The Financial Industry Regulatory Authority and the Municipal Securities Rulemaking Board released Monday companion proposals that would require disclosure of pricing reference information on customer confirmations for transactions in fixed income securities.
The proposals, which are substantially similar, seek input on factors unique to the corporate and municipal bond markets.
Under the FINRA and MSRB proposals, bond dealers in retail-sized fixed income transactions would be required to disclose on the customer’s confirmation the price of certain same-day principal trades in the same security, as well as the difference between this reference price and the customer’s price.
“Requiring additional pricing-related disclosure to investors as part of the customer confirmation promotes price transparency and will benefit customers in retail-sized trades,” said Robert Colby, FINRA’s chief legal officer, in a statement.
Trade prices are publicly available for corporate bonds on FINRA’s Trade Reporting and Compliance Engine (TRACE) and for municipal securities on the MSRB’s Electronic Municipal Market Access (EMMA) website.