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Speech by SEC Chairman: Opening Remarks at SEC Roundtable on Fixed Income Markets

Chair Mary Jo White

U.S. Securities and Exchange Commission

Washington, D.C.

April 16, 2013

Good morning and welcome to the Commission’s roundtable on the fixed income markets; and a special welcome to our very distinguished panelists. Thank you for taking time to share your thoughts and ideas with us.

I am really pleased to welcome you here today, and will be coming back later today to hear from our panelists about the current state of the fixed income markets and about potential improvements that can be made to promote a robust market for all market participants.

Needless to say, the fixed income markets are critical components of our national economy. As of the end of 2012, there was $3.7 trillion in aggregate principal amount outstanding of municipal securities and $10.8 trillion of corporate bonds.

In recent years, the staff has been dedicating increasing resources to the public evaluation of the fixed income markets. Most recently, this effort was launched with the Commission’s July 2012 Report on the Municipal Securities Market. In that report, the Commission focused on the trading of municipal securities and made a number of recommendations to consider for improving secondary market trading for all market participants including retail investors.

Those recommendations generally included consideration of proposals to:

  • Improve pre- and post-trade transparency.
  • Promote the use of transparent and open trading venues.
  • Buttress existing dealer obligations by among other things: (1) requiring dealers to disclose their markups in riskless principal transactions; (2) requiring dealers to seek “best execution” for customers in municipal securities transactions; and (3) encouraging or requiring dealers to provide customers with relevant pricing information in connection with their transactions.

The Municipal Securities Report, however, was only the first step in what I think needs to be a deeper dive into and across the fixed income markets. Today, the Commission is taking an additional step in its continued study of the market structure for fixed income securities, focusing on the trading of not only municipal securities, but also corporate bonds and asset-backed securities. We also will be discussing the various recommendations contained in the report.

We have assembled an impressive list of panelists from the academic community as well as market intermediaries, issuers, investors, and regulators to discuss both the current state of the market structure for fixed income securities and potential improvements. We all look forward to a robust conversation about the many issues confronting the fixed income markets and many more discussions going forward about the topics we address today.

At this time I would like to introduce Commissioner Walter, who has been a tireless and effective leader of the Commission’s efforts in this area. Thank you, Commissioner Walter, for your dedication and continued resolve to improve the fixed income markets for the benefit of all market participants.

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