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Fixed Income

FINRA.org | Fixed Income

FINRA plays an important role in regulating and providing transparency to the fixed income securities markets. For example, we operate and enforce FINRA rules regarding the Trade Reporting and Compliance Engine (TRACE®), and enforce, for our member firms, federal securities regulations governing fixed income, including those promulgated by the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB).

Most recently, the SEC designated FINRA as the examination and enforcement authority for municipal advisors that are FINRA members. Firms selling municipal securities or performing municipal advisory services must register with the MSRB.

FINRA Member Regulation is responsible for examining all FINRA members involved in the fixed income markets for compliance with applicable rules and regulations. Among other things, Member Regulation reviews firms' fixed-income sales practices to determine whether they have dealt fairly with customers and that their registered representatives are properly qualified and supervised, and ensures they are in compliance with net capital requirements.

Market Regulation, meanwhile, monitors trading activity in more than 2.5 million individual debt securities, including corporate bonds, municipal securities, government agency securities, and mortgage- and asset-backed securities, for potential manipulative activity and to ensure customers receive fair prices.

Trade Reporting and Compliance Engine (TRACE)

TRACE, introduced in 2002, captures real-time consolidated transaction data for all eligible public and private (144A) corporate bonds—including investment grade, high yield and convertible debt—and agency debt. Securitized products, such as mortgage-backed securities (MBS), traded in specified pool or To Be Announced (TBA) transactions also are part of the TRACE system.

As a result, TRACE brings transparency to the bond market. Individual investors and market professionals can access information on all over-the-counter (OTC) public and private activity representing more than 99 percent of total U.S. corporate bond debt, more than 16,000 agency debt securities, and more than one million asset and mortgage-backed securities.

FINRA licenses TRACE data to TRACE vendors and subscribers. The TRACE Content Licensing section provides information about data licensing options, agreements, technical specifications, and market data policies.

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Guidance on Best Execution Obligations in Equity, Options and Fixed Income Markets
November 20, 2015
FINRA Requests Comment on a Revised Proposal Requiring Confirmation Disclosure of Pricing Information in Corporate and Agency Debt Securities Transactions
October 12, 2015
SEC Approves Rule to Address Conflicts of Interest Relating to the Publication and Distribution of Debt Research Reports
August 26, 2015
Guidance Relating to Firm Short Positions and Fails-to-Receive in Municipal Securities
July 30, 2015
FINRA Requests Comment on Proposal to Require Alternative Trading Systems to Submit Quotation Information Relating to Fixed Income Securities to FINRA for Regulatory Purposes
February 6, 2015
FINRA Reminds Firms of Their Sales Practice and Due Diligence Obligations When Selling Municipal Securities in the Secondary Market
September 20, 2010
FINRA Recommends Review of Municipal Securities Activities
June 30, 2009
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FINRA staff introduces the new Municipal Continuing Disclosure Report available through FINRA's Report Center.
June 13, 2011
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This podcast, the third in a three-part series on municipal securities, explores considerations for firms when gathering and disclosing information about these products.
November 8, 2010
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This podcast, the second in a three-part series on municipal securities, describes recent amendments to the Securities Exchange Act's Municipal Disclosure Rule.
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September 27, 2010
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FINRA staff provides guidance on principal-protected notes, including how they work and how FINRA rules covering communications with the public, suitability and training obligations apply.
May 17, 2010
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Guidance on sales practice obligations related to reverse convertibles.
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FINRA staff discuss firms' obligations related to the sale of bond funds, corporate bonds, structured products and non-conventional instruments in a high-yield environment.
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