FINRA Solicits Comment on New Academic TRACE Data Set
WASHINGTON—The Financial Industry Regulatory Authority (FINRA) is requesting comment on a proposal to create a new academic Trade Reporting and Compliance Engine® (TRACE®) data set that would be available to institutions of higher education.
While Historic TRACE Data is used by academic researchers today, it does not include any identifying information regarding the dealer reporting each transaction. FINRA has received requests from academics for access to historical TRACE data that provides sufficient information to allow them to track the behaviors of individual dealers or groups of dealers, even on an anonymous basis. In response to these requests, FINRA is proposing to create a new Academic TRACE Data set that would include masked market participant identifiers (MPIDs). The proposal takes steps to address the issue of potential reverse engineering of dealer identities (even though masked).
FINRA encourages all interested parties to comment on the proposal. Comments must be received by September 14, 2015. The Municipal Securities Rulemaking Board (MSRB) is also soliciting comment on a similar proposal that would apply to municipal securities transaction data.
TRACE was established in July 2002 to create a regulatory database and bring transparency to the corporate bond market. Transparency in non-144A transactions was fully phased in by January 2006, offering real-time, public dissemination of transaction and price data for all publicly traded corporate bonds—including intra-day transaction data and aggregate end-of-day statistics (most active bonds, total volume, advances and declines, and new highs and lows). Transparency in 144A transactions in corporate debt was added on June 30, 2014. Agency debentures were added in March of 2010 and are subject to real-time dissemination. On November 12, 2012, FINRA began disseminating transaction information for agency pass-through mortgage-backed securities traded "to-be-announced" (TBA). FINRA began disseminating information for so-called specified pool transactions in agency pass-through mortgage-backed securities and SBA-backed securities in July 2013. On June 1, 2015, FINRA brought transparency to the asset-backed securities market, providing investors with post-trade price information for asset-backed securities, including those backed by auto loans, credit card receivables and student loans.
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business—from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, and informing and educating the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.