Transaction Reporting Systems

Once trades are executed, they must be reported to the appropriate system. Knowing which reporting system applies to which security type is one of the most commonly tested concepts 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)

Exam Tip: Gotchas

• TRF is for listed stocks traded OTC (third market). ORF is for unlisted OTC stocks. Do not confuse the two.

Which System for Which Security?

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:

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.