The Federal Reserve Board has announced plans to enter negotiations with the Financial Industry Regualtory Authority (FINRA) to collect data from banks for US treasury transactions.
The plans follow news of the Securities and Exchange Commission’s (SEC) recent approval of rules requiring certain treasury transactions be reported to FINRA’s TRACE system.
The reporting obligations – proposed by the Financial Industry Regulatory Authority (FINRA) – are to apply to all treasury securities, except savings bonds.
FINRA’s proposal was in response to the flash crash in October 2014 which saw a working group, led by the US Treasury Department, issuing recommendations to avoid the event occurring again.
The SEC requested that FINRA “consider a proposal to require its member brokers and dealers to report treasury cash market transactions to a centralised repository.”
The date of implementation for the reporting requirements has been set for 10 July 2017.
Federal Reserve Governor, Jerome Powell, explained the collection of the data would “allow the US official sector a more complete view of Treasury securities trading in the secondary market.”
“Enhanced data collection was a key recommendation by the Inter Agency Working Group's joint staff report on the market events of October 15, 2014,” he added.