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Preliminary Recommendation for the SEC to Establish a 

New Issue Reference Data Service for Corporate Bonds

Introduction

The Technology and Electronic Trading Subcommittee (‘Subcommittee”) of the Fixed Income 

Market Structure Advisory Committee (“FIMSAC”) was formed to consider, among other 

things, the role of price data and reference data providers in relation to the increased use of 

electronic trading platforms. In its deliberations, the Subcommittee focused on whether the 

timeliness and accessibility of bond reference data is impacting the efficiency and 

interoperability of the corporate and municipal bond markets. The Subcommittee considered 

input from the leading reference data providers, underwriters, the Financial Industry Regulatory 

Authority, Inc. (“FINRA”) and the Municipal Securities Rulemaking Board (the “MSRB”). In 

addition, the Subcommittee members themselves represent a diverse cross-section of market 

participants, including electronic trading platforms, buy-side organizations, quantitative trading 

firms and sell-side dealers, as well as well-known market observers.

Whether bond reference data is available to reference data providers, electronic trading platforms

and investors in a timely manner for new issues of corporate and municipal bonds, as well as on 

an impartial basis, is of primary concern to the Subcommittee. Reference data includes issuer and 

issue identifiers and details, such as maturity, coupon, par value, payment frequency, 

amortization details, call schedule and convertibility, among other terms and conditions. Market 

participants require this information to identify bonds, settle bond trades and value bonds.

Reliable and timely reference data is necessary to support the efficient trading and settlement of 

corporate and municipal bonds as thousands of new issues come to market each year. Access to 

accurate and timely reference data is of growing importance as fixed income market participants 

increasingly rely on electronic trading platforms. To support the trading of newly issued bonds 

on electronic platforms, it is necessary that all platform participants price and trade bonds based 

on consistent and accurate information.

The Subcommittee realizes that differences in regulatory oversight in the municipal and 

corporate bond markets has led to different approaches to the dissemination of new issue data. In 

the municipal bond market, the MSRB established rules and processes to expedite dissemination

of new issue data by municipal bond underwriters to reference data vendors. Among other rules, 

MSRB Rule G-34 requires underwriters for most new issues of municipal securities to submit all

information required for a dealer to report and produce a customer trade confirmation to the New 

Issue Information Dissemination Service (“NIIDS”), developed and operated by DTC, no later 

than two hours after the time of “formal award” of the new issue. This information includes ten

data elements required to set up an issue in the NIIDS service, as well as up to 70 additional data 

elements that must be populated for DTC to mark the issue as “trade eligible.” NIIDS then 

makes this comprehensive new issue data immediately available to reference data providers that 

provide or sell such information to market participants. Any follow-up adjustments or changes 

to such data are also made through NIIDS.

In contrast, in the U.S. corporate bond market, neither underwriters nor issuers are currently 

required to submit a full set of new issue reference data to a central depository for onward public 
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dissemination. To facilitate trade reporting and dissemination of transactions in TRACE-eligible 

securities, FINRA requires underwriters of an initial offering of a TRACE-eligible bond to 

provide certain information to FINRA prior to the execution of the first transaction of the 

offering (FINRA Rule 6760). However, this information is generally limited to the fields 

required to set up a bond on TRACE for trade reporting purposes (CUSIP number, issuer name, 

coupon rate, maturity, 144A status and brief description of the bond). It does not include the

more detailed data required to price and settle a bond trade, such as the information needed to 

calculate accrued interest and net money.

No universal automated means now exists for underwriters or issuers to distribute new issue data

to corporate bond market participants. The Subcommittee understands that each corporate bond

reference data provider collects and disseminates new issue reference data at different speeds

that vary by a few hours to several days. The delays depend on their relationships with lead 

managers, their timely receipt and review of the prospectuses, and the scales of their reference 

data businesses, among other factors. This disparity increases the likelihood that market 

participants will use reference data that varies based on their choice of reference data provider.

The lack of a universal means of disseminating new issue reference data for the corporate bond 

market is further exacerbated by the lack of regulation mandating impartial access to corporate 

bond reference data. As discussed above, comprehensive and timely reference data is necessary 

for efficient electronic trading. Without impartial access requirements, reference data providers

can significantly tilt the playing field for trading platforms and market participants. If a reference 

database vendor refuses to license its database to all market participants and venues on 

commercially reasonable terms, the rejected entities must seek out and use alternative reference 

databases that may contain different reference data than their clients may use. The resulting 

confusion increases transaction costs and impedes competition in the corporate bond markets. 

The Subcommittee believes that common access to timely and accurate corporate bond reference 

data would increase the efficiency and interoperability of the corporate bond market and promote 

fair competition among all market participants. The Subcommittee notes that the municipal bond 

market has largely avoided various reference data access problems due to the regulatory structure

described above.

Recommendation

The Subcommittee believes that the corporate bond market would benefit from having a single 

central source of new issue reference data like that available in the municipal bond market. New 

issue reference data, and updates to reference data for seasoned issues, should be disseminated in 

real time to all reference data vendors and market participants, ensuring that everyone has access 

to the same data at the same time. 

To that end, the Subcommittee recommends that the SEC, in conjunction with FINRA, establish 

a new issue data service with the following elements:

- The managing underwriter1 of all TRACE-eligible corporate bond new issues, including 

registered offerings and unregistered Rule 144A offerings, would be required to send the 

 1 In the absence of a managing underwriter, the obligation to submit the information should follow the waterfall set 

forth in FINRA Rule 6760(a).
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specified new issue information specified below in Schedule A2, as well any follow-up 

adjustments, electronically to a central database managed by FINRA;

- The managing underwriter would be required to submit the new issue information to 

FINRA no later than distribution of the information to any reference data vendor or other 

third party not involved in the offering;

- Once the central database has all the required reporting information, FINRA will make 

the data available in a real-time electronic format to reference data vendors and other 

market participants as determined by FINRA; and

- FINRA shall provide subscribers with access to the service on an impartial basis at fees 

determined on a commercially reasonable basis, subject to applicable regulation.

The Subcommittee believes that the implementation of its recommendation would make the

valuation, trading, settlement and trade reporting of new issue corporate bonds more efficient by 

reducing trading errors and enhancing competition among data vendors, trading platforms and 

investors. The Subcommittee recognizes that the creation of this service will impose costs on 

FINRA and the underwriters. Based on available information, the Subcommittee believes that 

the costs would be small relative to the value of the service as the required information to be 

reported is similar to the information that underwriters already provide directly to reference data 

vendors. In addition, underwriters already must timely file a limited set of new issue corporate 

bond data to FINRA to satisfy their obligations pursuant to Rule 6760. The Rule 6760 

requirement suggests to the Subcommittee that FINRA is the appropriate party to implement and 

manage the service.

Future Considerations

Seasoned Issues: Following initial implementation of the new issue service, the Subcommittee 

believes that the SEC should consider whether the service should be extended to seasoned issues. 

Inclusion of seasoned issues would require back-reporting for thousands of bonds, which would

be costly. However, as the vast majority of issuers and their settlement agents maintain 

databases that describe their outstanding bonds, the cost may not be large in comparison to the 

value of having uniformly accurate data available to all market participants. The Subcommittee 

believes that seasoned issues do not currently present the market with the same concerns 

regarding timeliness and impartial access and, for this reason, did not include seasoned issues in 

the initial recommendation. However, the Subcommittee recognizes the value of having 

universal access to accurate reference data available for all bonds.

Corporate Actions: The Subcommittee believes that expanding the new issue service to include 

information about corporate actions also should be considered in the future. Bond reference data 

 2 The Subcommittee believes (i) that the fields set forth on Schedule A should include all detailed information that is 

required to perform the calculations necessary to price and settle a corporate bond trade and (ii) that such fields 

should be objective, succinct and clear in scope so that the reporting obligation may be straightforwardly fulfilled by 

underwriters from both a technology and legal perspective. The Subcommittee has included a preliminary proposal

of the required fields on Schedule A after discussion with certain market participants, but recommends that the final 

list of fields be determined by the SEC and FINRA after further analysis.
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is not static. Many corporate actions, such as bond default, partial redemption, tender offer, 

exchange offer and consent solicitation, can impact the price and trading of a bond. The 

Subcommittee believes that the efficiency and resiliency of the corporate bond market would 

improve if a central database for the reporting of corporate actions on an on-going basis were 

available to all market participants. However, given that underwriters may not be involved in 

corporate actions months or years after the initial offering, the reporting obligation would more 

logically fall on the issuer. Such a requirement would represent a significant departure from the 

proposed model for the new issue service. For that reason, the Subcommittee believes that 

consideration of how to disseminate information about corporate actions should be considered 

separately.3

 3 One possibility, among others, would be to expand the Form 8-K reporting requirements, at least for public issuers.
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SCHEDULE A

Proposed List of New Issue Reference Data Fields

Field Field Definition

Issuer Name of the issuing entity of the security.

Coupon Current interest rate of the security.

ISIN Number The International Securities Identification Number (ISIN).

CUSIP Number The Committee on Uniform Security Identification 

Procedures (CUSIP) number.

Currency Currency in which the security was issued.

Issue Date/First Settle Date Date the security is issued. Displays the First Settle Date, 

the date payment is due.

Interest Accrual Date Date from which interest begins to accrue.

Day Count Description The description of the day-count convention for 

calculating yields and/or accrued interest. 

Coupon Frequency Number of times per year interest is paid.

First Coupon Payment Date The first coupon payment date following the initial 

settlement date.

Maturity Date the principal of a security is due and payable.

Calculation Types (CALT) The following calculation types correspond to fields in the 

Description (DES) function for fixed income securities, 

and are organized by number. Each calculation type 

describes a specific method used to determine the accrued 

interest and price/yield of the loaded security based on 

specified market conventions and security structures.

144A Eligible Indicator Field will return true when the issuer's offering 

documentation (e.g., prospectus or offering memorandum) 

includes a statement to the effect that the security will be 

offered and sold in reliance upon Rule 144A of the U.S. 

Securities Act of 1933 or when other information from the 

issuer or another involved party indicates that the security 

will be offered and sold in such manner.

Regulation S Indicator Field will return true when the issuer's offering 

documentation (e.g., prospectus or offering memorandum) 

includes a statement to the effect that the security will be 

offered and sold outside the United States in reliance upon 

Regulation S of the U.S. Securities Act of 1933 or when 

other information from the issuer or another involved party 

indicates that the security will be offered and sold in such 

manner.

Security Type Brief description of the specific instrument type. For 

example, Corporate Note, Bond or Debenture or Other.
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Bond Type Brief description of bond type. For example, Junior 

Unsecured or Junior Subordinated Unsecured; Senior 

Secured; Secured; Unsecured; Senior Unsecured; 

Subordinated Unsecured; Senior Subordinated Unsecured; 

Other.

First Coupon Period Type Describes the first coupon period of the bond with respect 

to the payment frequency.

Convertible Indicator Indicates if the security is a convertible.

Call Indicator Indicates whether the security has a call provision.

First Call Date The first date on which bonds may be called for 

redemption.

Put Indicator Indicates the existence of a feature that provides the bond 

holder the contractual option to redeem the bond prior to 

the scheduled maturity date.

Put Date Date on which securities are subject to redemption by the 

bond holder.

Minimum Increment The minimum increment of the face value of the bond as 

originally specified in the issuer's offering documentation

of the security. 

Minimum Piece The minimum tradable amount or investment, as originally 

specified in the issuer's offering documentation of the 

security.