SEC Approves NASD Plan to Significantly Increase Corporate Bond Sale Data Dissemination
Washington, DC — NASD today announced that the SEC has approved its plan to significantly increase the dissemination of corporate bond transaction data by expanding the pool of corporate bonds reported to the public from 500 to 4,200 on March 3, 2003. When expanded reporting begins, NASD will be reporting on bonds responsible for approximately 75 percent of market volume. NASD currently reports bond sale activity responsible for 50 percent of market volume.
The increase follows approval by The Securities and Exchange Commission (SEC) of the Phase II implementation of public corporate bond transaction reporting through NASD's Trade Reporting and Compliance Engine (TRACE). NASD began public dissemination of data through TRACE on July 1, 2002 as part of its program to increase transparency in the corporate bond market.
The new bonds to be disseminated March 3 are all investment grade bonds with an original issue size of $100 million or more that are rated at least A3/A-. In addition, on March 31, NASD will disseminate transaction information on 90 bonds rated "triple-B." The 90 bonds represent a broad spectrum of "triple-B" rated bonds. Additional information regarding the expanded list can be found at: http://www.nasdr.com/pdf-text/0312ntm.pdf.
"This increased level of information for investors and traders is another step in fulfilling NASD's commitment to make pricing more transparent, and the bond market easier to access and navigate," said Douglas H. Shulman, NASD's President of Regulatory Services and Operations. "TRACE provides unique information and has proven to be an excellent vehicle for meeting the goal we share with the SEC and the securities industry, which is to increase access by the public and professionals alike to vital bond market data. We will continue to work to expand reporting and increase the availability of data as part of our mission to ensure market integrity."
Currently, TRACE, which was originally designed as a tool to help regulators oversee bond market activity, receives transaction reports on approximately 25,000 corporate bonds, and disseminates price information for the largest issues of investment grade bonds-those corporate bonds of an original issue size of $1 billion or more, plus an additional 50 high yield bonds. This information is available to the public via http://www.nasdbondinfo.com/asp/home.asp.
Launched on July 1, 2002, TRACE enables investors - for the first time - to receive accurate information on the actual sale price of U.S. corporate bonds. As with the disclosure of the actual selling price of equities, this capability affords a new level of protection to bond investors who now have access to independent bond transaction data that can be used to confirm that they are paying a fair market price for the bonds they purchase. Because TRACE makes public and accessible information that has heretofore been impossible to access, it increases market fairness and integrity.
NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business - from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and member firms. For more information, please visit our Web Site at www.nasd.com.