Statement on Financial Data Transparency Act Proposed Joint Rulemaking

Today, the Commission is proposing joint data standards for information collected by nine financial regulators (the "Agencies"). Through the Financial Data Transparency Act of 2022 ("FDTA"), Congress mandated that the Agencies propose such standards. In fulfilling the Congressional mandate, I'm pleased to support this proposal, as it will make financial data collected by the Agencies more accessible, uniform, and useful to the public.

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.

The proposal puts forward standards with regards to data identifiers, as well as ways to transmit and structure data.

First, with regards to identifiers, the Agencies propose a number of identifiers related to entities, geographic locations, dates, and certain products and currencies.[1] For instance, with regards to entities, the joint proposal would establish Legal Entity Identifier ("LEI") as a common entity identifier.[2] Similarly, as it relates to geographic jurisdictions, the proposed joint standards use U.S. postal service abbreviations, as well as country codes.[3] With regard to products and instruments, the proposed joint standard uses three internationally recognized standards for financial instrument identifiers.[4]

All of these common identifiers are non-proprietary and available under an open license.

Secondly, the joint proposal would establish a principles-based joint standard with respect to transmitting and structuring data. Under the proposal, any specific format (e.g., eXtensible Markup Language) that enables the structuring and transmission of high-quality, machine-readable data would be permitted.

In addition, Congress required in the FDTA that the joint data standards must, to the extent practicable, "use, be consistent with, and implement applicable accounting and reporting principles".[5] Thus, the Agencies are seeking comment on whether to establish joint data standards regarding existing definitions of generally accepted accounting and financial reporting terms. Doing so would benefit both investors and the financial entities who report data.

Upon finalization of these joint standards, Congress has mandated that the SEC and certain other Agencies issue Agency-specific rules that implement the standards. In accordance with the FDTA, Agencies will be permitted flexibility in considering how best to implement the final joint standards.

I'd like to thank the Board of Governors of the Federal Reserve System, the Department of the Treasury, Commodity Futures Trading Commission, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration, and the Office of the Comptroller of the Currency for working with the SEC on this joint rule.

I'd also like to thank members of the SEC staff for their work on this rule proposal, including:

• Austin Gerig, Parth Venkat, Alexander Permison, Margarita Brose, and Jennifer Davitt from the Office of the Chief Data Officer;
• Mellissa Duru, Elizabeth Murphy, Luna Bloom, Valian Afshar, John Fieldsend, Cicely LaMothe, Rolaine Bancroft, Chris Windsor, Ben Meeks, Kayla Roberts, Shalini Shah, Robert Errett, Mike Stehlik, and Dennis Hermreck from the Division of Corporation Finance;
• Mike Willis, Julie Marlowe, Parhaum Hamidi, Paul Yin, Navin Jayaram, Joshua Caust-Ellenbogen, Caroline Schulte, Kali Prasun Chowdhury, Evan Avila, and Joseph Otchin from the Division of Economic and Risk Analysis;
• Bryant Morris, Peggy Kim, Eduardo Aleman, and Hillary Holman from the Office of General Counsel;
• Maria Boodoo and Mark Velsko from the Division of Enforcement;
• Sarah ten Siethoff, Brian Johnson, Amy Miller, and Adele Kittredge Murray from the Division of Investment Management;
• David Saltiel, Roni Bergoffen, Roxanne Ramnauth, and Sudha Bhat from the Division of Trading and Markets;
• Jed Hickman, Rosemary Filou, Todd Canali, Laurita Finch, and Lidian Pereira from the EDGAR Business Office;
• Paul Munter, Natasha Guinan, Jonathan Wiggins, Anita Doutt, Shaz Niazi, Dana Cretu, Mai-Khoi Nguyen-Thanh, and Rachel Mincin from the Office of Chief Accountant;
• Patrick Boyle and Carmen Moncada-Terry form the Office of Credit Ratings; and

Dave Sanchez, Adam Wendell, Mary Simpkins, and Preston Swapp from the Office of Municipal Securities.

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