Finra Seeks To Add GSE, Government. Agency Debt To Trace Database
March 09 2009 - 12:39PM
Dow Jones News
The Financial Industry Regulatory Authority, or Finra, said
Monday it is seeking to expand its corporate bond database to
include debt issued by federal agencies, government corporations
and government-sponsored enterprises such as Fannie Mae (FNM) and
Freddie Mac (FRE).
The proposed expansion of Finra's database, known as the Trade
Compliance and Reporting Engine, or Trace, would require approval
by the Securities and Exchange Commission. Currently, Trace only
reports real-time pricing and trade volume on corporate bonds in
the secondary market.
Finra said that its proposed expansion will double the number of
bonds included in Trace reporting by adding about 25,000 bonds to
the database. It noted that retail investor activity in the GSE
bond market is expected to be comparable to the corporate bond
market.
"We believe that transparency is an extremely important
ingredient for investor participation in a market," said Finra's
executive vice president, Steven Joachim. "Based on our experience
with corporate bonds, this expansion should help all investors -
especially retail investors- get better prices because Trace has
shown that transparency helps to reduce bid-ask spreads."
Trace was established in 2002 to increase transparency in the
U.S. corporate debt market. Finra is currently the largest
independent regulator for the U.S. securities industry.
Finra said it expects the SEC to publish its proposal and seek
public comments soon.
-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634;
sarah.lynch@dowjones.com