Views on improving the integrity of global capital markets
02 November 2016

SEC Supports Data Strategy to Better Serve Investors and Market Participants

Data, data analytics, and technology have the potential to improve the financial reporting process, which we have written about before and examined in our report — Data and Technology: Transforming the Financial Information Landscape. In the report, we examine how harnessing data and technology early in the financial reporting process can benefit all parties that are creating, consuming, or reviewing financial reports, including companies, regulators, and investors.

In the keynote address at the recent Big Data in Finance Conference, the commissioner of the SEC, Kara M. Stein, addressed what the regulatory community could do to make the use of data and technology a reality. First, she proposed the creation of an Office of Data Strategy:

For some time, I have asked that the SEC develop an executive team responsible for creating and overseeing such an office.  The office would be responsible for coordinating the creation of a data strategy addressing how we collect, manage, use, and provide data. This is a critical next step in turning our ad hoc growth as data users into a deliberate plan. The office could lend its expertise to, and would coordinate with, our policy, exam, and enforcement offices. Having a data strategy, and a team dedicated to it, is especially important in light of our limited resources.

She also proposed forming a Digital Disclosure Task Force:

…to help us reimagine how the SEC acquires and provides data to investors and market participants. I believe that we have an opportunity to reduce the burden on companies while at the same time providing better disclosure to investors.

CFA Institute supports both of these propositions because we believe that they are important steps toward transforming the financial reporting process to make it more effective for all parties, which leads to better investment decision making and more effective regulation, ultimately resulting in greater transparency for investors.

Read more of her speech here: A Vision for Data at the SEC.

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About the Author(s)
Mohini Singh, ACA

Mohini Singh is director of financial reporting policy at CFA Institute. She represents membership interests regarding financial reporting and disclosure proposals issued by the FASB, the IASB, and others. Singh holds the Associate Chartered Accountant (ACA) designation.

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