BDA Submits Comment Letter to FINRA and MSRB on Proposed Retail Markup Disclosure and Pricing Reference Rules

Today, BDA submitted a comment letter in response to the MSRB/FINRA proposed retail confirmation disclosure rules. BDA will continue to advocate for a simpler, less confusing, and less costly solution on this high-priority issue, including scheduling in-person meetings with all the relevant regulators in the near future. We will keep BDA membership informed on next steps on this issue.
The letter is structured in the following way based on the feedback we have received in conversations with BDA membership:
  • BDA urges regulators to harmonize the rules
  • We emphasize the complexity and costs associated with the proposals: 
    • Operational and technology cost concerns with proposed FINRA rule
    • Issues with ambiguous MSRB rule, but MSRB rule is step in right direction
  • Suggestions for alternative solutions in order of preference include:
    • Suggest a purely “riskless principal” rule
    • BDA requests that MSRB and FINRA leveraging TRACE/EMMA data to compute average daily inter-dealer cost and for the use of data display as the differential to retail trade on the confirm
    • BDA favors the MSRB’s approach contingent on guidance around inter-dealer cost
FINRA’s proposal can be read here.
MSRB’s proposal can be read here.