Below is an excerpt from an article by Michael Steinberg in GovLoop, published today.
The proposed Financial Transparency Act could be the most significant innovation in financial data reporting since the Great Depression. The bipartisan bill, which was originally introduced in 2010, will likely be reintroduced this year. If it is passed, the new regulations related to open data could greatly benefit regulators and investors.
That’s why GovLoop sat down with Hudson Hollister, founder of the Data Coalition and former attorney at the SEC, to learn more about the Financial Transparency Act. His organization will be hosting a Financial Data Summit later this month on the proposed bill, and he personally has been working with lawmakers on crafting this legislation for almost a decade. Hollister believes that standardizing and electronically formatting publicly available financial data will modernize the banking industry for the 21st century.
All public companies are required to submit financial transaction data to regulators such as the SEC, CFPB, and FDIC, so that the government can ensure that companies are complying with regulations and following accounting rules. Currently though, different regulators ask for different metrics, and different companies aggregate data in different ways. This makes it difficult for regulators investigating fraud and investors evaluating company financials because, many times, they must compare apples to oranges. The Financial Transparency Act, and the subsequent SEC regulations, will transform these processes and data points by requiring the standardization and digitization of one of the most commercially valuable public data sets in the world.
Continue reading the GovLoop article here.