The Financial Industry Regulatory Authority recently filed a proposed rule change with the Securities and Exchange Commission to amend FINRA Rule 6730 regarding transaction reporting. Currently under Rule 6730, US Treasury Securities transactions executed on an alternative trading system (ATS) must be reported to the Transaction Reporting and Compliance Engine (TRACE) by the ATS itself and by the counterparties to the trade, but only if the counterparties are FINRA members. The identities of counterparties that are non-FINRA members are not reported under the current iteration of the Rule.
Continue Reading FINRA Proposes Rule Change Regarding ATS Reporting of Transactions to TRACE

On October 20, the Financial Industry Regulatory Authority (FINRA) proposed a rule change to make permanent an exemption from the Trade Reporting and Compliance Engine (TRACE) reporting requirements for TRACE-Eligible Securities transactions executed on a facility of the New York Stock Exchange (NYSE).
Continue Reading FINRA Proposes to Make Permanent a TRACE-Reporting Exemption

On June 19, the Financial Industry Regulatory Authority filed a proposed rule amendment that would make new Trade Reporting and Compliance Engine (TRACE) Security Activity Reports available. Currently, FINRA Rule 7730 enumerates the TRACE data products that FINRA offers in connection with TRACE-Eligible Securities (i.e., certain debt and US Treasury securities). Under the amendment, Rule 7730 would provide for a TRACE Security Activity Report, which would include monthly aggregated statistics by security for corporate and agency bonds.
Continue Reading FINRA Proposes to Make New TRACE Security Activity Reports Available

On June 12, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change establishing February 5, 2018, as the date when member firms must begin using new transaction modifiers in connection with reporting transactions in certain US Treasury securities. In October 2016 the SEC approved changes to the FINRA

The Financial Industry Regulatory Authority recently released a document outlining updates to the TRACE Web Application Programming Interface (API). This new update, Version 5.0, affects only securitized products. As mentioned in the FINRA Regulatory Notice, effective May 16, 2011, securitized products include asset-backed securities, mortgage-backed securities and other similar securities. The document provides the new securitized products Sub Product Asset Codes and their descriptions.
Continue Reading FINRA Updates Web API Specifications for the TRACE Securitized Products

The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority’s amendments to its Trade Reporting and Compliance Engine (TRACE) rules to provide for dissemination of transactions in collateralized mortgage obligations (CMOs), and to reduce the reporting time for CMO transactions. Specifically, FINRA will disseminate trade-by-trade information relative to CMO transactions valued under $1 million immediately upon receipt of the transaction report. For CMO transactions valued at $1 million or more, and where there have been five or more transactions in that security of $1 million or more by at least two different market participants, FINRA will disseminate aggregated information relative to transactions in that security on a weekly and monthly basis. CMO transactions that do not meet the criteria for either immediate trade-by-trade dissemination or periodic aggregate dissemination will not be subject to public dissemination.
Continue Reading SEC Approves FINRA’s TRACE Amendments for CMO Transactions

The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority’s amendments to its Trade Reporting and Compliance Engine (TRACE) rules to provide for reporting of transactions in “US Treasury securities,” which includes all securities issued by the US Treasury Department, with the exception of savings bonds. As a consequence, the TRACE reporting requirements will apply to transactions in Treasury bills, notes, bonds and inflation-protected securities (referred to as “TIPS”), as well as separate principal and interest components of a US Treasury security that have been separated pursuant to the Separate Trading of Registered Interest and Principal of Securities (STRIPS) program operated by the Treasury Department. (The Corporate & Financial Weekly Digest edition of July 22, 2016 summarized FINRA’s proposed amendments.)
Continue Reading SEC Approves FINRA’s TRACE Amendments for US Treasury Securities

On August 10, the Financial Industry Regulatory Authority issued Regulatory Notice 16-30, which reminds member firms of their obligations to accurately enter a transaction’s “time of execution” on Trade Reporting and Compliance Engine (TRACE) reports. FINRA Rule 6730(c) (Transaction Information to Be Reported) requires “parties to a transaction” involving TRACE-eligible securities to report the transaction’s “time of execution”. The “time of execution” is generally deemed to occur when the parties to the transaction agree to all of the material terms needed to calculate the dollar price and quantity of the transaction.
Continue Reading FINRA Issues Notice Reminding Member Firms of “Time of Execution” Reporting

On July 19, the Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission to amend its Trade Reporting and Compliance Engine (TRACE) reporting rules to require the reporting of transactions in all US Treasury Securities other than US savings bonds. This proposal would include transactions in US Treasury bills, notes and bonds, as well as separate principal and interest components of a US Treasury Security that have been separated pursuant to the Separate Trading of Registered Interest and Principal of Securities (STRIPS) program operated by the Treasury Department.
Continue Reading FINRA Proposes To Require Members To Report Transactions in US Treasury Securities to TRACE