FINRA Amended Proposal to Establish a Corporate Bond New Issue Reference Data Service
Summary
SIFMA provides comments to the Securities and Exchange Commission (SEC) on FINRA’ s second amendment of a proposal to implement a new-issue reference data service for corporate bonds. Amendment No. 2 updates descriptive information for some of the proposed fields and adds additional fields to the proposed requirements. Further, the pricing component of the service has been severed and will be addressed in a future rule filing. SIFMA provides comments below on each of these topics. SIFMA remains concerned that some of the required fields are unclear and suffer from overlap, and that there is no discussion of a modernization of the process through which information is submitted to FINRA for TRACE set up.
Excerpt
October 24, 2019
Vanessa Countryman
Secretary
Securities and Exchange Commission
100 F Street NE
Washington, DC 20549
Re: SIFMA Comment Letter on Notice of Filing of Amendment No. 2 to a Proposed Rule Change To Establish a Corporate Bond New Issue Reference Data Service and Designation of a Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To Establish a Corporate Bond New Issue Reference Data Service [Release No. 34–87232; File No. SR–FINRA–2019–008]
Dear Ms. Countryman:
The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to provide additional comments in response to FINRA’s amended proposal to establish a corporate bond new issue reference data service (“Amendment No. 2”). We have submitted comments on the previous iterations of this proposal, and we stand behind those comments.2 Our previous suggestions included providing for the usage of an API, clarification of several issues with specific data fields, and justification of the proposed pricing of the service.
Amendment No. 2 updates descriptive information for some of the proposed fields and adds additional fields to the proposed requirements. Further, the pricing component of the service has been severed and will be addressed in a future rule filing. We provide comments below on each of these topics. We remain concerned that some of the required fields are unclear and suffer from overlap, and that there is no discussion of a modernization of the process through which information is submitted to FINRA for TRACE set up. Each concern places unnecessary burdens on FINRA-member broker-dealers.
1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.
2 See SIFMA letters of July 29, 2019: https://www.sec.gov/comments/sr-finra-2019-008/srfinra2019008-5885250-188752.pdf; and April 29, 2019: https://www.sec.gov/comments/sr-finra-2019-008/srfinra2019008-5426947-184647.pdf.