Quick Answer
Four systems split reporting by security type: TRACE for corporate, agency, and asset-backed bonds; EMMA/RTRS for municipal securities; TRF for exchange-listed stocks traded OTC; and ORF for unlisted OTC equities. TRACE and EMMA both require reporting within 15 minutes, but they never cover each other's securities.
Matching the right reporting system to the right security type is one of the most commonly tested details in this unit.
TRACE - Trade Reporting and Compliance Engine
- FINRA's system for reporting transactions in eligible fixed-income securities
- Covers: corporate bonds, agency debt, asset-backed securities (ABS), and certain other debt instruments
- Members must report transactions as soon as practicable but no later than 15 minutes after execution
- TRACE disseminates transaction data to the public in real time upon receipt
- Dissemination size caps: $5 million for investment-grade bonds, $1 million for non-investment-grade bonds (amounts above the cap shown as "$5MM+" or "$1MM+")
Exam Tip: Gotchas
- TRACE covers corporate bonds, agency debt, and ABS. It does NOT cover municipal bonds; those go through EMMA.
- Both TRACE and EMMA require reporting within 15 minutes, but they cover completely different security types.
- TRACE dissemination caps: $5M for investment-grade, $1M for non-investment-grade. Amounts above the cap are shown as "$5MM+" or "$1MM+".
EMMA - Electronic Municipal Market Access
- Operated by the MSRB (Municipal Securities Rulemaking Board)
- Free, centralized online portal for municipal securities market information
- Municipal dealers must report transactions within 15 minutes of trade execution
- EMMA provides:
- Real-time trade prices
- Official statements
- Continuing disclosure documents
- Credit ratings
- Material event notices
- Real-Time Transaction Reporting System (RTRS) is the underlying system that collects trade data from dealers and feeds it to EMMA
Exam Tip: Gotchas
- EMMA is for municipal securities only. The MSRB operates it, not FINRA.
- EMMA does NOT cover corporate bonds; those go through TRACE.
Trade Reporting Facility (TRF)
- Used for reporting OTC transactions in National Market System (NMS) stocks (exchange-listed stocks)
- When an exchange-listed stock trades OTC (third market), the trade must be reported to a TRF
- Operated by FINRA in conjunction with exchanges (e.g., FINRA/Nasdaq TRF, FINRA/NYSE TRF)
- Reports are disseminated through the consolidated tape
OTC Reporting Facility (ORF)
- FINRA's system for reporting transactions in OTC equity securities (non-NMS stocks)
- Covers securities quoted on OTC Markets (OTCQX, OTCQB, Pink), including certain restricted-equity transactions
- Reports must be made within 10 seconds of execution (much faster than TRACE and EMMA/RTRS's 15-minute deadlines); a report made after that window is designated late
- Short sales must carry the short-sale marking required by Regulation SHO's order-marking rules
- ATS trades reported through the ORF have only a limited reporting exemption; do not treat trading on an ATS as a blanket exemption from trade reporting
Exam Tip: Gotchas
- TRF is for listed stocks traded OTC (third market). ORF is for unlisted OTC stocks. Do not confuse the two.
- An ATS execution still generally requires trade reporting. The ATS reporting exemption is narrow, not a blanket pass; do not assume trading through an ATS eliminates the reporting obligation.
- The ORF's 10-second window is much tighter than TRACE or EMMA's 15 minutes. If the exam asks for the fastest reporting deadline among the four systems, ORF is the answer.
Which System for Which Security?
| Reporting System | Securities Covered | Operator |
|---|---|---|
| TRACE | Corporate bonds, agency debt, ABS | FINRA |
| EMMA/RTRS | Municipal securities | MSRB |
| TRF | NMS stocks traded OTC (third market) | FINRA |
| ORF | OTC equity securities (non-NMS) | FINRA |
The Consolidated Tape
- The electronic system that reports real-time trade and quote data for all NMS securities regardless of where the trade was executed
- Ensures transparency by aggregating data from all exchanges and OTC market centers
- Two tape plans:
| Tape | Covers | Plan |
|---|---|---|
| Tape A | NYSE-listed securities | Consolidated Tape Association (CTA) / Consolidated Quotation System (CQS) |
| Tape B | Regional exchange-listed securities | CTA/CQS |
| Tape C | Nasdaq-listed securities | Unlisted Trading Privileges (UTP) Plan |
Exam Tip: Gotchas
- The consolidated tape has three parts: Tape A (NYSE), Tape B (regional exchanges), Tape C (Nasdaq).
- All three tapes report real-time data regardless of where the trade actually executed.
What Should You Check on Exam Day?
- Given a security type, can you name the correct reporting system (TRACE, EMMA/RTRS, TRF, or ORF)?
- Do you know both TRACE and EMMA use a 15-minute reporting deadline, but cover entirely different securities?
- Can you match each consolidated tape (A, B, C) to the securities it covers?
- Do you know an ATS execution generally still requires trade reporting, since the ATS exemption is narrow rather than blanket?