SEC Punts on ‘Unreasonable’ Rule That Surprised Bond Traders
- Rule revision involving quotes won’t be enforced for 3 months
- More time is needed to create framework, dealer group says
Photographer: Joshua Roberts/Bloomberg
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The U.S. Securities and Exchange Commission is giving bond markets at least three more months to prepare for a rule revision that industry insiders say would upend trading for some debt securities.
The amendment to SEC Rule 15c2-1, set to go into effect on Tuesday, is intended to protect investors in over-the-counter trading markets from pump-and-dump schemes often seen with penny stocks. The change mandates that “broker-dealers, in their role as professional gatekeepers to this market, do not publish quotations for an issuer’s security when current issuer information is not publicly available.”