U.S. SEC Proposes Amendments to Cross-Trading Rule, Restoring Registered Funds’ Authority to Cross-Trade Fixed-Income Securities
October 10 — According to reports from Washington, the U.S. Securities and Exchange Commission (SEC) on Friday proposed amending Rule 17a-7 on cross-trading under the Investment Company Act of 1940, expanding the range of securities that registered funds may cross-trade.
Since the rule was introduced in 1966, registered funds had been able to use it to trade stocks and fixed-income products. However, after the fund valuation rule took effect in 2020, cross-trading in the vast majority of fixed-income securities was effectively restricted.
The proposed amendments are intended to restore the ability of registered funds to cross-trade most fixed-income securities with their affiliates, while updating pricing, oversight, and other requirements. They would also require participating funds to submit summary reports of their transactions to improve market transparency.
SEC Chair Paul S. Atkins said that properly regulated cross-trading can reduce funds’ costs when trading in public markets, ultimately benefiting fund investors. The proposal will be open for public comment for 60 days after its publication in the Federal Register.
In summary, the SEC’s proposed amendments would effectively correct the trading restrictions introduced by the 2020 valuation rule. By restoring cross-trading in fixed-income securities and updating pricing and oversight mechanisms, they aim to lower funds’ trading costs and improve market liquidity while maintaining compliance.
At the same time, the new transaction-summary reporting requirement strikes a balance between capital efficiency and regulatory transparency, and signals a shift toward a more market-oriented and nuanced approach to U.S. fund regulation.
#基金交叉交易规则
October 10 — According to reports from Washington, the U.S. Securities and Exchange Commission (SEC) on Friday proposed amending Rule 17a-7 on cross-trading under the Investment Company Act of 1940, expanding the range of securities that registered funds may cross-trade.
Since the rule was introduced in 1966, registered funds had been able to use it to trade stocks and fixed-income products. However, after the fund valuation rule took effect in 2020, cross-trading in the vast majority of fixed-income securities was effectively restricted.
The proposed amendments are intended to restore the ability of registered funds to cross-trade most fixed-income securities with their affiliates, while updating pricing, oversight, and other requirements. They would also require participating funds to submit summary reports of their transactions to improve market transparency.
SEC Chair Paul S. Atkins said that properly regulated cross-trading can reduce funds’ costs when trading in public markets, ultimately benefiting fund investors. The proposal will be open for public comment for 60 days after its publication in the Federal Register.
In summary, the SEC’s proposed amendments would effectively correct the trading restrictions introduced by the 2020 valuation rule. By restoring cross-trading in fixed-income securities and updating pricing and oversight mechanisms, they aim to lower funds’ trading costs and improve market liquidity while maintaining compliance.
At the same time, the new transaction-summary reporting requirement strikes a balance between capital efficiency and regulatory transparency, and signals a shift toward a more market-oriented and nuanced approach to U.S. fund regulation.
#基金交叉交易规则