FINRA Trade Reporting and Compliance Engine (TRACE)

STOCKBROKER LAW - Posted on September 9, 2015

The Financial Industry Regulatory Authority (FINRA) has developed a system for the mandatory reporting of
most bond transactions in the United States. All broker/dealers who are members of FINRA are required to
report transactions and corporate bonds to the TRACE System under rules approved by the SEC. These rules
were designed to bring transparency to bond transactions and to prevent overpricing, excessive markups
and self dealing whereby firms selling bonds to customers might otherwise reap improper and undisclosed
trading profits by way of sales of bonds to customers.

The current reporting time for bond transactions is fifteen minutes, which means that firms are required
to fully account for the bond pricing increase of bonds sold to customers. FINRA publishes and annual
TRACE Fact Book which gives retail investors, market professionals, media and educational institutions a
historical perspective of the over-the-counter (OTC) U.S. corporate bond, agency dementia, asset backed
and mortgage back security markets. The TRACE Fact Book includes data entered in the TRACE system
reporting historical bond pricing, figures and other market activity reported by TRACE participating
firms.

We offer free initial consultation to bond investors who feel they may have been victimized in the
bond markets. Please contact our offices at (518) 426-7700 to arrange a free initial
consultation.