Regulatory Notice 09-24

SEC Approves Amendments Expanding the Definition of "TRACE-Eligible Security"

Effective Date: June 15, 2009

Effective June 15, 2009, firms must begin reporting transactions in additional TRACE-eligible securities and otherwise comply with all other FINRA Rule 6700 Series requirements regarding such securities. On April 14, 2009, the SEC approved the amendment that broadens the definition of "TRACE-eligible security" by deleting the following two requirements:

(1) that TRACE-eligible securities be registered under the Securities Act of 1933 (Securities Act); and

(2) with respect to securities that are resold in a Securities Act Rule 144A transaction, that such securities initially be offered and sold under the exemption from registration in Section 4 (2) of the Securities Act.

The amended rule extends price transparency to corporate bonds that are being purchased and sold by diverse market participants, including retail investors, and enhances the surveillance of the corporate bond market.

The amended rule text is in Attachment A of this Notice.

Questions regarding this Notice should be directed to:

  • Elliot R. Levine, Associate Vice President and Counsel, Transparency Services, at (202) 728-8405; or
  • Sharon Zackula, Associate Vice President and Associate General Counsel, Office of General Counsel, at (202) 728-8985.