Transparency continues to be one of the underlying factors for market recovery, said speakers on a regulatory panel at Information Management Network’s 15th Annual ABS East conference held in Miami.
American Securitization Forum Executive Director George Miller, who was part of the panel, said that most of the industry’s efforts have been done under its Project RESTART.
The Securities and Exchange Commission (SEC) is also pursuing provisions that directly impact transparency.
“We need bigger discussion within resets of loan level data to other asset classes and the cost of providing this data versus the benefits,” Miller said.
In terms of price transparency, the Financial Industry Regulatory Authority (FINRA) has proposed to use post trade data that would apply to ABS, a panelist said.
The proposal seeks to collect market data on ABS, including MBS and CDOs.
FINRA would initially only collect ABS transaction data. After detailed analysis and observation of the market, it would then determine whether dissemination of ABS data is appropriate.
If the SEC approves the expansion to ABS transactions, 70% of the U.S. debt market would be subject to FINRA market surveillance, up from the current 27%.
This includes market surveillance FINRA conducts on the Municipal Securities Rulemaking Board`s behalf. Firms would report post-trade data for all publicly traded debt securities except money market instruments and U.S. Treasury securities.
FINRA`s proposal to collect ABS data, if approved, will also name increased disclosure as an effective means of creating more stable capital markets, as emphasized by the U.S. Treasury Department`s Financial Regulatory Reform: A New Foundation.
