FINRA proposed amendments to Rule 6730 ("Transaction Reporting") that would provide additional transparency into delayed Treasury spot and portfolio trades through the use of "specific modifiers."
As previously covered, FINRA requested comment on proposed amendments to FINRA Rule 6730 that would require firms to identify corporate bond trades (i) where the trade price is based on a delayed Treasury spot trade, which is one that "was priced earlier in the day based on the spread to a U.S. Treasury Security," and (ii) that are within a larger portfolio trade.
In response to comments, FINRA proposed amending Rule 6730 to:
- increase transparency into delayed Treasury spot trades by requiring members to (i) "append a new modifier when reporting a delayed Treasury spot trade" and (ii) report the time for the agreed-upon spread for a delayed Treasury spot trade; and
- increase transparency into portfolio trades by requiring members to append a new modifier if reporting a transaction in a corporate bond (i) is executed between only two parties, (ii) involves a basket of corporate bonds of at least 10 unique issues, and (iii) is for a single agreed price for the entire basket.
If the SEC approves the proposal, FINRA will notify market participants in the Federal Register within 90 days.
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