77388 Federal Register / Vol. 88, No. 216 / Thursday, November 9, 2023 / Notices 

28For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 29 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Regulatory Notice 16–39 (October 2016); see 

also Securities Exchange Act Release No. 79116 

(October 18, 2016), 81 FR 73167 (October 24, 2016) 

(Order Granting Accelerated Approval of File No. 

SR–FINRA–2016–027). 

date of filing to allow Eligible Firms to 

apply for FINRA membership pursuant 

to proposed IM–1013–3 beginning on, or 

as close as possible to, the November 6, 

2023 effective date of amended 

Exchange Act Rule 15b9–1. FINRA 

stated that while under the proposed 

rule change Eligible Firms must apply 

for membership at least 120 days before 

the September 6, 2024 compliance date 

of amended Exchange Act Rule 15b9–1, 

some firms have already inquired about 

beginning the application process. For 

those firms that wish to apply close to 

the effective date, this will also provide 

FINRA with additional time to process 

such Eligible Firms’ applications and 

provide more certainty that they will be 

able to continue their business in 

compliance with amended Exchange 

Act Rule 15b9–1. For these reasons, the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. Therefore, the 

Commission hereby waives the 

operative delay and designates the 

proposal operative upon filing.28

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

FINRA–2023–014 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–FINRA–2023–014. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of 

FINRA. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–FINRA–2023–014 and should be 

submitted on or before November 30, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–24759 Filed 11–8–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98859; File No. SR–FINRA– 

2023–015] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of a 

Proposed Rule Change Relating to 

Dissemination of Information on 

Individual Transactions in U.S. 

Treasury Securities and Related Fees 

November 3, 2023. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

2, 2023, the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by FINRA. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to (1) amend 

FINRA Rules 6710 and 6750 to provide 

that FINRA will disseminate 

information on individual transactions 

in U.S. Treasury Securities that are Onthe-Run Nominal Coupons reported to 

FINRA’s Trade Reporting and 

Compliance Engine (‘‘TRACE’’) on an 

end-of-day basis with specified 

dissemination caps for large trades, and 

(2) amend FINRA Rule 7730 to include 

U.S. Treasury Securities within the 

existing fee structure for end-of-day and 

historic TRACE data. 

The text of the proposed rule change 

is available on FINRA’s website at 

http://www.finra.org, at the principal 

office of FINRA and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On July 10, 2017,3 FINRA members 

began reporting information on 

transactions in U.S. Treasury 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 216 / Thursday, November 9, 2023 / Notices 77389 

4Under Rule 6710(p), a ‘‘U.S. Treasury Security’’ 

means a security, other than a savings bond, issued 

by the U.S. Department of the Treasury (the 

‘‘Treasury Department’’) to fund the operations of 

the federal government or to retire such outstanding 

securities. The term ‘‘U.S. Treasury Security’’ also 

includes separate principal and interest 

components of a U.S. Treasury Security that has 

been separated pursuant to the Separate Trading of 

Registered Interest and Principal of Securities 

(STRIPS) program operated by the Treasury 

Department. 

5TRACE is the FINRA-developed system that 

facilitates the mandatory reporting of over-thecounter transactions in eligible fixed income 

securities. See generally Rule 6700 Series. 

6See Agency Information Collection Activities: 

Announcement of Board Approval Under Delegated 

Authority and Submission to OMB, 86 FR 59716 

(October 28, 2021) (Federal Reserve approval to 

implement the Treasury Securities and Agency Debt 

and Mortgage-Backed Securities Reporting 

Requirements (FR 2956; OMB No. 7100–NEW)). 

7The Treasury Department, the Federal Reserve 

Board, the Federal Reserve Bank of New York, the 

SEC and the U.S. Commodity Futures Trading 

Commission (CFTC) comprise the Inter-Agency 

Working Group for Treasury Market Surveillance 

(IAWG or ‘‘official sector’’). 

8See FINRA Press Release, FINRA Launches New 

Data on Treasury Securities Trading Volume, 

https://www.finra.org/media-center/newsreleases/ 

2020/finra-launches-new-data-treasury-securitiestrading-volume; see also Securities Exchange Act 

Release No. 87837 (December 20, 2019), 84 FR 

71986 (December 30, 2019) (Order Approving File 

No. SR–FINRA–2019–028). FINRA also made 

historical weekly aggregate data for transactions in 

U.S. Treasury Securities reported since January 

2019 available for download on its website. 

9See infra note 20 and accompanying text for the 

proposed definition of ‘‘On-the-Run Nominal 

Coupon.’’ 

10See Technical Notice, Enhancements to 

Aggregated Reports and Statistics for U.S. Treasury 

Securities, https://www.finra.org/filing-reporting/ 

trace/enhancements-weekly-aggregated-reportsstatistics-122822; see also Securities Exchange Act 

Release No. 95438 (August 5, 2022), 87 FR 49626 

(August 11, 2022) (Order Approving File No. SR– 

FINRA–2022–017). 

11Remarks by Under Secretary for Domestic 

Finance Nellie Liang at the 2022 Treasury Market 

Conference (November 16, 2022), https://

home.treasury.gov/news/press-releases/jy1110 

(‘‘Treasury Conference Remarks’’). 

12See Treasury Department, Additional Public 

Transparency in Treasury Markets, (November 

2022), https://home.treasury.gov/system/files/221/ 

TBACCharge1Q42022.pdf (‘‘TBAC Findings’’). 

13See Treasury Department, Notice Seeking 

Public Comment on Additional Transparency for 

Secondary Market Transactions of Treasury 

Securities, 87 FR 38259 (June 27, 2022) (Docket No. 

TREAS–DO–2022–0012). 

14See TBAC Findings, supra note 12, at 28–29; 

Treasury Conference Remarks, supra note 11. 

15The proposed rule change would not affect 

FINRA’s existing publication of aggregate U.S. 

Treasury Security data. FINRA would continue to 

publish daily and monthly aggregate U.S. Treasury 

Security data on the same terms as it does today, 

which include aggregate data on other types of U.S. 

Treasury Securities in addition to On-the-Run 

Nominal Coupons. See supra notes 8 and 10 and 

accompanying text. 

16Rule 6710(a) generally defines a ‘‘TRACEEligible Security’’ as a debt security that is United 

States (‘‘U.S.’’) dollar-denominated and is: (1) 

issued by a U.S. or foreign private issuer, and, if a 

‘‘restricted security’’ as defined in Securities Act 

Rule 144(a)(3), sold pursuant to Securities Act Rule 

144A; (2) issued or guaranteed by an Agency as 

defined in Rule 6710(k) or a Government-Sponsored 

Enterprise as defined in Rule 6710(n); or (3) a U.S. 

Treasury Security as defined in Rule 6710(p). 

‘‘TRACE-Eligible Security’’ does not include a debt 

security that is issued by a foreign sovereign or a 

Money Market Instrument as defined in Rule 

6710(o). Beginning on November 6, 2023, the 

definition of ‘‘TRACE-Eligible Security’’ will be 

amended to also include a Foreign Sovereign Debt 

Security as defined in new paragraph (kk) of Rule 

6710. See FINRA Adopts Amendments to Require 

Reporting of Transactions in U.S. DollarDenominated Foreign Sovereign Debt Securities to 

TRACE, Regulatory Notice 22–28 (December 2022); 

see also Securities Exchange Act Release No. 95465 

(August 10, 2022); 87 FR 50354 (August 16, 2022) 

(Order Approving File No. SR–FINRA–2022–011) 

(‘‘Foreign Sovereign Filing’’). 

Securities 4 to TRACE.5 In addition, 

pursuant to requirements adopted by 

the Board of Governors of the Federal 

Reserve System (the ‘‘Federal Reserve 

Board’’), on September 1, 2022, certain 

banks that are not FINRA members 

(‘‘covered depository institutions’’) 

began reporting information on 

transactions in specified fixed income 

securities, including U.S. Treasury 

Securities, to TRACE.6 Information 

reported to TRACE regarding individual 

transactions in U.S. Treasury Securities 

is currently used for regulatory and 

other official sector purposes only and 

is not disseminated publicly. FINRA 

makes the data regarding individual 

transactions in U.S. Treasury Securities 

available to the official sector to assist 

them in the monitoring and analysis of 

the U.S. Treasury Security markets.7

Since the commencement of TRACE 

reporting for U.S. Treasury Securities, 

FINRA has actively studied the reported 

data and, in consultation with the 

Treasury Department, considered ways 

that it can enhance transparency in the 

U.S. Treasury Security market. On 

March 10, 2020, FINRA began posting 

on its website weekly, aggregate data on 

the trading volume of U.S. Treasury 

Securities reported to TRACE.8 In 

February 2023, FINRA increased the 

cadence of the aggregated volume data 

it publishes for U.S. Treasury Securities 

to daily, and enhanced the content of 

the aggregate data by adding trade 

counts and, for On-the-Run Nominal 

Coupons,9 volume-weighted average 

price information.10

In remarks at the 2022 U.S. Treasury 

Market Conference,11 Under Secretary 

for Domestic Finance Liang proposed a 

policy of publicly releasing secondary 

market transaction data for On-the-Run 

Nominal Coupons, with end-of-day 

dissemination and with appropriate cap 

sizes. The Treasury Department’s views 

on their policy proposal were informed 

by a range of inputs, including 

responses to a survey of the primary 

dealers, analysis and recommendations 

from the Treasury Borrowing Advisory 

Committee (‘‘TBAC’’),12 and public 

comments submitted in response to its 

Request for Information (‘‘RFI’’) on 

Additional Transparency for Secondary 

Market Transactions of Treasury 

Securities.13 The Treasury Department 

concluded that transaction-level 

transparency can provide important 

benefits for the U.S. Treasury Securities 

market, but should proceed in a gradual 

and calibrated manner to mitigate risks 

for large trades or for trades in less 

liquid segments of the U.S. Treasury 

Securities market. Accordingly, the 

Treasury Department recommended that 

the next step should be to release 

transaction data for On-the-Run 

Nominal Coupons, with end-of-day 

dissemination and appropriate cap 

sizes.14

Consistent with the Treasury 

Department’s proposed policy, and in 

furtherance of FINRA’s mission as a 

national securities association to protect 

investors and promote market integrity, 

FINRA believes that providing 

transaction-level information for trades 

in On-the-Run Nominal Coupons, with 

end-of-day dissemination and 

appropriate cap sizes, is an appropriate 

next step to increase transparency in 

transactions in U.S. Treasury Securities. 

Accordingly, as described in more detail 

below and in consultation with the 

Treasury Department, FINRA is 

proposing to commence dissemination 

of individual transaction information at 

this time for On-the-Run Nominal 

Coupons,15 on an end-of-day basis with 

appropriate dissemination caps for large 

trades. The proposed rule change would 

not require any reporting changes by 

members or covered depository 

institutions. 

Scope and Timing of Dissemination 

Under Rule 6750(a), FINRA 

disseminates information on all 

transactions in TRACE-Eligible 

Securities,16 including transactions 

effected pursuant to Securities Act Rule 

144A, immediately upon receipt of the 

transaction report, except as provided in 

paragraphs (b) and (c) of Rule 6750 

(Dissemination of Transaction 

Information). In relevant part, current 

Rule 6750(c)(5) provides that FINRA 

will not disseminate information on a 

transaction in a TRACE-Eligible 

Security that is a U.S. Treasury Security. 

Under the proposed rule change, 

FINRA would begin disseminating 

individual transaction information for 

On-the-Run Nominal Coupon U.S. 

Treasury Securities on an end-of-day 

basis. As for all individual TRACE 

transaction information that FINRA 


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17To accommodate the addition of new paragraph 

6750(c), the proposed rule change would 

redesignate current Rule 6750(c) as Rule 6750(d), 

and make conforming changes to the paragraph 

cross-references in Rule 6750(a) and Supplementary 

Material .01 to Rule 6750. The proposed rule text 

also reflects the inclusion of Rule 6750(c)(6) (to be 

redesignated as Rule 6750(d)(6)), which will be 

added by the Foreign Sovereign Filing effective 

November 6, 2023. See Foreign Sovereign Filing, 

supra note 16. 

18The proposed dissemination would include all 

transactions in On-the-Run Nominal Coupons 

reported to TRACE, including both transactions 

reported by FINRA members and transactions 

reported by covered depository institutions 

pursuant to rulemaking by the Federal Reserve. See 

supra note 6 and accompanying text. 

19FINRA members are generally required to 

report transactions in U.S. Treasury Securities to 

TRACE within 60 minutes of the Time of Execution. 

See Rule 6730(a)(4). 

20The proposed paragraph designation for the 

new definition of ‘‘On-the-Run Nominal Coupon’’ 

in Rule 6710 reflects the inclusion of paragraphs (jj) 

and (kk) in Rule 6710, which were added, 

respectively, by the Corporate Bond New Issue 

Reference Data Service Filing (see Securities 

Exchange Act Release No. 90939 (January 15, 2021); 

86 FR 6922 (January 25, 2021) (Order Approving 

File No. SR–FINRA–2019–008)) and Foreign 

Sovereign Filing. While the Corporate Bond New 

Issue Reference Data Service Filing has not been 

implemented, the Foreign Sovereign Filing will 

become effective November 6, 2023. See Foreign 

Sovereign Filing, supra note 16. 

21Under Rule 6710(gg), ‘‘Auction’’ means the 

bidding process by which the Treasury Department 

sells marketable securities to the public pursuant to 

Part 356 of Title 31 of the Code of Federal 

Regulations. 

22FINRA will identify the most recently 

auctioned U.S. Treasury Security that is a Treasury 

note or bond paying fixed rate nominal coupons as 

an ‘‘On-the-Run Nominal Coupon’’ in TRACE 

reference data beginning on the business day after 

its auction. 

23 Information about the U.S. Treasury Security 

aggregate statistics, including security subtypes and 

groupings, is available at https://www.finra.org/ 

finra-data/browse-catalog/about-treasury. 

24FINRA would incorporate information about 

these dissemination caps in the TRACE 

dissemination protocols published on its website, 

available at https://www.finra.org/filing-reporting/ 

trade-reporting-and-compliance-engine-trace/tracereporting-timeframes. Specifically, information 

about the dissemination caps would be added as a 

new bullet in the ‘‘Transparency’’ column of the 

row of the table describing the protocols for 

‘‘Treasury Bonds,’’ to read as follows: ‘‘Individual 

transactions in On-the-Run Nominal Coupons are 

disseminated on an end-of-day basis with security 

identifiers (e.g., CUSIP) and the following 

transaction size caps based on the maturity of the 

security at issuance: 2 Years: $250 million; 3 Years: 

$250 million; 5 Years: $250 million; 7 Years: $150 

million; 10 Years: $150 million; 20 Years: $50 

million; 30 Years: $50 million.’’ 

disseminates, the disseminated 

transaction information for U.S. 

Treasury Securities would be 

anonymized, i.e., it would not include 

the market participant identifier (MPID) 

or other identifying information 

regarding the parties to the trade. 

However, consistent with other TRACE 

products, the disseminated transaction 

information would include counterparty 

type (i.e., dealer, customer, affiliate, or 

alternative trading system (‘‘ATS’’)), a 

flag to indicate whether the trade was 

executed on an ATS, and other trade 

modifiers and indicators. To implement 

such dissemination, FINRA is proposing 

to amend Rule 6750(c)(5) (to be 

redesignated as Rule 6750(d)(5)) to 

provide that FINRA will not 

disseminate information on a 

transaction in a TRACE-Eligible 

Security that is a U.S. Treasury Security 

‘‘other than an On-the-Run Nominal 

Coupon,’’ and to add a new paragraph 

(c) to Rule 6750 providing that FINRA 

will disseminate information on 

individual transactions in On-the-Run 

Nominal Coupons on an end-of-day 

basis.17 Consistent with the Treasury 

Department’s proposed policy, these 

proposed amendments to Rule 6750 

would provide for FINRA to 

disseminate information on individual 

transactions in U.S. Treasury Securities 

on an end-of-day basis only, rather than 

immediately upon receipt of the 

transaction report, and would 

specifically limit such dissemination to 

On-the-Run Nominal Coupons.18 FINRA 

believes that disseminating information 

on individual transactions in On-theRun Nominal Coupons on an end-of-day 

basis at this time would strike an 

appropriate balance between enhancing 

transparency by providing timely 

information to the public about U.S. 

Treasury Security market activity and 

mitigating potential information leakage 

concerns that could arise with a more 

accelerated dissemination timeframe, 

such as a real-time data feed.19 FINRA 

may in the future consider whether it 

would be appropriate to disseminate 

information for transactions in U.S. 

Treasury Securities on a more 

accelerated basis. 

To provide clarity regarding the scope 

of transactions in U.S. Treasury 

Securities that would be subject to 

individual dissemination under 

amended Rule 6750, FINRA is 

proposing to add a definition of ‘‘Onthe-Run Nominal Coupon’’ as new 

paragraph (ll) of Rule 6710 

(Definitions).20 Specifically, ‘‘On-theRun Nominal Coupon’’ would be 

defined to mean the most recently 

auctioned U.S. Treasury Security that is 

a Treasury note or bond paying fixed 

rate nominal coupons starting after the 

close of the TRACE system on the day 

of its Auction through the close of the 

TRACE system on the day of the 

Auction of a new issue for the next U.S. 

Treasury Security of the same 

maturity.21 For further clarity, the 

proposed definition would specify that 

On-the-Run Nominal Coupons do not 

include Treasury bills, STRIPS, 

Treasury Inflation-Protected Securities 

(TIPS), floating rate notes (FRNs), or any 

U.S. Treasury Security that is a Treasury 

note or bond paying a fixed rate 

nominal coupon that is not the most 

recently issued U.S. Treasury Security 

of a given maturity (i.e., off-the-run 

nominal coupons).22 FINRA believes 

this proposed definition is consistent 

with Treasury Department usage and 

industry practice in categorizing 

different types of U.S. Treasury 

Securities, and is also consistent with 

how FINRA currently categorizes 

different U.S. Treasury Securities for 

purposes of groupings in its existing 

U.S. Treasury Security aggregate data.23

Consistent with the Treasury 

Department’s proposed policy, FINRA 

believes it is appropriate at this time to 

limit dissemination of individual 

transaction information to On-the-Run 

Nominal Coupons. FINRA may in the 

future consider whether it would be 

appropriate to disseminate information 

for transactions in other types of U.S. 

Treasury Securities, such as off-the-run 

nominal coupons. 

Dissemination Protocols 

As described above, under the 

proposed rule change all individual 

transactions in On-the-Run Nominal 

Coupons reported to TRACE on a given 

trading day would generally be included 

in the end-of-day dissemination file for 

such date. However, to further mitigate 

concerns around information leakage for 

large trades and in consideration of the 

different risk and liquidity 

characteristics among different U.S. 

Treasury Security tenors, FINRA would 

implement transaction size 

dissemination caps to indicate that the 

size of a trade was above a designated 

threshold. This approach is consistent 

with the Treasury Department’s 

proposed policy as well as FINRA’s 

existing dissemination protocols for 

other types of TRACE-Eligible 

Securities. 

Accordingly, in consultation with the 

Treasury Department, FINRA proposes 

to apply the following transaction size 

dissemination caps based on the 

maturity of the On-the-Run Nominal 

Coupon at issuance: 24

• Two Years: $250 million; 

• Three Years: $250 million; 

• Five Years: $250 million; 

• Seven Years: $150 million; 

• 10 Years: $150 million; 

• 20 Years: $50 million; and 

• 30 Years: $50 million. 

Thus, for example, a $200 million 

transaction in a 10-year On-the-Run 


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25As described further below, these 

dissemination caps would apply for the end-of-day 

dissemination file. Consistent with its approach to 

other TRACE data products, FINRA also plans to 

provide an Historic TRACE data product covering 

the same scope of transactions, which would 

provide the actual, uncapped transaction sizes on 

a six-month delayed basis. 

26These data sets are defined in Rule 7730(c), 

which sets forth the market data fees for Real-Time 

TRACE transaction data. Under Rule 7730(g)(3), 

‘‘Real-Time’’ is defined to mean that period of time 

starting from the time of dissemination by FINRA 

of transaction data on a TRACE-Eligible Security, 

and ending no more than four hours thereafter. 

27There is no charge for receipt of the End-of-Day 

TRACE Transaction file for a given data set for a 

subscriber to the Vendor Real-Time Data feed for 

that data set. 

28For purposes of Rule 7730, a Tax-Exempt 

Organization means an organization that is 

described in Section 501(c) of the Internal Revenue 

Code (26 U.S.C. 501(c)) and has received 

recognition of the exemption from federal income 

taxes from the Internal Revenue Service. See Rule 

7730(g)(2). 

29The $2,000 fee for non-qualifying Tax Exempt 

Organizations is applicable where the subscriber 

receives the data for internal use and internal and/ 

or external display application, but bulk redistribution of data is not permitted at this rate. A 

non-qualifying Tax Exempt Organization seeking 

bulk re-distribution of the Historic TRACE Data is 

instead subject to a fee of $1/CUSIP per calendar 

year (or part thereof) within a single data set of 

Historic TRACE Data per each recipient of redistributed data, with a maximum fee per data set 

of $1,000/calendar year (or part thereof) per each 

recipient of re-distributed data. A qualifying TaxExempt Organization is subject to the $500/calendar 

year per data set fee for internal use and internal 

and/or external display application, with bulk redistribution of data permitted with certain 

restrictions. 

30The development and set-up fee is a one-time 

fee when a subscriber initially begins receiving 

Historic TRACE Data for any data set. The fee does 

not apply if a subscriber switches data sets, or adds 

additional data sets, of Historic TRACE Data. 

31A clarifying edit would also be made to the first 

sentence of Rule 7730(g)(6), which defines End-ofDay TRACE Transaction File for the existing data 

sets, to clarify that it applies for Data Sets other 

than U.S. Treasury Securities. This change is 

necessary because the definition for other Data Sets 

is based on data disseminated as part of Real-Time 

TRACE transaction data on that day for a given data 

set, which will not be applicable for U.S. Treasury 

Securities. 

32A conforming change would also be made in 

the description of Historic TRACE Data in Rule 

7730(d) to add the Historic Treasury Data Set to the 

list of data sets comprising Historic TRACE Data. 

Nominal Coupon would be 

disseminated with a trade size of 

‘‘150MM+’’ rather than the actual dollar 

amount of the trade.25 As discussed 

further below, FINRA believes these 

transaction size caps are appropriately 

tailored to mitigate potential 

information leakage concerns related to 

large transactions given the different 

liquidity and concentration 

characteristics of the market for each 

maturity. In consultation with the 

Treasury Department and based on 

ongoing analysis of the data, FINRA 

may in the future make adjustments to 

these dissemination caps to maintain 

the appropriate balance between 

enhanced transparency and protecting 

against potential information leakage 

that could negatively impact trading 

behaviors. Any proposed future changes 

to the dissemination caps would be filed 

with the Commission pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934. 

Dissemination Fees 

FINRA is also proposing amendments 

to Rule 7730 (Trade Reporting and 

Compliance Engine) to expand the 

existing fee framework for the TRACE 

End-of-Day Transaction File and the 

Historic TRACE Data product to include 

data products providing for the 

dissemination of information on 

individual transactions in On-the-Run 

Nominal Coupons. Rule 7730, among 

other things, sets forth the TRACE data 

products offered by FINRA in 

connection with information on TRACEEligible Securities and associated data 

fees. 

Among other products, Rule 7730 

provides for the dissemination of an 

End-of-Day TRACE Transaction File and 

Historic TRACE Data. Rule 7730(g)(6) 

defines the End-of-Day TRACE 

Transaction File to mean a daily file that 

includes all transaction data 

disseminated as part of Real-Time 

TRACE transaction data on that day, 

which is separately available for each 

data set for which Real-Time TRACE 

transaction data is available (i.e., the 

Corporate Bond Data Set, Agency Data 

Set, SP Data Set, and Rule 144A Data 

Set) 26 and made available daily after the 

TRACE system closes. Rule 7730(g)(4) 

defines Historic TRACE Data to mean 

historic transaction-level data with 

elements to be determined from time to 

time by FINRA in its discretion as stated 

in a Regulatory Notice or other 

equivalent publication, which will not 

include market participant identifiers 

(MPIDs). Historic TRACE Data is 

separately available for each of the 

Historic Corporate Bond Data Set, the 

Historic Agency Data Set, the Historic 

SP Data Set, and the Historic Rule 144A 

Data Set, as defined in Rule 

7730(g)(4)(A) through (D). Historic 

Corporate Bond and Historic Agency 

Data is delayed a minimum of six 

months, while Historic SP Data is 

delayed a minimum of 18 months and 

Historic Rule 144A Data carries a delay 

consistent with the delay period 

applicable to the component security 

type (e.g., the delay for a Rule 144A 

transaction in a Securitized Product (SP) 

is 18 months, while the delay for a Rule 

144A transaction in a corporate bond is 

six months). Generally, Historic TRACE 

Data includes the same transaction 

information as provided in the End-ofDay TRACE Transaction File for a given 

period of time, except that the End-ofDay TRACE Transaction File includes 

dissemination caps for large 

transactions while the Historic TRACE 

Data includes the actual, uncapped 

transaction sizes. 

Rule 7730 sets forth, among other 

things, the fees applicable to receive the 

End-of-Day TRACE Transaction File and 

Historic TRACE Data from FINRA, 

which apply individually for each data 

set (i.e., a separate fee applies for each 

of the Corporate Bond Data Set, Agency 

Data Set, SP Data Set, and Rule 144A 

Data Set). The fee for the End-of-Day 

TRACE Transaction File is $750/month 

per data set,27 with a lower $250/month 

per data set fee available to qualifying 

Tax-Exempt Organizations.28 The fee for 

Historic TRACE Data is $2,000/calendar 

year per data set, with a lower $500/ 

calendar year per data set fee available 

to qualifying Tax-Exempt 

Organizations.29 A single fee of $2,000 

for development and set-up to receive 

Historic TRACE Data also applies, with 

a lower $1,000 development and set-up 

fee available to qualifying Tax-Exempt 

Organizations.30

FINRA is proposing that the End-ofDay TRACE Transaction File and 

Historic Data include a new set of data 

for U.S. Treasury Securities, as outlined 

above, with the same fees for the 

Treasury data set that exist for other sets 

of TRACE-Eligible Securities. To 

effectuate these changes, under the 

proposed rule change, FINRA would 

amend the existing definition of ‘‘Endof-Day TRACE Transaction File’’ in Rule 

7730(g)(6) to include the End-of-Day 

Transaction File for U.S. Treasury 

Securities as a separately available daily 

file that includes transaction data for 

On-the-Run Nominal Coupons reported 

to TRACE on that day.31 FINRA would 

similarly amend the definition of 

‘‘Historic TRACE Data’’ in Rule 

7730(g)(4) to add a new definition of 

‘‘Historic Treasury Data Set’’ to include 

all historic transactions in On-the-Run 

Nominal Coupons reported to TRACE. 

Historic Treasury Data would also be 

subject to a minimum six-month delay, 

as is the case currently for the existing 

Historic Corporate Bond and Historic 

Agency Data sets.32 The addition of U.S. 

Treasury Securities to the current 

framework in Rule 7730 for the TRACE 

End-of-Day Transaction File and 

Historic TRACE Data products would 

apply the existing data fees for each 

current TRACE data set to the new U.S. 


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33As for other types of TRACE-Eligible Securities, 

FINRA also anticipates making transaction 

information for On-the-Run Nominal Coupons 

available free of charge for personal, noncommercial purposes only through FINRA’s Fixed 

Income Data website, available at https://

www.finra.org/finra-data/fixed-income. 

34FINRA notes that, unlike for other types of 

TRACE-Eligible Securities, FINRA does not 

currently charge reporting fees for transactions in 

U.S. Treasury Securities. 

35 15 U.S.C. 78o–3(b)(6). 

36 15 U.S.C. 78o–3(b)(9). 

37 15 U.S.C. 78o–3(b)(5). 

38As noted, FINRA shares this data with the 

IAWG, which includes the Treasury Department, 

The Federal Reserve Board, The Federal Reserve 

Bank of New York, the SEC, and the CFTC. See 

supra note 7. 

39The reported statistics include transactions 

reported to TRACE by covered depository 

institutions pursuant to Federal Reserve Board 

requirements. Beginning September 1, 2022, certain 

depository institutions (Covered Depository 

Institutions) were required to report transactions in 

U.S. Treasury Securities, agency debt securities and 

agency mortgage-backed securities (Covered 

Securities) to FINRA’s Trade Reporting and 

Compliance Engine (TRACE). For more information, 

see https://www.finra.org/filing-reporting/trace/ 

federal-reserve-depository-institution-reporting. 

40Reporting parties were identified using market 

participant identifiers (MPIDs). Depository 

institution customers are depository institutions 

with buy-side activity only. 

Treasury data sets.33 FINRA believes 

these fees are reasonable, and notes that, 

as for any of the TRACE data sets, 

subscribing to each product is optional 

for members and others. 

FINRA has an expansive and robust 

regulatory program regarding U.S. 

Treasury Securities, involving TRACE 

reporting requirements; dissemination 

of aggregate data and, if this filing is 

approved, dissemination of individual 

transaction data; surveillance and 

examination for complete and accurate 

reporting; and surveillance, 

examinations, and enforcement for 

manipulation and other unfair and 

prohibited trading practices, both in the 

U.S. Treasury Security market and 

across markets and products. FINRA to 

date has not implemented any 

additional fees to recover its 

implementation or ongoing operation 

costs with respect to its regulatory 

programs concerning activity in U.S. 

Treasury Securities.34 FINRA continues 

to review its revenue and cost structure 

and consider ways to fund its operations 

in this area. FINRA believes the fees 

proposed in the instant filing are 

reasonable given the incremental costs 

to be incurred by FINRA in developing, 

producing, and distributing the new 

U.S. Treasury Security data sets and 

providing ongoing administrative, 

functional, and technical support to 

subscribers. However, FINRA notes that 

such fees will not, and are not designed 

to, recover FINRA’s full costs with 

respect to FINRA’s regulatory programs 

regarding TRACE for U.S. Treasury 

Securities; FINRA intends to further 

consider the most appropriate fee 

structure(s) to recover these costs. 

If the Commission approves the 

proposed rule change, FINRA will 

announce the effective date of the 

proposed rule change in a Regulatory 

Notice. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,35 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest, and Section 15A(b)(9) of 

the Act,36 which requires that FINRA 

rules not impose any burden on 

competition that is not necessary or 

appropriate. FINRA believes that the 

proposal represents an important step in 

enhancing transparency in the U.S. 

Treasury Securities market, consistent 

with the Treasury Department’s 

proposed policy, by beginning 

dissemination of individual transaction 

information in a calibrated and careful 

manner, on an end-of-day basis, limited 

to On-the-Run Nominal Coupons, and 

with appropriate dissemination caps for 

large trades. FINRA believes that 

providing this data to the public would 

improve price transparency for U.S. 

Treasury Securities, benefiting liquidity 

and resilience in this critical market, 

while also mitigating potential 

information leakage concerns that could 

negatively impact market behavior. 

FINRA also believes that the proposed 

rule change is consistent with the 

provisions of Section 15A(b)(5) of the 

Act,37 which requires, among other 

things, that FINRA rules provide for the 

equitable allocation of reasonable dues, 

fees and other charges among members 

and issuers and other persons using any 

facility or system that FINRA operates 

or controls. Pursuant to the proposed 

rule change, FINRA will establish fees 

for (i) the new End-of-Day TRACE 

Transaction file for U.S. Treasury 

Securities and (ii) the new Historic 

TRACE Data product for U.S. Treasury 

Securities. In each case, the fees will be 

the same as those FINRA already 

charges to receive each of the other data 

sets for other types of TRACE-Eligible 

Securities. FINRA believes these fees are 

reasonable and are identical to existing 

fees already in place for end-of-day and 

historic data products for other types of 

TRACE-Eligible Securities. FINRA 

further notes that the fees will be 

applied equally to all similarly situated 

interested parties that choose to 

subscribe to either data product, and 

that subscribing to these data products 

is optional for members and others. 

Thus, FINRA believes that the 

proposed rule change is in the public 

interest and consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Economic Impact Assessment 

FINRA has undertaken an economic 

impact assessment, as set forth below, to 

further analyze the regulatory need for 

the proposed amendments to the 

TRACE rules, their potential economic 

impacts, and the alternatives considered 

in assessing how to best meet FINRA’s 

regulatory objectives. 

Regulatory Need 

Under existing rules, transaction-level 

data in U.S. Treasury Securities 

reported to TRACE is used for 

regulatory and other official sector 

purposes and is not publicly 

disseminated.38 Currently, market 

participants may access some post-trade 

information for U.S. Treasury Securities 

directly through multiple private 

platforms. However, the data provided 

by such private platforms is not 

comprehensive, its content and format 

might vary across venues, and the data 

is available only to those trading on a 

specific platform or subscribing to its 

data services. 

FINRA believes that the proposed 

amendments relating to dissemination 

of individual transaction information for 

U.S. Treasury Securities are consistent 

with FINRA’s ongoing TRACE 

transparency initiatives. The proposal 

may create a more level playing field, 

increase understanding of market 

activity, enhance market liquidity, 

reduce transaction costs, and assist in 

price efficiency and valuation. 

Economic Baseline 

FINRA analyzed secondary market 

activity in U.S. Treasury Securities from 

September 1, 2022, to February 28, 2023 

using transactions reported to TRACE.39

During the six-month sample period, 

there were 941 unique trade reporters 

(904 broker-dealers, 17 ATSs, 15 

depository institutions, and five 

depository institution customers).40

Table 1 shows that, during the sample 


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41Treasury notes and bonds include nominal 

coupon securities and 2-year FRNs. 

42The average transaction size in these securities 

was $2.37 million. The median and the 99th 

percentile are approximately $1 million and $26.76 

million, respectively. 

43The proportion of customer and non-ATS 

trades are substantially lower in On-the-Run 

Nominal Coupons compared to the broader 

Treasury Securities market. Trade sizes for 

transactions in U.S. Treasury Securities that occur 

on an ATS are, on average, smaller than non-ATS 

trades. 

period, there were on average 302,120 

trades per day in all U.S. Treasury 

Securities with an average daily volume 

of approximately $732.01 billion. Daily 

trades in Treasury notes and bonds 41 on 

average accounted for 77.6 percent of all 

daily trades and 74.6 percent of the total 

daily dollar volume in all U.S. Treasury 

Securities, which also includes bills, 

TIPS and STRIPS in addition to notes 

and bonds. 

TABLE 1—TRADING ACTIVITY IN TREASURY SECURITIES

Type 

Number of trades Dollar volume 

Average daily 

(thousands) 

Total 

(MM) 

Average daily 

($B) 

Total 

($T) 

Total ................................................................................................................. 302.12 36.56 732.01 88.57 

Security Type 

Bills .................................................................................................................. 63.17 7.64 165.89 20.07 

Notes & Bonds ................................................................................................. 234.56 28.38 546.27 66.10 

TIPS ................................................................................................................. 2.82 0.34 16.30 1.97 

STRIPS ............................................................................................................ 1.57 0.19 3.55 0.43 

Counterparty Type * 

Customer ......................................................................................................... 83.45 10.10 270.64 32.75 

Dealer .............................................................................................................. 148.87 18.01 301.00 36.42 

Affiliate ............................................................................................................. 11.36 1.38 78.65 9.52 

PTF .................................................................................................................. 58.44 7.07 81.72 9.89 

Venue 

ATS .................................................................................................................. 157.14 19.01 251.15 30.39 

Non-ATS .......................................................................................................... 144.98 17.54 480.86 58.18 

* The ‘‘customer’’ counterparty type includes trades between broker-dealers and customers or between covered depository institutions and customers. The ‘‘dealer’’ counterparty type includes interdealer trades, trades between broker-dealers and covered depository institutions, as well as 

trades among covered depository institutions. The ‘‘affiliate’’ counterparty type includes trades between broker-dealers and non-member affiliates 

or trades between covered depository institutions and non-member affiliates. The ‘‘PTF’’ counterparty type includes trades conducted by principal 

trading firms (PTFs) and other non-FINRA members on a ‘‘covered ATS,’’ as defined in FINRA Rule 6730.07. 

Further analysis of the data shows 

that the average daily number of trades 

and average daily dollar volume of Onthe-Run Nominal Coupons were 

approximately 166,240 and $392.80 

billion respectively which were 

substantially higher than the number 

and volume of trades in off-the-run 

nominal coupons (approximately 68,079 

and $150.18 billion respectively). 

Table 2 provides more detail 

regarding the trades in the On-the-Run 

Nominal Coupons that are subject to the 

proposed amendments. On-the-Run 

Nominal Coupons on average accounted 

for approximately 55 percent of the total 

daily number of trades and 53.7 percent 

of the total daily volume of trades in 

U.S. Treasury Securities during the 

sample period.42 Separating out the 

activity by maturity shows that 5-year 

notes are the most actively traded both 

in terms of the number and volume of 

trades. The analysis also shows active 

interdealer trading and electronic 

trading, as proxied by ATS volume, in 

this market segment and a substantial 

volume of trades by non-FINRA 

members, such as PTFs, on the ATS 

platforms that are subject to Rule 

6730.07.43

TABLE 2—TRADING ACTIVITY IN ON-THE-RUN NOMINAL COUPON TREASURY SECURITIES

Type 

Number of 

trades 

Dollar volume 

Average daily 

(thousands) 

Total 

(MM) 

Average daily 

($B) 

Total 

($T) 

Total ................................................................................................................. 166.24 20.11 392.80 47.53 

Maturity 

2Y ..................................................................................................................... 21.99 2.66 60.19 7.28 

3Y ..................................................................................................................... 20.19 2.44 53.27 6.45 

5Y ..................................................................................................................... 46.72 5.65 115.38 13.96 

7Y ..................................................................................................................... 13.76 1.66 31.85 3.85 

10Y ................................................................................................................... 43.95 5.32 94.24 11.40 

20Y ................................................................................................................... 5.14 0.62 10.66 1.29 


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44See supra note 13. 

45See Additional Transparency for Secondary 

Market Transactions of Treasury Securities (October 

2022), https://www.sifma.org/wp-content/uploads/ 

2022/10/FINAL-SIA-SIFMA-REPORT-AdditionalTransparency-for-Secondary-Market-Transactionsof-Treasury-Securities.pdf. 

46See TBAC Findings, supra note 12. 

47See, e.g., comment letters from CME Group Inc. 

and JPMorgan Chase & Co., available at https://

www.regulations.gov/docket/TREAS-DO-2022- 

0012/comments. 

48See, e.g., comment letters from Spatt, Hollifield 

& Neklyudov; Jane Street Capital, LLC; MarketAxess 

Holdings Inc.; and Citadel Securities, available at 

https://www.regulations.gov/docket/TREAS-DO2022-0012/comments. 

49See Sia Partners/SIFMA survey, supra note 45, 

at 9–10. 

50The studies interpret the effect on other bonds 

as a ‘‘liquidity spillover’’ where the traded prices 

of disseminated bonds provided useful information 

for valuing bonds whose trades were not 

disseminated. See Hendrik Bessembinder, William 

Maxwell & Kumar Venkataraman, Market 

Transparency, Liquidity Externalities, and 

Institutional Trading Costs in Corporate Bonds, 

82(2) Journal of Financial Economics 251–288 

(2006); Amy K. Edwards, Lawrence E. Harris & 

Michael S. Piwowar, Corporate Bond Market 

Transaction Costs and Transparency, 62(3) The 

Journal of Finance 1421–1451 (2007); Michael A. 

Goldstein, Edith S. Hotchkiss & Erik R. Sirri, 

Transparency and Liquidity: A Controlled 

Experiment on Corporate Bonds, 20(2) The Review 

of Financial Studies 235–273 (2007); Hendrik 

Bessembinder & William Maxwell, Markets: 

Transparency and the Corporate Bond Market, 22(2) 

The Journal of Economic Perspectives 217–234 

(2008). 

51See Erik R. Sirri, Report on Secondary Market 

Trading in the Municipal Securities Market (2014), 

https://www.msrb.org/sites/default/files/2022-09/ 

MSRB-Report-on-Secondary-Market-Trading-in-theMunicipal-Securities-Market.pdf; John Chalmers, 

Yu Liu & Z. Jay Wang, The Difference a Day Makes: 

Timely Disclosure and Trading Efficiency in the 

Muni Market, 139(1) Journal of Financial 

Economics 313–335 (2021); Paul Schultz & 

Zhaogang Song, Transparency and Dealer Networks: 

Evidence from the Initiation of Post-Trade 

Reporting in the Mortgage Backed Security Market, 

133(1) Journal of Financial Economics 113–133 

(2019). 

TABLE 2—TRADING ACTIVITY IN ON-THE-RUN NOMINAL COUPON TREASURY SECURITIES—Continued 

Type 

Number of 

trades 

Dollar volume 

Average daily 

(thousands) 

Total 

(MM) 

Average daily 

($B) 

Total 

($T) 

30Y ................................................................................................................... 14.50 1.75 27.21 3.29 

Counterparty Type 

Customer ......................................................................................................... 10.34 1.25 100.87 12.20 

Dealer .............................................................................................................. 90.93 11.00 184.99 22.38 

Affiliate ............................................................................................................. 7.02 0.85 33.47 4.05 

PTF .................................................................................................................. 57.95 7.01 73.48 8.89 

Venue 

ATS .................................................................................................................. 130.17 15.75 184.87 22.37 

Non-ATS .......................................................................................................... 36.07 4.36 207.93 25.16 

Economic Impacts 

Given the unique and fundamental 

role of the U.S. Treasury Securities 

market in the global economy, 

promoting the market’s liquidity, 

efficient functioning, and resilience in 

times of stress is crucial both to 

Treasury market participants and the 

broader financial system. 

The following sections outline the 

potential benefits and costs of the 

proposed dissemination of end-of-day 

and historical transaction-level 

information for On-the-Run Nominal 

Coupons, with appropriate 

dissemination caps for large trades. The 

discussion is informed by the public 

comments submitted in response to the 

Treasury Department’s RFI,44 the Sia 

Partners/SIFMA survey results,45 TBAC 

Findings,46 and the academic literature. 

Anticipated Benefits 

While the RFI and survey respondents 

expressed mixed opinions on the impact 

of increased transparency on market 

liquidity and resilience, they broadly 

supported a gradual and calibrated 

approach to providing additional 

transparency in the Treasury Security 

market.47 The anticipated benefits 

included reducing trading costs, 

increasing liquidity, incentivizing 

intermediation and promoting 

additional participation, increasing 

market confidence, enhancing risk 

management, and higher market 

resilience during times of stress.48 Some 

respondents indicated that having 

access to transaction-level information 

could lead to improved price discovery 

and trade execution for both investors 

and dealers. Others indicated that 

additional transparency would assist 

quantitative trading firms as electronic 

trading becomes more prevalent.49

The academic literature also provides 

insights on the effects of post-trade 

transparency in other fixed income 

markets and investigates the effect of 

transparency on price discovery, market 

liquidity, and the welfare of different 

classes of market participants. Several 

studies found that the transparency 

following the initiation of TRACE 

resulted in substantially lower trading 

costs and bid-ask spreads in the 

corporate bond market, not only for 

bonds whose trades were disseminated, 

but for other bonds as well.50 Studies on 

the impacts of post-trade transparency 

in the municipal bond market and 

securitized products market also 

reported reduced transaction costs as a 

result of additional transparency.51

These results are consistent with 

investors’ ability to negotiate better 

prices in the presence of post-trade 

transparency. 

FINRA believes that end-of-day public 

dissemination of transaction 

information on On-the-Run Nominal 

Coupons, as described above, would 

similarly benefit market participants by 

providing access to a single-source, 

comprehensive data set, subject to the 

proposed fees. The availability of this 

information, together with the historic 

TRACE data product for U.S. Treasury 

Securities, may also prompt further 

research and facilitate a better 

understanding of the U.S. Treasury 

Securities market, ultimately benefiting 

investors and other market participants 

and providing insight into how to better 

support the resiliency of the U.S. 

Treasury Securities market in times of 

stress. 

Anticipated Costs 

Market participants (and dealers in 

particular) expressed a concern in 

response to the Treasury Department’s 

RFI and Sia Partners/SIFMA survey that 

releasing transaction details could 

potentially expose trading strategies or 


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52See, e.g., comment letters from Citigroup 

Global Markets Inc.; Vanguard Group, Inc.; and the 

joint comment letter from SIFMA, SIFMA AMG, 

ABASA, and IIB, available at https://

www.regulations.gov/docket/TREAS-DO-2022- 

0012/comments. 

53See TBAC Findings, supra note 12, at 7. 

54See Hendrik Bessembinder & William Maxwell, 

Markets: Transparency and the Corporate Bond 

Market, 22(2) The Journal of Economic Perspectives 

217–234 (2008). 

55See Paul Asquith, Thomas Covert & Parag A. 

Pathak, The Effects of Mandatory Transparency in 

Financial Market Design: Evidence from the 

Corporate Bond Market (2019), available at https:// 

ssrn.com/abstract=2320623; Bruce Mizrach, 

Analysis of Corporate Bond Liquidity (2015), 

https://www.finra.org/sites/default/files/OCE_

researchnote_liquidity_2015_12.pdf; Greenwich 

Associates, In Search of New Corporate Bond 

Liquidity (2016) available at https://

www.greenwich.com/fixed-income-fx-cmds/searchnew-corporate-bond-liquidity; Schultz & Song, 

supra note 51. 

56The bulk re-distribution of the data is permitted 

subject to a different fee structure or additional 

restrictions, as discussed above. 

positions to competitors and impede 

dealers’ ability to appropriately manage 

risk and confidentially hedge their 

positions. If true, this could decrease 

intermediaries’ risk-taking capacity and 

their willingness to participate, leading 

to a decline in liquidity supply and 

market resilience during stressed 

conditions. These concerns were mostly 

directed to the less-liquid market 

segments, larger trade sizes, and realtime dissemination.52 Most commenters 

and respondents believed that there was 

limited risk to the delayed 

dissemination of the transaction-level 

information for On-the-Run Nominal 

Coupons with appropriate transaction 

size dissemination caps. Some RFI 

commentors indicated that additional 

transparency could impact market 

participants’ trading behavior by 

incentivizing market participants to 

engage in smaller size trades or other 

behaviors to avoid dissemination, such 

as attempting to move flows outside the 

U.S. market.53 Generally, the RFI and 

survey respondents shared the view that 

introducing additional post-trade 

transparency in the U.S. Treasury 

Securities market requires careful and 

prudent implementation to avoid 

disrupting market functioning. 

The academic papers and industry 

reports that studied the impacts of posttrade transparency in other markets 

have found evidence of dealers’ 

reluctance to carry inventory in the 

disseminated securities and moving 

flow to alternative markets.54 Others 

found evidence of difficulty in 

executing larger trades, reduced trading 

volume and transaction size— 

particularly in riskier and less liquid 

assets.55

Accordingly, the proposed rule 

change incorporates multiple mitigants, 

developed in consultation with the 

Treasury Department, to address these 

concerns. First, the scope of the 

proposed rule change is limited to only 

transactions in On-the-Run Nominal 

Coupons, which are highly liquid. 

Second, delayed, end-of-day 

dissemination would further protect 

market participants against information 

leakage. Third, FINRA has conducted 

careful analysis and consulted with 

Treasury to specify appropriate 

transaction size dissemination caps 

calibrated to the maturity, liquidity and 

trading concentration in the underlying 

security to preserve the anonymity of 

market participants trading large 

transactions. In setting the proposed 

transaction size dissemination caps, 

FINRA considered both the percentage 

of traded market volume that would be 

disseminated (versus reported) across 

each maturity along with the daily 

number of unique intermediaries 

trading each security at or above the cap 

size for each maturity. This approach 

balances providing similar levels of 

transparency across maturities with 

sensitivity to information leakage 

concerns regarding reverse engineering 

of other market participants’ identities, 

positions, or trading strategies. In this 

regard, FINRA analyzed the 

concentration of dealer activity and 

market liquidity in trades above various 

cap sizes in each specific Treasury 

maturity. 

The proposed dissemination caps 

would—across all maturities—result in 

0.09 percent of transactions being 

capped. Specifically, for the two-year, 

three-year, and five-year notes (which 

would be subject to a $250 million 

dollar cap), 0.08 percent, 0.08 percent, 

and 0.03 percent of transactions, 

respectively, would be capped upon 

dissemination (i.e., because the size of 

the trade was greater than $250 million); 

for the seven-year and 10-year notes 

(which would be subject to a $150 

million dollar cap), 0.13 percent and 

0.05 percent of transactions, 

respectively, would be capped upon 

dissemination (i.e., because the size of 

the trade was greater than $150 million); 

and for the 20-year and 30-year bonds 

(which would be subject to a $50 

million dollar cap), 0.39 percent and 

0.29 percent of transactions, 

respectively, would be capped upon 

dissemination (i.e., because the size of 

the trade was greater than $50 million). 

There is no anticipated operational 

impact on member firms as a result of 

FINRA’s proposed end-of-day and 

historical dissemination of On-the-Run 

Nominal Coupon data, as reporting 

requirements will remain unchanged. 

As noted above, the disseminated data 

would be available to market 

participants for a fee. The proposed fees 

for the Treasury data set are the same as 

those that exist for other types of 

TRACE-Eligible Securities. FINRA does 

not anticipate any negative competitive 

effects as a result of the proposed fees. 

The proposed end-of-day and historical 

dissemination of transactions in On-theRun Nominal Coupon U.S. Treasury 

Securities, subject to their related fees, 

will provide an option for all market 

participants, including smaller firms, to 

access post-trade transparency in the 

U.S. Treasury Securities market at a 

reasonable cost. Some market 

participants may choose to access the 

data indirectly through their data 

vendors as the vendors may externally 

display the data.56 Those market 

participants who choose to access the 

data directly through FINRA may incur 

an additional cost to set up the 

technological infrastructure necessary to 

access the data if they are not already 

subscribed to other TRACE data 

products. On balance, market 

participants would only incur costs if 

they determine that the benefits of 

receiving the data outweigh the costs. 

Alternatives Considered 

FINRA, in consultation with the 

Treasury Department, considered 

several alternatives with respect to the 

scope of the Treasury Securities that 

would be subject to dissemination 

under the proposed rule change, 

dissemination timeframes, and 

transaction size dissemination caps. 

Scope of the Treasury Securities Subject 

to Dissemination 

Regarding the scope of the U.S. 

Treasury Securities proposed to be 

subject to dissemination, FINRA 

considered including off-the-run and 

other types of U.S. Treasury Securities. 

However, since On-the-Run Nominal 

Coupons are both highly liquid and 

represent a significant portion of the 

Treasury Securities volume, FINRA 

believes that disseminating transactionlevel data for On-the-Run Nominal 

Coupons would improve Treasury 

Securities market transparency with 

limited risk for market participants. The 

RFI and survey respondents’ concerns 

regarding the potential impact of 

disseminating transaction data on their 

ability to manage their inventory risk 

were more pronounced for the lessliquid segments of the market, such as 

off-the-run U.S. Treasury Securities. 


ddrumheller on DSK120RN23PROD with NOTICES1
77396 Federal Register / Vol. 88, No. 216 / Thursday, November 9, 2023 / Notices 

57FINRA also notes that covered depository 

institutions that report to TRACE pursuant to 

Federal Reserve Board requirements generally 

report transactions in U.S. Treasury Securities to 

TRACE by the end of the day. Thus, not all 

transactions in U.S. Treasuries reported to TRACE 

are subject to a one-hour timeframe, which is 

another factor that FINRA considered in connection 

with the proposed rule change. 58 17 CFR 200.30–3(a)(12). 

Dissemination Timeframe 

FINRA also considered real-time and 

less delayed dissemination of 

transaction level data as potential 

dissemination timeframe alternatives. 

However, weighing the potential 

benefits of providing the market with 

more timely data against concerns about 

protecting the confidentiality of market 

participants’ positions and trading 

strategies, FINRA believes that, on 

balance, end-of-day dissemination will 

prudently balance the timeliness of 

transparency and concerns regarding 

potential negative impacts. End-of-day 

dissemination will provide FINRA and 

others the ability to research the 

proposed rule change’s impact.57

Transaction Size Caps 

FINRA considered setting a single 

transaction size dissemination cap 

applicable to all transactions in On-theRun Nominal Coupons. However, since 

liquidity and trading volume varies 

across U.S. Treasury Securities with 

different maturities, FINRA, in 

consultation with the Treasury 

Department, determined that it is 

appropriate to propose dissemination 

caps that are calibrated to the maturity, 

liquidity, interest rate sensitivity, and 

trading concentration of the underlying 

U.S. Treasury Security. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) by order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

FINRA–2023–015 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–FINRA–2023–015. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–FINRA–2023–015 and should be 

submitted on or before November 30, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.58

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–24758 Filed 11–8–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

35046; File No. 812–15392] 

Kayne Anderson Energy Infrastructure 

Fund, Inc., et al. 

November 6, 2023. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’). 

ACTION: Notice. 

Notice of application for an order 

(‘‘Order’’) under sections 17(d) and 57(i) 

of the Investment Company Act of 1940 

(the ‘‘Act’’) and rule 17d–1 under the 

Act to permit certain joint transactions 

otherwise prohibited by sections 17(d) 

and 57(a)(4) of the Act and rule 17d–1 

under the Act. 

SUMMARY OF APPLICATION: Applicants 

request an order to amend a previous 

order granted by the Commission that 

permits certain business development 

companies (‘‘BDCs’’) and closed-end 

management investment companies to 

co-invest in portfolio companies with 

each other and with certain affiliated 

investment entities. 

APPLICANTS: Kayne Anderson Energy 

Infrastructure Fund, Inc., Kayne 

Anderson Nextgen Energy & 

Infrastructure, Inc., Kayne Anderson 

BDC, Inc., Kayne DL 2021, Inc., Kayne 

Anderson Capital Income Partners (QP), 

L.P., Kayne Anderson Infrastructure 

Income Fund, L.P., Kayne Anderson 

Midstream Institutional Fund, L.P., 

Kayne Anderson MLP Fund, L.P., Kayne 

Equity Yield Strategies, L.P., Kayne 

Simplified Midstream, L.P., Kayne 

Senior Credit Fund III, L.P., Kayne 

Senior Credit III Offshore Fund, L.P., 

Kayne Liquid Credit Fund, L.P., KA 

Credit Advisors, LLC, KA Credit 

Advisors II, LLC, KA Fund Advisors, 

LLC, Kayne Anderson Capital Advisors, 

L.P., Kayne Anderson Fund Advisors, 

LLC, Kayne Senior Credit III Manager, 

L.P., Kayne Senior Credit Funding III, 

LLC, Kayne Senior Credit Funding III 

Offshore, LLC, Kayne Senior Credit III 

Mini-Master Fund, L.P., Kayne Senior 

Credit IV Manager, L.P., Kayne Senior 

Credit Fund IV, L.P., Kayne Senior 

Credit IV Mini-Master Fund, L.P., Kayne 

Senior Credit IV Offshore Fund, L.P., 


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