The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

XBRL Falls Off the US Regulatory Checklist, What Will This Mean for Data Management?

Share article

One of the stranger happenings during the lengthy US reform negotiation process was that a provision to require the use of Extensible Business Reporting Language (XBRL) for financial data reporting was unexpectedly struck from the financial regulation reform bill, which was passed this week. Given that XBRL is being touted as the next big thing for data management efficiency and players such as Swift and the DTCC are keen to extend its reach into the world of corporate actions, what will this rather strange regulatory development mean?

The XBRL provision was dropped out of the Senate version of the bill without explanation and much to the consternation of key proponent representative Darryl Issa, who has since vowed to bring the XBRL provision before the full House for a separate vote.

The amendment Issa originally proposed for the Dodd-Frank bill would have required regulators to use a standard electronic format such as XBRL only for a few types of transactions, collecting and publishing business information from the financial industry. However, Issa withdrew his original proposal to work on an expanded version with the staff of the House Financial Services chairman Barney Frank. The new proposal would have affected almost every aspect of financial data collection in the regulatory overhaul bill, but it has since been canned.

The omission of the provision will, no doubt, also go down like a lead balloon with the Securities and Exchange Commission (SEC), which has been a key proponent of the data tagging standard since its passing of a rule in December to require XBRL reporting for financial disclosures. XBRL has also garnered the attention of European regulators and the Committee of European Banking Supervisors (CEBS) most recently noted its potential in the area of risk data reporting.

Swift, XBRL US and DTCC will also take note of the development due to their project to introduce XBRL to the corporate actions space. Last month, they published their business case to this end, which indicated that the introduction of XBRL to this corner of the market could result in an estimated saving for the industry of US$400 million a year and potential direct savings to investors and their investment managers of US$172 million annually.

Given their championship of the standard thus far, it is unlikely that the political machinations involved in the putting together of the reform bill will deter XBRL’s proponents in the long term. Issa is certainly determined to get it back on the political agenda and the SEC will ensure it remains on the regulatory agenda for the near future.

As for its future in Europe, that’s anyone’s guess at this point. Swift and other parties may be keen, but there are many that feel XBRL is not an appropriate format for these markets.

Related content

WEBINAR

Recorded Webinar: Overcoming the Barriers to Implementing RegTech Solutions: The View from Either Side of the Fence

RegTech holds the promise of targeted, agile and often low-cost solutions to the real-world problems faced by financial institutions across the board. So why is it so difficult to get RegTech projects off the ground? RegTech solutions providers complain that it’s difficult to get access to decision-makers, and even when they do it’s tough to...

BLOG

FCA Business Priorities Could Be Derailed By COVID-19

The UK’s Financial Conduct Authority has laid out its business priorities for the year ahead, but warns that it will focus on the challenges presented by the coronavirus epidemic, which could lead to a shift in priorities as the year progresses. The FCA identifies four primary objectives for the coming year: including enabling effective consumer...

EVENT

RegTech Summit Virtual

Regtech Summit Virtual will explore how business and operating models have adapted post COVID and how RegTech can provide agile and enhanced compliance for managing an evolving risk and compliance landscape. As the dust settles, we will look at the outlook for the global RegTech industry, where Regulators are focusing as they get back to business, and deep dive into global regulatory priorities for the rest of the year and into 2021.

GUIDE

Regulatory Data Handbook 2020/2021 – Eighth Edition

This eighth edition of A-Team Group’s Regulatory Data Handbook is a ‘must-have’ for capital markets participants during this period of unprecedented change. Available free of charge, it profiles every regulation that impacts capital markets data management practices giving you: A detailed overview of each regulation with key dates, data and data management implications, links to...