Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Re: File Number SR-FINRA-2021-030

To Whom It May Concern,

SIFMA1 is pleased to respond to the SEC’s publication of FINRA’s proposal (“the Proposal”) to implement requirements in TRACE for modifiers and other information related to portfolio trades and delayed treasury spot trades. SIFMA previously commented2 on FINRA’s RN 20-243 on this topic. In general, our views today are similar to the views expressed in our previous comment letter, with the modifications noted below. In summary, form, while we support the broad goals of transparency, we have some concerns regarding the nature of the disclosure that is proposed to be required and the balance of the costs versus the benefits of certain aspects of the Proposal. We also are concerned that the number of modifiers on TRACE reports is becoming excessive.

We note that while the Commission has provided a standard length of time for comment on this proposal (21 days), this comment period ran entirely in December and across two important religious observations. Additionally, year-end is a time when many market participants are out of the office or otherwise focused on important year-end activities. We have provided the most complete response
possible to this proposal given the circumstances, but we respectfully believe the Commission should have extended the comment period at least a week or two into January so as to allow for a comprehensive consideration of the proposal.

1. Portfolio Trades

As we discussed in our previous comment letter, we believe that market participants today are generally able to identify portfolio trades based on information that is disseminated by TRACE. Accordingly, the incremental benefit to transparency of this flag is somewhat limited.

1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).

2 SIFMA’s comments on RN 20-24 are available here (“our 2020 comment letter”):
https://www.sifma.org/wp-content/uploads/2020/09/SIFMA_PortfolioSpot_Final.pdf 

3 FINRA RN 20-24 is available here: https://www.finra.org/sites/default/files/2020-07/Regulatory-Notice-20-24.pdf