Notice2022-17225
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Amend FINRA Rule 6750 Regarding the Publication of Aggregated Transaction Information on U.S. Treasury Securities
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 11, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 154 (Thursday, August 11, 2022)</title>
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[Federal Register Volume 87, Number 154 (Thursday, August 11, 2022)]
[Notices]
[Pages 49626-49628]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-17225]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95438; File No. SR-FINRA-2022-017]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Approving a Proposed Rule Change To Amend FINRA
Rule 6750 Regarding the Publication of Aggregated Transaction
Information on U.S. Treasury Securities
August 5, 2022.
I. Introduction
On June 23, 2022, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend FINRA Rule 6750 to provide that FINRA may
publish or distribute aggregated transaction information and statistics
on U.S. Treasury Securities on a more frequent basis. The proposed rule
change was published for comment in the Federal Register on July 1,
2022.\3\ The Commission received one comment letter on the proposed
rule change.\4\ This order approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 95165 (June 27,
2022), 87 FR 39573 (July 1, 2022) (``Notice'').
\4\ See Letter from Stephen John Berger, Managing Director,
Global Head of Government & Regulatory Policy, Citadel Securities,
to Vanessa Countryman, Secretary, Commission (July 21, 2022)
(``Citadel Letter''). Comment letters are available at: <a href="https://www.sec.gov/comments/sr-finra-2022-017/srfinra2022017.htm">https://www.sec.gov/comments/sr-finra-2022-017/srfinra2022017.htm</a>.
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II. Description of the Proposal
On March 10, 2020 FINRA began posting on its website weekly,
aggregate data on the trading volume of U.S. Treasury Securities \5\
reported to the
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Trade Reporting And Compliance Engine (TRACE).\6\ FINRA is proposing to
amend paragraph (b) of Supplementary Material .01 to FINRA Rule 6750 to
delete the word ``weekly'' so as to permit more frequent publication of
aggregated U.S. Treasury Security transaction information and
statistics, such as on a daily basis.\7\
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\5\ ``U.S. Treasury Security'' means a security, other than a
savings bond, issued by the U.S. Department of the Treasury
(``Treasury Department'') to fund the operations of the federal
government or to retire such outstanding securities. The term also
includes separate principal and interest components of a U.S.
Treasury Security that have been separated pursuant to the Separate
Trading of Registered Interest and Principal of Securities (STRIPS)
program operated by the Treasury Department. See FINRA Rule 6710(p).
\6\ See, e.g., Supplementary Material .01(b) to FINRA Rule 6750;
FINRA Press Release, FINRA Launches New Data on Treasury Securities
Trading Volume, available at <a href="https://www.finra.org/media-center/newsreleases/2020/finra-launches-new-data-treasury-securities-trading-volume">https://www.finra.org/media-center/newsreleases/2020/finra-launches-new-data-treasury-securities-trading-volume</a>.
\7\ On July 10, 2017, FINRA members began reporting information
on transactions in U.S. Treasury Securities to TRACE. Information
reported to TRACE regarding individual transactions in U.S. Treasury
Securities is used for regulatory and other official sector purposes
and is not published or disseminated. Pursuant to FINRA Rule 6750
(Dissemination of Transaction Information) FINRA may, at its
discretion, publish or distribute weekly aggregated transaction
information and statistics on U.S. Treasury Securities at no charge
(unless FINRA submits a rule filing imposing a fee for such data).
FINRA states it has received favorable feedback on the weekly
aggregated trading volume data for U.S. Treasury Securities that is
currently made available on its website and that, in consultation
with the Treasury Department, it now believes it would be
appropriate to increase the frequency by which this aggregated data
is made available. See Notice, supra note 3, 87 FR at 39573.
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FINRA states that the more frequent aggregated U.S. Treasury
Security data would continue to not identify individual market
participants or transactions, and that FINRA would continue to not
publish aggregated transaction information and statistics by individual
U.S. Treasury Security (except for the category of on-the-run U.S.
Treasury Securities because there is only one on-the-run security at a
time for each subtype and maturity).\8\ FINRA also states that the
aggregate U.S. Treasury Security data would continue to be provided at
no charge (unless FINRA first submits an appropriate rule filing
establishing a fee for this data).\9\ FINRA states that the proposed
rule change will become effective on the date of Commission
approval.\10\
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\8\ See Notice, supra note 3, 87 FR at 39573-74. See also Rule
6750.01(b) (providing that aggregated transaction information and
statistics on U.S. Treasury Securities will not be published or
distributed by individual security (except for aggregated data that
includes on-the-run U.S. Treasury Securities that may have had only
one on-the-run security during the aggregated period) and will not
identify individual market participants or transactions).
\9\ See Notice, supra note 3, 87 FR at 39574; Supplementary
Material .01(b) to FINRA Rule 6750.
\10\ See id.
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III. Discussion and Commission Findings
After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
association.\11\ In particular, the Commission finds that the proposed
rule change is consistent with Section 15A(b)(6) of the Act,\12\ which
requires, among other things, that FINRA rules be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, and, in general, to protect investors
and the public interest.
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\11\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78o-3(b)(6).
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The Commission received one comment letter in response to the
proposal.\13\ This commenter states that dissemination of more frequent
aggregated transaction information will facilitate a better and more
timely understanding of overall trading activity in U.S. Treasury
securities and will improve the efficiency of the U.S. Treasury
market.\14\ The commenter further states that FINRA's proposal is
another positive incremental step in enhancing transparency in the U.S.
Treasury market.\15\
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\13\ See Citadel Letter, supra note 4 at 1.
\14\ See Citadel Letter, supra note 4 at 1.
\15\ See Citadel Letter, supra note 4 at 1.
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The Commission believes that the proposal will benefit investors
and market participants by providing them with timelier insights into
activity in the U.S. Treasury Securities markets while maintaining the
confidentiality of individual market participants and transactions. The
proposal would enable FINRA, in its discretion, to publish or
distribute at no charge (unless FINRA submits a rule filing imposing a
fee for such data) aggregated transaction information and statistics on
TRACE-Eligible Securities \16\ that are U.S. Treasury Securities on a
more frequent basis than the weekly cadence provided under the current
rule. FINRA represents it has received favorable feedback on the weekly
aggregated trading volume data for U.S. Treasury Securities that is
currently made available on its website and, in that, in consultation
with the Treasury Department, FINRA now believes it would be
appropriate to increase the frequency within which this aggregated data
is made available.\17\ The Commission believes that the more frequent
availability of such aggregated transaction information on U.S.
Treasury Securities would provide greater overall transparency into the
market for U.S. Treasury Securities.
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\16\ ``TRACE-Eligible Security'' means a debt security that is
United States (``U.S.'') dollar-denominated and is: (1) issued by a
U.S. or foreign private issuer, and, if a ``restricted security'' as
defined in Securities Act Rule 144(a)(3), sold pursuant to
Securities Act Rule 144A; (2) issued or guaranteed by an Agency as
defined in FINRA Rule 6710(k) or a Government-Sponsored Enterprise
as defined in FINRA Rule 6710(n); or (3) a U.S. Treasury Security as
defined in FINRA Rule 6710(p). ``TRACE-Eligible Security'' does not
include a debt security that is issued by a foreign sovereign or a
Money Market Instrument as defined in FINRA Rule 6710(o). See FINRA
Rule 6710(a).
\17\ See Notice, supra note 3, 87 FR at 39573.
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The Commission also believes that the proposal is reasonably
designed to preserve the confidentiality of individual market
participants and transactions, as aggregated transaction information
and statistics on U.S. Treasury Securities would not be published or
distributed by individual security (except for aggregated data that
includes on-the-run U.S. Treasury Securities that may have had only one
on-the-run security during the aggregated period), and would not
identify individual market participants or transactions.\18\ In
addition, FINRA represents that the proposed rule change would not
impose any additional requirements on firms, because any aggregate
statistics that are published or distributed by FINRA pursuant to this
rule change would be derived from trade reports already required to be
submitted to TRACE.\19\
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\18\ See Notice, supra note 3, 87 FR at 39573-74; Supplementary
Material .01(b) to FINRA Rule 6750.
\19\ See Notice, supra note 3, 87 FR at 39574.
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Pursuant to Section 19(b)(5) of the Act,\20\ the Commission
consulted with and considered the views of the Treasury Department in
determining to approve the proposed rule change. The Treasury
Department indicated its support for the proposal.\21\ Pursuant to
Section 19(b)(6) of the Act,\22\ the
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Commission has considered the sufficiency and appropriateness of
existing laws and rules applicable to government securities brokers,
government securities dealers, and their associated persons in
approving the proposal.
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\20\ See 15 U.S.C. 78s(b)(5) (providing that the Commission
``shall consult with and consider the views of the Secretary of the
Treasury prior to approving a proposed rule filed by a registered
securities association that primarily concerns conduct related to
transactions in government securities, except where the Commission
determines that an emergency exists requiring expeditious or summary
action and publishes its reasons therefor'').
\21\ See Email from U.S. Treasury Department staff to Justin
Pica, Division of Trading and Markets, Commission (August 4, 2022).
See also Quarterly Refunding Statement of U.S. Treasury Department
Assistant Secretary for Financial Markets Josh Frost (August 3,
2022) (stating that ``Treasury supports [FINRA's] recent proposed
rule change to publish the aggregated U.S. Treasury Security
transaction information and statistics on a more frequent basis'')
available at <a href="https://home.treasury.gov/news/press-releases/jy0908">https://home.treasury.gov/news/press-releases/jy0908</a>.
\22\ 15 U.S.C. 78s(b)(6).
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The proposal will benefit investors and market participants by
promoting greater transparency into the U.S. Treasury Securities market
while also maintaining the confidentiality of individual market
participants and transactions.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\23\ that the proposed rule change (SR-FINRA-2022-017) is approved.
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\23\ 15 U.S.C. 78s(b)(2).
\24\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-17225 Filed 8-10-22; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on August 11, 2022.
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