In November, 2016, the SEC announced that it has approved FINRA's proposal that will require broker-dealers to disclose on retail customer confirmations the "mark-up" or "mark-down" for most sales in corporate and agency debt securities.7 The SEC's approval may be found at the following link: https://www.sec.gov/rules/sro/finra/2016/34-79346.pdf.
Under the new rule, if a broker-dealer buys or sells a corporate fixed-income security (including a structured note) to or from a retail customer and on the same day buys or sells the same security as principal from another party in an equal or greater amount, the firm will be required to disclose on the customer confirmation the firm's mark-up or mark-down from the market price. The confirmation would also have to provide the execution time and access to trade-price data in the TRACE system.
The new rules do not apply to securities purchased in fixed-price offerings, such as most initial offerings of structured notes.
The effective date of the new rule is expected to be announced shortly.
For additional discussion of these rules, please see the September 14, 2016 edition of this publication, which can be found at the following link: https://media2.mofo.com/documents/160914-structured-thoughts.pdf.