SEC Approves Expanded Bond Pricing

February 5, 2003 ( - The Securities and Exchange Commission (SEC) approved a plan to publicly distribute real-time pricing data for 4,200 corporate bonds.

The National Association of Securities Dealers (NASD) said it hopes to implement the current expansion to the Trade Reporting and Compliance Engine ( TRACE) system early this year.   The expansion of quotes available from the current 500 is designed to provide greater transparency in the $4 trillion US corporate bond market and make pricing data covering about 75% of that market widely available, according to a Dow Jones report.

Smaller investors are expected to benefit significantly.   These investors have had access to real-time prices on stocks through the Internet or their broker, but until now, lacked similar access to bond prices.  

Small Bond Orders

The expansion of TRACE will offer prices on all bonds rated in the “single-A” category or higher by credit rating agencies, and with an original issue size of $100 million or more. Prices will also be available on 90 bonds in the “triple-B” category and 50 lower-rated, “junk” bonds.

These bonds, comprising issues of $1 billion and higher, account for about 25,000 recorded trades a day and 50% of US investment-grade corporate bond trading volume.