U.S. Financial Regulators Propose Unified Data Standards to Enhance Efficiency

A joint proposal from nine U.S. financial regulators aims to streamline submissions and facilitate data sharing among agencies, the Securities and Exchange Commission (SEC) announced. The common standards, after years of siloed regulation, will simplify submissions for stakeholders and enable easy data sharing across multiple regulators, the SEC noted in a press release on Friday.

Mandated under the Financial Data Transparency Act of 2022, these uniform standards will introduce a common identifier for businesses, known as a Legal Entity Identifier (LEI), based on the International Organization for Standardization. According to an SEC fact sheet about the proposal, LEIs will “uniquely and unambiguously” identify a legal entity.

The proposal also includes the creation of uniform identifiers for specific business services, business instruments, currencies, and business locations, alongside a standardized date and time format. Additionally, the methods for data transmission among the agencies will be standardized to ensure the shared information is high-quality and machine-readable, the SEC stated.

The eight other agencies involved in this proposal are the Federal Reserve Board of Governors, the Commodity Futures Trading Commission, the Consumer Financial Protection Bureau, the U.S. Treasury Department, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration, and the Treasury’s Office of the Comptroller of the Currency.

The SEC will accept public comments on the proposal, published in the Federal Register, for a 60-day period. Meanwhile, the other agencies are at various stages of approving the standards.

“This proposal will make financial data more accessible, uniform, and useful to the public,” SEC Chair Gary Gensler remarked in the release. “Consistent data standards will make it easier for financial institutions to file reports across multiple agencies. They also will help regulators be more effective and efficient in carrying out our oversight functions.”

By fLEXI tEAM