exchange Commission has finalised joint data standards under the Financial Data Transparency Act of 2022, establishing a unified technical framework for data submitted to federal financial regulatory agencies. The rule introduces common identifiers for entities, geographic locations, dates, products, and currencies, designed to promote interoperability across the regulatory landscape.

Eight additional federal agencies have established or are expected to adopt these joint standards. The participating bodies include 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.

SEC Chairman Paul S. Atkins stated that the establishment of these joint standards would ensure consistent data collection, thereby easing burdens for financial institutions and making data more accessible to investors. The initiative seeks to streamline the flow of information between regulators and the entities they oversee.

The standards also incorporate a principles-based joint standard regarding data transmission, schema, and taxonomy formats. This component is intended to allow financial institutions to submit high-quality, machine-readable data to the agencies, facilitating more efficient processing and analysis of regulatory submissions.

SEC Commissioner Mark T. Uyeda described the action as a first step towards implementing the Financial Data Transparency Act across federal financial regulatory agencies. He noted that the effort would be followed by separate rulemaking for agency-specific standards, which would further improve the accessibility of financial data.

While the joint standards represent a significant move towards standardisation, the source material indicates that it remains unclear which specific agencies have fully finalised their adoption versus those still in the process. Furthermore, the timeline for the subsequent rulemaking for agency-specific standards has not been specified.

The broader objective of this regulatory shift is to improve the accessibility of financial data across federal financial regulatory agencies. By mandating these joint data standards, the SEC and its counterparts aim to create a more transparent and efficient data environment for the financial sector.