September 11, 2024 - Last month we summarized a controversial and problematic rule (the “Proposed Rule”) proposed by the Treasury Department  and seven key financial regulators under the Financial Data Transparency Act (“FDTA”). The FDTA is a law designed to modernize the collection and dissemination of financial data by and between federal financial regulators, with the aim of making that information more accessible, more uniform, and ultimately more useful to investors and consumers. Surprisingly, the Proposed Rule selected the Financial Instrument Global Identifier (“FIGI”), a little-used identifier owned by Bloomberg, as the as the sole identifier of financial instruments (seemingly to the exclusion of CUSIPs and ISINs).

Last week the American Bankers Association (“ABA”), the owner of CUSIP, submitted a letter to the SEC and other agencies to repropose the Proposed Rule or, at a minimum, extend the current 60-day comment period for an additional 60 days. The ABA asserts that by declining to consider CUSIPs or ISINs and proposing FIGI as the exclusive financial instruments identifier the agencies acted outside the FDTA’s statutory mandate and acted arbitrarily and capriciously under the Administrative Procedure Act (“APA”).  As noted in an article in the American Banker, in addition, to requesting an extension, the ABA was laying the groundwork for litigation under the APA if the Proposed Rule is finalized in its current from which excludes CUSIP by its terms.

The LSTA is also considering requesting an extension of the comment period, which currently ends October 21st.  We are in the process of assessing the ramifications of the Proposed Rule for the corporate loan market given that CUSIPs are ubiquitous and FIGIs are rarely used. We will be engaging with members in this process but these efforts will require more than 60 days.

For more information on the FDTA and the Proposed Rule please see these helpful memos from Covington and Chapman.