Matched Trade Proposals

SIFMA provides comments to the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB) in regards to the FINRA Regulatory Notice 14-52, Pricing Disclosure in the Fixed Income Markets and the MSRB Regulatory Notice 2014-20, Request for Comment on Draft Rule Amendments to Require Dealers to Provide Pricing Reference Information on Retail Customer Confirmations.

SIFMA fully supports the objective to enhance bond market price transparency by putting more information into the hands of retail investors. To this end, SIFMA urges FINRA and the MSRB to withdraw the Matched Trade Proposals in favor of an approach that directs retail investors to the extensive pricing information available free of charge on TRACE and EMMA.

As formulated, the Proposals risk confusing retail investors, present unworkable challenges in application, and threaten burdensome operational challenges while imposing unjustified costs and burdens than alternatives that would embrace TRACE and EMMA. SIFMA believes that – if FINRA and the MSRB were to require a new confirmation disclosure obligation with specific price references – alternative formulations would better accomplish the desired regulatory objective. Nonetheless, the enormous costs and burdens associated with even these alternative formulations significantly outweigh the purported benefits.

Finally, SIFMA notes that nothing in the Proposals suggests that FINRA or the MSRB have conducted an adequate cost-benefit analysis as required under federal law and their own policies. The astronomical costs and burdens associated with implementation and compliance with the Proposals far outweigh the unproven benefits.