Passage of the Financial Data Transparency Act

In December 2022, a watershed moment took place for regulatory filings and, indeed, financial reporting when the US Senate passed the Financial Data Transparency Act (FDTA).

The act was passed by the House of Representatives in November 2021. It calls for the eight major US financial regulatory agencies to adopt and apply data standards which render their data fully machine-readable and searchable – meaning, as a practical matter, to adopt XBRL. This act will result in enhanced transparency, comparability, and usability of the data collected by the regulators.

Numerous regulators and government agencies and government will be affected, including the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the Federal Reserve, the Federal Housing Finance Agency, the National Credit Union Administration, and the Commodity Futures Trading Commission, among others.

The act will also lead to major changes in the municipal reporting area. The Municipal Securities Rulemaking Board will also be required to adopt data standards for information submitted to Electronic Municipal Market Access (EMMA), a change that is likely to create dramatic change in the municipal bonds market.

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