A proposed rule to establish uniform financial data standards across regulatory agencies should either be revised to comply with federal law or a new proposal put forward, the American Bankers Association said yesterday in a letter to nine federal agencies.
The Securities and Exchange Commission, Federal Reserve, FDIC and six other agencies in August proposed common data standards that would form the basis of data collections by financial regulators. For an identifier of financial instruments, they proposed to use Bloomberg’s Financial Instrument Global Identifier (FIGI) rather than the Committee on Uniform Security Identification Procedures (CUSIP) or the closely related International Securities Identification Number (ISIN). ABA is the owner of CUSIP.
In its comments, ABA reiterated concerns expressed in a Sept. 3 letter that the agencies misread the law in designating FIGI. Among other things, the association said the agencies overlooked the efficiency-enhancing role of CUSIP in U.S. and global markets, ignored the extent to which CUSIP fungibility is critical for the operations of markets and financial reporting, and failed to adequately consider the costs and benefits of the proposed rule. ABA urged the agencies to revise the proposed rule to comply with federal law or promulgate a new proposal.
“Any other path would risk saddling each individual Agency with the task of either promulgating potentially costly and disruptive proposals or spending unnecessary resources explaining why it would not follow any final standards,” ABA said. The association also provided a preliminary economic analysis of the proposed rule’s potential effects and other analyses showing frequent errors in current filings that use FIGI. Many other commenters — including the Depository Trust and Clearing Corporation, Intercontinental Exchange, Bank Policy Institute, SIFMA, Cboe Global Markets and the National Association of State Treasurers — also raised similar questions about the proposal in their letters.
