Daily Management Review

U.S. SEC to form committee to look into reforming the bond market


10/28/2017


The Fixed Income Market Structure Advisory Committee (FIMSAC) is likely to look into issues, including minimizing complexities of the municipal bond market and pre-trade transparency.



As per regulatory filing, the U.S. Securities and Exchange Commission has taken the first step in the formal establishment of an advisory committee who will be tasked to scrutinize existing rules for the fixed income market and come up with potential measures for reform.
 
With a mandate of two years, the Fixed Income Market Structure Advisory Committee (FIMSAC) is likely to meet four times a year, with subcommittees likely to meet more often, said the SEC in a filing.
 
In July, Jay Clayton, the SEC’s chairman, had come up with the idea of a committee which could advise the regulatory body for reforms to the bond market.
 
Issues that are likely to be taken up include, minimizing complexities of the municipal bond market and pre-trade transparency, said SEC Commissioner Michael Piwowar.
“There are enough issues within that topic alone to keep the committee members busy for some time,” he said of the liquidity issue. “Including the impact of bond ETFs on liquidity in the underlying securities, the evolving role of the buy-side in the provision of liquidity, and the impact of regulatory and monetary policy decisions on fixed income markets,” said Piwowar.
 
The new committee is set to have up to 21 voting members who will be appointed by the SEC and will represent a cross-section of the fixed income industry. Non-voting members could also be part of the committee.
 
 
References:
reuters.com







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