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Regulation

SEC launches fixed-income advisory panel, ends equity counterpart

Securities and Exchange Commission Chairman Jay Clayton

A panel of fixed-income experts shared their suggestions on how the Securities and Exchange Commission should research ways to improve liquidity at the first meeting of a market structure advisory group in Washington on Thursday.

SEC officials also informed members of a similar panel for equities that its charter is ending. The equities panel was formed in February 2015, and renewed several times since then. SEC Chairman Jay Clayton said Thursday that agency officials are "actively considering" some of the recommendations made, but decided to not extend the panel. "Our plan is to organize targeted roundtables on discrete equity market structure issues, which will feature experts on each topic representative of a broad diversity of viewpoints," he said.

Mr. Clayton's remarks came at the start of the inaugural meeting of the Fixed Income Market Structure Advisory Committee, where he called the fixed-income markets "massive, and growing."

Issuance in the U.S. corporate bond market has hit record highs five years running, with nearly 1,400 companies issuing $1.5 trillion of corporate bonds in 2016. Its growth has outpaced U.S. equities, rising in value by 76% vs. 40% for the equity market cap between 2006 and 2016.

Fixed-income markets also differ in their connection to the interest rate derivatives market, while corporate and municipal debt markets, the new committee's initial focus, "are particularly significant to retail investors," Mr. Clayton said.

Institutional investors are represented on the fixed-income advisory panel by investment officials from Chicago, the Colorado Public Employees' Retirement Association and Verizon. Asset manager representatives include officials from Pacific Investment Management Co., BlackRock (BLK) and Citigroup.