FINRA Files Amendment No. 1 Regarding Trace Reporting Involving Asset-Backed Securities

FINRA filed Amendment No. 1 with the SEC in response to comments it received regarding the proposed rule involving TRACE reporting for asset-backed securities ("ABS"). In the amendment, FINRA proposes to revise FINRA Rule 6750 ("Dissemination of Transaction Information") to include ABS among TRACE-Eligible Securities that FINRA will disseminate publicly.The amendment also proposes to revise certain existing definitions in FINRA's rules and add new definitions in order to delineate the specific ABS that would be subject to dissemination pursuant to Rule 6750. Specifically, FINRA has proposed to rename as "Securitized Products" the broad group of securities currently defined as "Asset-Backed Securities" in FINRA Rule 6710(m) and, in a proposed new definition in FINRA Rule 6710(cc) ("Definitions"), to redefine the term "Asset-Backed Security" more narrowly. Additionally, FINRA has proposed to provide further guidance regarding the scope of this narrower definition of "Asset-Backed Security" in proposed Supplementary Material .01 to FINRA Rule 6710.

See: FINRA Amendment No. 1.See also: SEC Announces the Designation of a Longer Period for Commission Action Regarding FINRA-Proposed Rule Change Relating to TRACE Reporting and Asset-Backed Securities (January 13, 2014); SIFMA Submits Comments Regarding FINRA-Proposed Rule Relating to TRACE Reporting of Asset-Backed Securities (December 18, 2013); FINRA Proposes Rule Relating to TRACE Reporting and the Dissemination of Transactions in Asset-Backed Securities (November 13, 2013); FINRA-Proposed Rule Change to Amend Rule 6700 Series and TRACE Dissemination Protocols (October 31, 2013); Proposed Rule Change Relating to Dissemination of Agency Pass-through Mortgage-Backed Securities and SBA-Backed ABS Traded in Specified Pool Transactions (May 24, 2013); SEC Approves Amendments to FINRA Rule 6730(d)(2) Requiring Firms to Report Factor in ABS Transactions Executed in Agency Capacity (FINRA Regulatory Notice 13-15) (April 12, 2013); FINRA Proposal Relating to TRACE Reporting of Asset-Backed Securities (March 23, 2011).