Regulatory Notice 16-39: Trade Reporting and Compliance Engine (TRACE)

In 2001, the Securities and Exchange Commission approved the Trade Reporting and Compliance Engine (TRACE), a rule that requires all member firms to report secondary market transactions in eligible over-the-counter fixed income securities to FINRA. Unlike equities, over-the-counter securities trades are private transactions between counterparties and were not previously publicly reported. This lack of reporting provided very little to no price execution transparency to the marketplace.  Read More…

Another Proposed Rule Change Related to TRACE

FINRA is proposing to expand the Trade Reporting and Compliance Engine (‘‘TRACE’’) reporting rules to include most secondary market transactions in marketable U.S. Treasury securities.  The market in U.S. Treasury securities—or ‘‘Treasuries’’ —is the deepest and most liquid government securities market in the world.

Treasuries are traded by broker-dealers as well as commercial bank dealers and principal trading firms (‘‘PTFs’’) that are not registered as broker-dealers with the SEC or members of FINRA. Read More…

TRACE: Rule Change Related to Treasuries

FINRA is proposing to expand the Trade Reporting and Compliance Engine (‘‘TRACE’’) reporting rules to include most secondary market transactions in marketable U.S. Treasury securities.  The market in U.S. Treasury securities—or ‘‘Treasuries’’ —is the deepest and most liquid government securities market in the world.

Treasuries are traded by broker-dealers as well as commercial bank dealers and principal trading firms (‘‘PTFs’’) that are not registered as broker-dealers with the SEC or members of FINRA. Read More…

TRACE Trade Reports: Time of Execution

Broker-Dealer firms are required under FINRA Rule 6730 (Transaction Reporting) to report the “time of execution” of a transaction in TRACE trade reports. The time of execution is defined as the time when the parties to a transaction in a TRACE-eligible security agree to the material terms of the transaction (such as price and quantity) and can calculate the dollar price of the trade.

If a trade is executed on a firm’s trading desk at 11:30:00 ET, but isn’t entered into the firm’s system until Read More…

Proposed Rule Change Related to TRACE

FINRA is proposing to amend the FINRA Rule 6700 Series and the Trade Reporting and Compliance Engine (‘‘TRACE’’) dissemination protocols to provide for dissemination of transactions in an additional type of Securitized Products—specifically, collateralized mortgage obligations (‘‘CMOs’’).

In addition, FINRA is proposing a corresponding change to Rule 6730 to reduce the reporting period for CMOs from end-of-day to 60 minutes, and also to amend Rule 6730 to simplify the reporting requirements for transactions in Read More…