Washington, DC — The Financial Industry Regulatory Authority announced today that the Securities and Exchange Commission approved a major expansion of FINRA's Trade Reporting and Compliance Engine (TRACE) to include debt issued by federal government agencies, government corporations and government sponsored enterprises (GSEs), as well as primary market transactions in new issues.
Currently, TRACE reports real time pricing and trade volume information only on corporate bonds trading in the secondary market. The expansion into agency debt will become effective on March 1, 2010. Details about the expansion and its implementation are available in FINRA Regulatory Notice 09-57.
"Transparency is a crucial ingredient for investor participation in a market," said FINRA Chairman and Chief Executive Officer Richard G. Ketchum. "Based on our experience with corporate bonds, this expansion should help all investors, and especially retail investors, to better monitor their executions by putting immediate and accurate sales and pricing information in their hands.
"For regulators, there is a demonstrated need for increased bond market information, particularly as we move forward from financial crisis," Ketchum said. "Enhanced disclosure in these markets will allow proactive oversight and a deeper understanding of market dynamics."
Specific market information that is reported through TRACE includes: prices, trade size, the overall size of markets and market participants. Collecting agency and primary market transaction data will enhance FINRA's ability to better detect fraud, manipulation, unfair pricing and other misconduct that violates the federal securities laws and FINRA rules.
TRACE was established in July 2002 to bring transparency to the corporate bond market. It was fully phased in by February 2005, offering real-time, public dissemination of transaction and price data for all corporate bond trades — including intra-day transaction data and aggregate end-of-day statistics (most active bonds, total volume, advances and declines and new highs and lows).
Retail investors have free access to this data at www.finra.org/marketdata. As part of its effort to demystify the corporate bond market and make it truly accessible to retail investors, FINRA has developed a comprehensive online learning center where retail investors can become familiar with the full range of bond types and bond markets. Smart Bond Investing is available at www.finra.org/smartbonds.
FINRA, the largest independent regulator for all securities firms doing business in the United States, is dedicated to investor protection and market integrity through comprehensive regulation. FINRA touches virtually every aspect of the securities business — from registering and educating all industry participants to examining securities firms; writing and enforcing rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and firms.
For more information, please visit our Web site at www.finra.org.