Finra, Fixed Income and FinTech—Fixing What Folks Keep Saying is Broken

MarketsMuse blog update profiles a proposal from FINRA which proposes pre-trade transparency for fixed income automatic trading systems operators. This update is courtesy of  Traders Magazines’ article, “A Step Closer to a Fixed-Income NBBO” with an excerpt from the article below.

A modest proposal made by the Financial Industry Regulatory Authority (FINRA) aims to have fixed-income alternative trading system (ATS) operators to submit a weekly report that contains all of their quotation data for TRACE-eligible corporate and agency debt-securities to the regulator.

Such data would help FINRA better surveil the growing electronic fixed-income market, especially retail trades, according Robert Colby, the chief legal officer at FINRA.

“We would love to have this information,” he said when speaking the Investment Company Institute’s capital markets conference. “We do not get them now, so we are not super familiar with it. We’ve gotten it in batches at times but are not familiar with it enough to know how to work it into our surveillance system, which is our primary line of interest.”

FINRA officials declined to comment on the proposal further citing that it was still out for comment at press time.

According to the proposal’s text, FINRA would not disseminate the ATS-provided data publicly and use it solely for regulatory and surveillance purposes. However the text also states that FINRA may analyze the data for “the potential value and feasibility of public dissemination in the future.”

To read the entire article from Traders Magazine, click here.