The FDTA will require the heads of the covered federal agencies to consult with each other to allow data to promote interoperability across the members of the Financial Stability Oversight Council. Additionally, the FDTA will allow agencies to scale the data reporting requirements to ease the burden on smaller entities.

The FDTA also mandates the adoption of an open-source data standard as well as common identifiers. Because the agencies that are covered by the FDTA include the SEC, the required changes to the data standard will have a significant impact on the continuing disclosures that are made to the MSRB by municipalities through the Electronic Municipal Market Access (EMMA) website. While not limited to data collected via the EMMA website, the FDTA requires entities that file financial information with the EMMA website to comply with the new data standard.

The data standard selected by agencies must fill the following requirements:

• support high quality data through “schemas”
• be machine-readable
• be accompanied by a taxonomy or ontology model, which clearly defines the semantic meaning of the data.
• be nonproprietary and open-source
• be consistent with accounting and reporting principles for governmental entities

While the FDTA is mandating the use of common identifiers across the covered agencies and the use of the new open-source data standard, there are no new reporting or disclosure requirements in the FDTA. The FDTA does not require any covered agency to collect or make publicly available any additional information.

The SEC must release draft rules for review and comment by stakeholders by the end of this year. While the SEC has not revealed any information about what data standard they intend to use, based on the requirements for public corporations that must provide structured data to the SEC using the EDGAR website, XBRL (or inline XBRL) would seem a likely candidate.

XBRL checks all of the boxes required by the FDTA and has been used to great success at the SEC for their EDGAR filers. While the initial transition was challenging for registrants and filers, the use of XBRL has since expanded at the SEC and provides transparency for investors on an unprecedented level.

We’ve been working with XBRL since it was first adopted by the SEC, providing filers with cost-effective tools to meet these ever-changing requirements. Our tools are focused on minimizing the burden of structured data compliance by providing flexibility and simplicity. We’ve helped numerous EDGAR filers transition to structured data, and we’re ready to help you too.

If you’d like to know more and get some tips on how to prepare for the changes coming to your financial disclosures, please download our FDTA Fact Sheet by clicking the link below.