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| 5 Aug 2026 | |
| Blogs |
By Alex Rarick, Special Projects Intern, Data Foundation
In July 2026, the Data Foundation hosted a webinar on a new report, The Impact of Data Quality, Data Standards, and Fraud Mitigants in Private Markets, featuring the report’s co-authors Tom Dunlap and Kirke Cushing of DIACSUS Advisory and Consulting, who unpacked why a $15 trillion market still runs on unstructured data and manual workarounds, and what it will take to close the gap.
Dunlap is a Data Foundation Senior Fellow and member of the Data Foundation’s Open Data Standards Task Force, a collaborative initiative co-chaired by the Data Foundation and Bloomberg that brings together experts from government, businesses, non-profits, and academia to address challenges in implementing common business identifiers, entity identifiers, and data standards in the United States, particularly within financial services.
Data Foundation Vice President Ashley Nelle-Davis, who also leads the organization's efforts related to financial regulatory data and co-chairs the Open Data Standards Task Force, moderated the webinar.
For anyone who could not attend the live webinar, you can watch a recording or read five takeaways in the summary below.
One brief definition: Identifiers are standardized codes, such as the Committee on Uniform Securities Identification Procedures (CUSIP), the International Securities Identification Number (ISIN), the Financial Instrument Global Identifier (FIGI), and the Legal Entity Identifier (LEI) used to uniquely track financial instruments and the entities that issue or trade them. They are mandatory in public markets but only voluntarily applied in private ones.
The report and the webinar make the case that closing these data gaps, starting with something as simple as shared identifiers, could bring transparency, efficiency, and stronger fraud protections to one of the fastest growing corners of the financial system.
Private markets have grown into one of the largest corners of the financial system, but the infrastructure behind them has not kept pace. Asset management in the space now sits at $15 trillion, spanning private equity, private credit, syndicated loans, and real estate investment trusts (REITs), Dunlap noted. One global systemically important bank told the panel it received data in 5,000 different formats from its counterparts alone. Growth is partly driven by diversification, Cushing said, but increasingly by retirement accounts and retail investors entering a space built for institutions, who often expect more timely data with less sophistication than traditional players.
Public markets require disclosure, standardized identifiers, and centralized infrastructure like the Depository Trust & Clearing Corporation (DTCC); private markets treat all three as optional, with the Securities and Exchange Commission’s (SEC) Form PF a rare exception. Pricing relies on periodic, general partner (GP)-calculated valuations rather than real-time data. The result: reporting lags that keep growing. “It’s the one asset class that we’ve seen delays go longer,” Cushing said, noting that a 30-day reporting lag two decades ago has stretched to roughly 90 days today.
The panel identified six risk factors facing the industry, with beneficial ownership drawing the most attention. Layered structures, a Cayman entity, a limited partnership, and a family office are often set up for entirely legitimate tax or estate planning reasons, Cushing explained. “It’s also the same way that it would be set up if it was nefarious," he said, making traditional knowledge of your customer checks significantly harder in private markets. AI compounds the issue: “Absent a federal standard, the liability hot potato currently lands squarely on the firm and its fiduciaries,” Cushing said, noting 2023 SEC guidance holds fiduciary duty regardless of who or what made the decision. Left unchecked, poor data at scale becomes a risk multiplier, allowing local errors to compound into systemic vulnerabilities.
Dunlap and Cushing outlined a three-part set of recommendations.
Dunlap drew a direct parallel to pre-2008 over-the-counter (OTC) derivatives, where fragmented, bilateral processes mirrored today’s private markets, until standardization led by the International Swaps and Derivatives Association (ISDA) separated deal economics from common term sheets and identifiers, cutting novation matching from two hours to seconds. Much of that foundation already exists for private markets too, largely through the Financial Data Transparency Act (FDTA), which established data standards, including the LEI, across nine federal agencies. Closing the discussion, Cushing put it plainly: “We would prefer to get ahead of a disaster as opposed to trying to sit in that Lehman Brothers conference room for a three-day weekend.” With $15 trillion now in play, the panel framed this less as a warning than a case for urgency, noting that much of the necessary standards infrastructure is already in place.
The tools to close the data gaps in private markets already exist, and they are neither expensive nor complicated to adopt. Shared identifiers, standardized terminology, and common reporting templates work in public markets and, through the FDTA, are partly in place for private ones, and they just need to be applied. As Dunlap and Cushing argued, the same standards that brought order to OTC derivatives after 2008 could deliver transparency and stronger fraud protection today, at a fraction of what the current system spends on reconciliation and risk management. The takeaway was clear: the tools exist, and the time to apply them is now, before a crisis forces the issue.
