Managed Funds Association announced its support for the Securities and Exchange Commission’s (SEC) vote to propose new rules regarding order execution transparency as well as to adopt a revised compliance schedule and issue guidance for reporting security-based swap data.
MFA Members have advocated for greater transparency and uniform disclosures with respect to broker-dealer order routing. This proposal does that and ultimately accomplishes our shared goals with the SEC of helping make markets more fair and efficient.
Under the order routing proposal, investors can receive more detailed information on how their orders are routed and compare order execution across broker-dealer firms, giving enhanced tools for making more informed assessments of whether they are receiving best execution. MFA has long urged the SEC to adopt this change and MFA Members are pleased the Commission has taken steps to do so.
MFA, along with the Securities Industry and Financial Markets Association and Investment Company Institute, developed in late 2014 a proposed template for minimum disclosure of order routing and execution at SEC Commissioner Mary Jo White’s request. More information on the associations’ work is available here and the proposed template is available here.
MFA Members also appreciate the SEC’s adoption of a final security-based swap reporting regime and related guidance. These actions should enhance transparency in the security-based swap market, both for the Commission’s regulatory oversight purposes as well as for the trading and valuation decisions of market participants. Among other changes, the SEC’s new rule will require a registered clearing agency to report any cleared security-based swap, similar to the CFTC and EU reporting regimes.
In 2011, MFA submitted a comment letter to the SEC on Regulation SBSR Reporting and Dissemination of Security-Based Swap Information. The letter supported the intent of the regulation and urged several changes to help improve the regulation’s efficacy, many of which the SEC accepted in the final rules. That letter is available here.