TRACE-Eligible bond means a debt security that is United States dollar-denominated and is: (1) issued
by a US or foreign private issuer, and, if a “restricted security”, sold pursuant to Securities Act Rule
144A; (2) issued or guaranteed by an US Government Agency; or (3) a US Treasury security. “TRACE-Eligible Security” does not include a debt security that is issued by a foreign sovereign or a Money Market Instrument.
TRACE (Trade Reporting and Compliance Engine) is the FINRA-developed vehicle that facilitates the mandatory reporting of over-the-counter secondary market transactions in eligible fixed income securities. All broker-dealers who are FINRA member firms have an obligation to report transactions in bonds to TRACE under an SEC-approved set of rules. These rules were developed to bring greater price transparency to bond markets.