WASHINGTON—Starting next week, mom-and-pop investors will learn how much their broker made selling them bonds. The change in practice is due to a new rule meant to curb abusive sales practices. Beginning Monday, brokers will have to say how much they pocket when they buy corporate and municipal bonds and sell them to retail investors later that day. The...
A new rule requiring US brokers to reveal how much money they make buying and selling corporate and municipal bonds came into effect on 14 May. The regulation , designed to improve transparency and crack down on abusive sales practices , could lead to retail investors negotiating lower fees with brokers or , alternatively , shifting towards mutual funds or exchange - traded funds for low - income exposure . However , some critics of the rule said it does not go far enough to protect investors . There is also concern notifying disclosure of the fees by regular investors could lead to notices never being read .