May 12, 2022

FINRA Proposes to Require TRACE Reporting of Foreign Sovereign Debt Securities Transactions

FINRA proposed to require TRACE reporting of transactions in U.S. dollar-denominated foreign sovereign debt securities. Under the proposal, the securities would be subject to same-day reporting requirements. However, FINRA does not currently intend to publicly disseminate TRACE reports on these securities.

As outlined in the filing, FINRA proposed to define "Foreign Sovereign Debt Security" as a debt security issued or guaranteed by (i) the government of a foreign country, (ii) any political subdivision of a foreign country (e.g., state, provincial, or municipal government), or (iii) a supranational entity (e.g., the World Bank and European Investment Bank).

If approved by the SEC, FINRA proposed that the effective date of the new TRACE reporting requirements would be up to 365 days following publication of a Regulatory Notice announcing SEC approval of the amendment.

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