SEC Approves FINRA’s TRACE Amendments for CMO Transactions
Friday, October 21, 2016

The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority’s amendments to its Trade Reporting and Compliance Engine (TRACE) rules to provide for dissemination of transactions in collateralized mortgage obligations (CMOs), and to reduce the reporting time for CMO transactions. Specifically, FINRA will disseminate trade-by-trade information relative to CMO transactions valued under $1 million immediately upon receipt of the transaction report. For CMO transactions valued at $1 million or more, and where there have been five or more transactions in that security of $1 million or more by at least two different market participants, FINRA will disseminate aggregated information relative to transactions in that security on a weekly and monthly basis. CMO transactions that do not meet the criteria for either immediate trade-by-trade dissemination or periodic aggregate dissemination will not be subject to public dissemination.

The revised TRACE rules also provide that CMO transactions executed on or after issuance must be reported to TRACE within 60 minutes of execution. CMO transactions executed before the date of issuance must be reported to TRACE no later than the first settlement date of the security.

The TRACE amendments for CMO transactions will go into effect on March 20, 2017.

More information on FINRA Regulatory Notice 16-38 is available here.

 

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