Data Foundation Response to FDTA Joint Proposed Rule

Download Data Foundation Response to FDTA Joint Proposed Rule

The Data Foundation submitted comments to the nine covered agencies in response to the Joint Proposed Rule on Data Standards for the Financial Data Transparency Act (FDTA) of 2022. The comments include a transcript of public comments made during the FDTA Forum 2024: Defining Success as an appendix. Below is a summary of the Data Foundation comments. Full comments are available for download at the end of the page. 

The Data Foundation (LEI: 254900I43CTC59RFW495) is a non-profit organization that seeks to improve government and society by using data to inform public policymaking. For more than a decade, our Data Coalition community has advocated for responsible policies to make government data high-quality, accessible, and usable. The Data Foundation, and our Data Coalition partners, have worked with policymakers on bipartisan laws to advance the intentional use of data across government, which includes foundational data modernization and transparency laws like the Digital Accountability and Transparency (DATA) Act of 2014, the Foundations for Evidence-Based Policymaking (Evidence) Act of 2018, and the Financial Data Transparency Act (FDTA) of 2022. 

The Data Foundation applauds the collaboration from across the financial regulatory community in developing a proposed joint rule on data standards for the Financial Data Transparency Act, and appreciates the opportunity to provide comments that reflect our community, our experience, and our expertise. The inclusion of agencies not explicitly required in the law, for example the Commodity Trading Futures Commission (CFTC), demonstrates to organizations like the Data Foundation the intent for meaningful collaboration across relevant federal agencies. This coordination and collaboration for issuing and implementing data standards on priority topics will be essential in the years ahead to ensure the American people realize the value intended from the FDTA. 

In the spirit of promoting high-value activities for implementing data standards, the Data Foundation’s comments emphasize the importance of adopting reliable, machine-readable, semantically-rich data standards that promote interoperability, reduce regulatory burden, and enhance transparency in financial reporting.

In response to the proposed standards, the Data Foundation supports:

• Establishment of the Legal Entity Identifier (LEI) as the legal entity identifier standard, and recommends that LEIs be kept current for filing entities, continuing the relationship between the GLEIF ROC and the Office of Financial Research (OFR), and for the Agencies to consider verifiable LEI (vLEI) for future iterations of the standard. 
• Establishment of the Unique Product Identifier (UPI - ISO 4914) for reporting swaps and security-based swaps. 
• Establishment of the Classification of Financial Instruments (CFI - ISO 10962), and recommends the Agencies provide a list of approved assigning bodies for CFI codes or determining that security issuers assign the CFI code for the sake of consistent, reliable, and traceable codes.
• Establishment of the FIGI as an adjacent identifier of financial instruments, and recommends the Agencies direct questions to subject matter experts and statutory-designated Chief Data Officers to best determine how the FIGI should be standardized in relation to the FDTA and how best to pursue non-proprietary and open-licensed financial instrument identifiers, as directed by the FDTA, over the long term. 
• Establishment of ISO 8601 for date fields, but encourages additional clarification on “to the extent practicable,” so that the interpretation within Agencies does not undermine future interoperability of date comparisons across covered agencies or for data analysis. 
• Establishment of U.S. Postal Service Abbreviations for identification of a "State" of the United States. 
• Establishment of ISO 3166 for country codes and their subdivisions.
• Establishment of ISO 4217 Currency Codes for identification of currencies.
• Establishment of Census [Bureau] Tract identifier in combination with 5-digit Federal Information Processing Standard (FIPS). The Data Foundation also acknowledges the financial regulatory community may seek further coordination with the Federal Geographic Data Committee for implementing this standard.  

Additionally, provided the following recommendations and considerations for data transmission and schema/taxonomy format standards:

• Noting that JSON, XML, and CSV files are acceptable when they are associated with a complete taxonomy. To accomplish this, regulators should explicitly state that the required format must be XBRL-JSON, XBRL-XML, and XBRL-CSV, respectively. By requiring a complete taxonomy that includes a single semantic data model/structure, Agencies will be able to then choose from XML, JSON, etc. structures and the combination will allow for interoperability and flexibility for data transmission while protecting semantic meaning. 
• Agencies should not using PDF or PDF/A files for data transmission. Transitioning from PDF files, which are effectively documents and non machine-readable, can also help the Agencies apply analytics with little to no data translation, reducing potential errors in transmission and protecting meaning.
• Agencies should reuse existing taxonomies like the GAAP Financial Reporting Taxonomy.

In regards to broader efforts towards standardization and improving data quality, the Data Foundation recommended:

• That the Agencies consider shifting to a data-centric methodology rather than report-based data-gathering, implementing schemas/taxonomies for data collections, ensure consistency in naming, labeling, and tagging across taxonomies, establish a joint standard for taxonomies based on principles with appropriate metadata, and collaborate on common and consistent data fields and tags across agencies
• That Chief Data Officers lead the interagency coordination in their statutory-designated position to “manage data assets of the agency, including the standardization of data format, sharing of data assets, and publication of data assets in accordance with applicable law” (ref: Foundations for Evidence-Based Policymaking Act of 2018)

The Data Foundation applauds the Agencies for the collaboration they have done to produce the proposed rule, and urges the Agencies to continue close interagency collaboration, leveraging the expertise of their Chief Data Officers and other subject matter experts, to ensure a cohesive and effective implementation of the FDTA. 

The Data Foundation remains ready and willing to engage with the Agencies through the implementation process. The Data Foundation, and our Data Coalition partners, have demonstrated a long-standing commitment to contributing expertise in support of improved data environments, practices, and structures. 

The implementation of the recommended standards and best practices will significantly enhance the efficiency and effectiveness of regulatory oversight, reduce reporting errors, reduce compliance burdens, and support market efficiencies. By adopting machine-readable, semantically rich data standards, the Agencies can facilitate more sophisticated risk assessment and market analysis, ultimately leading to better-informed policy decisions, increased data transparency and utility, and a stronger society. The Data Foundation encourages the Agencies in the forthcoming efforts to prioritize effective implementation of the FDTA, and is prepared to support engagement and provide expertise.

Download Data Foundation Response to FDTA Joint Proposed Rule