US Financial Transparency Act reintroduced to Congress
In May 2021, the Financial Transparency Act (FTA) was reintroduced to the 117th United States Congress. This bill, if passed, would direct all eight major US financial regulatory agencies to implement consistent data standards for the information they collect from filers under existing securities, commodities and banking laws. It would make this data fully machine-readable, comparable, and easy to use and analyse in an integrated way, as well as helping to ensure its quality.
The FTA would also mandate that regulatory information be published online as open data, making it fully searchable and downloadable to all, and facilitating advances in RegTech and artificial intelligence applications. Notably, it would require the use of common identifiers for legal entities (i.e. the LEI), transactions and products. While the US is already a longstanding innovator in reporting standards and digitisation, the FTA therefore offers worthwhile, common-sense improvements to enhance transparency and accountability while reducing the reporting burden for filers.
“By requiring the information already collected by regulators to be reported and published as structured data, financial firms and regulators will have more timely and accurate data to support decision-making as well as weed out fraud and other abuses,” said Corinna Turbes, Managing Director of the Data Coalition, which has worked tirelessly to progress the FTA. “Structured financial data will enable new analytic capabilities that will help us understand what is happening in financial markets in near real time … The importance of this modernization effort should not be underestimated, especially as we work to recover from the pandemic.”
While the FTA has not passed on previous attempts, we detect a sense of optimism from our US colleagues, and we will be watching with interest for this next step forward in US reporting.