February 15, 2024 - In a letter filed with the Securities and Exchange Commission (SEC) today, the FIA Principal Traders Group (FIA PTG) urged the SEC to reject the Proposal which would reduce the current 15-Minute TRACE reporting timeframe to one minute across certain bond markets. FIA PTG said that while they supported FINRA’s Request for Comment that preceded this Proposal, they cannot support FINRA’s new Proposal because it will not increase transparency and could harm competition and efficiency in the fixed income markets.
FIA PTG opposed the Proposal because for the first time, FINRA proposes to create a post-trade transparency framework that establishes different transparency requirements solely based on mode of execution and/or method of trade processing. FIA PTG said that establishing the proposed disparate reporting requirements, along with an inexhaustive, but lengthy list of manual intervention exceptions, may reduce efficiency, competition, and introduce opportunities for abuse. FIA PTG added that the Proposal could also disincentivize market participants from increasing reporting capabilities because of the overbroad manual trade exception, undermining the growth of electronic fixed income markets, among others.
FIA PTG suggested that FINRA should instead require reporting of all trades within five minutes of execution and eliminate the manual trade exception. Adding that this alternative would incrementally improve transparency but would not risk the harmful unintended consequences of the manual trade exception.
Read the full letter here.
