NASD Launches TRACE Bond Trade Data System
Washington, D.C. — NASD, the leading self-regulatory organization for the securities industry, today launched TRACE, its corporate bond reporting system.
TRACE is a regulatory system that will capture the reporting and dissemination of eligible corporate bond transactions, including investment grade and high yield debt, medium term notes, and convertible bonds. NASD's FIPS product for reporting high-yield debt transactions will be retired and replaced by TRACE, effective today.
"TRACE fulfills NASD's mission to bring greater transparency to debt markets. In today's business climate, it is more important than ever for regulators and investors to have access to more information," said Douglas H. Shulman, NASD's President of Regulatory Services and Operations. "In developing this system, NASD has worked closely with the SEC, Bond Market Association, and the dealer community to ensure that the TRACE maximizes transparency, while optimizing liquidity."
On Jan. 23, 2001, the Securities and Exchange Commission (SEC) approved proposed rules that will require NASD members to report over-the-counter secondary market transactions in eligible fixed income securities to the NASD and also subject certain transaction reports to dissemination. TRACE is the NASD-developed vehicle that facilitates this mandatory reporting. Prices and transaction size for these trades are then available to the investing public, subject to certain restrictions and limitations.
All brokerage firms in the United States have an obligation to report eligible secondary market, over-the-counter transactions in corporate bonds to TRACE under an SEC-approved set of rules.
Relevant trade data will be available from vendor services to the trading community and the public. Some data will also be available at NASD's Web site www.nasd.com.
NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business -- from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and member firms. For more information, please visit our Web site at www.nasd.com.