FIF Urges FINRA to Adopt Proposed Approach to Delayed Treasury Spot Trade Reporting
The Financial Information Forum ("FIF") urged FINRA to adopt a FINRA proposed version of TRACE reporting requirements for delayed Treasury spot trades. (See FINRA Regulatory Notice 20-24.)
In its Comment Letter, FIF said that the changes to the initial proposal that FINRA submitted in Regulatory Notice 22-26 would fundamentally change how a firm records trading activity. FIF said that the original proposal, which was recommended by the Fixed Income Market Structure Advisory Committee, would provide greater transparency into delayed Treasury spot trade markets without causing significant change to the reporting system.
Additionally, FIF said that current FINRA reporting systems do not require firms to report pre-execution data, and transitioning would be more complex than anticipated given TRACE's dual-party reporting requirement. Further, FIF said that FINRA should provide an exemption for certain transactions from the dual-party reporting requirement if the transaction involves one dealer routing an order to another dealer that then executes the order.
FIF urged FINRA to provide an implementation period of at least 18 months given the complexity of the required changes, and encouraged FINRA to consult with market participants on the technical compliance specifications the agency plans to implement.
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