November 8, 2022

FIF Calls for Bifurcated Reporting Timeframes for Manual Trades

Financial Information Forum ("FIF") criticized related FINRA and MSRB proposals to shorten the required reporting time for certain fixed income securities. (See FINRA Notice 22-17; MSRB Notice 2022-07.)

As previously covered, the proposed rule changes would amend FINRA Rule 6730 ("Transaction Reporting") and MSRB Rule G-14 ("Reports of Sales or Purchases") to require trades in covered fixed income securities to be reported to their respective trade reporting systems within one minute from the time of execution.

In a comment letter, FIF expressed concern about the viability of reporting a transaction to the Trade Reporting and Compliance Engine system ("TRACE") or the MSRB Real-Time Transaction Reporting System ("RTRS") within one minute for manually executed transactions. FIF said that requiring manual trades to be reported within one minute of execution may severely restrict firms' ability to negotiate the terms of a trade, as firms may rush to comply with the shortened timeframe. Additionally, FIF recommended that FINRA and MSRB permit firms to report non-disseminated information on an end-of-day basis.

FIF urged FINRA and the MSRB to implement a separate set of reporting requirements for manually executed trades that gives firms more of a cushion in the time to report transactions. FIF encouraged FINRA and the MSRB to issue guidance to firms on how to best comply with the new reporting timeframe. FIF also recommended that FINRA and the MSRB should institute a long compliance period, as updating to comply with a one-minute timeframe will require a multi-year effort.