Industry warns SEC bond disclosure plan may backfire

Extending rules for OTC equities to 144A bond issues could result in less price transparency

Financial scrutiny

US broker-dealers are warning the Securities and Exchange Commission (SEC) that extending the scope of a disclosure rule, which was originally designed for over-the-counter stocks, could harm liquidity in the private placement market for large corporate bonds.

Dealers warn that the application of Rule 15c2-11 to bonds whose issuers have been granted safe harbour from Securities Act registration under Rule 144A would drive trading into darker channels.

“It is a massive step backwards in terms

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