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TRACE-Eligible bonds

Category — US Bond Market

TRACE-Eligible (Trade Reporting and Compliance Engine) is a debt security denominated in U.S. dollars and

1) issued by a U.S. or foreign issuer privately and, if the right of transfer is limited, registered under Rule 144A;
2) issued or guaranteed by a U.S. government agency or
3) is a U.S. government bond.

Example: Apple, 3% 9feb2024, USD, Pemex, FRN 11mar2022, USD

The TRACE-Eligible category does not include foreign government bonds and money market instruments..

For such bonds, the United States SEC (Securities and Exchange Commission) makes all broker-dealers who are FINRA (Financial Industry Regulatory Authority) member firms report transactions in bonds of this type to TRACE under the SEC-approved set of rules. Technically, it is necessary to report through the FINRA platform. FINRA also ensures information availability to the public. The main purpose of introducing such an engine is to ensure price transparency in the over-the-counter bond market.

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