TRACE Foreign Sovereign Debt (Live Nov 6, 2023)
Beginning Monday, November 6, 2023, FINRA will require firms to report transactions in U.S. dollar-denominated foreign sovereign debt securities to TRACE.
Project Timetable*
Launch | November 6, 2023 |
Availability of Master List of Securities | June 1, 2023 |
Firm Pre-launch User Testing (NTF region) | August 7, 2023 |
Firm User Acceptance Test Dates (UAT 1) | September 9, 2023 |
Firm User Acceptance Test Dates (UAT 2) | October 7, 2023 |
*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
- Rule Interpretations: Lauren Schreur, Associate General Counsel, FINRA Office of General Counsel, via email.
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Issue Master List
FINRA is working with industry specialists to define the foreign sovereign roster of securities. To give firms adequate time to build their master files for the November 6, 2023, implementation, FINRA will post a monthly file of FINRA Symbols and CUSIPs for TRACE Foreign Sovereign securities on finra.org. The securities file will be posted from June 1, 2023, through November 3, 2023. There will be no fees to access this information.
Beginning November 6, 2023, clients must access the list using API or TRAQS production entitlement credentials.
This list is provided for informational purposes to assist members in determining whether a TRACE trade reporting obligation exists for an executed transaction in a TRACE-eligible security. FINRA expresses no view as to the legality of transactions involving the securities identified on this list. Multiple considerations can come to bear on whether a particular transaction is permissible under all applicable regulatory requirements for the parties involved in the activity. For example, trades in U.S.-dollar denominated foreign sovereign debt securities may implicate the U.S. sanctions laws and regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). Each FINRA member is responsible for complying with the regulatory obligations applicable to its activities.
Please contact FINRA Market Operations for questions on the security master and information on obtaining the Issue Master with CUSIP/ISIN identifiers (subject to licensing verification).
Frequently Asked Questions (FAQ)
1. Can firms add a U.S. dollar-denominated foreign sovereign debt security to TRACE where a CUSIP or CINS is unavailable?
Yes. Firms may submit through the FINRA Gateway a TRACE New Issue Form requesting a symbol for a U.S. dollar-denominated foreign sovereign debt security where only an ISIN or a FIGI is available for the security.
2. Can firms report foreign sovereign debt securities to TRACE using ISINs and/or FIGIs?
No. Firms may only submit transactions using CUSIP or FINRA symbols. To request a FINRA symbol, firms may submit through the FINRA Gateway a TRACE New Issue Form requesting a symbol for a U.S. dollar-denominated foreign sovereign debt security if an ISIN or a FIGI (but not a CUSIP) is available for the security.
3. Is a foreign sovereign debt security considered to be “U.S. dollar-denominated” only if it was issued in U.S. dollars or can the determination also be based on the currency in which the security typically trades?
A foreign sovereign debt security is considered “U.S. dollar-denominated” only if the security was issued in U.S. dollars.
4. Are transactions in U.S. dollar-denominated debt issued by a foreign municipality reportable to TRACE?
Yes. As specified in Rule 6710(kk), the term “foreign sovereign debt security” means a debt security issued or guaranteed by the government of a foreign country, any political subdivision of a foreign country, or a supranational entity. “Political subdivision” includes securities issued or guaranteed by state, provincial, or municipal governments.
5. Under which TRACE product will I report trades in U.S. dollar-denominated foreign sovereign debt securities?
Members are required to report transactions in U.S. dollar-denominated foreign sovereign debt securities in accordance with the TRACE documentation for corporate and agency securities. Users of the TRAQS system will be able to view their transactions under the Corporate and Agency section.
6. Do trades in U.S. dollar-denominated foreign sovereign debt securities need to be reported within 15 minutes?
No. Transactions in U.S. dollar-denominated foreign sovereign debt securities generally will be subject to a same-day reporting requirement. Specifically, reportable TRACE transactions in U.S. dollar-denominated foreign sovereign debt securities executed on a business day at or after 12:00 a.m. Eastern Time (ET) through 5:00 p.m. ET must be reported the same day during TRACE system hours. Transactions executed on a business day after 5:00 p.m. ET but before the TRACE system closes must be reported no later than the next business day (T+1) during TRACE system hours, and, if reported on T+1, designated “as/of” and include the date of execution. Firms that wish to report transactions in U.S. dollar-denominated foreign sovereign debt securities on an immediate basis may do so.
7. What does “same day during TRACE system hours” mean?
Reported the same day as execution prior to the system close. "TRACE System Hours" means the hours the TRACE system is open, which are 8:00:00 a.m. Eastern Time through 6:29:59 p.m. Eastern Time on a business day, unless otherwise announced by FINRA.
8. Will U.S. dollar-denominated foreign sovereign debt securities be included on the existing Corporate and Agency Security Master and Daily List files?
No. These securities will be included on a new security master and daily list file that includes only U.S. dollar-denominated foreign sovereign debt securities.
9. Are trades in U.S. dollar-denominated foreign sovereign debt securities going to be disseminated?
No, these trades will not be disseminated at this time.
10. Will my trades in U.S. dollar-denominated foreign sovereign debt securities be included in my firm’s ADDS files?
Yes, these trades will be included in the existing Corporate & Agency trade journals with the sub-product ‘SOVN’.
11. Are U.S. dollar-denominated foreign sovereign debt securities subject to the mark-up disclosure requirements under Rule 2232? NEW 11/10/2023
No. Rule 2232 requires mark-up disclosure for corporate and agency debt securities, as they are defined in Rule 2232(f). Accordingly, Rule 2232 does not apply to other types of debt securities, including foreign sovereign debt securities, as defined in Rule 6710(kk).