FINRA Proposes to Disseminate TRACE Information on Treasury Security Transactions

FINRA proposed amendments to the Trade Reporting and Compliance Engine ("TRACE") Rules to provide for FINRA to disseminate information on certain Treasury security transactions.

The proposed amendments to TRACE Rules 6710 ("Definitions") and 6750 ("Dissemination of Transaction Information") would provide for FINRA to disseminate information on transactions in U.S. Treasury securities reported to TRACE that are "On-the-Run Nominal Coupons" (i.e., transactions in the most recently auctioned U.S. Treasury securities that pay a fixed interest rate). In order to mitigate concerns with respect to information leakage, FINRA proposed to disseminate this information on an end-of-day basis (not on a more accelerated basis), and to indicate whether large transactions meet specified size thresholds (or "dissemination caps"), and not disseminate the actual dollar value of such large transactions. The proposed rule change does not affect reporting requirements of broker-dealers or "covered depository institutions" (i.e., banks subject to TRACE reporting for transactions in U.S. Treasury securities).

Additionally, FINRA proposed to amend FINRA Rule 7730 ("Trade Reporting and Compliance Engine") to include Treasury securities within the existing fee structure for end-of-day and historic TRACE data.

Comments on the proposal must be submitted within 21 days of publication in the Federal Register.