FINRA is committed to ensuring that investors and market participants have access to trade information so they can more effectively assess securities prices and valuations. Transparency Services oversees the management and operation of FINRA’s OTC market transparency facilities. In this capacity, FINRA provides the public and professionals with timely quotes and trade information for equity and debt securities.
The Transparency Services facilities are the primary source for regulatory data on such market transactions. They not only provide FINRA with regulatory insight, but also firms with the necessary tools to comply with reporting obligations in debt and equity securities.
FINRA operates five transparency facilities:
The Trade Reporting and Compliance Engine®, introduced in 2002, captures real-time transaction data for all eligible public and private (144A) corporate bonds, including investment grade, high-yield and convertible debt, agency debt, and asset and mortgage-backed securities.
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 MBS, including the TBA market.
- Alternative Display Facility
Firms can post quotes, and report and compare trades in exchange-listed securities that are not traded on an exchange on the Alternative Display Facility (ADF®). All FINRA-regulated firms are eligible to use ADF if they choose not to post quotes or trade through an exchange. However, ADF does not offer execution or matching capabilities.
- Trade Reporting Facilities
Trades in exchange-listed securities that are executed over the counter may be reported to one of the two FINRA Trade Reporting Facilities® (TRFs®) operated in partnership with the New York Stock Exchange and Nasdaq Stock Exchange. These transactions are generally reported by member firms within 10 seconds of execution, and disseminated to the public in real-time and to FINRA to create a regulatory audit trail.
- Over-the-Counter Reporting Facility (ORF)
As the OTC broker-dealer regulator, FINRA also operates transparency facilities for unlisted equity securities (publicly-traded, non-exchange listed securities). In this role, FINRA issues new unlisted equity issuer symbols and disseminates notices of corporate-issuer actions to the public and declares trading halts.
Firms report and compare trades in non-exchange-listed securities to the OTC Reporting Facility (ORF®). These transactions are generally reported by member firms within 10 seconds of execution, and disseminated to the public in real-time and to FINRA to create a regulatory audit trail.
- OTC Bulletin Board®
As the OTC broker-dealer regulator, FINRA also operates an inter-dealer quotation system for unlisted equity securities. The OTC Bulletin Board (OTCBB®) facilitates member firm quoting of eligible unlisted equity securities that submit timely financial reports to the SEC.
In addition to operating the transparency facilities for collection of necessary regulatory information, FINRA disseminates information to industry members and the broad investing public. Examples offerings include:
- Reports of stock-by-stock volum of Alternative Trading Systems (ATS), including dark pools. This has substantially increased transparency in ATS trading. FINRA began issuing these reports on a weekly basis in June of 2014 when the SEC began requiring ATS to report weekly volume information to FINRA and use unique market participant identifiers.
- TRACE information and products like the FINRA TRACE Market Aggregates, FINRA-Bloomberg Corporate Bond Indices, and real-time Market Data