U.S. regulators are enhancing transparency in the asset-backed securities markets, with new public reporting of trade data from these markets.
Investors now have access to post-trade price information on transactions in asset-backed securities, including issues backed by auto loans, credit card receivables and student loans, though the U.S. Financial Industry Regulatory Authority’s (FINRA) Trade Reporting and Compliance Engine (TRACE).
The Washington, D.C.-based regulator announced the new information service on Monday.
On average, there are about 400 trades per day in asset-backed securities markets, representing approximately US$3.5 billion in market value, FINRA says.
The publicly available information includes the time of the trade, price and volume. Initially, trade information will be made available within 45 minutes of the trade being executed. After Dec. 4, that delay will be reduced to 15 minutes. Market professionals can access the data through the major market data vendors, whereas retail investors have free access through FINRA’s Market Data Center starting Monday.
“The dissemination of transaction information in asset-backed securities is another milestone in making the debt markets more transparent, ensuring the integrity of markets and investor protection,” said Ola Persson, vice president at FINRA, in a news release.
“Like with other products, we have adjusted the dissemination protocol to reflect the characteristics of these securities, and we will continue on this path with other more complex products in the near future,” Persson said.
FINRA is also considering a proposal to expand this reporting to include other sorts of securitized products, such as collateralized mortgage obligations (CMOs), commercial mortgage-backed securities (CMBSs) and collateralized debt obligations (CDOs).
The comment period on that proposal closed on April 10, and the regulator is currently reviewing the comments it received, FINRA says.