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Federal Reserve Depository Institution Reporting to TRACE

Beginning Thursday, September 1, 2022, certain depository institutions (Covered Depository Institutions) will be required to report transactions in U.S. Treasury securities, agency debt securities and agency mortgage-backed securities (Covered Securities) to FINRA’s Trade Reporting and Compliance Engine (TRACE).

Project Timetable*


Launch

September 1, 2022

Firm Pre-launch User Testing (NTF region)

TBD

Firm User Acceptance Test Dates (Production region) 

TBD

Industry Education Presentation Calls

TBD

*Test dates are estimates and subject to change by FINRA.

 

Additional Information


Contacts


  • General Questions: [email protected]
  • Technical Questions: [email protected] or (866) 899-2107
  • Required Documentation: [email protected] or (866) 776-0800
  • Subscribe for Updates
  • Rule Interpretations
    • For questions regarding FINRA’s TRACE rules: Robert McNamee, Associate General Counsel, FINRA Office of General Counsel, at [email protected] or (202) 728-8012
    • For questions regarding the Federal Reserve’s reporting requirements: Jeffrey Huther, Sr Economic Project Manager, Board of Governors of the Federal Reserve System, at [email protected] or (202) 973-7470

FINRA Reserved MPID

Reserved MPID Bank Name
BACP Bank of America, N.A.
BACT Bank of America, N.A.
BAGM Bank Of America, N.A.
BMCH Bank of Montreal, Chicago Branch
BNSA Bank of Nova Scotia
BNYB Bank of New York Mellon
BOKC BOKF, N.A.
CASA Credit Agricole CIB
CBNY Citibank, N.A.
FHCM FHN Financial Capital Markets
GSCM Goldman Sachs Bank, USA
JPMB JP Morgan Chase Bank, N.A.
NXNY Natixis New York Branch
RNYB Royal Bank of Canada
SGNY Societe Generale, New York Branch
SSBC State Street Bank & Trust Corporation
SSBK SouthState Bank, N.A.
USBN U.S. Bank National Association
WFNA Wells Fargo Bank, N.A.
WFND Wells Fargo Bank, N.A.

As of May 11, 2022

FINRA FAQS for Covered Depository Institutions


Section 1: Access & Agreements

1.1  How do I obtain a TRACE Market Participant Identifier (MPID)?

Covered Depository Institutions should contact FINRA Market Operations at (866) 776-0800 or [email protected] to obtain a TRACE MPID.

1.2 How do I sign up for TRACE reporting?

Covered Depository Institutions must first onboard to FINRA’s Account Management System and establish an Account Administrator by submitting the FINRA Entitlement Agreement (“FEA”).  Please view the onboarding checklist below for links to the FEA and other onboarding instructions.

Then, to become a TRACE reporting participant, Covered Depository Institutions must use the Participant Data Management (“PDM”) system to view and certify the terms of the FINRA Transparency Services Participation Agreement (FPA) (https://participants.finra.org). PDM users must have the Participant Data Management entitlement in the FINRA Account Management System.  Please consult your organization’s Account Administrator (“AA”) if a new login id or an adjustment to your entitlements is needed.  The FINRA Entitlement Group can assist with determining your AA or with resetting your password.  They can be reached by calling 301‐869‐6699 or by emailing [email protected]

1.3 Where do I find the appropriate agreements?

The PDM system allows Covered Depository Institutions to view and modify various agreements including the FINRA Participation Agreement and the Uniform Reporting Agreement.  PDM also allows Covered Depository Institutions to:

  • View and modify access to TRACE;
  • Manage MPIDs and communicate information regarding MPID changes to FINRA; and
  • Manage TRAQS login ids.

For questions about PDM, contact FINRA Market Operations at 866-776-0800, Option 2.

1.4 If my clearing firm reports on my behalf, do I still need to sign up for TRACE?

Yes, even Covered Depository Institutions whose clearing firms report on their behalf must submit a new TRACE participation agreement and receive a TRACE MPID. 

1.5 How can I get access to the API master files and Daily List?

Access is by subscription, and users can request this by contacting FINRA Operations. API queries to retrieve data and respondent data sets are described in the Web API Specification

Section 2: Technical

2.1 Which methods can Covered Depository Institutions use for testing and reporting trades? 

Covered Depository Institutions can use FIX or TRAQS. For testing, FIX connections must route to the test environment (NTF). 

2.2 Can I report trades to TRACE via FIX?

Yes. Covered Depository Institutions may elect to use the FIX protocol to report trades to TRACE. Technical details can be found in the FIX Specifications on the FINRA TRACE Web page, and questions can be answered by Nasdaq Technical Support at (212) 231-5180. For more information on FIX, please refer to the Nasdaq website.

2.3 Can my FIX connections share a port for more than one product (e.g., Corporate and Agency Debt trade reporting and Treasuries trade reporting)?

No. The FIX protocol requires a single port for Corporate and Agency Debt transaction reporting, and a separate port for each of the other TRACE products.

2.3 How can Covered Depository Institutions report via the FINRA Web Browser?

Covered Depository Institutions may report through a secure web-based application called TRAQS. Access to the TRAQS website is managed through the Participant Data Management system by your organization’s Account Administrator or authorized delegate.

For more information about using the TRAQS website, product-specific user guides can be found on the TRACE Documentation page. Participant Data Management demonstration videos and other training materials can be found on the Participant Data Management Training Materials/Timeline page.

2.4 If I use FIX protocol to submit trade reports, will I be able to see them in the Web application and take any corrective action necessary or would I need to amend trade reports using FIX?

Covered Depository Institutions can view those trade reports submitted via either protocol in the TRAQS web application and can perform Cancel and Correction actions using the web application. 

2.5 Will FINRA distribute a file with all reportable Covered Securities? 

Yes, the Security Master and Daily List are available through an API and on the TRAQS web application.  

2.6 Is the master list of Covered Securities available for TRACE reporting updated dynamically during the trading day?

FINRA updates the Security Master List dynamically and additions and deletions are also communicated via the Daily List. 

2.7 Will FINRA supply a list of Covered Securities available for testing?

Securities available for testing will be made available in the Security Scan on the TRAQS website (NTF version) and via the API Master List (NTF version). 

2.8 Once I know how my Covered Depository Institution plans to report to TRACE, how do I arrange for testing?

For FIX users: Please contact NASDAQ Testing Facility technical support at (212) 231-5180.

Third-Party Reporting Intermediaries: If a Covered Depository Institution plans to report through a FINRA member clearing firm or via a vendor or service bureau, it is recommended that they contact that firm directly for information regarding their services and process around corrections and managing rejected trades. Most third-party reporting intermediaries providing TRACE reporting services already have FIX lines in place to NASDAQ, FINRA's technology provider.

TRACE Web users: Please contact FINRA Operations at 866-776-0800 or via e-mail ([email protected]) to receive access to the NASDAQ Testing Facility (NTF) secure website. Please note, a FINRA Order Form submitted through PDM CT will be required to begin the process of gaining access to the NTF secure website.

For other questions concerning testing, please contact FINRA Product Management at (866) 899-2107.

Section 3: Reporting

3.1 When will the TRACE reporting requirement for Covered Depository Institutions become effective?

As announced in the Federal Reserve Notice, the effective date is September 1, 2022.

3.2 How much time do I have to report transactions in Covered Securities to TRACE?

  See the Federal Reserve Supporting Statement for applicable reporting timeframes.

3.3 Can I assume that if I report my transactions in Covered Securities through someone else, they will take care of all of my reporting responsibilities?

No. The reporting responsibility remains with the Covered Depository Institution who has the reporting obligation.

3.4 Who is responsible for resubmitting rejected trades in Covered Securities?

The Covered Depository Institution that had the original reporting obligation is ultimately responsible for resubmitting corrected reports.

3.5 What is a Covered Depository Institution's reporting obligation with respect to a counterparty that is a registered broker-dealer (BD) or another Covered Depository Institution?

Covered Depository Institutions must accurately identify their registered BD or Covered Depository Institution counterparties when reporting a transaction to TRACE, using the appropriate MPID. If the counterparty uses multiple MPIDs, the Covered Depository Institution required to report the transaction must accurately identify the counterparty by the appropriate MPID.

3.6 Will both sides of a trade in a Covered Security involving reporting participants (i.e., FINRA members and/or Covered Depository Institutions) have to report?

Yes. Both FINRA members and Covered Depository Institutions are required to report their side of the transaction to TRACE, whether a buy or a sell.

3.7 In a transaction involving both an executing broker and an introducing broker, which member reports?

Both parties are required to report to TRACE. For example, introducing broker A (IBA) receives an order to buy a Covered Security from its customer and then sends that order to executing broker B (EBB) for execution. EBB sells the securities to IBA from its inventory account.  The following reports would be required:

EBB reports a principal sell to IBA
IBA reports an agency buy from EBB
IBA reports an agency sell to its customer

3.8 How do I self-report any TRACE reporting problems in Covered Securities to FINRA?

In the event that a Covered Depository Institution experiences a reporting problem that results in late and/or inaccurate transactions reports to TRACE, FINRA encourages such Covered Depository Institutions to self-report these issues to FINRA’s Market Regulation Department using [email protected].

3.9 Will report cards be generated by FINRA and provided to Covered Depository Institutions?

Yes, report cards will be generated by FINRA and provided to Covered Depository Institutions via the FINRA Gateway. Access to such report cards requires entitlement establishment through the FINRA Account Management System.

3.10 What steps should be taken by a covered depository institution that no longer meets the threshold?

A depository institution that no longer meets the thresholds must inform FINRA Operations so that its assigned MPID can be inactivated. Such depository institution should also communicate to its counterparties that they should no longer use the inactivated MPID when reporting transactions with the depository institution.

A depository institution that no longer meets the thresholds may not voluntarily report transactions in Covered Securities to TRACE.

3.11 When buying for one’s own account, does a sale to the portfolio need to be reported?

Any transactions representing changes in beneficial ownership should be reported to TRACE. A Covered Depository Institution buying for its own portfolio needs to report the purchase if it is made on the secondary market from an external counterparty. It should not report a sell for the transfer to the portfolio, so long as the portfolio belongs to the same legal entity.

For more FAQs relating to TRACE Reporting, please see TRACE FAQs.

Federal Reserve Interpretive Questions

1. Which depository institutions are subject to the new Federal Reserve reporting rule?

Every national bank, state member bank, state non-member bank, savings association, or U.S. branch and agency of a foreign bank that files a Notice by Financial Institutions of Government Securities Broker or Government Securities Dealer Activities (Form G-FIN) with average daily transaction volumes over $100 million, for U.S. Treasury debt, or over $50 million, for agency-issued debt and MBS, during the 12-month period ending September 30 of the prior year is subject to the new reporting rules, regardless of the type(s) of trading activity such entity engages in (e.g., dealer or non-dealer activity).

2. Does FR2956 apply to my firm if our GFIN status has changed?

FR2956 applies to firms based on their current GFIN status. A firm reporting under FR2956 that withdraws its filing of its Form G-FIN is no longer required to report, while a firm that files a new Form G-FIN is required to immediately begin reporting if it meets the reporting thresholds.

3. What are the timeframes for determining whether a depository institution meets the reporting thresholds?

2022 – Depository institutions must determine if they meet the thresholds based on all applicable transactions for each business day from 10/1/2020 through 9/30/2021, inclusive. Depository institutions that meet the thresholds during this period must begin reporting on 9/1/2022.

2023 – Depository institutions must determine if they meet the thresholds based on all applicable transactions for each business day from 10/1/2021 through 9/30/2022, inclusive. Depository institutions that meet the thresholds during this period must begin reporting on 1/3/2023.

Every Year Thereafter – Depository institutions must determine if they meet the thresholds based on all applicable transactions for each business day during the 12-month period ending 9/30 of the prior year for each subsequent year. Depository Institutions that meet these thresholds must begin reporting on the first business day in the subsequent year.

4. What transactions should be included to determine whether my firm exceeds the reporting thresholds for transactions under FR2956?

The transactions used to determine whether your firm exceeds the reporting thresholds are: in respect to Part 1 of FR2956, all secondary-market transactions in U.S. Treasury Securities; and in respect to Part 2 of FR2956, all secondary-market transactions in TRACE-Eligible Securities issued by an Agency or a Government-Sponsored Enterprise as defined in FINRA Rule 6710. Transactions for which there is no beneficial change in ownership should not be included in the calculations.

5. How should transactions be valued to determine whether my firm exceeds the reporting thresholds for transactions under FR2956?

For U.S. Treasury Securities, volume should be calculated as the transaction value of the trade. For Agency Mortgage-Backed Securities, volume should be calculated as the remaining principal balance of the trade (original face value times the factor at the time of execution), or, if this information is not available, as the final settlement amount. Once chosen, the pricing methodology should be uniformly applied across all trades in the review period.

6. Does FR2956 apply to transactions in which there is no beneficial change of ownership?

No. FR2956 threshold calculations and reporting should exclude transactions in which there is no beneficial change of ownership. These transactions should be excluded even if they involve multiple MPIDs or price differentials.

Checklist

Check List Item Start Date Complete by
1. MPID Assignment – contact Market Operations

Available now

May 30, 2022

2. Register with FINRA Entitlements Account Management System

Available now

May 30, 2022

a) Complete FINRA Entitlement Agreement

*New non-member depository institutions will be assigned an Org ID upon submission/processing of the FEA.
 

Available now

May 30, 2022

b) Complete the online FINRA Entitlement Program Certification Representative (CRep) Form

Available now

May 30, 2022

c) Complete FINRA Entitlement Form for Federal Reserve Depository Institutions

Available now

May 30, 2022

d) Account Administrator can create additional user accounts as needed

Available now

May 30, 2022

3. Submit FINRA Transparency Services Participation Agreement via PDM

June 2022

 

a) Customer Test Environment

June - July

 

b) Production Environment

August

 

4. Obtain technical specifications for reporting to TRACE: https://www.finra.org/filing-reporting/trace/documentation.

Available now

 

5. Establish Port/FIX Connection via Nasdaq (Optional unless reporting through FIX)

 

 

a) Nasdaq Test Environment

Available now

 

b) Production Environment

July - August

 

6. Create TRAQS Users via Participant Data Management (Optional)

 

 

a) Customer Test Environment

June

August 31, 2022

b) Production Environment

August

 

7. Participate in NTF Testing

June - August

August 31, 2022

(30-calendar-day period from start date)

8. Participate in UAT Production Testing

July - August

August 20, 2022

9. Access to Report Cards (Optional)

August

 

10. Access to ADDS Trade Journals (Optional)

August