FINRA Can Kick Alert! Notice of Designation of a Longer Period for Commission action on a Proposed Rule Change to Amend FINRA Rule 6730 to Enhance TRACE Reporting Obligations for U.S. Treasury Securities.
34-95003Additional Materials: Exhibit 2a, Exhibit 2b, Exhibit 2c, Exhibit 5Comments received are available for this proposal.
Notice of Designation of a Longer Period for Commission action on a Proposed Rule Change to Amend FINRA Rule 6730 to Enhance TRACE Reporting Obligations for U.S. Treasury Securities
The Commission is extending this 45-day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change in order to consider the proposed rule change and the comments received. Accordingly, pursuant to Section 19(b)(2) of the Act, 5 the Commission designates September 1, 2022, as the date by which the Commission shall approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR-FINRA-2022-013).
What are they punting on?
FINRA is proposing to amend FINRA Rule 6730 to: (i) require members to report electronically executed transactions in U.S. Treasury Securities to FINRAโs Trade Reporting and Compliance Engine (โTRACEโ) in the finest increment captured by the system used to execute the transaction, subject to an exception for members with limited trading volume in U.S. Treasury Securities; and (ii) reduce the trade reporting timeframe for transactions in U.S. Treasury Securities to generally require reporting to TRACE as soon as practicable but no later than 60 minutes.
Why is the current rule a problem?
Under the existing rule and related guidance, if a member uses multiple systems to facilitate trade reporting and those systems differ in granularity, then the member may use the finest increment that is common across all systems. As a result, currently members may use a reporting system to report a trade to TRACE in an increment of time that is less precise than that captured by the system that is used to execute the transaction (i.e., the โexecution systemโ).
