The Financial Industry Regulatory Authority (FINRA) is establishing a new effective date of May 16, 2011 for reporting ABS to the trade reporting and compliance engine (TRACE).

In a press release, FINRA said that the extended effective date would allow sufficient time to make additional systems enhancements and allow for coordinated testing of the technology.

In February 2010, the SEC approved SR-FINRA-2009-065 (TRACE ABS filing), which: amends the TRACE Rules to classify ABS, MBS and other similar securities as TRACE-eligible; requires that ABS transactions be reported to TRACE; modifies certain other reporting requirements and notification provisions; and establishes reporting fees for ABS transactions.

Last April FINRA published Regulatory Notice 10-23, which announced the Securities and Exchange Commission’s approval of the TRACE ABS filing and established an effective date of February 14, 2011. That date has now been moved to May 16, 2011.

FINRA’s TRACE Rules or the Rule 6700 series provide for the reporting of transactions in TRACE-eligible securities to TRACE and the dissemination of deal information, with limited exceptions. TRACE reporting and data fees are set forth in FINRA Rule 7730.

"Previously it was supposed to be something that was going to get launched in Feb of 2011 and the Fed was just going to 'monitor' the information but not make it available to the public," said Jesse Litvak, an MBS trader at Jefferies & Co. "Now it's saying that TRACE is going on line May 16, 2011. Which means the 'monitoring' period will likely roll into the end of 2011, which means 2012 is going to be when it goes on-line and gets rolled out to the world."

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