FINRA Rule 6730 and MSRB Rule G-14 will be updated with reporting changes that are effective on Monday, July 18. These changes reflect the continued efforts by FINRA and the MSRB toward greater transparency for all market participants.
MSRB Rule G-14 requires dealers to report all executed transactions in most municipal securities to the MSRB’s Real-Time Transaction Reporting System (RTRS) within 15 minutes of the time of trade, with limited exceptions. FINRA Rule 6730 addresses post-trade reporting requirements to FINRA’s Trade Reporting and Compliance Engine (TRACE). FINRA members must report transactions in corporate and agency debt and securitized products to TRACE within 15 minutes of the time of trade, also with limited exceptions.
Series Exam Impact
The changes that may apply to series exams include the following:
- Revised reporting of transactions charges to reflect additional remuneration arrangements. TRACE reports will now include “C” (commission), “M” (mark-up/mark-down)” and “N” (no remuneration). The new “N” No-Remuneration indicator will apply when a firm does not charge or does not know the amount of the commission or mark-up/mark-down at the time of TRACE reporting, such as in fee-based account where remuneration is based upon assets under management instead of individual commissions or mark-ups/mark-downs.
- No yield calculations required on customer trades reported by dealers. The MSRB will now calculate and disseminate yield for trades reported to RTRS.
- New fields to identify ATS trades on RTS and TRACE reports. Trades involving Alternative Trading Systems (ATS trades) will now be identified with new fields to provide greater market information about the use of alternative trading systems.
Series 24, 52, 53 and 57 exams may include information on these new requirements following the July 18, 2016, effective date.
More information about these changes is found in FINRA Regulatory Notice 15-47 and MSRB Regulatory Notice 2016-09.
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