Karsten Wenzlaff, Advisor
August 26th, 2025
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Federal Agencies Start Working on Financial Data Transparency Act
FDTA | Sep 12, 2024
Image: Freepik/rawpixel.com
After a Slow Start, Federal Agencies Begin Implementing the Financial Data Transparency Act (FTDA)
The Financial Data Transparency Act (FDTA) was approved in December 2022, and is now beginning to influence the way data is managed and processed by US financial authorities. The Act mandates that nine federal agencies create machine-readable standards for their data in order to facilitate processing and analysis. Even if the changes are being implemented gradually, businesses that may be impacted by them should remain aware since they may have a big impact on reporting obligations.
What is the Financial Data Transparency Act?
The FDTA was approved as part of a defence funding bill to improve the way regulatory bodies gather and use financial data. The Act is to simplify reporting and analysis across several sectors by mandating that these organizations follow a single set of data standards. Having data standards will improve the effectiveness of financial data collection and help regulators more accurately and efficiently evaluate risks.
See: Open Banking: Revolutionizing Financial Data Sharing
The agencies include the Department of Treasury, the Federal Reserve, the Securities and Exchange Commission (SEC), and others. Together, nine agencies are developing new guidelines that will be applicable to financial institutions, publicly listed firms, and other organizations that provide data to federal regulators.
The FDTA also includes measures to make some data more accessible to the general public, making it easier for researchers and analysts to obtain information.
Joint Standards Rulemaking WIP
The first proposals for shared data standards were published last month, in August 2024. The purpose is to provide common data identifiers for key data elements, such as legal entities, financial instruments, dates, locations, and currencies. Important to note that these new guidelines do not require any new data collection, they just change how the data is reported. The key principles of the proposed standards are:
- Ensure that data is completely searchable and machine readable
- Define each data element and its connection to others
- Maintaining consistent identification across all regulatory requirements
- Using standards that are either non-proprietary or released under open licenses
Next Step
Once the joint standards have been approved, each agency will incorporate them into their own regulations over the next two years.
See: Bank of England Launches New Data Innovation Strategy
During this time, companies and institutions will need to follow developments to ensure compliance with any new reporting formats or regulations. Changes may have an impact on internal systems that require changes to data collection and submission procedures.
Outlook
The Financial Data Transparency Act is introducing changes that will affect many organizations that interact with federal financial regulators. As agencies finalize their joint data standards, it’s important for businesses to prepare for potential shifts in their reporting processes. This is one to watch closely.
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