Jeffrey Eileen, ICE Bonds Securities Corporation
Application for Exemptive Relief from Trade Reporting Obligation for Certain Transactions on an Alternative Trading System
September 21, 2022
Chief Compliance Officer
ICE Bonds Securities Corporation
850 Third Avenue, 9th Floor
New York, NY 10022
Re: Application for Exemptive Relief from Trade Reporting Obligation for Certain Transactions on an Alternative Trading System
Dear Mr. Eileen,
The staff of the Market Regulation Department (the “staff”) of Financial Industry Regulatory Authority, Inc. (“FINRA”) has received and reviewed your letter dated August 18, 2022, in which ICE Bonds Securities Corporation (“ICE Bonds”) requests exemptive relief for the ICE Bondpoint (“VABD”) and ICE TMC (“TMCC”) alternative trading systems (“ATSs”) from the FINRA trade reporting obligations pursuant to FINRA Rule 6732.1
Based on the information provided in your application, and conditioned upon ICE Bonds providing the items listed below with respect to VABD and TMCC, the staff has determined that the VABD and TMCC ATSs meet the specified criteria and hereby grants, pursuant to FINRA Rule 9610, ICE Bonds an exemption from the trade reporting obligation under FINRA Rule 6730, subject to the monthly transaction reporting obligation and remission of the transaction reporting fees based on the fee schedule set forth in Rule 7730(b)(1) for each exempted sell transaction occurring on the VABD and TMCC ATSs.
- By September 30, 2022, ICE Bonds must provide to FINRA a written attestation that it has entered into written agreements as required by FINRA Rule 6732(a)(5) with all of its FINRA member subscribers that will be parties to an exempt transaction. In addition, by September 30, 2022, ICE Bonds must provide to FINRA a sample agreement required by FINRA Rule 6732(a)(5) with respect to an exempt transaction that involves only one member.2
- By December 14, 2022, ICE Bonds shall provide to FINRA data relating to each transaction exempted pursuant to FINRA Rule 6732 occurring on VABD and TMCC for the period from October 3, 2022 through October 31, 2022, and for the month of November 2022. Thereafter, ICE Bonds must provide such monthly trade information to FINRA and such information must be received by FINRA no later than the 10th business day following the completion of each calendar month.3
In addition, should either VABD or TMCC qualify as a “covered ATS” under Rule 6730.07 at a later date, such ATS must provide to each member subscriber that executes an exempt transaction with a non-member subscriber (and the member subscriber must report to TRACE using) the FINRA-assigned identifier for each non-FINRA member subscriber. 4
This letter replaces and supersedes the letter providing a Rule 6732 exemption to KGC BondPoint ATS on June 6, 2016,5 and the letter providing a Rule 6732 exemption to TMC Bonds on July 27, 2016.6 This exemption will be fully and finally effective upon the date that FINRA receives the written attestation and the sample written agreement as required by FINRA Rule 6732(a)(5), described in Item 1 above. If ICE Bonds fails to provide such written attestation and sample agreement within this timeframe, the exemption granted herein will be revoked unless otherwise expressly agreed to by FINRA.
This letter responds only to the issue you have raised on the facts as you have described them, and does not address any other rule or interpretation of FINRA, or all the possible regulatory and legal issues involved. Any changes in the facts or representations as you have described them will require further consideration and may cause us to reach a different conclusion. You should contact FINRA immediately if there is a change in any of the facts or representations contained in your letter. In addition, this exemption is subject to modification or revocation if at any time FINRA determines that such action is necessary or appropriate for the protection of investors.
Should you have any questions about this letter, please contact Patrick Geraghty in Market Regulation at (240) 386-4973.
Executive Vice President
Market Regulation Department
1 Effective October 3, 2022, FINRA has adopted amendments to Rule 6732 to expand the scope of the exemption to include eligible ATS transactions that involve only one member (other than the ATS). See FINRA Rule 6732 and Regulatory Notice 22-13 (June 2022).
2 ICE Bonds is reminded it must retain the written agreements pursuant to its books and records obligations under FINRA rules, the Exchange Act, and applicable Exchange Act rules, and must be able to produce them to FINRA upon request.
3 See Regulatory Notice 16-15 (April 2016).
4 See FINRA Rule 6730.07 (ATS Identification of Non-FINRA Member Counterparties for Transactions in U.S. Treasury Securities).
5 See Letter from Jon Kroeper, Executive Vice President, Market Regulation Department, FINRA, to William Vulpis, Head of KCG BondPoint, KGC Americas LLC, dated June 6, 2016.
6 See Letter from Jon Kroeper, Executive Vice President, Market Regulation Department, FINRA, to Thomas S. Vales, Chief Executive Officer, TMC Bonds L.L.C, dated July 27, 2016.