On Jun. 5, FINRA proposed rules on ATS reporting of Treasuries.
- Amend Rule 6730 applicable to ATSs which report transactions in US Treasuries.
Non-FINRA Principal Members
- To identify non-FINRA member subscribers on the transaction reports to TRACE.
- Non-member firms include hedge funds, banks and principal trade firms (PTFs).
- Principal trade investors often deploys proprietary automated trading strategies.
- Low latency is a key element of trading strategies; and while may be registered
as a broker-dealer, it does not have clients as in a typical dealer business model. - This will help identify majority of trades on ATS currently not done by members.
ATS Trading Data Transparency
- A large portion of ATS trades in US Treasury involves unidentified counterparties.
- Incomplete trade data for FINRA and official sector, requiring specific subscriber.
- Information to enhance information available to assess treasury market liquidity.
- Improve surveillance pattern for detailed granularity of trading data and activity.
Effectiveness
- Comments should be submitted within 21 days of publication in federal register.
- FINRA will announce effective date in notice, by 60 days following SEC approval.
- Effective date will within 180 days, following publication of the regulatory notice.
- ATSs to submit list of its non-member subscribers, 60 days before effective date.
