June 25, 2019

June 24, 2019

Subscribe to Latest Legal News and Analysis

FINRA Proposes Rule Change Regarding Trade Modifiers and the Reporting of Transactions in US Treasury Securities

On June 12, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change establishing February 5, 2018, as the date when member firms must begin using new transaction modifiers in connection with reporting transactions in certain US Treasury securities. In October 2016 the SEC approved changes to the FINRA Transaction Reporting and Compliance Engine (TRACE) rules to require reporting of transactions in certain US Treasury securities and to introduce the use of two new modifiers in connection with such reporting: “B” on a trade report if the transaction being reported is part of a series of transactions where at least one of the transactions involves a futures contract (e.g., a “basis” trade), and “S” on a trade report if the transaction being reported is part of a series of transactions and may not be priced based on the current market (e.g., a fixed-price transaction in an “on-the-run” security as part of a transaction in an “off-the-run” security). Under the newly filed rule change, member firms may begin using the new trade modifiers as of the July 10effective date for the amended TRACE rules, but will not be required to do so until February 5, 2018.

©2019 Katten Muchin Rosenman LLP


About this Author

Michael T. Foley, Katten, Lawyer, Finance, FINRA, Chicago
Special Counsel

Michael Foley represents broker-dealers, investment advisers and other financial services industry participants with respect to a broad spectrum of legal and regulatory matters arising under the federal securities laws.

Michael has nearly 20 years of experience in private practice and in-house at both a large, full-service broker-dealer and at an online discount broker-dealer, advising broker-dealers and other financial institutions regarding compliance with the federal securities and commodities laws, and with the regulations of the US Securities and Exchange...

Stanley V. Polit, Katten Muchin, Financial Services lawyer, Corporate Regulatory Matters Attorney

Stanley Polit concentrates his practice in transactional, corporate and regulatory aspects of financial services matters. Stan is able to provide legal services to a wide variety of clients including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, commodity trading advisers, financial institutions and general corporate clients.

Prior to joining Katten, Stan served as a council member for a national crisis management firm, where he specialized in crisis communication and merged media strategies. He has lectured extensively and conducted trainings related to these topics at numerous national and international conferences, including the National Communication Association's National Convention, the International Crisis and Risk Communication Conference and the Disaster Recovery Journal's World Business Continuity Conference.