Keep Fixed-Income Markets Open in Crises, Says BMA
Regulatory authorities should concentrate on keeping fixed-income markets open during times of emergency, rather than looking for authority to close them, according to The Bond Market Association. The US Municipal Securities Rulemaking Board (MSRB) has filed with the Securities and Exchange Commission (SEC) for a proposal that would give it regulatory authority to halt trading in the municipal bond market during emergencies. The Association believes such authority would ultimately do more harm than good. Micah S. Green, president of The Bond Market Association, said: ‘In times of stress or damage to critical infrastructure, bond market participants should be permitted to trade, if they can, to provide liquidity to investors and to each other that is critical to our nation’s economy and banking system.’ In a comment letter, the Association noted that the MSRB’s proposal, if granted, would be the first time trading halt authority would be explicitly given to a self-regulatory organization instead of a government agency. The Association believes this would set a bad precedent and that the focus of the debate should be on the significant public policy issues surrounding the appropriateness of any trading halt in an over-the-counter market.