The Financial Data Transparency Act passed in December 2022 with rare bipartisan support. By 2027, local governments that issue municipal bonds will need to submit financial data to EMMA in machine-readable formats.
In other words: If your current ACFR is a PDF, youโve got work to do.
What FDTA Requires
FDTA amends the Securities Exchange Act to require machine-readable data for municipal securities disclosures. The goal is straightforward: make financial data comparable across the roughly 50,000 municipal issuers in the United States.
Right now, if an investor wants to compare debt levels across ten cities, they download ten PDFs and manually extract the numbers. FDTA changes that. Structured, tagged data means software can pull and compare figures automatically.
This affects Annual Comprehensive Financial Reports, continuing disclosures, and official statements. If you issue bonds and file with EMMA, these requirements will apply to you.
Timeline
The legislation set 2027 as the compliance deadline. Between now and then:
- 2023-2024: SEC and MSRB developed proposed rules
- 2025-2026: Final rulemaking expected
- 2027: Compliance begins
Exact format specifications aren’t finalized yet. This is something that Gravity will be watching closely as we continue to develop modern ACFR and disclosure solutions. However, the direction is clear, and waiting for final rules today means scrambling to plug holes later.
What “Machine-Readable” Actually Means
Machine-readable doesn’t mean searchable PDF. It means structured data with tagged fields that software can process without human interpretation.
Think XML or XBRL formats where each data point carries a standardized label. Your general fund balance isn’t just a number on page 47 of a PDF. It’s a tagged field that identifies what the number represents, which government reported it, and what fiscal year it covers.
Corporations have filed with the SEC in XBRL format since 2009. FDTA brings similar requirements to municipal finance.
Why This Matters for Your ACFR Process
Here’s where it gets practical.
You might be in trouble if your ACFR process looks like this: pull numbers from ERP, paste into Excel, build schedules, write narratives in Word, export to PDF. The PDF is your end product, but there’s no structured data behind it. When FDTA requirements take effect, you can’t just export your Word document in a different format. The data structure doesn’t exist.
Retrofitting unstructured documents into tagged data formats is expensive and painful. Governments that have modernized their ACFR process will have a much easier path.
Modern ACFR software stores your financial data in structured databases from the start. Every number lives in a tagged field tied to standard account codes. When FDTA-compliant export formats are finalized, generating them becomes a configuration option rather than a rebuild of your entire process.
For a deeper look at what modern ACFR processes look like, see our complete guide: ACFR Modernization: The Complete Guide for Local Governments
How to Prepare Now
You don’t need to wait for final rules to start preparing. The direction is clear enough to act.
Evaluate your current process. Where does your ACFR data actually live? If the answer is spreadsheets and Word documents, that’s your gap. Data scattered across files can’t be exported in structured formats without significant manual work.
Choose software built for structured data. When evaluating ACFR solutions, ask how data is storedโnot just how reports look when finished. Look for:
- Database storage with tagged fields (not just document templates)
- Data tied to standardized account codes
- Export flexibility for multiple output formats
For example: Gravity’s Disclosure Studio has a Universal Data Model, which stores your financial data in a structured way from day one. Your ACFR content lives in connected fields.
Don’t wait for the deadline. Governments that modernize now get immediate benefits, such as: faster reporting, fewer errors and easier collaboration, while also building FDTA readiness into their foundation. Governments that wait will face two transitions at once: modernizing their process and meeting new compliance requirements under deadline pressure.
What GFOA Is Saying
GFOA has engaged actively in the rulemaking process. They’ve raised concerns about implementation burden on smaller governments and advocated for reasonable timelines and clear standards.
But they’re not opposing the direction. Transparency is core to GFOA’s mission. Machine-readable data serves that mission.
The Bottom Line
FDTA is coming whether you’re ready or not. The question is whether you’ll have a smooth path to compliance or a stressful scramble in 2026.
The same investments that make ACFR season easier with a tool like Gravityโs Disclosure Studio โ connected data, structured storage, automated workflows โ also prepare you for FDTA requirements. Modernize now and you solve both problems at once.
Ready to see how Gravity prepares you for FDTA compliance? Book a demo to see the Universal Data Model in action.
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