SEC Approves FINRA Rule Change to Clarify How Certain Securities Are Classified and Reported (Fed. Reg.)

The SEC approved FINRA's proposed rule change, as modified by Amendment No. 1, clarifying how certain securities are classified and reported to FINRA.

The proposed amendments are designed to clarify how members are required to report two classes of securities - "depositary shares" and "capital trust" (or "trust preferred") securities - under these rules. Both classes are "hybrid" securities, in that each has debt and equity-like features. The SEC received two comment letters on the original proposal that expressed concerns with FINRA's proposed guidance regarding the trade reporting of hybrid securities. For that reason, in Amendment No. 1, FINRA modified the proposal to expand the term "TRACE-Eligible Security."

The implementation date is 150 days following the SEC's approval.

See: 79 FR 21494. Related news: SEC Publishes Extension of Review Period for FINRA-Proposed Rule Regarding the Classification and Reporting of Certain Securities (Fed. Reg.) (April 2, 2014); SEC Extends Review Period for FINRA-Proposed Rule Change to Clarify the Classification and Reporting of Certain Securities to FINRA (March 28, 2014); FINRA-Proposed Rule Change to Clarify the Classification and Reporting of Certain Securities (September 17, 2013).