The Financial Data Transparency Act (FDTA) (Title 58 of the FY 2023 National Defense Authorization Act) amends securities and banking laws to make the information already reported to financial regulators electronically searchable and to further enable the development of regulatory technologies and artificial intelligence applications. The ultimate goal is to harmonize reporting requirements, reduce the private sector’s regulatory compliance burden, and enhance transparency and accountability.

The covered financial regulatory agencies have two years from the date of enactment to issue a joint rulemaking to promulgate data standards governing the information financial institutions report to each agency as well as data collected from covered agencies. The covered agencies will have two additional years to implement the standards from the final rule.

The first milestone was a semi-annual report to congress from the Securities and Exchange Commission (SEC) on “on the public and internal use of machine-readable data for corporate disclosures;” delivered June 2023.

July 2024, or 18 months after enactment, the heads of the covered agencies will release a proposed rule for public comment that establishes data standards for information reported to members of the FSOC and collected from covered agencies on behalf of the Council.

December 2024, or two years after enactment, the heads of the covered agencies will publish the final rule that takes the public comments into account. (Please see the FDTA timeline for additional milestones and deadlines.)

Members of the Financial Stability Oversight Council (FSOC), that include the Department of the Treasury, Securities and Exchange Commission, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Bureau of the Consumer Financial Protection, Federal Reserve System, National Credit Union Administration, and Federal Housing Finance Agency.

Congress directed the covered agencies to pursue a joint rulemaking. A joint rulemaking is a common procedure that supports cooperative action while identifying shared data standards and reporting requirements.

The FDTA requires covered agencies to establish common identifiers for reported information, which could include transactions and financial products (or instruments). The law specifically requires the adoption of a common, non-proprietary legal entity identifier that will be made available under an “open license.”

Open license means “a legal guarantee that a data asset is made available - at no cost to the public; and with no restrictions on copying, publishing, distributing, transmitting, citing, or adapting such asset.” (44 U.S.C. § 3502(21))

The FDTA defines requirements for common data standards that are consistent with previous data focused laws, like the Foundations for Evidence-Based Policymaking Act (Evidence Act) and the Digital Accountability and Transparency Act (DATA Act). The FDTA require that data be rendered fully searchable – which is facilitated by the requirement to be “machine-readable,” and where allowable, be made available as an “open Government Data asset” ( 44 U.S.C. § 3502(18)) and (44 U.S.C. § 3502(20)), both defined in the Evidence Act. This assures the data assets collected under the regulatory authorities of the FDTA’s covered agencies are consistent with existing government-wide data policy. (See “Annotating the Law’s Text for the Financial Regulatory Environment,” in Implementing the FDTA: From Data Sharing to Data Meaning for additional information.)

No. The FDTA only requires each covered agency to publish the data that it already makes public as an open Government data asset. The law does not grant any new authority to covered agencies to make data public.

Item descriptionSo far as state and local governments report to the Municipal Securities Review Board (MSRB) or other regulatory agencies, the governments will update reporting standards that will further support transparency and good governance at a local level through consistent, machine-readable submissions.

The FDTA directs individual agencies under the “covered agencies” to develop rules that establish data standards for their data of information reported to their specific agency as another step of report harmonization over a span of a few years.

The Data Foundation hosted a virtual PitchFest, “PitchFest 2023: Unlocking the Vision of the Financial Data Transparency Act.” The theme focused creative ideas and proposals about how the implementation of the Financial Data Transparency Act of 2022 (FDTA) will bring about positive changes across sectors and agencies as financial regulatory data becomes standardized and machine-readable.

For this event, selected speakers will have up to 10 minutes to pitch their best ideas on how to use the improved financial regulatory information and data.

Presenters had the opportunity to showcase their idea to our panel of experts.

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RegTech 2023 was hosted by the Data Foundation in Washington, D.C., and presented by Donnelley Financial Solutions (DFIN). Its primary focus was on how federal regulators, regulated entities, RegTech and data companies, and data transparency advocates can work together to implement the FDTA and realize its full potential. The Summit explored key questions, such as effective strategies for implementation and stakeholder involvement in rulemaking on data standards, as well as how implementation could improve the health of our financial regulatory system and serve as a model for applying data standards in government.

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Shortly after the enactment of the FDTA, Data Foundation President Nick Hart and Policy Director Corinna Turbes joined the Data Coalition and discussed the provisions of the law and what the implementation process will look like. They highlighted potential challenges to full FDTA implementation and discussed how the data community can support regulators as they modernize financial regulatory data.

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The Open Data Standards Task Force, co-chaired by Bloomberg and Data Foundation, with support from the Data Coalition jointly hosted a public forum to facilitate a private-public exchange to help provide insights on federal financial regulatory data in May 2022. The forum provided an opportunity for financial institutions, the data community, and oversight bodies to offer actionable and practical feedback on how to improve data management strategies across federal financial regulatory and oversight agencies. The event’s compendium provides an overview of the central themes and ideas present throughout the forum, as well as some of the most common issues in financial data identified by stakeholders.

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