White Paper: Structured Data is Coming to the Municipal Securities Market–Now What?

The Financial Data Transparency Act of 2022 (FDTA), enacted by Congress as Title LVIII of the National Defense Authorization Act for Fiscal Year 2023, was signed into law by President Biden on December 23, 2022. The FDTA is likely to usher in significant changes in how information is prepared, disseminated, and consumed by municipal securities market participants.

Even though final rules under the FDTA for the municipal securities market are not slated to be completed for another four years or more, critical first steps in the multi-layered standard-setting process laid out in the FDTA can be expected to begin in the near future.

The municipal market will need to be actively engaged in this process from the beginning to ensure that appropriately tailored data standards fit for use in the highly diverse municipal securities market emerge from this process. Input from market participants will be critical to ensuring that data standards are implemented in a phased, non-disruptive manner that takes full account of the unique profile of municipal market issuers and other market participants, as well as the regulatory structure embodied in the Tower Amendment1 as reconfirmed by the FDTA.

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