FINRA filed a proposed rule change with the SEC that would provide a temporary Trade Reporting and Compliance Engine ("TRACE") exemption permitting FINRA member alternative trading systems ("ATSs") and ATS subscribers to report aggregate trade information about certain U.S. Treasury Securities transactions. Without the proposed rule change, ATSs are required to report both the purchase of a security from one counterparty and the sale of the same security to another counterparty when the ATS is acting as the central counterparty to both sides of a transaction, or a series of transactions, during a "trading session."
Some ATSs allow users to enter into "trading sessions" in order to trade U.S. Treasury Securities. These trading sessions often involve multiple transactions on either side of the market. Even in scenarios in which multiple transactions occur, traders often receive a single trade message noting the aggregate trading activity at the end of a trading session. FINRA's proposed change would allow members temporarily to report eligible transactions executed during trading sessions on an aggregate basis.
The proposed rule change would provide members with the above relief until July 10, 2018, and is intended to provide members with sufficient time to complete the systems changes necessary to allow the members to report each individual transaction in a trading session, as otherwise required by Rule 6730.
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