The Securities and Exchange Commission on Tuesday approved a proposal by the Municipal Securities Rulemaking Board to make yields for interdealer trades available on EMMA beginning April 30.
The online Electronic Municipal Market Access system currently displays yields for municipal securities transactions between customers and dealers, but not for interdealer trades.
“The display of interdealer yield data on the EMMA website will expand the amount and type of information available to municipal market participants,” MSRB executive director Lynnette Kelly said. “Investors and other market stakeholders will now have access to comparable data when making investment decisions.”
The new data will be displayed on EMMA the same way prices and yields for customer trades are, the MSRB said.
The board filed the proposed changes to its Rule G-14 on reports of sales and purchases with the SEC on Jan. 20.
Currently, dealers report the par amount, accrued interest, and final money — which includes commissions and fees — of transactions between dealers.
Though they report prices and yields for customer transactions, dealers generally don’t report that information when they conduct interdealer trades, resulting in a “disparity between what is disseminated for interdealer and customer transactions,” the SEC said in its order approving the proposal.
Dealers report the data to the Depository Trust & Clearing Corp.’s Real-Time Trade Matching system. The data then moves to the MSRB’s Real-Time Transaction Reporting System and EMMA.
The rule change calls for the MSRB to reprogram the RTRS so that it calculates yields for interdealer trades.
“To facilitate yield-based comparisons of transaction data across securities, the proposed rule change would cause RTRS to be reprogrammed to perform this calculation so that a yield for most interdealer transactions would be added to the information disseminated from RTRS,” the SEC said in the order.
In addition to reprogramming RTRS, the board will update some RTRS procedures and eliminate some outdated reporting rules, including a requirement that dealers working on interdealer trades report the identity of an “intermediate dealer.”
The rule change also will require dealers to report the contractual dollar prices for certain interdealer trades and will make changes to RTRS aimed at reducing price and yield calculation errors.
The changes will be implemented in three phases, the first of which begins immediately and includes changes to procedures and definitions. In the next phase, to be completed by April 30, the MSRB will make yields of interdealer trades available on EMMA.
The third phase includes changes to dealers’ reporting requirements and will be implemented no later than Nov. 30. The board will announce the date in a notice on its website no later than 30 days before the end of November.