Comment Text:
I am submitting this comment on behalf of our registered APs who currently pre-arrange trades and submit the trades to a SEF. We are a small inter-dealer broker and provide bespoke inter-dealing broking to our clients. The proposed rules will effectively prohibits our APs from continuing their business, thus loss of income.
In addition, the market participants will lose access to the expertise and services which our APS currently provide. Liquidity of transactions will effectively diminished or reduced. A pre-arranged trade, in our view, is not a process which will distort transparency of the market. It will assist market participants to obtain more bespoke market information from a single source. The resulting trades are being made transparent when the trades are put on the SEF by the APs.
A small broker such as us will struggle to register as a SEF. The regulatory requirements and operating costs associated with running a SEF will be detrimental for progression of business. This will in itself results in bigger firms, brokers and banks having the monopoly of the OTC markets.
We urge the CCTF to take into consideration of the impact of the proposed rules on small inter-dealer broker such as Market Securities.
Thank you.
