FINRA launches reporting of treasury transactions

FINRA's 2018 volume tops 2017 activity by 87%

A new requirement for securities firms to report certain transactions in Treasury securities to FINRA was implemented successfully yesterday, providing regulators with a new tool to increase understanding and enhance surveillance of this bellwether market.

The rule requires that FINRA member firms report secondary-market transactions in Treasury securities except savings bonds to TRACE, FINRA’s Trade Reporting and Compliance Engine.

The Treasury market is the deepest, most liquid and most widely followed government-securities market in the world, and it is critical that regulators receive the data necessary to inform effective oversight of the market,” said FINRA President and CEO Robert W. Cook. “Our existing TRACE utility has been ideally positioned to receive this important regulatory information in a manner that minimizes the incremental burden on member firms.

At this time, FINRA is not charging transaction-level fees and is not publicly disseminating information on transactions in Treasuries. FINRA is including the information in the TRACE regulatory feed it provides to federal financial agencies in order to enhance their oversight and knowledge of the Treasury markets.

The implementation follows months of preparation by FINRA and its member firms, beginning in October 2016 when FINRA published a notice as well as technical specifications. That was followed by months of making a testing facility available, three separate industry tests and three educational conference calls, as well as numerous additional informational memos.

Also in October 2016, the Federal Reserve Board announced that it plans to collect data from banks for secondary-market transactions in U.S. Treasury securities and will enter into negotiations with FINRA to potentially act as the Board’s collection agent for the data.

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