Regulatory Notice 09-57

SEC Approves Amendments Expanding TRACE to Include Agency Debt Securities and Primary Market Transactions; Effective Date: March 1, 2010

Executive Summary

The SEC approved major amendments to the TRACE Rules (FINRA Rule 6700 Series) and FINRA Rule 7730 relating to TRACE fees that will increase the number and type of securities and transactions that will be reported to TRACE. The changes become effective March 1, 2010.

 

Debt securities that are issued or guaranteed by an Agency or by a Government-Sponsored Enterprise (collectively, Agency Debt Securities) will become TRACE-Eligible Securities, and transactions in such securities will be reported and disseminated. Primary market transactions in TRACE Eligible Securities will be Reportable TRACE Transactions. For certain primary market transactions—List or Fixed Offering Price Transactions or Takedown Transactions—several significant exceptions to the current TRACE requirements will apply:

 

  • the reporting period for List or Fixed Offering Price Transactions and Takedown Transactions will be extended to the close of business of the day following the day of execution (i.e., to 6:30 p.m. Eastern Time on T+1);
  • member firms reporting such transactions will not be required to pay a standard transaction reporting fee; and
  • transaction information will not be disseminated.

 

The SEC also approved new FINRA Rule 6770, granting FINRA emergency authority to suspend the reporting and/or dissemination of certain transactions in TRACE-Eligible Securities, or certain reporting or dissemination requirements as market conditions warrant and in consultation with the SEC.

 

These and other related amendments to the TRACE Rules and FINRA Rule 7730, which the SEC approved on September 28, 2009, are discussed below. The amended rule text is available on our Web site at www.finra.org/notices/09-57.

 

Questions regarding this Notice should be directed to:

 

  • Elliot R. Levine, Associate Vice President and Counsel, Transparency Services, at (202) 728-8405;
  • Sharon Zackula, Associate Vice President and Associate General Counsel, Office of General Counsel, at (202) 728-8985; or
  • Patrick Geraghty, Director,Market Regulation, at (240) 386-4973.