Trade Reporting and Compliance Engine (TRACE)
Unlike stocks, bonds are not generally traded on exchanges. Instead, bond trading takes place directly between broker-dealers, banks, mutual funds, and other market makers in a decentralized, over-the-counter market. Bonds have not been well suited to exchange trading because bonds are less uniform and more varied than stocks. A large corporation might have dozens of different bond issues. In addition, there are government and agency bonds, corporate bonds, municipal bonds, mortgage and collateralized debt obligation bonds, and foreign bonds. In this vast and complicated bond universe, bond dealers offer inventory and information. Since bond trading is less liquid than equities, broker-dealers, banks, and other institutional buyers/sellers have been able to offer liquidity and information via their o