Introduced as H.R. 1530, the Financial Transparency Act of 2017 requires financial regulatory agencies to standardize securities, commodities and banking law information.
Similar to how the DATA Act refashioned the way federal spending was collected and reported, the Financial Transparency Act standardizes disconnected financial regulatory reporting documents into machine-readable formats.
Since the initial proposal in May 2015, the bill has undergone a series of four revisions. Despite ongoing referrals, House representative, Darrell Issa “expressed optimism regarding passage this year, pointing to the shift in attitude regarding the importance of data accuracy.”
If enacted, the Financial Transparency Act has the ability to modernize the U.S. financial regulatory system, benefitting regulators and investors in the process.
Financial Transparency Act Re-Introduced in House
In March 2017, 28 members of the House of Representatives reintroduced the Financial Transparency Act to Congress.
“Passing the Financial Transparency Act would be a milestone for data transparency and the openness of public information,” said Issa in a press release. “What my previous legislation, the DATA Act, is doing to open up government spending through online, searchable and freely accessible data, the Financial Transparency Act would do for financial reporting information.”
Amidst bipartisan support, the bill remains under review. According to Congress.Gov, the bill was referred to the Committee on Financial Services and the Committee of Agriculture simultaneously on March 15, 2017, as each has jurisdiction over parts. It has yet to be approved by either.
A Push for Standard Business Reporting (SBR) Programs
Standard business reporting—the idea of multiple government agencies using the same taxonomy for regulatory reporting—could further promote open data efforts.
SBR programs have benefited countries like the Netherlands and Australia by modernizing reporting processes, reducing manual data entry, automating compliance electronically, and allowing deeper analysis of regulatory information.
By contrast, standardization efforts in the United States exist in siloed projects and legislative initiatives, such as the DATA Act and Financial Transparency Act. While beneficial, none span cross government to include all regulatory information.
“Our ultimate vision goes beyond financial regulation. We aspire to align the data formats of all U.S. regulatory agencies—so that companies’ software can automate all of compliance,” explains Hudson Hollister on the Data Coalition blog.
How will open data initiatives affect the financial industry? Share your thoughts with us in the comments below.
Image Source: Pixabay