The Washington, D.C.-based Financial Industry Regulatory Authority (FINRA) is considering a plan to open up corporate bond trading data to academic researchers to allow them to carry out more detailed studies of trading behavior, FINRA announced on Thursday.
FINRA is requesting comment on a proposal to create a new academic version of its Trade Reporting and Compliance Engine (TRACE) data, which collects transaction and price data for all publicly traded corporate bonds.
The proposal comes in response to requests from academic researchers for access to historic TRACE data that allows them to track the trading behaviour of individual dealers, or groups of dealers. The historical data that’s currently available does not include any identifying information about dealers.
As a result, FINRA is proposing to create a new Academic TRACE data set that would include dealer identifiers, but the actual identities of the dealers would be masked so they would remain anonymous, but researchers would be able to study the trading activity of particular dealers. The proposal also includes measures designed to prevent potential reverse engineering of dealer identities.
The U.S. Municipal Securities Rulemaking Board (MSRB) is also soliciting comment on a similar proposal for municipal securities transaction data, FINRA notes.
Comments on the proposals are due by Sept. 14.