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TRACE Price on Client Confirmations Policy

On May 14, 2018, amendments to FINRA Rule 2232 will take effect, which require a member firm to disclose on the customer confirmation the amount of mark-up or mark-down it applies for certain trades with retail customers in corporate or agency debt securities. Disclosed mark-ups must be calculated consistent with existing Rule 2121. With regard to the client confirmation requirements and consistent with current TRACE rules and data policies concerning the receipt of TRACE data by Non-Professionals, FINRA is clarifying that member firms are permitted to display real-time TRACE Data on customer confirmations. This policy also includes the receipt of TRACE data on a post-trade basis solely for the use of calculating a mark-up that is displayed on customer confirmation, or for generating internal reports used specifically to monitor compliance with the customer mark-up disclosure requirements in Rule 2232. Specifically, the display of the TRACE Data on a customer confirmation and the post-trade delivery of TRACE data solely for these uses under this policy does not require Vendors to report display usage to TRACE Data Services.

Consistent with this policy, Vendors wishing to supply a TRACE Real Time price to external firms for customer confirmation display purposes may do so, provided that:

  1. There is an executed agreement between the Vendor firm and the client stipulating that the price provided may be used only for inclusion on a customer confirmation or for calculating a mark-up that is displayed on a customer confirmation, and a related internal compliance report, if applicable; and
  2. The price is provided after the transaction has been executed. This requirement must be verified by the Vendor (e.g. the transaction is executed on the Vendor platform, or the client provides the TRACE control number and control number date of the transaction at the time of the request).

Except as specifically outlined in this policy, all requirements regarding redistribution of TRACE data under the Vendor Agreement remain in effect.