Financial Services

Considerations for Alternative Trading Systems (Part 3 of 6)

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So far in our 6-part blog series explaining the intricacies of TRACE, we have defined TRACE reporting and detailed the prep work to be done in order to effectively report TRACE transactions. Now, we will review considerations for alternative trading systems, before delving into the details of when and by whom transactions are to be reported in Part 4 of the series.

Larger TRACE participants often operate an alternative trading system (ATS). If so, the participant must obtain a single, separate Market Participant Identifier (MPID) for each ATS designated for the exclusive use of reporting each ATS transaction. The participant must use separate MPIDs to report all transactions executed within the ATS to TRACE, however, transactions not executed within the ATS must be excluded.

Participants with a single ATS are permitted to use two separate MPIDs but only if one is used exclusively for reporting transactions to TRACE and the other exclusively for reporting transactions to the equity trade reporting facilities such as OTC or the New York Stock Exchange. Remember, TRACE reporting is for TRACE-eligible fixed income securities, not equities.

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Our financial services team can help your company understand and comply with TRACE. Our colleagues are well-versed not just in the requirements but also the technology and processes required to ensure financial institutions remain compliant with one of the most fluid, time-dependent, and onerous processes required by federal banking regulators.

Interested in learning more? I’ve created a guide, The What, Why, and How of TRACE Reporting Compliance, that outlines the intricacies, rules, and regulations surrounding TRACE. You can download it here.

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Carl Aridas

Carl is certified in the Scaled Agile Framework (SAFe), a Scrum Master, and a Six Sigma Green Belt project manager with more than 25 years of experience in financial services overseeing large-scale development global, multi-currency accounting, regulatory reporting, and financial reporting software platforms. He has hands-on experience completing, reviewing, and filing Federal Reserve, FFIEC, and IRS reports, including Call Reports, Y9C reports, 2900 reports, TIC reports, and arbitrage rebate reports.

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