Aug 22 -- The Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Consumer Financial Protection Bureau, Federal Housing Finance Agency, Commodity Futures Trading Commission, Securities and Exchange Commission, and Department of the Treasury invite public comment on a proposed rule to establish data standards to promote interoperability of financial regulatory data across these agencies. Final standards established pursuant to this rulemaking will later be adopted for certain collections of information in separate rulemakings by the agencies or through other actions taken by the agencies. The agencies are proposing this rule as required by the Financial Data Transparency Act of 2022. Comments must be received by October 21, 2024.
On December 23, 2022, the Financial Data Transparency Act of 2022 (FDTA) was signed into law. The FDTA seeks to promote interoperability of financial regulatory data. As explained below, the FDTA directs the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission (SEC), and Department of the Treasury (Treasury) (each referred to individually as the “Agency” and collectively as the “Agencies”) to jointly establish data standards. The FDTA also directs most of the Agencies to issue individual rules adopting applicable joint standards for certain collections of information under their respective purview. In this proposed rule, the Agencies are requesting comment on data standards to be jointly established; individual Agency proposals will follow after the establishment of the joint standards.
The Agencies seek comment on all aspects of the proposal.
A. Joint Agency Rulemaking
Section 5811 of the FDTA amends subtitle A of the Financial Stability Act of 2010 (Financial Stability Act) by adding a new section 124. Section 124 of the Financial Stability Act directs the Agencies jointly to issue regulations establishing data standards for (1) certain collections of information reported to each Agency by financial entities under the jurisdiction of the Agency, and (2) the data collected from the Agencies on behalf of the Financial Stability Oversight Council (FSOC). The statute requires the Agencies to issue the final joint rule within two years of December 23, 2022. Section 124 of the Financial Stability Act defines the term “data standard” to mean a standard that specifies rules by which data is described and recorded. In this preamble, “joint standard” refers to a data standard that has been established by the Agencies pursuant to the joint rule.
As noted in section I.B below, the FDTA directs the OCC, Board, FDIC, NCUA, CFPB, FHFA, and SEC (collectively, the “implementing Agencies”) to issue individual rules adopting applicable data standards for specified collections of information (collectively, the “Agency-specific rulemakings”) and to incorporate and ensure compatibility with, to the extent feasible, the joint standards.
The application of the joint standards to specific collections of information would take effect through adoption by an Agency of an Agency-specific rulemaking or other action.
Section 124(c)(1)(A) of the Financial Stability Act requires the joint standards to include common identifiers, including a common nonproprietary legal entity identifier that is available under an open license for all entities required to report to the Agencies. Further, section 124(c)(1)(B) of the Financial Stability Act requires that the data standards must, to the extent practicable:
-- Render data fully searchable and machine-readable;
-- Enable high quality data through schemas, with accompanying metadata documented in machine-readable taxonomy or ontology models, which clearly define the semantic meaning of the data, as defined by the underlying regulatory information collection requirements;
-- Ensure that a data element or data asset that exists to satisfy an underlying regulatory information collection requirement be consistently identified as such in associated machine-readable metadata;
-- Be nonproprietary or made available under an open license;
-- Incorporate standards developed and maintained by voluntary consensus standards bodies; and
-- Use, be consistent with, and implement applicable accounting and reporting principles.
Finally, section 124 of the Financial Stability Act directs the Agencies, in establishing the joint standards, to consult with other Federal departments and agencies and multi-agency initiatives responsible for Federal data standards and to seek to promote interoperability of financial regulatory data across members of the FSOC.
B. Agency-Specific Rulemakings
Separate from section 124 of the Financial Stability Act, the FDTA specifically requires each implementing Agency to adopt by rule applicable data standards for certain collections of information that are regularly filed with or submitted to that Agency. Subject to the flexibilities and discretion discussed below, the data standards that an implementing Agency adopts in its Agency-specific rulemaking must incorporate and ensure compatibility with, to the extent feasible, applicable joint standards. Pursuant to the FDTA, the data standards adopted by each implementing Agency through their respective Agency-specific rulemaking must take effect not later than two years after the final joint rule is promulgated.
Generally, an implementing Agency will determine the applicability of the joint standards to the collections of information specified in the FDTA under its purview. Additionally, in issuing an Agency-specific rulemaking, each implementing Agency (1) may scale data reporting requirements to reduce any unjustified burden on smaller entities affected by the regulations and (2) must seek to minimize disruptive changes to those entities or persons. Further, section 5891(c) of the FDTA provides that nothing in the FDTA may be construed to prohibit an Agency from tailoring the data standards when those standards are adopted. To the extent an Agency has separate authority to adopt data standards, the Agency may adopt other standards beyond the joint standards. Finally, the FDTA does not impose new information collection requirements (that is, it does not require an implementing Agency to collect or make publicly available additional information that the Agency was not already collecting or making publicly available prior to the enactment of the FDTA). For example, to the extent the joint standards include a common identifier for a financial instrument, an implementing Agency that collects aggregated data related to that type of financial instrument would not be required to collect disaggregated data for that type of financial instrument.
The Agencies expect to work together on the adoption of the established joint standards in the Agency-specific rulemakings or other Agency actions, as appropriate. The Agencies also expect to monitor developments related to data standards, including the joint standards, and update the joint rule, as appropriate. The field of data standards, data transmission, schemas and taxonomies is rich with well-established practices and is also rapidly evolving, including with proposals to extend existing standards beyond their existing use and with development of new standards.
C. Consultations
Section 124(c)(2)(A) of the Financial Stability Act directs the Agencies to consult with other Federal departments and agencies and multi-agency initiatives responsible for Federal data standards. To comply with this requirement, the implementing Agencies and Treasury consulted with a variety of Federal governmental entities with relevant experience in advance of issuing this proposal. The implementing Agencies and Treasury also met with public stakeholders with relevant experience in advance of issuing this proposal. These consultations provided the implementing Agencies and Treasury with a greater understanding of the issues involved in establishing and adopting the joint standards. In addition, the Agencies anticipate receiving public comments on this proposed rule from a wide range of stakeholders.
FRN:
https://www.federalregister.gov/d/2024-18415 [19 pages]
