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FINRA Launches New TRACE Data Product for Academics

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The Financial Industry Regulatory Authority launched its new Academic Corporate Bond TRACE Data product, an enhanced historical data product available solely to institutions of higher education.

The new product – which is available to institutions of higher education effective Monday – supports and encourages academic research on corporate bonds by providing academics with access to TRACE historical transaction-level, corporate bond data.

The cost for the data is $500 per calendar year, plus a one-time set-up fee of $500. In addition, subscribers must sign an agreement specifying that they will not redistribute the data or attempt to reverse engineer the identity of any market participant, among other requirements.

“With interest in the fixed-income markets and market design on the rise, the Academic Corporate Bond TRACE Data provides researchers with broad content to investigate issues of interest to market participants and regulators including liquidity provision, search costs, inventory models, price discovery and the treatment of retail orders,” Jonathan S. Sokobin, FINRA chief economist and senior vice president, said in a statement. “We believe the product will lead to research that increases understanding of these important markets.”

Introduced in July 2002, TRACE — the Trade Reporting and Compliance Engine — is FINRA’s fixed income market real-time price dissemination service. TRACE brings transparency to the fixed income market and helps create a level playing field for all market participants by providing comprehensive, real-time access to price information.

FINRA’s existing Historical TRACE Data product, which will continue to be available, provides transaction-level data on an 18-month delayed basis, but does not include any identifying information regarding the dealer reporting each transaction.

As a result, academics requested – and FINRA will now make available – an enhanced version of historical TRACE data that includes masked dealer identities.

The Academic Corporate Bond TRACE Data is available on a 36-month delayed basis and will include masked identifying information regarding the dealer reporting each transaction. As of Monday, requests may be made for data on corporate bonds reported to TRACE from 2002 through 2013. (Note: 2013 is the calendar year that is at least 36 months prior to the effective date of the Academic Corporate Bond TRACE Data product.)

The data set will also include a security identifier, execution date and time, price, yield, quantity, commission, buy or sell, and principal or agency capacity.

On Sept. 2, 2016, the Securities and Exchange Commission approved an amendment to FINRA Rule 7730 to create a new Academic Corporate Bond TRACE Data product that will be available solely to institutions of higher education.

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