Industry leaders asked the House Committee on Financial Services in future legislative sessions to consider modernizing financial regulatory reporting within the government.
“There is a growing consensus in the U.S. technology and financial industries that our financial regulators should move quickly to modernize their reporting regimes and replace documents with data. But progress has been slow,” said the letter sent by the Center for Data Innovation, CompTIA, the Data Coalition, the Information Technology & Innovation Foundation, LexisNexis Risk Solutions, Morningstar, OTC Markets, and the Software & Information Industry Association.
The letter noted that actions taken by the Securities and Exchange Commission (SEC) in 2009 requiring companies to file eXtensible Business Reporting Language (XBRL) were not commercially acceptable because the SEC had not phased out old-fashioned reporting requirements.
It also referred to the successes of other countries as models for the next Congress to use in improving data reporting.
“By replacing disconnected documents and disparate databases with open data, regulators can make reporting cheaper and more transparent without amending its substance,” said Hudson Hollister, executive director of the Data Coalition. “For example, because Australian regulators adopted a single data dictionary for all the information they collect, as part of the Standard Business Reporting program, Australian companies are saving over $1 billion annually in compliance costs, even before the system is mandatory. U.S. regulators should do the same, and the 115th Congress can lead the way.”
The letter’s authors commended the Financial Services Committee on the pieces of legislation and policy it has proposed in the past, but also requested that the committee call a hearing of subject-matter experts to address the needs of government and industry in financial data reporting.
“The financial technology industry is ready to reduce compliance costs through automation, deliver actionable information to markets, and provide powerful analytical services to the regulators, but these innovations will only become possible if the regulators embrace standardized data formats for the information they collect,” said David Logsdon, senior director of public advocacy at CompTIA. “We welcome the Financial Services Committee’s leadership on modernizing financial regulatory reporting and we look forward to breakthroughs in coming legislative sessions.”