July 8, 2012
The rules need more clarification for dissemination of new issue scales. You note the importance of pricing information with regard to new issues that have already been priced, but it is even more important for all investors to see the scales before the pricing is final and give all investors the opportunity to place orders.
Retail investors are not seeing scales from most large firms. It is not permitted according to their firm policies.
The firms are quoting MSRB rules for the very reasons that they will not allow retail brokers to e-mail scales to their customers "the requirements of the regulators are too broad and insurmountable and we must continue with the internal policy".
I think it is great that the investors are going to see the pricing after a deal has priced, but when the price of the bond is being offered to them is significantly higher than the issue price does it matter.
Please incorporate into your rules a manner in which retail customers can see the scales before the price is final and give them a chance to buy the issue at issue price.
The firms do not seem interested in finding a solution. Someone is going to have to tell them how they can disseminate new issue scales to retail customers. E-mails have been suggested, but there is concern over changes in pre-pricing/additional pricing wires. There is also concern about being able to distribute the information evenly or fairly amongst the customers.
Please make a rule or comment as to how brokerage firms can get new issue scales to retail customers in a timely matter. As it stands now this is very opaque and will continue to be with out direction from a regulator.