SEC Commissioner Calls For Fixed Income Market Reforms

March 17th, 2015

Securities and Exchange Commission (SEC) Commissioner Daniel Gallagher delivered remarks last week at the Financial Industry Regulatory Authority’s (FINRA’s) Fixed Income Conference in New York. Commissioner Gallagher proposed reforms to fixed income markets in his speech, aptly titled

“A Watched Pot Never Boils,” and focused on the “significant risks that have been brewing in the fixed income markets.”

Although the Commissioner did not propose any specific new rules, he did call for enhanced SEC oversight.  Last fall, the SEC engaged industry stakeholders to develop solutions to enhance secondary fixed income market liquidity.  Commissioner Gallagher reported that several firms were now meeting with SEC staff to further discussion the issue. He also underscored the need for additional resources to “incentivize standardized primary offerings to further facilitate secondary liquidity.”

Commissioner Gallagher ended his remarks on a cautious note, saying, “The fixed income market pot is at a steady simmer — and at last we have a chance to intervene in an issue before another mess occurs.”

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