33844 Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Notices 

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). 

NRC EXPORT LICENSE APPLICATION—Continued 

Country of Destination ........................................ Belgium. 

Dated: May 27, 2022. 

For the Nuclear Regulatory Commission. 

David L. Skeen, 

Deputy Director, Office of International 

Programs. 

[FR Doc. 2022–11854 Filed 6–2–22; 8:45 am] 

BILLING CODE 7590–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: Notice is hereby given, 

pursuant to the provisions of the 

Government in the Sunshine Act, Public 

Law 94–409, that the Securities and 

Exchange Commission Investor 

Advisory Committee will hold a public 

meeting on Thursday, June 9, 2022. The 

meeting will begin at 10:00 a.m. (ET) 

and will be open to the public. 

PLACE: The meeting will be conducted 

by remote means. Members of the public 

may watch the webcast of the meeting 

on the Commission’s website at 

www.sec.gov. 

STATUS: This Sunshine Act notice is 

being issued because a majority of the 

Commission may attend the meeting. 

PUBLIC COMMENT: The public is invited 

to submit written statements to the 

Committee. Written statements should 

be received on or before June 8, 2022. 

Written statements may be submitted 

by any of the following methods: 

Electronic Statements 

• Use the Commission’s internet 

submission form (http://www.sec.gov/ 

rules/other.shtml); or 

• Send an email message to rulescomments@sec.gov. Please include File 

No. 265–28 on the subject line; or 

Paper Electronic Statements 

• Send paper statements to Vanessa 

A. Countryman, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

No. 265–28. This file number should be 

included on the subject line if email is 

used. To help us process and review 

your statement more efficiently, please 

use only one method. 

Statements also will be available for 

website viewing and printing in the 

Commission’s Public Reference Room, 

100 F Street NE, Room 1503, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. All statements 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. 

MATTERS TO BE CONSIDERED: The agenda 

for the meeting includes: Welcome and 

introduction of new IAC members; 

opening remarks; approval of previous 

meeting minutes; a panel discussion 

regarding the accounting of nontraditional financial information; a 

panel discussion regarding climate 

disclosure; a discussion of a 

recommendation on protecting older 

investors, a discussion of a 

recommendation on funding investor 

advocacy clinics, subcommittee reports; 

and a non-public administrative session. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed; please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Authority: 5 U.S.C. 552b. 

Dated: June 1, 2022. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2022–12120 Filed 6–1–22; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95003; File No. SR–FINRA– 

2022–013] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of a 

Proposed Rule Change To Amend 

FINRA Rule 6730 To Enhance TRACE 

Reporting Obligations for U.S. 

Treasury Securities 

May 27, 2022. 

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 May 23, 

2022, the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II 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 amend FINRA 

Rule 6730 to: (i) Require members to 

report electronically executed 

transactions in U.S. Treasury Securities 

to FINRA’s Trade Reporting and 

Compliance Engine (‘‘TRACE’’) in the 

finest increment captured by the system 

used to execute the transaction, subject 

to an exception for members with 

limited trading volume in U.S. Treasury 

Securities; and (ii) reduce the trade 

reporting timeframe for transactions in 

U.S. Treasury Securities to generally 

require reporting to TRACE as soon as 

practicable but no later than 60 minutes. 

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 


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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. 

6On March 10, 2020, FINRA began posting on its 

website weekly, aggregate data on the trading 

volume of U.S. Treasury Securities reported to 

TRACE. See 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). Information on 

individual transactions in U.S. Treasury Securities 

is not published or disseminated. 

7The Treasury Department, the Board of 

Governors of the Federal Reserve System (the 

‘‘Federal Reserve’’), the Federal Reserve Bank of 

New York, the SEC and the U.S. Commodity 

Futures Trading Commission comprise the InterAgency Working Group for Treasury Market 

Surveillance (IAWG or ‘‘official sector’’). 

8Currently, the TRACE reporting requirements 

apply only to FINRA members. However, FINRA 

notes that the Federal Reserve has approved a rule 

change that will require certain non-FINRA member 

banks to begin reporting information on 

transactions in specified fixed income securities, 

including U.S. Treasury Securities, to TRACE. See 

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)). 

9Under Rule 6710(d), the ‘‘Time of Execution’’ 

generally means the time when the parties to a 

transaction agree to all of the terms of the 

transaction that are sufficient to calculate the dollar 

price of the trade. 10Existing Supplementary Material .04 provides 

that a member must report ‘‘at a minimum, in 

increment of seconds.’’ As discussed below, to 

avoid confusion, the proposed amendments update 

this language to clarify that members must report 

trades in an increment of ‘‘no longer than a second’’ 

and no shorter than a microsecond. TRACE 

currently cannot accept a Time of Execution in an 

increment that is finer than a microsecond. The 

proposed rule change would also make a nonsubstantive edit to Supplementary Material .04 to 

capitalize the defined term ‘‘Time of Execution.’’ 

11Specifically, TRACE Treasury FAQ #3.5.8 

provides as follows: Question: Our firm will use 

two separate systems to facilitate trade reporting of 

U.S. Treasury Securities for different business lines. 

One system (‘‘System A’’) has the capability to 

capture the time of execution to the millisecond; 

however, the second system (‘‘System B’’) will only 

capture the time of execution to the second. Will 

our firm be required to update System B to capture 

the time of execution to the millisecond? Answer: 

No. The rule requires members to report the time 

of electronic executions to the finest increment of 

time captured in the member’s system (e.g., 

millisecond, microsecond), but at a minimum, in 

increments of seconds. Since the firm would be 

reporting the time of execution to the finest 

increment captured by each system, the firm would 

not need to make any updates to System B to 

comply with a finer time increment. 

12For purposes of Supplementary Material .04, 

FINRA would consider the relevant execution 

system to be the system used to execute the 

particular U.S. Treasury Security transaction being 

reported to TRACE, regardless of whether the 

member is using its own internal systems for 

execution or if the transaction is executed through 

an external system. For example, if a member 

executes a transaction in a U.S. Treasury Security 

through an alternative trading system (‘‘ATS’’) or 

other electronic trading platform, the member 

would be required to report in the finest increment 

of time captured by such ATS or electronic trading 

platform (but no finer than a microsecond, in line 

with TRACE system parameters). 

13The TRACE system does not accept trade 

reports in increments finer than a microsecond. 

Where a firm captures time in a finer increment, the 

firm must truncate the time when reporting the 

transaction to TRACE. Specifically, TRACE FAQ 

#3.5.37 provides as follows: Question: Is rounding 

permitted when reporting the Time of Execution of 

a U.S. Treasury Security transaction to TRACE? 

Answer: No. Members must accurately report a 

transaction’s Time of Execution and are not 

permitted to round when reporting to TRACE. The 

TRACE system can accommodate reporting up to 

the microsecond and, where the firm captures time 

in an increment finer than microseconds, the firm 

must truncate when reporting to TRACE. 

14See supra note 12. In connection with the 

proposed rule change, FINRA would also amend its 

existing TRACE FAQs to clarify that a member must 

report using the finest increment of time captured 

by the execution system, and therefore may need to 

update other systems to enable trade reporting 

using the execution system’s level of timestamp 

granularity. 

Securities 4 to TRACE.5 Information 

reported to TRACE regarding 

transactions in U.S. Treasury Securities 

is used for regulatory and other official 

sector purposes and is not disseminated 

publicly.6 Among other regulatory uses, 

FINRA makes the data available to the 

official sector to assist them in the 

monitoring and analysis of the U.S. 

Treasury Security markets.7

Since members began reporting U.S. 

Treasury Security transaction 

information to TRACE,8 FINRA has 

continued to study the data and, in 

consultation with the Treasury 

Department, consider potential ways to 

enhance the quality and availability of 

the data for FINRA and the official 

sector. FINRA is now proposing two 

changes to its TRACE reporting rules to 

enhance the regulatory audit trail and 

require members to report transactions 

in U.S. Treasury Securities to FINRA in 

a more timely manner. The first 

proposed change would require 

members to report electronically 

executed transactions in U.S. Treasury 

Securities to TRACE in the finest 

increment captured by the system that 

executed the transaction, as discussed 

below. FINRA is proposing to provide 

an exception from the amended 

execution timestamp provision for 

members with limited trading volume in 

U.S. Treasury Securities. The second 

proposed change would reduce the 

reporting timeframe for transactions in 

U.S Treasury Securities, as discussed 

further below. 

Execution Timestamps 

Existing Supplementary Material .04 

to Rule 6730 provides that, when 

reporting transactions in U.S. Treasury 

Securities executed electronically to 

TRACE, members must report the Time 

of Execution 9 pursuant to paragraph 

(c)(8) of Rule 6730 to the finest 

increment of time captured by the 

member’s system (e.g., millisecond, 

microsecond), but at a minimum, in 

increments of seconds.10 The 

‘‘member’s system’’ referenced in the 

existing rule refers to the system that is 

used to report the transaction to TRACE 

(i.e., the member’s ‘‘reporting system’’). 

Under the existing rule and related 

guidance, if a member uses multiple 

systems to facilitate trade reporting and 

those systems differ in granularity, then 

the member may use the finest 

increment that is common across all 

systems.11 As a result, currently 

members may use a reporting system to 

report a trade to TRACE in an increment 

of time that is less precise than that 

captured by the system that is used to 

execute the transaction (i.e., the 

‘‘execution system’’).12

To improve the granularity and 

consistency of transaction information 

for U.S. Treasury Securities, FINRA is 

proposing to amend Supplementary 

Material .04 to Rule 6730 to instead 

provide that, when reporting 

transactions in U.S. Treasury Securities 

executed electronically, members must 

report the Time of Execution pursuant 

to paragraph (c)(8) of Rule 6730 to the 

finest increment of time captured by the 

execution system (e.g., millisecond, 

microsecond), but reporting must be in 

an increment of (i) no longer than a 

second and (ii) no shorter than a 

microsecond. Amended Supplementary 

Material .04 would not require members 

to update execution systems for U.S. 

Treasury Securities—instead members 

must update their reporting systems, if 

necessary, to ensure that their TRACE 

reports reflect the finest increment of 

time captured by the execution system 

(but not finer than a microsecond).13

Therefore, a member may be required to 

update its reporting system for U.S. 

Treasury Securities if such reporting 

system does not currently report to 

TRACE to the same level of granularity 

as the execution system.14

For example, if the execution system 

captures time in milliseconds but the 

reporting system for U.S. Treasury 

Security transactions reports the Time 


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15The proposed rule change would also make 

non-substantive, conforming edits to the 

Supplementary Material to Rule 6730. Specifically, 

existing Supplementary Material .06 to Rule 6730 

provided a temporary exception for aggregate 

transaction reporting of U.S. Treasury Securities 

executed in ATS trading sessions. By its terms, that 

temporary exception expired on April 12, 2019. 

Therefore, FINRA is proposing to delete the 

temporary exception under existing Supplementary 

Material .06, renumber existing Supplementary 

Material .07 (ATS Identification of Non-FINRA 

Member Counterparties for Transactions in U.S. 

Treasury Securities) as Supplementary Material .06 

and add the new exception for members with 

limited trading volume in U.S. Treasury Securities 

as new Supplementary Material .07. 

16Under the proposed rule change, once a 

member’s activity falls outside of the scope of the 

proposed criteria based on its trading activity 

during a given preceding calendar year, such 

member generally may no longer rely on the 

exception beginning 90 days after the end of such 

calendar year, irrespective of whether it again meets 

the criteria in a subsequent calendar year. However, 

a member may consult with FINRA staff regarding 

the availability of the exception where the member 

has changed business lines or undergone a 

corporate restructuring that significantly impacts its 

level of activity in U.S. Treasury Securities. 

17Under Rule 6710(t), ‘‘TRACE System Hours’’ 

means the hours the TRACE system is open, which 

are 8:00:00 a.m. Eastern Time through 6:29:59 p.m. 

Eastern Time on a business day, unless otherwise 

announced by FINRA. 

18FINRA is not proposing to provide an 

exception for members with limited trading activity 

in U.S. Treasury Securities from the proposed 

reduced reporting timeframe requirement. 

19 In connection with the proposed changes to 

Rule 6730(a)(4) discussed above, the proposed rule 

change would also make conforming changes to 

Supplementary Material .03 to Rule 6730, which 

sets forth standards for firms reporting transactions 

‘‘as soon as practicable’’ after the Time of Execution 

in accordance with Rule 6730(a). Existing Rule 

6730.03 provides that ‘‘[e]ach member with a trade 

reporting obligation pursuant to paragraph (a) above 

for a TRACE-Eligible Security that is subject to 

dissemination must adopt policies and procedures 

reasonably designed to comply with the 

requirement that transactions in TRACE-Eligible 

Securities be reported ‘as soon as practicable’ by 

implementing systems that commence the trade 

reporting process at the Time of Execution without 

delay.’’ Under the proposed rule change, the ‘‘as 

soon as practicable’’ standard would also apply to 

transactions in U.S. Treasury Securities, which are 

not subject to dissemination. Therefore, FINRA is 

proposing to update the first sentence of Rule 

6730.03 to provide that ‘‘[e]ach member with an 

obligation to report a transaction in a TRACEEligible Security ‘as soon as practicable’ pursuant 

to paragraph (a) of this Rule must adopt policies 

and procedures reasonably designed to comply with 

this requirement by implementing systems that 

commence the trade reporting process at the Time 

of Execution without delay.’’ 

of Execution in seconds, the member 

would be required to update its 

reporting system to report the Time of 

Execution in milliseconds. Similarly, if 

a member’s reporting system reports 

transactions in U.S. Treasury Securities 

in milliseconds but the member 

executes trades on an ATS that captures 

the execution times in microseconds, 

the member would be required to 

update its reporting system to report the 

Time of Execution in microseconds. 

FINRA believes the proposed change 

would result in FINRA and the official 

sector receiving more precise 

information with respect to the Time of 

Execution of transactions in U.S. 

Treasury Securities, which would assist 

with trade matching and sequencing for 

U.S. Treasury Securities. 

FINRA is, however, proposing to add 

new Supplementary Material .07 to Rule 

6730 to provide a limited exception for 

members with limited trading volume in 

U.S. Treasury Securities from the 

proposed requirement to report 

electronically executed transactions in 

U.S. Treasury Securities to the finest 

increment of time captured by the 

execution system.15 The proposed 

Supplementary Material would define a 

‘‘member with limited trading volume 

in U.S. Treasury Securities’’ as a 

member that executed transactions in 

U.S. Treasury Securities of $10 million 

or less in average daily par value, 

computed by aggregating buy and sell 

transactions, during the preceding 

calendar year. Where a member’s 

activity is below the proposed criteria 

during the preceding calendar year, 

such member would not be required to 

report transactions in U.S. Treasury 

Securities in the finest increment 

captured by the execution system and 

would be permitted to continue to 

report the Time of Execution for 

transactions in U.S. Treasury Securities 

executed electronically as it does today 

for the duration of the following 

calendar year. 

Under the proposed rule change, a 

member that relies on the exception for 

limited trading volume would be 

required to confirm on an annual basis 

that it continues to meet the criteria for 

the exception based on its trading 

activity during the preceding calendar 

year. Where a member no longer meets 

the criteria for the exception based on 

its trading activity during a given 

preceding calendar year, the member 

may no longer rely on the exception 

beginning 90 days after the end of such 

calendar year, which FINRA believes 

would provide such members with a 

sufficient amount of time to make any 

systems changes that may be needed to 

comply with the amended timestamp 

requirement.16

As discussed further below in the 

Economic Impact Assessment, FINRA 

believes that providing an exception 

from the amended execution timestamp 

requirement is appropriate as it would 

apply the enhanced obligations under 

the rule and associated burdens to the 

members that engage in substantial 

trading activity in U.S. Treasury 

Securities (based on the $10 million 

average daily par value traded 

threshold). 

Reporting Timeframe Reduction 

Under existing Rule 6730(a)(4)(A), 

transactions in U.S. Treasury Securities 

executed on a business day at or after 

12:00:00 a.m. Eastern Time through 

5:00:00 p.m. Eastern Time must be 

reported the same day during TRACE 

System Hours, i.e., 8:00:00 a.m. Eastern 

Time through 6:29:59 p.m. Eastern 

Time.17 A transaction executed on a 

business day after 5:00:00 p.m. Eastern 

Time but before the TRACE system 

closes can be reported the same day 

before the TRACE system closes, but 

must be reported no later than the next 

business day (T+1) during TRACE 

System Hours, i.e., 8:00:00 a.m. Eastern 

Time through 6:29:59 p.m. Eastern 

Time, and, if reported on T+1, 

designated ‘‘as/of’’ and include the date 

of execution. Finally, a transaction 

executed on a business day at or after 

6:30:00 p.m. Eastern Time through 

11:59:59 p.m. Eastern Time (or a 

Saturday, a Sunday, a federal or 

religious holiday or other day on which 

the TRACE system is not open at any 

time during that day) must be reported 

the next business day (T+1) during 

TRACE System Hours, i.e., 8:00:00 a.m. 

Eastern Time through 6:29:59 p.m. 

Eastern Time, designated ‘‘as/of,’’ and 

include the date of execution. 

To provide more timely information 

about transactions in U.S. Treasury 

Securities, FINRA is proposing to 

amend Rule 6730(a)(4) to reduce the 

trade reporting timeframe as follows.18

Amended Rule 6730(a)(4) would 

provide that transactions in U.S. 

Treasury Securities must be reported as 

soon as practicable, but no later than the 

following time periods.19 Amended 

Rule 6730(a)(4)(A) would require that a 

transaction executed on a business day 

at or after 12:00:00 a.m. Eastern Time 

through 7:59:59 a.m. Eastern Time must 

be reported the same day no later than 

60 minutes after the TRACE system 

opens. A transaction executed on a 

business day at or after the time the 

TRACE system opens at 8:00:00 a.m. 

Eastern Time through when the TRACE 

system closes at 6:29:59 p.m. Eastern 

Time (standard TRACE System Hours) 

must be reported within 60 minutes of 

the Time of Execution, except that a 

transaction executed on a business day 

less than 60 minutes before 6:30:00 p.m. 

Eastern Time can be reported the same 

day before the TRACE system closes, 

but must be reported no later than 60 

minutes after the TRACE system opens 

the next business day (T+1), and if 

reported on T+1, designated ‘‘as/of’’ and 


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20 15 U.S.C. 78o–3(b)(6). 

21 In selecting a sample period, FINRA also 

analyzed trade reports during the 2020 calendar 

year, which includes the March 2020 stress period, 

and found no significant difference in the statistics 

over the 2020 calendar year as compared to the 

statistics over the July 2020 to June 2021 period. 

22The analysis considers all transaction reports 

for the purpose of the rule, and thus differs from 

the weekly aggregated statistics published by 

FINRA, which adjusts for multiple reporting of 

trades where a trade involves an ATS or both sides 

are FINRA members. See supra note 6. 

23FINRA has analyzed the number of transactions 

executed on or through an ATS because these are 

a readily identifiable subset of all electronically 

executed transactions. 

include the date of execution. Finally, a 

transaction executed on a business day 

at or after 6:30:00 p.m. Eastern Time 

through 11:59:59 p.m. Eastern Time, or 

a Saturday, a Sunday, a federal or 

religious holiday or other day on which 

the TRACE system is not open at any 

time during that day (determined using 

Eastern Time) must be reported the next 

business day (T+1) no later than 60 

minutes after the TRACE system opens, 

designated ‘‘as/of,’’ and include the date 

of execution. 

FINRA believes the proposal to 

require that members report transactions 

in U.S. Treasury Securities to TRACE as 

soon as practicable, but no later than 

within 60 minutes of the Time of 

Execution (or within 60 minutes after 

the TRACE system opens for trades 

executed during specified periods, as 

described above) is a beneficial next 

step towards providing FINRA and the 

official sector with more timely 

information about activity in the U.S. 

Treasury Security markets than the 

current reporting timeframe, including 

more timely data about intraday pricing 

and liquidity. As discussed further in 

the Economic Impact Assessment, 

FINRA also notes that members already 

report over 90 percent of transactions in 

U.S. Treasury Securities within 60 

minutes of the Time of Execution. 

FINRA will continue to consider 

whether further reducing the reporting 

timeframe for U.S. Treasury Securities 

may be beneficial. 

If the Commission approves the 

proposed rule change, FINRA will 

announce the effective date of the 

proposed rule change in a Regulatory 

Notice. The effective date will be no 

later than 365 days following 

publication of the Regulatory Notice 

announcing Commission approval of the 

proposed rule change. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,20 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. 

FINRA believes that the proposed rule 

change to align the granularity of the 

Time of Execution provided in TRACE 

reports with the granularity of 

timestamps in the system used to 

execute transactions in U.S. Treasury 

Securities will enhance the regulatory 

audit trail for U.S. Treasury Securities 

available to FINRA and the official 

sector by facilitating more efficient 

matching and sequencing of 

transactions in the audit trail data. 

FINRA also believes that providing an 

exception from the amended execution 

timestamp requirement for members 

with limited trading volume in U.S. 

Treasury Securities will reduce burdens 

for members with limited activity while 

continuing to ensure that FINRA and 

the official sector receives valuable 

audit trail information for U.S. Treasury 

Security trades. FINRA further believes 

that requiring members to report 

transactions in U.S. Treasury Securities 

to TRACE in a more timely manner will 

improve the availability to regulators of 

information regarding transactions in 

the U.S. Treasury Security markets, 

including more timely data about 

intraday pricing and liquidity. 

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 rule change, its potential 

economic impacts, including 

anticipated costs, benefits, and 

distributional and competitive effects, 

relative to the current baseline, and the 

alternatives FINRA considered in 

assessing how best to meet its regulatory 

objective. 

Regulatory Need 

Under the existing rule, members may 

report a trade to TRACE in an increment 

of time that is less precise than that 

captured by the execution system, 

which makes it difficult to match 

interdealer trades when two sides report 

at different time granularity because 

coarse granularity in timestamps makes 

sequencing trades less precise. To 

address this, the proposed amendment 

requires that, when reporting 

transactions in U.S. Treasury Securities 

executed electronically, members must 

report the Time of Execution to the 

finest increment of time captured by the 

execution system, but must report in an 

increment of time that is no longer than 

a second and no shorter than a 

microsecond. 

Under the existing rule, a transaction 

executed on a business day at or after 

12:00:00 a.m. Eastern Time through 

5:00:00 p.m. Eastern Time must be 

reported the same day during TRACE 

System Hours, while a transaction 

executed after 5:00:00 p.m. Eastern 

Time but before the TRACE system 

closes must be reported no later than the 

next business day (T+1) during TRACE 

System Hours. A transaction executed 

on a business day at or after 6:30:00 

p.m. Eastern Time through 11:59:59 

p.m. Eastern time or on a non-business 

day must be reported the next business 

day (T+1) during TRACE System Hours. 

To improve the timeliness of the 

information reported to TRACE, the 

proposed amendment will require 

transactions in U.S. Treasury Securities 

to be reported as soon as practicable, but 

no later than 60 minutes from the Time 

of Execution (or within 60 minutes after 

the TRACE system opens for trades 

executed during specified periods), 

which would provide more timely 

information to regulators. 

Economic Baseline 

The economic baseline of the 

proposed rule change is the existing 

TRACE U.S. Treasury Security reporting 

requirements, and member firms trading 

activities in these securities. FINRA has 

analyzed TRACE U.S. Treasury Security 

transaction reports during the sample 

period of July 2020 to June 2021 by 729 

members and 21 ATSs, 21 during which 

there were approximately 336,612 

transaction reports on average reported 

to TRACE per day.22 ATSs collectively 

accounted for 58.8 percent of these 

reports. Among the top 10 TRACE 

reporters for U.S. Treasury Securities, 

five are ATSs and five are non-ATS 

FINRA members. The top 10 reporters 

collectively represented 71.8 percent of 

all TRACE U.S. Treasury Security 

reports, and the five ATSs accounted for 

57.8 percent of the total. On average, 

there were 667 FINRA members that 

reported fewer than 100 transactions per 

day for the days on which they reported 

transactions in U.S. Treasury Securities. 

During the sample period, 253 unique 

MPIDs reported transactions in U.S. 

Treasury Securities executed on or 

through an ATS to TRACE.23 Of the 253 

MPIDs, 173 MPIDs reported transactions 

in seconds and 80 MPIDs reported 


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24See supra note 8. 

25Under Rule 6710(l), an ‘‘Agency Debt Security’’ 

means a debt security (i) issued or guaranteed by 

an Agency; (ii) issued or guaranteed by a 

Government-Sponsored Enterprise; or (iii) issued by 

a trust or other entity that was established or 

sponsored by a Government-Sponsored Enterprise 

for the purpose of issuing debt securities, where 

such enterprise provides collateral to the trust or 

other entity or retains a material net economic 

interest in the reference tranches associated with 

the securities issued by the trust or other entity. The 

term excludes a U.S. Treasury Security and a 

Securitized Product, where an Agency or a 

Government-Sponsored Enterprise is the Securitizer 

(or similar person), or the guarantor of the 

Securitized Product. 

transactions in milliseconds or finer. 

Fifty-nine of the 173 reporters which 

reported in seconds had no more than 

$10 million in average daily par value 

traded. Thirty-four of the 80 reporters 

which reported in milliseconds or finer 

had no more than $10 million in average 

daily par value traded. There were 

approximately 70.2 million ATS 

transactions reported in the sample 

period across all 253 MPIDs. Most of 

these transactions (72.7 percent) were 

reported in milliseconds or finer. 

Furthermore, for the sample period 

reviewed, FINRA analysis found that for 

transactions executed on business days 

between 8:00 a.m. and 5:00 p.m., 

members reported 96.5 percent of 

transactions within 60 minutes of the 

Time of Execution. Of the 749 MPIDs 

(either member firm or ATS) that 

reported transactions, 281 MPIDs 

always reported transactions within 60 

minutes and 12 MPIDs always reported 

transactions more than 60 minutes after 

the execution. The remaining 456 

MPIDs reported transactions both 

within 60 minutes and after 60 minutes 

of execution, of which 96.5 percent 

were reported within 60 minutes of 

execution. FINRA also observed that of 

the transactions that were executed from 

5:00 p.m. through 7:59:59 a.m. the next 

business day or on non-business days by 

318 MPIDs, 95.5 percent of these 

transactions were reported within 60 

minutes after the TRACE system 

opened. Of the 318 MPIDs, 109 always 

reported within 60 minutes after the 

TRACE system opened. Of the 318 

MPIDs, 193 reported both within and 

after 60 minutes after the TRACE system 

opened. 

Economic Impacts 

As discussed above, FINRA is 

proposing two enhancements to 

improve the quality and timeliness of 

the information reported to TRACE for 

transactions in U.S. Treasury Securities. 

The enhancements will result in 

benefits, including facilitating market 

oversight and providing FINRA and the 

official sector with valuable insight into 

U.S. Treasury Security transactions, 

thereby benefiting the markets and 

market participants, and strengthening 

investor protection. 

FINRA recognizes that the proposed 

enhancements may result in costs for 

members that trade U.S. Treasury 

Securities where members must 

implement changes to their processes 

and systems for reporting U.S. Treasury 

Securities transactions to TRACE. 

The proposed rule change may affect 

competition between member firms 

with reporting obligations and nonmembers engaging in U.S. Treasury 

Security trades. Such competitive 

impact could result from the extent to 

which members pass costs resulting 

from the reporting requirement to 

customers, either fully or partially. 

Customers may thus choose to trade 

using non-members who do not have 

TRACE reporting obligations. However, 

such substitutability would depend on, 

among other things, whether sufficient 

liquidity exists with these non-reporting 

firms, and regulatory or practical 

limitations on where customers and 

institutions may trade. In addition, 

search and other costs may further 

impose a burden on customers that may 

limit such potential substitution. 

Substitution may also be limited where 

other regulators impose TRACE 

reporting requirements that align with 

the proposed rule change, for example 

when the Federal Reserve implements 

TRACE reporting for U.S. Treasury 

Securities for banks.24 The proposed 

rule change may also affect competition 

among reporting firms, where firms 

reporting only a limited number of 

trades may face the same costs of 

upgrading their systems and therefore 

find their limited trading in U.S. 

Treasury Securities less viable. The 

impact on such firms is expected to be 

mitigated as a result of the proposed 

exception for eligible members in 

connection with the proposed 

timestamp granularity provision, as 

described above. 

Execution Timestamps 

As discussed above, FINRA is 

proposing to require members to report 

electronically executed transactions in 

U.S. Treasury Securities in the finest 

increment of time as that captured by 

the execution system, but must report in 

an increment of time that is no longer 

than a second and no shorter than a 

microsecond. Finer time granularity in 

the audit trail will assist with trade 

matching and sequencing by allowing 

transactions to be matched more 

accurately and sequenced with more 

granularity. This facilitates market 

oversight by providing FINRA and the 

official sector with more information on 

U.S. Treasury Security transactions. It 

will result in costs for members that 

need to implement changes to their 

processes and systems. 

FINRA is proposing an exception 

from the timestamp granularity 

requirement for members that engage in 

limited activity in U.S. Treasury 

Securities—specifically, members that 

executed transactions in U.S. Treasury 

Securities of no more than $10 million 

in average daily par value traded 

(computed by aggregating buy and sell 

transactions over the prior calendar 

year). The $10 million threshold would 

provide relief for firms with limited 

activity (and for which the technological 

changes required may be more 

significant compared to their level of 

activity in this space) while continuing 

to ensure that FINRA receives valuable 

audit trail information for U.S. Treasury 

Security trades. Based on 2020 data 

which is the full calendar year 

members’ activity will be measured, the 

proposed threshold would provide relief 

to 485 firms that, in the aggregate, 

accounted for 0.11% of the total par 

value traded. 

Reporting Timeframe Reduction 

As discussed above, FINRA is 

proposing to reduce the timeframe for 

reporting transactions in U.S. Treasury 

Securities to TRACE to generally require 

reporting as soon as practicable but no 

later than within 60 minutes of the Time 

of Execution (or within 60 minutes after 

the TRACE system opens for trades 

executed during specified periods). This 

facilitates market oversight by providing 

FINRA and the official sector with more 

timely information on U.S. Treasury 

Security transactions. It will result in 

costs for members that need to 

implement changes to their processes 

and systems. As discussed in the 

baseline, members reported 

approximately 96 percent of 

transactions within 60 minutes of the 

Time of Execution. 

Some members who trade in U.S. 

Treasury Securities also trade in other 

types of TRACE-Eligible Securities that 

already require reporting in a shorter 

timeframe. For example, transactions in 

corporate bonds and Agency Debt 

Securities 25 generally are required to be 

reported to FINRA as soon as 

practicable, but no later than within 15 

minutes of the Time of Execution. In the 

sample period, of the 750 MPIDs that 

reported transactions in U.S. Treasury 

Securities, 691 MPIDs also reported 

transactions in corporate bonds and 

Agency Debt Securities. While these 

transactions may occur on separate 


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26See supra note 8. 

27See SR–FINRA–2022–013 (Form 19b-4, Exhibit 

2b) for a list of abbreviations assigned to 

commenters (available on FINRA’s website at 

http://www.finra.org). 

28FINRA notes that Regulatory Notice 20–43 

solicited comment on a number of potential 

enhancements to TRACE reporting for U.S. 

Treasury Securities, including items that are not 

being proposed in the instant filing. Thus, Item II.C. 

of this filing is limited to a discussion of comments 

received in response to the Regulatory Notice that 

relate to the items being proposed herein. 

29See Citadel at 4. 

30See EA at 1–2. 

31See FIF at 5–6. 

32See SIFMA at 4–5. 

trading desks, to the extent that 

members are able to leverage existing 

technology within the firm, the costs 

associated with the proposed reporting 

timeframe changes for U.S. Treasury 

Securities could potentially be reduced. 

Alternatives Considered 

FINRA considered several alternatives 

to the $10 million threshold for the 

exception from the timestamp 

granularity requirement. First, FINRA 

considered basing the relief on the 

number of trades reported rather than 

the par value traded. Based on its 

analysis, FINRA believes that average 

daily par value traded is a more 

appropriate measurement; specifically, 

some firms with fewer than 100 trades 

on average per day still had significant 

average trading volume. FINRA also 

considered basing the relief on different 

levels of trading activity, up to an 

average daily par value traded of $100 

million (which is the threshold used by 

the Federal Reserve for bank 

reporting).26 FINRA determined that a 

$100 million threshold would result in 

the loss of valuable audit trail 

information for members that trade 

significant U.S. Treasury Security 

volumes. FINRA also analyzed firms at 

or below a $50 million threshold, a $20 

million threshold, and $15 million 

threshold and determined in each case 

that these thresholds were too high for 

purposes of the proposed exception and 

would result in the loss of valuable 

audit trail information. On balance, 

FINRA believes that the firms within 

scope of the proposed execution 

timestamp enhancement, using the 

proposed $10 million threshold, are 

active participants in the U.S. Treasury 

Security space and should be required 

to implement the U.S. Treasury Security 

reporting changes; therefore, this 

threshold would ensure that FINRA 

receives valuable audit trail information 

for U.S. Treasury Security trades from 

more active firms. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The proposed rule change was 

published for comment in Regulatory 

Notice 20–43 (December 2020). Nine 

comments were received in response to 

the Regulatory Notice. A copy of the 

Regulatory Notice is available on 

FINRA’s website at http://

www.finra.org. A list of the comment 

letters received in response to the 

Regulatory Notice is available on 

FINRA’s website.27 Copies of the 

comment letters received in response to 

the Regulatory Notice are also available 

on FINRA’s website. The comments 

received in response to the Regulatory 

Notice that relate to the instant proposal 

are summarized below.28

Execution Timestamps 

Comments regarding the proposed 

execution timestamp requirement were 

mixed. Citadel supported the proposal 

to increase the granularity of execution 

timestamps to match execution 

systems.29 EA supported normalizing 

the Time of Execution information 

received and the general language 

proposed in the Regulatory Notice, but 

stated that it should be revised to 

indicate best and worst boundaries, i.e., 

the worst being one second and the best 

one microsecond as currently supported 

by the TRACE facility.30 As discussed 

above, the proposed rule change would 

clarify that the Time of Execution must 

be reported in an increment of no longer 

than a second and no shorter than a 

microsecond. 

FIF did not support increasing the 

granularity of execution timestamps to 

match execution systems, stating that 

the proposal would require significant 

system changes to match the granularity 

of internal and third-party execution 

systems, and requested that FINRA 

provide additional insight into the 

objective of the proposal.31 SIFMA also 

generally did not support increasing the 

granularity of execution timestamps, 

stated that the proposal would present 

technological complexities, and asked 

that FINRA provide additional 

information regarding the objectives of 

the proposal so that execution time 

information can be structured in a way 

that reflects the complexities of market 

practice, firm systems, and interactions 

among market participants.32 SIFMA 

further stated that, while some firms 

already provide information at this level 

of granularity, it is not standard across 

firms, and that using the most granular 

time component within any element of 

larger systems would create substantial 

operational challenges. In addition, 

SIFMA noted that it is likely that firms 

receive timestamps at differing 

increments across venues (or potentially 

even products), and therefore it would 

not be an easy or straightforward 

undertaking to create the level of 

uniformity required by the proposal. 

As discussed above, FINRA 

acknowledges that some members may 

need to make operational and 

technological changes to comply with 

the amended timestamp requirement. 

However, FINRA continues to believe 

that the benefits to the regulatory audit 

trail of aligning the timestamps reported 

to TRACE with those captured by the 

relevant execution system are 

appropriate. In particular, requiring 

firms to align the reporting system 

timestamp granularity to the level of 

granularity used in the execution system 

would result in more precise 

information with respect to the Time of 

Execution of transactions in U.S. 

Treasury Securities that would be 

available to FINRA and the official 

sector, which would assist with trade 

matching and sequencing for U.S. 

Treasury Securities. FINRA also notes 

that the proposed timestamp 

requirement would provide an 

exception for members with limited 

trading activity, which is intended to 

provide relief for firms with limited 

activity in the U.S. Treasury Security 

markets from making the operational 

and technological changes that may be 

needed to update their systems to 

comply with the new requirements. 

SIFMA raised concerns regarding the 

proposed requirement for transactions 

that are ‘‘executed electronically,’’ and 

stated that it is unclear which 

transactions would be within scope of 

the proposal, and further stated that 

creating a different standard for voice 

versus electronic trades would create 

confusion. SIFMA also asserted that it 

would be most effective from a 

technological perspective to apply the 

same timestamp standards across all 

TRACE-Eligible Securities, such that 

timestamp granularity for U.S. Treasury 

Securities would be informed by the 

limitations and structural constraints 

that shape reporting timestamps for 

other TRACE-Eligible Securities. 

With respect to commenter concerns 

regarding members’ ability to accurately 

identify transactions that are ‘‘executed 

electronically’’ and the impact of 

establishing different standards for 

voice versus electronic trades, FINRA 

notes that the existing timestamp 

granularity provision for U.S. Treasury 

Securities in Rule 6730.04 specifically 

applies to transactions that are 

‘‘executed electronically,’’ and FINRA is 


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33See EA at 2. 

34See FIA PTG at 1. 

35See Citadel at 1–2; MFA at 2. 

36See FIF at 6. 

37See SIFMA at 5–6. 

not aware that there has been confusion 

regarding the scope of the current 

requirement that has resulted in 

compliance concerns for members. To 

the extent that members encounter 

interpretive questions, FINRA will work 

with the industry to provide guidance, 

as appropriate, with respect to the 

proposed amendments. 

FINRA appreciates commenter 

concerns regarding requiring a different 

timestamp granularity standard for U.S. 

Treasury Securities than for other 

TRACE-Eligible Securities. FINRA notes 

that, to the extent preferable, members 

may choose to make the systems 

changes required under the proposal for 

reporting all TRACE-Eligible Securities 

in the same increment as captured by 

the execution system used to execute 

the transaction (to the extent this is 

preferable to making the change solely 

for U.S. Treasury Securities). FINRA 

also notes that the proposal would not 

require that trades executed 

electronically be captured by execution 

systems in increments finer than a 

second; however, to the extent that the 

execution system uses a finer increment, 

the proposal would require that TRACE 

reports also reflect such finer increment 

(but no finer than a microsecond, in line 

with TRACE system parameters). 

Reporting Timeframe Reduction 

Comments regarding reducing the 

reporting timeframe for U.S. Treasury 

Securities were generally supportive. 

EA supported the proposed 60-minute 

reporting timeframe, noting that it 

already reports transactions within this 

timeframe. EA stated that the 60-minute 

requirement would be a significant step 

forward while still allowing members 

sufficient time between execution and 

reporting to resolve any system issues.33

FIA PTG stated that there was no 

justification for the lengthy reporting 

window that exists today in light of the 

prevalence of electronic trading in this 

market.34 As such, FIA PTG stated that, 

at a minimum, it supported the 

proposed reduction to a 60-minute 

timeframe, but would generally 

recommend further reducing the 

reporting timeframe to no greater than 

15 minutes, congruent with current 

reporting requirements for corporate 

bonds. Additionally, with respect to onthe-run U.S. Treasury Securities, FIA 

PTG recommended a 10-second 

reporting window to mirror U.S. equity 

markets, given the liquidity profile of 

the market for on-the-run U.S. Treasury 

Securities. 

Similarly, both Citadel and MFA 

supported the proposed reporting 

timeframe reduction, but both 

recommended further reducing the 

period to 15 minutes to harmonize 

reporting with corporate bonds.35

Citadel agreed that the proposed 

reduction would provide the official 

sector with access to more timely data 

regarding intraday pricing and liquidity 

dynamics. Citadel argued that market 

participants should be well-situated to 

comply with a 15-minute timeframe for 

U.S. Treasury Securities, noting that 

members already report approximately 

95% of U.S. Treasury Security 

transactions within an hour after 

execution, despite not being required to 

report until end-of-day. Citadel further 

stated that harmonizing reporting 

timeframes is warranted given the 

ongoing consideration of whether to 

publicly report secondary market U.S. 

Treasury Security transactions, as 

public dissemination would require 

trading activity to be reported to FINRA 

as soon as possible following execution. 

MFA also argued that regulators should 

have the same timely data with respect 

to the U.S. Treasury Securities as they 

do for corporate bonds, noting that 

timely data is critical for regulators to 

perform their supervisory functions, 

especially in times of extreme market 

volatility. 

FIF stated that its members generally 

do not object to a reduction in the 

reporting timeframe. FIF stated that 

some members recommend a two-hour 

timeframe rather than the proposed 60- 

minute timeframe, while other FIF 

members recommend a shorter 

timeframe that is harmonized with 

requirements in other asset classes (i.e., 

15 minutes for corporate bonds).36

SIFMA noted that, although shortening 

the reporting timeframe would be a 

substantial change, its members feel that 

some shortening of the reporting 

timeframe would be feasible for firm 

systems, provided that any change 

includes sufficient time for 

implementation and testing.37 However, 

SIFMA recommends moving to a 

reporting timeframe of, at most, two 

hours, rather than the proposed 60- 

minute timeframe. SIFMA noted that 

operational challenges would be 

inherent in moving from the current 

reporting timeframe to the proposed 60 

minute-timeframe, including the impact 

of transmitting more data through 

systems on an intraday basis, as well as 

the potential for increased late reports, 

cancels and corrections. SIFMA also 

stated that the reporting timeframe 

should reflect the unique operational 

and market responsibilities of firms 

active in the U.S. Treasury Security 

market, noting for example that primary 

dealers have responsibilities to support 

auctions and open market activity, such 

that a wider reporting window would 

provide more flexibility to meet firms’ 

other time-sensitive requirements. 

FINRA continues to believe that 

requiring members to report as soon as 

practicable, but no later than 60 minutes 

from the Time of Execution is 

appropriate for U.S. Treasury Securities. 

The proposed reporting timeframe 

would provide FINRA and the official 

sector with more timely data regarding 

U.S. Treasury Security transactions, 

which will significantly increase the 

ability of regulators to monitor intraday 

pricing and liquidity information in the 

U.S. Treasury Security markets. FINRA 

does not agree that a longer outer limit 

reporting timeframe than 60 minutes— 

e.g., two hours—would be appropriate, 

as it would reduce the timeliness of 

intraday data available to FINRA and 

the official sector. FINRA does not 

believe that the operational challenges 

of reporting within 60 minutes would be 

significantly greater than reporting 

within two hours. As discussed above in 

the Economic Impact Assessment, 

FINRA notes that members already 

report over 90 percent of transactions in 

U.S. Treasury Securities within 60 

minutes of the Time of Execution. 

FINRA also does not believe that 

establishing an outer limit of 15 minutes 

or 10 seconds is appropriate. As noted 

above, individual transaction 

information for U.S. Treasury Securities 

is not publicly disseminated, and 

therefore the shorter timeframes that 

generally apply to disseminated 

transactions are not necessary for U.S. 

Treasury Securities. Thus, FINRA 

continues to believe that requiring 

members to report as soon as 

practicable, but no later than 60 minutes 

from the Time of Execution is 

appropriate for U.S. Treasury Securities 

as it would provide more timely 

information for regulatory use while 

balancing concerns regarding the 

burdens that would be imposed on 

reporting members. 

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 

up to 90 days of such date (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 


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Federal Register / Vol. 87, No. 107 / Friday, June 3, 2022 / Notices 33851 

38 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

FINRA–2022–013 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–2022–013. 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 (http://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 such filing 

also will be available for inspection and 

copying at the principal office of 

FINRA. All comments received will be 

posted without change. Persons 

submitting comments are cautioned that 

we do not redact or edit personal 

identifying information from comment 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–FINRA– 

2022–013 and should be submitted on 

or before June 24, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11878 Filed 6–2–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95002; File No. SR–ICC– 

2022–006] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Notice of Filing of 

Proposed Rule Change Relating to the 

ICC Model Validation Framework 

May 27, 2022. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on May 17, 

2022, ICE Clear Credit LLC (‘‘ICC’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared primarily by ICC. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The principal purpose of the 

proposed rule change is to revise the 

ICC Model Validation Framework (the 

‘‘Model Validation Framework’’ or 

‘‘Framework’’). These revisions do not 

require any changes to the ICC Clearing 

Rules (the ‘‘Rules’’). 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, ICC 

included statements concerning the 

purpose of and basis for the proposed 

rule change, security-based swap 

submission, or advance notice and 

discussed any comments it received on 

the proposed rule change, securitybased swap submission, or advance 

notice. The text of these statements may 

be examined at the places specified in 

Item IV below. ICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(a) Purpose 

ICC proposes revisions to the Model 

Validation Framework, which provides 

assurances that ICC models are 

performing as expected. The proposed 

amendments include clarifications on 

the scope and applicability of the 

Framework, responsibilities of relevant 

stakeholders, and other validation 

elements. Additional proposed changes 

reorganize certain portions of the 

Framework and make language 

clarifications to promote readability. 

ICC believes the proposed changes will 

facilitate the prompt and accurate 

clearance and settlement of securities 

transactions and derivative agreements, 

contracts, and transactions for which it 

is responsible. ICC proposes to make 

such changes following Commission 

approval of the proposed rule change. 

The proposed rule change is described 

in detail as follows. 

ICC proposes amendments to Section 

1 containing the introduction. To 

introduce the purpose of the Framework 

more clearly, ICC proposes to begin the 

document with an overview in 

Subsection 1.1. The revision history of 

the Framework would be moved to the 

end of the document. Proposed new 

language in Subsection 1.1 describes 

ICC’s clearing approach that utilizes 

various models as part of its risk 

processes. For clarity, the definition of 

a model and the purpose of validation 

is included. Relevant language from 

current Subsection 1.1 is accordingly 

moved to Subsection 1.2 and certain 

other language is removed as described 

below. 

Amended Subsection 1.2 applies the 

Framework to clearing house models, 

rather than risk management system 

models. ICC proposes these revisions to 

expand the scope of the Framework. 

The current language directly applies 

the Framework to ICC’s risk 

management system models (i.e., those 

relating to financial resources and 

liquidity resources). The proposed 

revisions clarify that the Framework 

applies to all ICC models, which would 

include an additional model relating to 

counterparty credit. Accordingly, the 

changes frame the components that 

make up a model (‘‘model 

components’’) in terms of ICC’s models 

rather than its risk management system. 

Information in current Subsection 1.1 

regarding risk drivers would be removed 

to avoid confusion as it is specific to 

risk management system models and not 

relevant elsewhere in the document. 

Detailed information regarding risk 


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