August 15, 2005
I write in support of the proposed exemtion being sought to allow most of the outstanding credit instruments to be listed on the NYSE. I believe the exemption will provide a visible market for investors that will materially increase liquidity and provide credible and cost effective transaction costs for investors. For far too long pricing of credit instruments has been marginalized and abused by dealers. It cannot have gone unnoticed that liquidity increased measurably once electronic screens began carrying quotes in Treasuries and most on the run credit instruments. The lack of a ready quote for Corporate Bonds has dampened investor enthusiasm for owning them out of frustration when valuation, liquidation or acquisition was considered. I cannot tell you how many times investors have been told that theoretical valuation techniques such as those used on the Bloomberg system do not represent reality and if the investor wants the quoted value he or she is welcome to sell or buy it from Bloomberrg.
I suspect that if and when this exemption is granted that the Commission will note with surprise and delight the development of an orderly and active market for both small and large lots of bonds. Investors will force dealers into the habit of printing trades and establishing price levels first to protect themselves and later to insist on fair and reasonable markets for their holdings.
I have spent 38 years in the financial services industry, 23 of those years as an RR, Principal or Fin Op. For 18 years I either traded or managed trading operations dealing with taxable fixed income in both odd lot and round lot markets. From 1981 through 1985 I operated as an electronic access member of the NYSE specializing in trading listed bonds. I was happy to provide trading support for markets and noted with increasing alarm the drying up of that market because of the prohibitive cost of maintaining the listings.
I hope you have the wisdom to reverse that reality and perform, through this exemption, a genuine service to investors.