MSRB and FINRA Move to Drop One-Minute Trade Reporting Rules

The MSRB rescinded proposed rule amendments that would have shortened the post-trade reporting window to one minute, reverting the timeframe to 15 minutes. (See prior coverage.) In addition, FINRA proposed rule amendments to maintain the currently effective 15-minute TRACE reporting timeframe. 

The MSRB said it rescinded the proposed amendment to MSRB Rule G-14 ("Reports of Sales or Purchases") after dealers raised concerns about operational challenges, including the feasibility of adjusting systems and workflows, particularly for trades with manual components or those relying on third-party vendors. The MSRB said that the feedback indicated that a broader range of trades than initially anticipated could be affected. Further, the MSRB said that trade data from 2024 showed improved reporting times compared to 2022, especially for electronically reported trades. The MSRB concluded that the "as soon as practicable" language in the proposed amendment could drive further improvements without imposing the compliance burdens and costs associated with the one-minute standard.

In a proposed rule change to Rule 6730 ("Transaction Reporting") FINRA would (i) "maintain the currently effective 15-minute outer limit timeframe for reporting transactions" and (ii) allow for delayed reporting of TRACE-Eligible Securities by member firms with de minimis reporting activity and for manual trades. FINRA is also proposing new Rule 6730.08 to streamline reporting for allocations of aggregate orders to managed accounts, and said it will update TRACE logic so that corrections made after the reporting window do not result in late flags if the original trade was timely reported.

FINRA's proposed rule change effectively reverses a 2024 Order adopting a proposal that reduced "the 15-minute TRACE reporting outer limit timeframe for fully electronic trades to one minute, with a later deadline for manual trades and firms with limited trading activity."

FINRA said that its latest proposed rule change was a response to feedback from members citing operational challenges, including difficulties reporting complex fully electronic trades (such as those involving managed accounts or portfolio allocations) within one minute and reporting manual trades within five minutes due to processes involving phone, email, or chat systems. FINRA said that firms also expressed concern over compliance burdens, particularly regarding late report designations when correcting disseminated fields after the reporting deadline. FINRA determined that maintaining the existing 15-minute reporting standard for all trades is appropriate and more workable.