SEC approves FINRA’s reporting rules for US treasuries

FINRA members will be required to report on transactions in treasuries as of July 2017.

The Securities and Exchange Commission (SEC) has approved new rules requiring certain treasury securities transactions in the US be reported to the TRACE system. 

The reporting obligations – proposed by the Financial Industry Regulatory Authority (FINRA) – are to apply to all treasury securities, except savings bonds.

FINRA’s proposal was in response to the flash crash in October 2014 which saw a working group, led by the US Treasury Department, issuing recommendations to avoid the event occurring again.

The SEC requested that FINRA “consider a proposal to require its member brokers and dealers to report treasury cash market transactions to a centralised repository.”

The date of implementation for the reporting requirements has been set for 10 July 2017.

FINRA’s executive vice president of transparency services, Steven Joachim, said the TRACE system will “provide an effective structure for FINRA members” to report the trades.

“The new requirement will significantly enhance the ability of FINRA and other regulators to understand trading activity in treasury securities.

“Leveraging the existing TRACE platform will reduce the burden on firms to comply with the new reporting obligations,” he added.