[ by Howard Haykin ]

FINRA filed for immediate effectiveness to amend the definition of "Money Market Instrument" in FINRA TRACE Rule 6710(o).  As amended, the definition of Money Market Instrument would be modified to include discount notes that are issued by an Agency or a Government-Sponsored Enterprise (GSE) and have a maturity of one calendar year and one day or less from the date of issuance - i.e., not later than 366 days from the date of issuance. 

Concurrently, the new definition for "Money Market Instrument" also would amend FINRA TRACE Rule 6710(a), by excluding additional short-term discount notes from consideration as a TRACE-Eligible Security.  

Currently, a Money Market Instrument is defined ... in FINRA Rule 6710(o) as "a debt security that at issuance has a maturity of one year or less."  And such products are excluded from the definition of TRACE-Eligible Security in FINRA Rule 6710(a) and thus are not subject to TRACE reporting and dissemination. FINRA interprets a Money Market Instrument to include an instrument with a 365-day term.

But what about an instrument that is issued on 9/15/12, and matures on 9/15/13 is not a Money Market Instrument (and thus is a TRACE-Eligible Security subject to TRACE reporting and dissemination)?

To address this last point, FINRA today is modifying ... the definition of Money Market Instrument i to include a significant number of agency discount notes. And, in turn, these securities will not be TRACE-Eligible and thus, not subject to TRACE reporting and dissemination. 

For further details, go to:  [FINRA Rule Filing 12-46, 10/11/12].