The Bond Market Association
|40 Broad Street
New York, NY 10004-2373
1445 New York Avenue, NW
Washington, DC 20005-2158
April 28, 2000
Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Selective Disclosure - File No. S7-31-99
Dear Mr. Katz:
The Bond Market Association (the "Association") is pleased to submit this letter in response to the request of the Securities and Exchange Commission (the "Commission") for comments on its proposals (the "proposals") to address selective disclosure of material, non-public information.1 The Association represents securities firms and banks that underwrite, trade and sell debt securities, both domestically and internationally. The Association's member firms collectively represent in excess of ninety-five percent of the initial distribution and secondary market trading of corporate debt securities, mortgage and other asset-backed securities, and other fixed-income securities.2
This letter is organized into four sections. The first section is an executive summary that gives an overview of the Association's comments. The second section details the Association's general concerns regarding the impact of the proposals. The third section discusses the impact of the proposals on both fixed-income research and the debt offering process. The final section presents our conclusions with respect to the proposals.
I. Executive Summary
The Association agrees that the practice of selective dissemination of material, non-public information for the purpose of conferring a benefit or preference is a disservice to investors. The Association believes, however, that the proposals are too broad for their stated goals and that the proposals do not fully take into account all of the consequences for the fixed-income markets that will result if Regulation FD is adopted as proposed. Among the most troubling of these consequences is the chilling effect that will result on communications from issuers to fixed-income analysts.
The Association is also concerned about the direct and indirect costs of complying with the proposals. We believe that direct compliance costs will be significantly more than the $33 million estimated by the Commission in its cost-benefit analysis. However, the more important costs are the indirect costs on the capital formation process: less liquidity, missed market windows and the introduction of market inefficiencies.3
We believe one of the most important factors that the Commission should take into account is the difference between equity and fixed-income markets, in the context of both research and offerings. There are significant differences between the equity and fixed-income markets. Careful consideration should be given to the application of Regulation FD to communications with debt analysts and to debt offerings because we believe that there is little concern about the selective disclosure of material, nonpublic information in those situations.
II. General Principles
Our capital markets are the best in the world in part because investors believe that trading on inside information--including giving tips to potential traders--is illegal and will be prosecuted by the Commission. However, the Association does not believe that selective disclosure for inappropriate purposes is a pervasive practice among the 14,000 publicly reporting companies. Rather, the examples cited in the proposing release have received attention from market participants and the media because they were the exception, rather than the rule.
Proposed Regulation FD appears to be aimed at providing parity of information for all investors. Although the federal securities laws require full disclosure to be provided to investors, these laws do not require parity of information among all investors.4 Besides being impractical, the attempt to ensure equal access to information can be counterproductive and costly. The examples of selective disclosure in the proposing release do not warrant a wholesale revision of the system, one that is the gold standard of capital formation for the world.5
The Association believes that the proposals would result in the flow of substantially less information to the marketplace, rather than more. If an issuer chooses to convey information, the proposals represent a new layer of regulation that necessitates determinations concerning materiality, who is covered by the proposals, whether the disclosure was intentional or not, and what method of publicizing the disclosure is required. In light of the consequences of violating Regulation FD, these determinations would require even more involvement than already exists of in-house and outside lawyers, as well as executive officers and directors, in every external communication. Considerable additional cost and delay would result. In addition, the application of the proposals to a wide range of corporate communications would require even greater regulatory diligence on the part of public companies than is the case today. As a practical matter, issuers would find it significantly less risky and less costly to be silent. Communication of every type, whether or not material, would be chilled as a result.6 The flow of information would especially be affected when Staff Accounting Bulletin 99 is considered in conjunction with the proposals. Many commentators believe that SAB 99 articulates a new and broader standard of materiality. Therefore, corporations would determine that more communications could be considered material today than were considered material before SAB 99. This would inevitably heighten concerns about hindsight determinations and result in even less willingness on the part of issuers to communicate publicly.
In this regard, the Association is concerned that the sweep of the proposals is much broader than necessary to meet the Commission's stated goals. Rather than tailor disclosure and filing requirements to specific matters or periods, like other filing requirements under the federal securities laws, the proposals apply to all communications by public companies. Proposed Regulation FD is over-broad for a filing requirement under Section 13(a) of the Exchange Act. Instead of focusing the proposals on improper issuer communications with analysts--which appears to be the goal of Regulation FD--Regulation FD would apply to every communication by all public companies. The Commission should more narrowly tailor the proposals to regulate only those communications that it is concerned with. In addition, we believe that the Commission already has the tools necessary to regulate the issuer's relationship with analysts, which appears to be a principal concern of the proposals.7
The Association is further concerned that the proposals represent an undesirable paradigm shift from handling selective disclosure on a case-by-case basis to an across-the-board regulation affecting all public companies on a daily basis. The Commission currently has at its disposal sufficient enforcement mechanisms to combat the dissemination of material, nonpublic information for the purpose of conferring a benefit or preference.8 In addition, we believe that advancing technology, such as webcasts, and increasing investor participation by electronic means, as well as best practice guidelines, such as those published by the National Investor Relations Institute, are facilitating access to more information more quickly than investors had as recently as one year ago. We expect these forces to continue to positively affect the flow of information.
The Association believes that the direct cost of compliance with the proposals in the case of debt offerings will easily exceed the approximately $33 million estimated by the Commission in its Cost-Benefit Analysis.9 Moreover, we believe that the most important cost to consider is not even discussed in the Cost Benefit Analysis: the indirect cost of the proposals on capital formation. We believe that confidentiality agreements, if undertaken as a practice rather than an exception, would result in market inefficiencies by excluding certain institutions which, for regulatory, negotiation or business purposes, cannot or will not agree to the restrictions in such agreements. By excluding potential buyers, there will be less demand for an issuer's securities, resulting in less favorable pricing. Furthermore, the delay that would be introduced into the offering process due to the heightened review of every statement will force issuers and their investment banks to be further exposed to market uncertainty and may cause issuers to miss market windows. Today more than ever, markets are dynamic and interest rates are often moving. Even a few minutes' delay in pricing an offering can have economic consequences, and the longer the delay, the greater the possibility of an adverse economic impact.
Although we are concerned about the adverse effects the proposals will have on the U.S. securities markets overall, these effects are addressed in other comment letters.10 We believe we can be most helpful to the Commission by focusing our comments on what we know best-fixed-income analysis and the debt offering process. This method of presentation will permit us to focus our comments and concerns on issues that may not have been specifically addressed in other comment letters. However, we note that the unintended effects on the fixed- income markets that we discuss are merely illustrative, rather than comprehensive.
To illustrate some of the unintended effects of the proposals on the fixed-income markets, we consider the proposals in light of the special characteristics of the debt markets. First, we note that fixed-income analysts serve a very different function than equity analysts. Fixed-income analysts provide information on the structural aspects of bonds and benchmark bonds against comparable securities in the market. For example, fixed-income analysts will often provide a discussion of the covenant package in high-yield debt offerings, as well as the asset class, cash flow structure and subordination in an asset-backed transaction. The analysis in these cases will lay out important factual information about the security itself. We do not believe that the proposals should cover communications addressing these types of issues.
Second, the terms of many debt offerings are negotiated between the issuer and the purchasers. Negotiation often occurs because the potential purchasers are institutional investors that have the bargaining power to change the terms of the proposed offering. Proposed Regulation FD could have the unintended effect of causing market participants to hesitate to engage in a robust negotiation because they may fear that parts of the negotiation would trigger public disclosure. Absent a confidentiality agreement, the proposals would require even more monitoring of these negotiations than is the case today as a result of the additional layer of regulation represented by the proposals. In addition, debt offerings are often sold into the 144A market, rather than the public market.11 Under the proposals, the fact that an issuer is even contemplating a 144A offering would likely be required to be made public.
Third, structured finance issuers are currently permitted to file term sheets and prospectuses with the Commission after these issuers use them to market and sell asset-backed securities.12 Absent a confidentiality agreement, the proposals would require simultaneous disclosure to the public when that information is released to potential purchasers, which are almost exclusively institutional investors. The proposals would require all computational material, even computational material not currently required to be filed pursuant to certain no-action letters previously granted by the Staff, to be made public at the same time it is furnished to potential purchasers. Making this information public is cumbersome and would cause delays. Furthermore, potential purchasers would be reluctant to have their proprietary assumptions concerning various factors that are imbedded in computational materials made public directly or indirectly by filings with the Commission.
We believe that the examples noted above illustrate why the proposals should be more narrowly tailored to target the specific communications the Commission is concerned about. On balance, we believe that the unintended consequences of proposed Regulation FD for the fixed-income market outweigh the positive effects the proposals are intended to achieve.
III. Examples of How Regulation FD Would Create Unintended Effects on Fixed- Income Research and on Debt Offerings
A. Impact on Fixed-Income Research
The Association is concerned about the chilling effect of the proposals on corporate communications with fixed-income analysts. Other commentators have generally described the adverse effects of the proposals on the role played by analysts in providing financial information to the marketplace.13 We believe it is important to note, however, that fixed-income analysts serve a very different function than equity analysts. Fixed-income analysts generally provide information on the structural aspects of the security. For example, fixed-income analysts often provide a discussion of the covenant package in high-yield debt, as well as analysis of the asset class, cash flow structure and subordination for asset-backed securities. Fixed-income analysts also benchmark a given bond against comparable securities in the market. This information is critical to understanding the risks associated with the securities in question but is not of the type that we believe was of concern to the Commission in proposing Regulation FD. We are nevertheless concerned that the proposals would chill issuer communications with fixed-income analysts on these issues.
Further, we note that many issuers that are subject to the periodic reporting requirements of the Exchange Act have not issued publicly traded equity. Instead, these companies have issued publicly held debt and file periodic reports only because this debt was issued in a public offering. Because these issuers have no publicly traded equity outstanding, fixed-income analysts serve a critical role in providing information and analysis for these companies. Nowhere in the Release accompanying the proposals is there any suggestion that selective disclosure has been a problem in communications between issuers and fixed-income analysts. The importance of the role played by fixed-income analysts is heightened when the debt securities outstanding have a significant degree of credit sensitivity, such as high-yield debt, or have complicated or new structures, such as structured finance securities. Even if an issuer has publicly traded equity outstanding in addition to debt securities, fixed-income analysts focus on the particular information needs of debt investors. Therefore, these analysts play an invaluable role in the efficient operation of the fixed-income market.
We believe that the proposals would negatively affect the ability of fixed-income analysts to seek out useful information. The consequence would be a decrease in analytically probing information that is available to debt investors without furthering the proposals' stated goals of lessening selective disclosure.
B. 144A High-Yield Debt Offerings
Proposed Regulation FD covers all aspects of securities offerings. We believe this broad scope of application is unnecessary and harmful to the fixed-income capital raising process, particularly as applied to Rule 144A offerings. We believe that the 144A private offering mechanism works well. As more fully set forth below, issuers and purchasers spend significant time, energy and resources, and have well-established procedures, such as Chinese walls, that apply to all aspects of the offering process, to protect against disclosure of material, nonpublic information. However, when the proposals are applied to a high-yield offering, several difficult issues still arise. A necessary backdrop to these issues is the recognition that confidentiality agreements cannot always be obtained from the parties to a Rule 144A transaction.
First, consider the case of an issuer that does not have an existing investment banking relationship. When such an issuer interviews investment banks and discusses possible capital raising scenarios with them, the issuer would have to determine whether each of those investment banks would be considered temporary insiders. If not, the issuer must determine whether the discussion of the issuer's capital requirements would be considered material, non-public information required to be disclosed simultaneously or whether any other material, non-public information was discussed. Although this type of determination would be made in any case under existing law, the additional layer of regulation represented by the proposals would raise the stakes and result in even greater costs and delays than is the case today. In addition, these discussions often cover covenant packages and security structures. We believe that these discussions are not of the type the Commission intended to be swept into the scope of the proposals. Additionally, during the course of the offering process, the structure of the deal often changes, thus making any previous disclosures irrelevant and confusing. Such disclosures become even more irrelevant and confusing if the issuer decides not to proceed with the offering.
Second, the issuer, the investment bank and counsel would have to take even more time to review the offering document before it was disseminated to potential QIB purchasers to determine what information, if any, might be considered material, non-public information. Although this review is normally done in any case, the heightened atmosphere in which such a review would take place under proposed Regulation FD creates the same concerns about costs and delays mentioned above in relation to the process of engaging an investment bank.
Third, the issuer faces a difficult choice when information is required to be made public. The issuer appears to be put in the awkward position of choosing whether to violate the general prohibition on solicitation of Section 4(2) of the Securities Act or to violate Section 13(a) and/or 15(d) of the Exchange Act. The information that is required to be made public would fall outside of the information permitted to be made publicly available pursuant to the safe harbor in Securities Act Rule 135c or proposed Rule 181.14 Thus, public disclosure pursuant to the proposals would cause the issuer to violate the prohibition against general solicitation for a private placement pursuant to Section 4(2) or Regulation D under the Securities Act. Failure to comply with Section 4(2) or Regulation D would trigger recision rights under Section 12(a)(1) of the Securities Act.15 If the issuer chooses not to disclose that information to ensure a valid private placement and avoid recision rights, the issuer would violate Section 13(a) and/or 15(d) of the Exchange Act. Violation of Section 13(a) and/or 15(d) would invite an action by the Commission's Division of Enforcement and would bar the issuer from using Form S-3 for a year in connection with a subsequent offering. We do not believe that such a Hobson's choice is an intended result of the proposals.
A fourth area of concern arises when the issuer and investment bank engage in a road show. To date, the road show process has worked well. Market participants and the Commission have worked together through a series of no-action letters to ensure that road shows are made more available to a wider audience.16 Adoption of the proposals would, in our view, reverse this trend of open communication not because material, nonpublic information is disclosed at road shows, but because the proposals are so burdensome that it is less risky to not say anything at all.17 Additionally, SAB 99, which articulates what many believe to be a new and broader definition of materiality, accentuates these concerns.
Fifth, the issuer must determine whether providing material, non-public information to a rating agency is exempted under the proposals. If the rating agency is not exempt as a temporary insider, the issuer would be required to make a choice. Either the information must be made public at the same time that such information is provided to the rating agency or the issuer must attempt to cause the rating agency to enter into a confidentiality agreement. The rating agency may refuse to do so.
Finally, before printing a final offering document, the issuer, investment bank and counsel would again need to review whether any new information in the offering document might be considered material, non-public information that must be disclosed simultaneously. While this practice already exists, the proposals would add an extra layer of regulation and would extend the process at considerable cost and result in delay, thereby extending market risk.
C. Structured Finance Offerings
We believe that the process of structured finance offerings functions well today. The industry has worked with the Commission to secure no-action letters that permit structured finance offerings to be completed efficiently.18 The Association is concerned that the proposals do not take into account the particular characteristics of structured finance securities and in fact, reverse some of the no-action positions previously granted to the industry. When the proposals are applied to a typical structured finance offering, a number of concerns therefore arise.
First, new filing requirements covering computational materials would extend to the entity issuing the security. Under the proposals, all computational materials used during the structuring phase between each potential purchaser and the investment bank involved in the offering would have to be examined for materiality and would likely be required to be made public simultaneously. In addition to the new filing requirement, there is a practical problem with this procedure. Due to the voluminous nature of the computational materials, it is impractical to put this information in a press release. An alternative is to file this information on EDGAR. Processing the tables in the computational materials on EDGAR is particularly time-consuming. This process would severely slow down the structuring process because the computational materials would have to be EDGARized and filed before or at the same time as they are given to potential purchasers.
Second, issuers face another timing problem. If proposed Regulation FD applied to the offering, then term sheets or red herring prospectus supplements would be required to be made public at the same time they are distributed to potential purchasers. Today, those offering documents must be filed only within two days after the offering.
Third, just as in a Rule 144A offering, the issuer must determine whether the rating agency is exempted under the proposals as a temporary insider. If the rating agency is not exempted or refuses to enter into a confidentiality agreement, the issuer would have to simultaneously make public all of the material, non-public information it provides to the rating agency.
Finally, the issuer, the underwriter and counsel would again need to review whether any new information in the final prospectus supplement could be considered material, non-public information that must be disclosed simultaneously. If so, the issuer would need to delay sending out the final prospectus supplement (and confirmations) until the material, non-public information is made public, which would extend the market risk to the issuer and the investment bank.
The Commission has been instrumental in creating today's capital markets, which are the best in the world. The proposals, however, would add a new level of regulation that does not exist today. We believe that this new level of regulation is unnecessary because:
We respectfully submit that the negative effects of the proposals substantially outweigh any positive effects. In addition, we believe that the unintended impacts on the fixed-income markets require further consideration. The Association therefore recommends that the proposals not be adopted or, at a minimum, republished before the Commission takes final action.19
The Association appreciates this opportunity to provide its views to the Commission in connection with this important project. If it would be helpful to the Commission or members of its Staff, we are available to meet and discuss any points raised in this letter. Please address any questions or requests for additional information to Michel de Konkoly Thege, Vice President and Associate General Counsel, of the Association at (212) 440-9476, or to John J. Huber of Latham & Watkins at (202) 637-2242, the Association's special outside counsel in connection with this project.
Chair, Corporate Bond Legal Advisory Committee
cc: The Honorable Arthur Levitt, Chairman
The Honorable Norman S. Johnson, Commissioner
The Honorable Isaac C. Hunt, Commissioner
The Honorable Paul R. Carey, Commissioner
The Honorable Laura S. Unger, Commissioner
David Becker, General Counsel, Office of the General Counsel
David B. H. Martin, Director, Division of Corporation Finance
Richard A. Levine, Assistant General Counsel, Office of the General Counsel
Sharon Zamore, Senior Counsel, Office of the General Counsel
Elizabeth Nowicki, Attorney, Office of the General Counsel
|1||Securities Act Release No. 7787 (Dec. 20, 1999).|
|2||This letter was prepared in consultation with The Association's Task Force on Selective Disclosure, consisting principally of legal professionals drawn from The Association's Corporate Bond Legal Advisory Committee and Litigation Committee, as well as the Credit Research Committee of the Association's Municipal Securities Division. More information about the Association is available on the Association's Web site at www.bondmarkets.com.|
|3||As Commissioner Hunt so aptly pointed out, President Roosevelt's letter to Congress introducing the bill that became the Securities Act of 1933 stated: "[t]he purpose of the legislation I suggest is to protect the public with the least possible interference to honest business." Commissioner Isaac C. Hunt, Remarks to the 26th Annual Cleveland Securities Law Institute on Securities Regulation, Cleveland, Ohio, Feb. 28, 2000, (citing Message from the President - Regulation of Security Issues, presented to the Senate, Mar. 28, 1933, 77 Cong. Rec. 937 (1933)).|
|4||Absent explicit Congressional intent, the federal securities laws do not guarantee equality of information for all investors. Chiarella v. United States, 445 U.S. 222, 233 (1980) and Dirks v. SEC, 463 U.S. 646, 657 n.16 (1983).|
|5||The academic study published in the Journal of Accountancy Research cited in the proposing release does not, in our view, support the broad scope of the proposals. The study found that during and immediately following teleconference calls between analysts and issuers, trading volume of the issuers' stock increased, average trade size increased and stock price volatility increased. The study concluded that material, nonpublic information was disclosed in the analysts' calls. However, the study did not examine the content of any analyst call, but rather linked approximate times of analyst calls to trading. The study did not account for the widespread knowledge of the fact that the analyst call was occurring. For example, day traders listening to CNBC are able to know about the earnings report and the fact that an analyst call is occurring. Momentum investors, as opposed to the Graham and Dodd investors the study assumes populate the marketplace, would only have to know that the call was occurring, earnings had been released, whether the issuer had hit its numbers and by how much the issuer had exceeded or fallen short of its expected earnings number. This information is regularly available in the marketplace during the pendency of a conference call to persons who may not be invited to or have access to the analyst call. Under current market conditions, this limited information can move markets, especially in the case of high tech companies, which the study found to be "more likely" to hold analyst conference calls than other companies. In addition, the study does not apply to fixed-income securities since it only reviewed analyst calls with issuers concerning equity securities. Given the results of the study, its limitations and its discussion of a lack of consensus by the academic community that conference calls affect investors' access to information, it appears that the primary economic basis for the proposals is anecdotal, rather than empirical.|
|6||The Commission's adoption of amendments to Rule 15c2-12 under the Exchange Act may be instructive with respect to the unintended effects of rulemaking. Although Rule 15c2-12, as amended, was intended to facilitate more timely dissemination of secondary market disclosure with regard to municipal issuers, some commentators have observed that the amendments to this Rule have resulted in unintended consequences. Many issuers of municipal securities have become unwilling to take the risk associated with providing information beyond the strict requirements of the Rule. For further information concerning the effects of amended Rule 15c2-12 and the issues that the proposals pose for the municipal securities market, see the comment letter on Regulation FD submitted by the National Federation of Municipal Analysts (Mar. 27, 2000).|
|7||A body of case law addressing issuers' relationship with analysts has developed since Elkind v. Liggett & Myers, Inc., 635 F. 2d 156 (2nd Cir. 1980)(introducing the concept that an issuer may be held liable for analyst projections if the issuer "entangles" itself with the projections). See e.g., Rubenstein v. Collins, 20 F.3d 160, 168-69 (5th Cir. 1994)(finding an adequate pleading where, among other allegations, a defendant was said to have called analysts' prospective statements "realistic."); Stack v. Lobo, 903 F.Supp. 1361 (N.D. Cal. 1995)(incorporating an analyst's report in an investor relations package is sufficient to state a claim for adoption by the company of the statements in the report); SEC v. Stevens, Litig. Release No. 12, 813 (S.D.N.Y. Mar. 19, 1991)(enjoining a former CEO for tipping analysts to protect and enhance his reputation as a corporate manager); and In re Fox-Pitt Kelton, Exchange Act Release No. 37940 (Admin. Proc. Nov. 12, 1996)(finding failure to maintain adequate procedures that reasonably prevent insider trading where an analyst received a tip and revealed it to one of the firm's brokers, who traded).|
|8||See e.g., Section 10(b) of the Exchange Act; Securities Act Rule 408 and Exchange Act Rule 12b-20.|
|9||Among other things, we believe that companies and their advisors will spend substantially more than an aggregate of 5.0 hours on each Regulation FD disclosure, due to legal involvement with each corporate communication. The cost estimate for both in-house ($85/hour) and outside ($125/hour) legal advisors does not reflect the current marketplace, much less what costs will be in the future. Not only is the cost estimate not reflective of current practice, the estimate does not take into account all of the persons involved in the process or the types of situations in which the proposals would result in additional cost. For example, the cost estimate does not include a situation where a legal analysis is undertaken of whether a statement is material and a determination is made that no disclosure is necessary because the statement is determined not to be material. Consequently, no filing would be made. Additionally, the Commission provides no basis for its assertion of five filings per year. Nor is any consideration given to the size of the issuer, with smaller public companies facing a greater cost, given the materiality issue, than large public companies.|
|10||See e.g., Comment letter submitted by the Securities Industry Association, Apr. 6, 2000 (the "SIA Letter").|
|11||In 1999, $199.8 billion was sold into the 144A market.|
|12||In 1999, $75.7 billion asset-backed securities were registered.|
|13||See e.g., the SIA Letter.|
|14||Securities Act Rule 135c permits a reporting issuer contemplating an unregistered offering to announce specified information about the proposed unregistered offering if the announcement complies with certain limitations. By its terms, proposed Rule 181 applies only to registered offerings.|
|15||Section 12(a)(1) of the Securities Act provides a recision right to investors that purchase securities from any person who offered or sold a security in violation of Section 5.|
|16||See e.g., Net Roadshow (avail. Jan. 20, 1998).|
|17||The Commission may want to consider whether it would prefer to deal with communications made at road shows in connection with its rule-making project on road shows, rather than in this broad arena.|
|18||See e.g., Kidder Peabody Acceptance Corporation I (avail. May 20, 1994); Public Securities Association (avail. May 27, 1994); Public Securities Association (avail. Feb. 17, 1995); Public Securities Association (avail. Mar. 9, 1995); Greenwood Trust Company and Discover Card Master Trust I (avail. Apr. 5, 1996); and PSA The Bond Market Trade Association (avail. Feb. 7, 1997).|
|19||On April 13, 2000, Commissioner Hunt gave the keynote address to the Ray Garrett Corporate and Securities Law Institute in Chicago. Commissioner Isaac C. Hunt, Remarks to the 20th Annual Ray Garrett, Jr. Corporate and Securities Law Institute, Chicago, Illinois, Apr. 13, 2000. Certain of Commissioner Hunt's suggested changes to the proposals contain innovative and measured solutions that address the unintended consequences that the proposals would have on public and private offerings of securities. We would like to see further discussion of many of Commissioner Hunt's suggestions, although we remain concerned about the unintended impact of the proposals on the fixed income market.|