MSRB Files Modified Post-Trade Data Proposal With SEC

WASHINGTON – The Municipal Securities Rulemaking Board on Thursday requested approval from the Securities and Exchange Commission to expand the post-trade data displayed on EMMA.

The proposed changes to Rule G-14 would require dealers to report new information through the Real Time Trade Reporting System, such as whether a trade occurred on an alternative trading system or involved a non-transaction based fee. It also would eliminate the requirement for dealers to report the yield for trades with customers.

The proposed rule changes, modified from an August version, drop a provision that would have required dealers to flag trades that occurred as a result of conditional trade commitments. CTCs occur when dealers solicit, accept, and conditionally allocate orders prior to the signing of the bond purchase agreement. The prices agreed upon do not necessarily reflect market conditions at the time of the formal award of the bonds. But because trades cannot officially be executed until the bond purchase agreement is signed and the bonds are formally awarded to the underwriter, conditional commitments appear on EMMA the same day as the day the bonds are issued and initially sold.

There is no current means of distinguishing between bonds sold through conditional commitments and bonds sold the first day. During the comment period late last year, dealers said the new reporting requirements could be costly and operationally difficult, particularly a CTC indicator.

The MSRB determined during its October 2014 board meeting to move forward with the proposal, but to leave the conditional trade commitment indicators out.

In its Thursday filing with the SEC, the MSRB proposed that the effective date for the proposed rule change be no later than May 23, 2016, with notice given no later than 60 days before the effective date. The SEC may solicit comments on the proposal, and could approve it as is or require changes. 

For reprint and licensing requests for this article, click here.
Law and regulation
MORE FROM BOND BUYER