October 15, 2019

October 15, 2019

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October 14, 2019

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FINRA Requests Comment on Proposed Pilot Program to Study Changes to Corporate Bond Block Trade Dissemination

On April 12, the Financial Industry Regulatory Authority (FINRA) published a regulatory notice (the “Notice”) requesting comment on a proposed pilot program to study proposed changes regarding corporate bond block trade dissemination based upon recommendations by the Fixed Income Market Structure Advisory Committee (FIMSAC) of the Securities and Exchange Commission. The changes are aimed at improving corporate bond block trade dissemination—mainly, by increasing block liquidity without imposing significant costs on market participants. Currently, FINRA’s Trade Reporting and Compliance Engine (TRACE) provides information to the marketplace regarding corporate bonds and other debt securities. It is intended that the pilot program will study FIMSAC’s recommendations to determine whether such recommendations can enhance current TRACE protocols.

The pilot program is expected to last one year and is designed to study two primary changes recommended by the FIMSAC:

  1. an increase to the current dissemination caps for large corporate bond trades; and

  2. a 48-hour dissemination delay for trades above the proposed caps.

The Notice discusses, among other items, current TRACE protocols, the FIMSAC recommendations, a description of the pilot program, an analysis of the pilot program’s economic impacts and questions for comment on the pilot program. The comment period expires on June 11.

The Notice is available here.

 

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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...

312-902-5452
Gregory Uffner, Financial Services Attorney, Katten Law Firm
Associate

Gregory Uffner is an associate in the Financial Services practice. 

While in law school, Gregory was an associate editor for the Moot Court Board, a member of the Fordham Urban Law Journal and served as managing editor for the Fordham Sports Law Forum.

212.940.6485