Finra Moving to Expand Disclosures on Securitized-Debt Trading

The Financial Industry Regulatory Authority, the non-governmental regulator of brokerages, is moving to disclose trade information on additional types of securitized debt.

Finra’s board has authorized its staff to seek approval from the U.S. Securities and Exchange Commission for the update to data released through its Trade Reporting and Compliance Engine, or Trace, according to a posting yesterday on its website. The proposal will cover bonds backed by assets including car loans and student borrowing, Finra said. It won’t extend to home-loan bonds known as collateralized mortgage obligations.

Finra has been expanding Trace to securitized debt after the opacity of trading in securities including home-loan bonds without government backing contributed to the worst financial crisis since the Great Depression in 2008.

The regulator, which operates from Washington and New York, has already started releasing trade-by-trade information on government-backed mortgage securities and aggregated data on a broader range of securitized debt.

The Trace system started in 2002, providing the first real-time data on most corporate bond trading to anyone with Internet access.

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