SEC Approves FINRA Rule Change to Clarify How Certain Securities Are Classified and Reported to FINRA

The SEC approved FINRA's rule proposal to clarify the classification and reporting of certain securities to FINRA. The proposed rule change aims to address the appropriate classification of "hybrid" securities for trade reporting purposes. The new rule change will permit FINRA to include a capital trust security and a trust preferred security in the term "TRACE-Eligible Security." Under the approved rule change, FINRA will continue to use existing infrastructure to report the hybrid securities to the Trade Reporting and Compliance Engine (TRACE). The implementation date will be 150 days following the SEC's approval.

See: SEC Notice of Approval.See also: SEC Publishes Extension of Review Period for FINRA-Proposed Rule Regarding the Classification and Reporting of Certain Securities (Fed. Reg.) (April 2, 2014); SEC Extends Review Period for FINRA-Proposed Rule Change to Clarify the Classification and Reporting of Certain Securities to FINRA (March 28, 2014) FINRA-Proposed Rule Change to Clarify the Classification and Reporting of Certain Securities (September 17, 2013).