FINRA Sets Comment Deadline for Proposal to Shorten TRACE Securities Reporting Times

FINRA set a comment deadline of February 26, 2024 on a proposal to shorten the time allowed for post-trade reporting. The proposal was published in the Federal Register.

As previously covered, FINRA proposed rule amendments to Rule 6730 ("Transaction Reporting") on TRACE-eligible transaction reporting to reduce the time to report from within 15 minutes to one minute. The amendments would allow certain exceptions for delayed reporting of TRACE-Eligible Securities by member firms with de minimis reporting activity and for manual trades. In the proposal, FINRA said that for firms qualifying for the de minimis exception with trading activity limited to fewer than 4,000 transactions, reporting must happen within 15 minutes of execution. FINRA said that if, for two years in a row, the firm exceeds the 4,000 transactions, then it will no longer qualify for the exception. As to the manual trades' exception, FINRA specified that a "15-minute outer limit would apply for the first year following implementation; a 10-minute outer limit would apply for the second year; and a five-minute outer limit would apply thereafter."