Finding a FIX for electronic FINRA TRACE reporting as the CTCI cut-off looms

By Philip Flood | 14 May 2019

The capital markets regulatory environment can seem as volatile as everyday trading conditions. Even regulatory reporting vehicles can’t be counted on to remain constant. From February next year, the legacy CTCI tool commonly used for electronic FINRA TRACE and ORF reporting will no longer be supported. If you handle your own submissions, you’ll need to switch to the preferred industry-standard Financial Information eXchange (FIX) API for electronic filing.

Adding to the challenge, with FIX there are variations for each financial instrument, so this isn’t simply a case of swapping one electronic data exchange tool for another. With just a 15-minute window to report Corporate Bond or OTC Derivative transactions, these new pathways must be able to reliably and quickly deliver the right data, in the right format, to the right destination.

So what are the practical implications, and what should you do now to position your team optimally for the change?

Once FINRA effectively stops accepting CTCI submissions in February 2020, any TRACE-eligible securities will have to be reported electronically via FIX, or specifically FIX 4.4, the latest incarnation of the standard. Unless you have an order management system (OMS) provider taking care of reporting for you, making the transition is likely to be a sizeable challenge.

For starters, you’ll need experts that can write to the FIX 4.4 specification for each different instrument. You’ll need use of a FIX engine, a dedicated internet connection and a robust underlying infrastructure so there’s no risk of service or data loss. You’ll also have to keep on top of New Notices from FINRA.

The best advice is to make sure you’re talking to someone about this now - while there’s a still the best part of a year to go before FIX-based reporting is mandatory. Rather than panic about assembling the right capabilities in house, though, seek out experts that have done this before - data scientists that understand how to find, extract, prepare and send the right data, in line with eligibility and determination rules, and have the right set-up to make this happen.

The FINRA TRACE changes may sound daunting, but they don’t have to be. You can find out more about CTCI Migration here.  Or download our new eBook, TRACE CTCI Migration

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