NOV 14, 2012 5:46pm ET

FINRA Adds TBA Data to TRACE, Specified Pools Are Next

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The Financial Industry Regulatory Authority this week added "to-be-announced" MBS information to the Trade Reporting and Compliance Engine and plans on adding specified pool trading information next.

Ola Persson, FINRA vice president, told National Mortgage News that there is not a set timeframe for the specified pool data to go live, but it has been approved and will be moving forward.

FINRA also continues to study collateralized MBS and other types of asset-backed securities for possible addition to TRACE, with consideration of their complexities and "different market dynamics," Persson said in a press statement. Together these make up 7% of the par value of all MBS/ABS traded, according to FINRA.

TBA MBS data that went live on TRACE this week include transaction information, CUSIPs, time of transaction, price and size.

TRACE, established in 2002 and fully phased in by February 2005, also is used to disseminate corporate bond information.

Information on agency debentures also has been disseminated through the system since March 2010. It first began collecting transactions on asset- and mortgage-backed securities in May 2011.

The system provides transaction and price data including intra-day deal information and aggregate end-of-day statistics for most active bonds, including their total volume, advances, declines, highs and lows.

According to the Financial Industry Regulatory Authority, the to-be-announced market for agency pass-through mortgage-backed securities represents more than $270 billion traded on an average daily basis in 8,400 trades.

The specified pool mortgage-backed securities market represents about $19 billion traded on an average daily basis in 3,000 trades. 

Together, the to-be-announced market for agency pass-through mortgage-backed securities and specified pool mortgage-backed securities markets represent about 93% of par value traded in all asset- and mortgage-backed securities.

When asked if the new dissemination of information through the Trade Reporting and Compliance Engine has had an effect on the to-be-announced market for agency pass-through mortgage-backed securities, Persson said it is too soon to say. Due to the TBA market’s settlement cycle, any impact would be most apparent when settlement deadlines are reached and trades occur.

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