Regulators Call for More Data at Industry Conference

SIFMA held its Annual Operations Conference and Exhibit, where SIFMA Vice President Randy Snook, SEC Commissioner Kara Stein, Office of Financial Research ("OFR") Director Richard Berner and other regulators discussed data standards, cybersecurity and various technology initiatives.

In his opening remarks, Mr. Snook contextualized the discussions by describing the evolution of the role of the operations professional. He described many changes in the financial services industry, and that a shift to a T+2 settlement cycle and an industry-wide prioritization of cybersecurity are on the horizon. Mr. Snook mentioned the continued implementation of the legal entity identifier ("LEI") initiative, long supported by SIFMA. Mr. Snook encouraged regulators to make the LEI a regulatory reporting linchpin, stating that doing so would "help regulators, supervisors, researchers, and firms to better measure and monitor systemic risk."

Commissioner Stein spoke about new tools that the SEC is using to manage data. By providing historical context, she underscored how the markets have changed, and described how the SEC has reacted to the markets' data and technology evolution. She expressed hope that the SEC will find new areas in which to deploy the LEI, such as including it on the table of subsidiaries filed as an exhibit to a company's annual report. Additionally, she mentioned initiatives the SEC has undertaken to address the protection of data, such as Regulation Systems Compliance and Integrity and the Consolidated Audit Trail ("CAT"). Commissioner Stein said that she has advocated consistently for the CAT to be implemented as soon as possible, and explained that only through CAT "can regulators appropriately survey our high-speed and high volume marketplace."

Mr. Berner discussed both the OFR's data standards agenda and threats to financial stability. He emphasized the importance of making financial data "usable and transparent," and stated that the global LEI "is the cornerstone for financial data standards." Mr. Berner explained that the OFR is working to accelerate the adoption of the LEI by calling for regulators to require "broader use of the LEI in regulatory reporting" as well as the broad adoption of standards for instruments and products as they become available. Additionally, he highlighted the need to improve methods for sharing sensitive data securely. Mr. Berner explained that regulators must work out legal agreements to determine the technology and standards for exchanging data. He also outlined his assessment of current threats to financial stability, including liquidity concerns in some financial markets.

See:Mr. Snook's Opening Remarks; Commissioner Stein's Speech; Mr. Berner's Remarks.