By establishing and maintaining reference databases for financial entities and financial instruments and making these available to the public, the NIF would subsume a function currently carried out by commercial data vendors. For these vendors, the maintenance of reference databases constitutes an expensive necessity, rather than a substantial commercial opportunity. The standardization of reference databases would lower costs for the financial data vendors, allowing them to focus their resources on higher-value activities.

Small banks and financial firms already largely rely on off-the-shelf software and services from third-party data and systems vendors for portfolio management. Consequently, the NIF should not impose significant new operational burdens on small banks. In addition, the public reference databases maintained by the NIF would provide benefits to all market participants, particularly those too small to maintain or purchase their own substitute services. In this way, the NIF would help level the playing field for institutions of all sizes.

We believe that the creation of the NIF would put the U.S. at a competitive advantage vis-a-vis other jurisdictions. By helping to reduce the threat of hidden systemic risks, the NIF would increase investors' confidence in the U.S. markets.