Due to a change in securities regulation, Zions Direct Auctions is now requiring bidders, with the exception of participants in FDIC-insured Certificate of Deposit auctions, to have a Zions Direct account connected to their auction account prior to bidding. This change is necessitated by a consumer-focused shift in reporting requirements to the Financial Industry Regulatory Authority’s (FINRA) Trade Reporting and Compliance Engine (TRACE).
TRACE was introduced in 2002 to give increased visibility to investors about publicly traded “TRACE -eligible” debt securities. In addition, the reporting system aggregates and recaps market data in an effort to help individuals understand how the fixed-income market is functioning. The data is free and open to the public.
For TRACE to work, firms must quickly report trades in specified securities when they are purchased or sold. In regards to Zions Direct Auction participants, purchasers of these specified securities sold in the auctions need to have an account with Zions Direct so that Zions Direct can meet its trade-reporting requirements in the allotted time specified by regulation.
In September 2009, FINRA notified its members, including Zions Direct, that TRACE reporting would cover “debt securities that are issued or guaranteed by an Agency or by a Government-Sponsored Enterprise (collectively, Agency Debt Securities)” and “primary market transactions”.*
This means beginning in March 2010, individual investors will have increased transparency into the securities markets, a move we are always happy to support.
*“FINRA Regulatory Notice 09-57”, September 2009 (see notice for more detail).
