On April 14, the Securities and Exchange Commission approved amendments to the definition of “TRACE-eligible security” contained in Financial Industry Regulatory Authority Rule 6710(a). The amendments broaden the definition of TRACE-eligible security by deleting the requirements that, to be TRACE-eligible, a security must: (i) be registered under the Securities Act of 1933, as amended (Securities Act) or (ii) if resold under Rule 144A of the Securities Act, initially offered and sold under the exemption from registration in Section 4(2) thereof. The amended definition provides that if a security is a “restricted security” as defined in Securities Act Rule 144(a)(3), it is TRACE-eligible if sold pursuant to Securities Act Rule 144A. The amendments, effective on June 15, are aimed at extending price transparency to corporate bonds that are being purchased and sold by diverse market participants, including retail investors, and enhancing the surveillance of the corporate bond market.
FINRA Regulatory Notice 09-24 is available here.