FINRA plays an important role in regulating and providing transparency to the fixed income securities markets. For example, we operate and enforce FINRA rules regarding the Trade Reporting and Compliance Engine (TRACE®), and enforce, for our member firms, federal securities regulations governing fixed income, including those promulgated by the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB).
Most recently, the SEC designated FINRA as the examination and enforcement authority for municipal advisors that are FINRA members. Firms selling municipal securities or performing municipal advisory services must register with the MSRB.
FINRA Member Regulation is responsible for examining all FINRA members involved in the fixed income markets for compliance with applicable rules and regulations. Among other things, Member Regulation reviews firms' fixed-income sales practices to determine whether they have dealt fairly with customers and that their registered representatives are properly qualified and supervised, and ensures they are in compliance with net capital requirements.
Market Regulation, meanwhile, monitors trading activity in more than 2.5 million individual debt securities, including corporate bonds, municipal securities, government agency securities, U.S. Treasury Securities and mortgage- and asset-backed securities, for potential manipulative activity and to ensure customers receive fair prices.
Trade Reporting and Compliance Engine (TRACE)
TRACE, introduced in 2002, captures real-time consolidated transaction data for all eligible public and private (144A) corporate bonds—including investment grade, high yield and convertible debt—agency debt and U.S. Treasury Securities. Securitized products, such as mortgage-backed securities (MBS), traded in specified pool or To Be Announced (TBA) transactions also are part of the TRACE system.
As a result, TRACE brings transparency to the bond market. Individual investors and market professionals can access information on all over-the-counter (OTC) public and private activity representing more than 99 percent of total U.S. corporate bond debt, more than 16,000 agency debt securities, and more than one million asset and mortgage-backed securities.
FINRA licenses TRACE data to TRACE vendors and subscribers. The TRACE Content Licensing section provides information about data licensing options, agreements, technical specifications, and market data policies.
ContactFINRA
FINRA's Fixed Income Regulation (FIR) staff provides broker-dealers, attorneys, registered representatives, investors and other interested parties with guidance relating to FINRA’s enforcement of MSRB rules.
FIR staff contacts:
Cynthia Friedlander and Bonnie Bowes
FINRA, Fixed Income Regulation
1700 K Street, NW
Washington, DC 20006
(202) 728-8000
FINRA Issues Guidance on the Enhanced Confirmation Disclosure Requirements in Rule 2232 for Corporate and Agency Debt Securities
07/12/2017
SEC Approves Amendments to Require Mark-Up/Mark-Down Disclosure on Confirmations for Trades With Retail Investors in Corporate and Agency Bonds
02/15/2017
Guidance on Best Execution Obligations in Equity, Options and Fixed Income Markets
11/20/2015
FINRA Requests Comment on a Revised Proposal Requiring Confirmation Disclosure of Pricing Information in Corporate and Agency Debt Securities Transactions
10/12/2015
SEC Approves Rule to Address Conflicts of Interest Relating to the Publication and Distribution of Debt Research Reports
08/26/2015
Guidance Relating to Firm Short Positions and Fails-to-Receive in Municipal Securities
07/30/2015
FINRA Requests Comment on Proposal to Require Alternative Trading Systems to Submit Quotation Information Relating to Fixed Income Securities to FINRA for Regulatory Purposes
02/06/2015
FINRA Reminds Firms of Their Sales Practice and Due Diligence Obligations When Selling Municipal Securities in the Secondary Market
09/20/2010
FINRA Recommends Review of Municipal Securities Activities
06/30/2009
NASD and NYSE Joint Interpretive Guidance on Fixed Income Research
07/31/2006
Guidance
In the near-future, FINRA is introducing a new TRACE Markup/Markdown Analysis Report on the Report Center. The report displays a firm's markup and markdown behavior compared to the industry and provides the underlying details used to calculate the markup or markdown.
May 23, 2018
Guidance
On this free, on-demand recording of a WebEx presentation, FINRA staff members discuss new and updated fixed income-related Report Cards.
November 25, 2015
Targeted Examination Letter
FINRA is reviewing transactions with retail customers of certain fixed income products known as “Gas Bonds.”
June 01, 2009
FAQ
Preliminary Note: FINRA recently adopted enhanced confirmation disclosure requirements for corporate and agency bonds.
FINRA Posts Guidance on Enhanced Price Disclosure to Retail Investors for Corporate and Agency Bonds
July 12, 2017
November 18, 2016
October 19, 2016
July 10, 2015
December 16, 2014
November 17, 2014
September 19, 2014
December 09, 2013
August 22, 2013
June 26, 2013
October 22, 2012
April 11, 2011
Investor Education
When securities are listed on a centralized exchange, such as the New York Stock Exchange or Nasdaq, transaction information such as price and trade history is readily available to investors through the exchange. But how can you get information about bonds and other fixed income securities that are not listed on a national securities exchange? Information about these securities, known as over-the-counter (OTC) debt securities, is provided by TRACE®—the Trade Reporting and Compliance Engine®.
