Financial Associations Raise Concerns on FINRA and MSRB Proposals to Shorten Trade Reporting Times

In response to proposed rule changes to reduce trade reporting time frames, the Financial Information Forum ("FIF") and the Investment Company Institute ("ICI") recommended that FINRA and MSRB provide additional exceptions to the application of any reduced reporting times. See "Both MSRB and FINRA Propose to Shorten Trade Reporting Times.".

In its Comment Letter, FIF recommended that FINRA and the MSRB: (i) provide an exception for the reduced reporting time where a firm is required to report a large number of allocations for a single block trade, (ii) have consistent exceptions for manual activity, (iii) consider scenarios where a firm corrects a technical issue, (iv) provide an implementation period of at least 18 months running from the date that FINRA and the MSRB publish updated technical specifications and relevant regulatory guidance and (v) confirm that the manual trade modifier will not be included in matching criteria.

In its Comment Letter, ICI recommended that FINRA and MSRB provide opportunities for funds, advisers and other market participants to submit data and comments on the timeframe for reporting manual trades. ICI argued further that FINRA and MSRB's lack of description as to how each will (i) engage with market participants and (ii) determine whether the manual trade exception reporting timeframe should be reduced, could create an "autopilot effect" where timeframes are reduced without market participants having an opportunity to comment or provide data.