SIFMA Submits Comments to FINRA and MSRB on Matched Trade Proposals

SIFMA submitted a comment letter to FINRA and the MSRB regarding their request for comments on companion rule proposals that would require firms to disclose additional information on customer confirmations for transactions in fixed-income securities.

According to SIFMA, the "enormous costs and burdens associated with the Proposals would significantly outweigh the purported benefits."

SIFMA urged that the new proposals be withdrawn in favor of a uniform rule that encouraged increased usage of the "extensive pricing data" already available on the Trade Reporting and Compliance Engine ("TRACE") and Electronic Municipal Market Access ("EMMA") systems.

Additionally, SIFMA raised a number of other points in the letter, including the following:

• the proposals by FINRA and MSRB should be uniform in design and terminology, since, according to SIFMA, they are not currently;
• the cost-benefit analysis undertaken by FINRA and the MSRB is "inadequate";
• the same-day trade window "would create confusing and misleading disclosure to investors" by pairing or matching trades in a manner that would create too much variability in what the price difference represented; and
• any confirmation disclosure obligation with specific price references "should be better tailored to retail trades and investors"; i.e., by using defined terms to exclude institutional and other sophisticated investors, and by applying more appropriate quantity thresholds.

See: SIFMA Comment Letter; SIFMA Press Release.Related news: FINRA and MSRB Propose Requiring Confirmation Disclosure of Pricing Information in Fixed Income Securities Transactions (FINRA Reg. Notice 14-52; MSRB Reg. Notice 2014-20) (with Patel Comment) (November 17, 2014).