SR-FINRA-2023-015

The Financial Industry Regulatory Authority (FINRA) has published a draft on proposed rule changes to FINRA Rule 6710, 6750 and 7730 in connection with the dissemination of „On-the-Run Nominal Coupon“ securities transactions and the adoption of a corresponding pricing policy. The draft has been forwarded to the Securities and Exchange Commission for approval.
Specifically, FINRA seeks to make available on the day of an auction – after end-of-day processing – transaction data on „On-the-Run Nominal Coupon” securities which includes U.S. Treasury notes and bonds paying fixed rate nominal coupons. FINRA expressly states that „On-the-Run Nominal Coupon” securities will not include – as quoted: „Treasury bills, STRIPs, Treasury Inflation-Protected Securities (TIPS), floating rate notes (FRNs), or any U.S. Treasury Security that is a Treasury note or bond paying fixed rate nominal coupons that is not the most recently issued U.S. Treasury Security of a given maturity“. The data will be available via a separate end-of-day Trade Reporting and Compliance Engine (TRACE) transaction file.
To protect the integrity of the securities market and individual firms involved in such transactions, FINRA will not make available data on engaged firms other than an indication as to the type of counterparty (dealer, customer, affiliate, or alternative trading system) and will also include transaction size caps for individual maturities to refrain from listing actual transaction sizes. The proposed caps include the following:
– Two Years: $250 million;
– Three Years: $250 million;
– Five Years: $250 million;
– Seven Years: $150 million;
– 10 Years: $150 million;
– 20 Years: $50 million; and
– 30 Years: $50 million.
Finally, FINRA proposes to establish corresponding transaction file fees of $750/month per data set with a lower $250/month per data set fee available for qualifying tax-exempt organizations. The fee for historic TRACE data would be $2,000/calendar year per data set, with a lower $500/calendar year per data set fee available again for qualifying tax-exempt organizations. A single one-time fee of $2,000 would also be charged for the development and set-up to receive historical TRACE data ($1,000 for qualifying tax-exempt organizations).