November 13, 2012
FINRA Increases Transparency in the TBA Market for Agency Pass-Through Mortgage-Backed Securities
FINRA announced that it "significantly increased transparency" in the "To-Be-Announced" (TBA) market for agency pass-through mortgage-backed securities. This market represents more than $270 billion traded on an average daily basis in 8,400 trades. Through the Trade Reporting and Compliance Engine (TRACE), FINRA has begun disseminating TBA transaction information, including the CUSIP, time of transaction, price, size and other related information.
In addition to the TBA market, the SEC approved a FINRA proposal to publicly disseminate transaction information in agency pass-through mortgage-backed securities traded "specified." This market represents approximately $19 billion traded on an average daily basis in 3,000 trades. FINRA will announce the effective date of this proposal in a forthcoming Regulatory Notice. Together, the market for agency pass-through mortgage-backed securities traded TBA and specified represent more than 93 percent of par value traded in all asset- and mortgage-backed securities.
TRACE was established in July 2002 to create a regulatory database and bring transparency to the corporate bond market.
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