FINRA Proposes to Shorten Trade Reporting Timeframe for Certain Debt Securities

FINRA proposed amendments to FINRA Rule 6730 ("Transaction Reporting") to reduce the Trade Reporting and Compliance Engine ("TRACE") reporting timeframe. The amendments would require transactions in TRACE-eligible securities that currently are subject to a 15-minute reporting timeframe to be reported within one minute.

Specifically, the proposed amendments would require the reporting of transactions executed on a business day:

  • prior to opening of the TRACE system (8:00 a.m.) to be reported on the same day, no later than one minute after the TRACE system opens;
  • from closing of the TRACE system (6:30 p.m.), or on any day where the TRACE system is not open, to be reported on T+1 no later than one minute after the TRACE system opens; and
  • during TRACE operating hours (8:00 a.m. - 6:29:59 p.m.) to be reported no later than one minute of the time of execution (except for transactions executed on a business day less than one minute before 6:30 p.m. ET, in which case firms would be required to report the trade no later than one minute after the TRACE system opens on T+1).

The proposed amendments would apply to all TRACE-eligible transactions in (i) corporate bonds, (ii) agency debt securities, (iii) asset-backed securities and (iv) agency pass-through mortgage-backed securities traded to-be-announced for good delivery.

The deadline for comments on the proposal is October 3, 2022. FINRA is seeking general feedback on the proposal, as well as answers to specific questions (see pp. 13-16 of the FINRA Notice).

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