Why the Lack of Price Integrity in Bond Markets?

The video discusses PIMCO's $20 million fine by the SEC for misleading investors about ETF performance. It highlights discrepancies in bond market pricing between retail and institutional investors, emphasizing the lack of transparency and visible pricing in the bond market compared to the stock market. The video also explores efforts to improve market transparency, including FINRA's initiatives to collect bond pricing data, and the potential for a system similar to the equity market's SIP to be implemented in the bond market.

What was the main reason for the SEC's charges against PIMCO?

• Failing to report financial statements

• Manipulating stock prices

• Exploiting arbitrage between retail and institutional bond pricing

• Misleading investors about stock performance

Why do retail investors often receive worse prices in the bond market?

• They have more trading experience

• They trade in larger quantities

• They have access to better information

• They lack visibility of the best bid and offer

What is a key difference between the stock and bond markets?

• Stock markets have a system to ensure best execution for retail orders

• Bond markets have visible pricing

• Bond markets are smaller than stock markets

• Stock markets lack protective rules for retail investors

What did Professor Larry Harris estimate about retail investors in the bond market?

• They save $700 million annually

• They dominate the bond market

• They waste $700 million annually

• They have no impact on the market

What is FINRA's role in improving bond market transparency?

• Collecting stock pricing data

• Implementing new trading platforms

• Collecting bond pricing data from electronic platforms

• Reducing the size of the bond market