Rule Change Updates

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.

Check back for regular updates from Knopman Marks to keep you up-to-date with the latest rule changes.

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Written by Marcia Larson
Marcia Larson is Vice President, Faculty, at Knopman Marks Financial Training, New York, NY. She has extensive experience in financial licensing and regulatory training, having authored, developed and presented courseware for numerous securities and insurance exam preparation and continuing education and compliance programs. Before joining Knopman Marks, Marcia was Director of Annuity Products and Business Development at CUNA Mutual Group, where she developed and marketed industry-leading annuity products and retirement solutions and implemented distribution relationships. She was previously VP, Securities Products for Kaplan Financial, managing securities training products and subsequently, international training and businesses development. Marcia has trained thousands of financial industry exam candidates throughout their careers, and also college students as an adjunct professor. Marcia was a summa cum laude graduate of Wartburg College with degrees in Business Administration and Piano Performance. Marcia also holds the designations of Chartered Financial Consultant® (ChFC®), Chartered Life Underwriter (CLU®), Certified Employee Benefit Specialist (CEBS), and Fellow Life Management Institute™ (FLMI®). She currently teaches the SIE, Series 6, 7, 24, 50, 52, 63, 65, and 66 exams.