FINRA Requires TRACE Reporting of U.S. Dollar-denominated Foreign Sovereigns

The SEC approved amendments to FINRA Rule 6730 ("Transaction Reporting") to require members to report transactions in U.S. dollar-denominated foreign sovereign debt securities to the Trade Reporting and Compliance Engine ("TRACE"). The Order was published in the Federal Register.

The rule change will expand the definition of a TRACE-eligible security to include the term "Foreign Sovereign Debt Security," which FINRA defines as "a debt security issued or guaranteed by the government of a foreign country, any political subdivision of a foreign country or a supranational entity." The requirement is limited to reporting of transactions in U.S. dollar-denominated foreign sovereign debt securities. Relevant transaction reporting fees will also apply.

In response to comments on the proposal, FINRA assured member firms that it will (i) update the new issue form process to permit members to receive a FINRA symbol based solely on an identifier, eliminating the need for issuers to call FINRA to assist with setting up a symbol, and (ii) ensure that FINRA symbols assigned to any given identifier are unique and non-duplicative.

FINRA stated it will announce the effective date of the rule via Regulatory Notice, and it assured member firms that it will provide an ample implementation period.