FINRA Requests Comments on TRACE Dissemination Issues (FINRA Regulatory Notice)

FINRA requests comments on two issues relating to the dissemination of information on TRACE-eligible securities transactions.

First, FINRA seeks input on whether it should maintain or modify current TRACE dissemination caps, under which the actual size (volume) of a transaction over a certain par value is not displayed in disseminated real-time TRACE transaction data. Second, FINRA requests comment on whether transactions in TRACE-eligible securities effected pursuant to Securities Act Rule 144A (Rule 144A transactions) should be disseminated and, if so, the scope and manner of such dissemination.

Lofchie Comment: The Notice contains information that looks interesting (although I have no idea what to make of it) as to the percentage of trades in different debt types that take place at or below certain size levels. Firms should consider whether they believe that disseminating additional information as to transaction size will materially help transparency or harm liquidity.

Comments Due: October 10, 2012.

Cross-Reference(s): FINRA Rules 6710 (Definitions) and 6750 (Dissemination of Transaction Information); Securities Act Sections 3 (Classes of securities under this subchapter) and 5 (Prohibitions relating to interstate commerce and the mails); and Securities Act Rule 144A (Private Resales of Securities to Institutions).

View notice here(links externally to FINRA website).