FINRA Proposes Rule Amendment to Clarify Definition of "Asset-Backed Security" in TRACE System

FINRA filed a proposed rule change with the SEC to amend FINRA Rule 6710. The proposed amendment is intended to narrow the scope of the definition of "Asset-Backed Security" to facilitate reporting to FINRA's Trade Reporting and Compliance Engine ("TRACE") system.

Specifically, the proposed amendment would make clear that home equity loans and lines of credit are not within the scope of the defined term "Asset-Backed Security."

FINRA has filed the rule amendment for immediate effectiveness. The implementation date of the proposed rule is June 1, 2015.

See: Text of Proposed Rule Change.Related news:SEC Approves Amendments to Require Firms to Identify Transactions with Nonmember Affiliates in TRACE Trade Reports (FINRA Reg. Notice 15-14) (May 12, 2015); FINRA Delays Implementation Date of Approved Trade Reporting Amendments (Fed. Reg.) (April 30, 2015).