FINRA Proposes to Expand TRACE Reporting to Trades in US Dollar-Denominated Foreign Sovereign Debt Securities | Practical Law

FINRA Proposes to Expand TRACE Reporting to Trades in US Dollar-Denominated Foreign Sovereign Debt Securities | Practical Law

FINRA proposed amendments to rules in the FINRA Rule 6700 series (Trade Reporting and Compliance Engine (TRACE)) to expand TRACE reporting requirements to transactions in US dollar-denominated foreign sovereign debt securities.

FINRA Proposes to Expand TRACE Reporting to Trades in US Dollar-Denominated Foreign Sovereign Debt Securities

by Practical Law Corporate and Securities
Published on 10 May 2022USA (National/Federal)
FINRA proposed amendments to rules in the FINRA Rule 6700 series (Trade Reporting and Compliance Engine (TRACE)) to expand TRACE reporting requirements to transactions in US dollar-denominated foreign sovereign debt securities.
On May 6, 2022, FINRA proposed amendments to rules in the FINRA Rule 6700 series (Trade Reporting and Compliance Engine (TRACE)) to expand TRACE reporting requirements to transactions in US dollar-denominated foreign sovereign debt securities
Current TRACE reporting requirements cover nearly all US dollar-denominated debt securities traded in the US, including debt of foreign private issuers. However, debt of foreign sovereign issuers are not subject to current TRACE reporting. The proposed rule changes would expand TRACE reporting to cover US dollar-denominated foreign sovereign debt.
Specifically, FINRA is proposing to:
  • Amend the definition of TRACE-Eligible Security in Rule 6710(a) to include the term "Foreign Sovereign Debt Security."
  • Define the term "Foreign Sovereign Debt Security" in Rule 6710(kk) as a debt security issued or guaranteed by the government of a foreign country, any political subdivision of a foreign country (e.g., state, provincial, or municipal governments), or a supranational entity.
  • Amend Rule 6730 (Transaction Reporting) to adopt a same-day reporting requirement for trades in US dollar-denominated foreign sovereign debt.
If approved by the SEC, FINRA will announce the effective date of the proposed rule change in a regulatory notice. The effective date would be no later than 365 days after FINRA's regulatory notice announcing the SEC's approval.