The Office of Financial Research Advances Dodd Frank Mandate
Published: December 14, 2020
WASHINGTON – The Office of Financial Research today took an important step toward fulfilling a key Dodd Frank mandate, by completing phase one of the Financial Instrument Reference Database, which is a foundational data dictionary.
Data describing financial instruments are often complex, incomplete, and incompatible. These weaknesses hinder companies and investors in managing their risk, and impede regulators in overseeing financial firms, markets, and the financial system as a whole. To address these concerns, the Dodd Frank Wall Street Reform and Consumer Protection Act (Dodd Frank Act) directed the OFR to prepare and publish, in a manner that is easily accessible to the public, a Financial Instrument Reference Database (FIRD).
Under Director Falaschetti’s leadership, the OFR renewed its focus to establish the FIRD. Today’s publication is the result of the OFR’s commitment to fulfilling this important Dodd Frank Act requirement.
This first phase of the FIRD establishes a set of granular data that are the basis for describing financial instruments. This foundational component is a data dictionary that leverages ISO 20022, an international data standard for financial messages. Phase one of the FIRD’s data dictionary provides the terms and definitions for five asset classes: Equity, Debt, Option, Future and Warrant. Future phases will build on this foundation.
The FIRD simplifies access to and understanding of the granular financial instrument data in ISO 20022. The format design and functionality make the text searchable and the relationships and properties clear. Phase one forms a foundation to which the public sector and private sector can begin to align financial instrument data.
Additionally, basing the data dictionary on ISO 20022, the OFR complies with Office of Management and Budget guidance to make use of industry standards and avoids creating an additional government unique standard. The FIRD is positioned to remain current and grow with evolving industry data standards.
The OFR helps promote financial stability by looking across the financial system to measure and analyze risks, perform essential research, and collect and standardize financial data principally to support the Financial Stability Oversight Council and its member agencies.