Bonds

The Municipal Securities Rulemaking Board has approved its first fees under its new rate card model, which helps the board respond to market pressures and adjust yearly rates accordingly, and expects to file those changes with the Securities and Exchange Commission within a month’s time.

Of the four fees the board collects from regulated entities, the trade count fee and transaction fee will be decreasing significantly, the board said, which is due to transaction volume surpassing expectations. The underwriting and municipal advisor professional fees will be increasing due to less than expected underwriting volume.

That was voted on and approved at the MSRB’s board meeting Oct. 25-26, where the board also received an update on MSRB’s move to a one-minute trade reporting window as part of amendments made to MSRB Rule G-14 on transaction reporting and its request for comment on Rule G-47 on time of trade disclosure.

“The annual rate card is designed to fund the organization with the revenue needed to deliver value to the municipal market through our regulatory protections, technology infrastructure and data services,” said MSRB chair Meredith Hathorn. “Importantly, any surplus beyond those funding needs is promptly returned to fee-payers in the form of reduced rates rather than accumulating in the MSRB’s coffers. For 2024, the MSRB will be returning over $3 million in excess revenue collected from dealers as a result of record-high trading volume in 2023.”

“The annual rate card is designed to fund the organization with the revenue needed to deliver value to the municipal market through our regulatory protections, technology infrastructure and data services,” said MSRB chair Meredith Hathorn. “Importantly, any surplus beyond those funding needs is promptly returned to fee-payers in the form of reduced rates rather than accumulating in the MSRB’s coffers. For 2024, the MSRB will be returning over $3 million in excess revenue collected from dealers as a result of record-high trading volume in 2023.”

The board is working towards a filing with the SEC on amendments to Rule G-14 on time of trade reporting and during this most recent meeting, the board received an update as to what is happening on that front. 

The board approved the proposal in July and said that the bulk of what was approved will stay intact, with two exceptions for manual trades and for small firms with de minimis trading activity. The MSRB is expecting that to be filed in the coming months, most likely after the fee proposal is filed.

“The MSRB continues to closely coordinate with our fellow regulators on this impactful enhancement to post-trade transparency, with the goal of making a filing in the coming months,” said MSRB Chief Executive Officer Mark Kim.

Related to that proposal is the MSRB’s request for comment on Rule G-47 on time of trade disclosures and contains related amendments to Rule D-15, which defines the sophisticated municipal market professional. Those are being separated, as the board said it is moving forward with the Rule G-47 proposal and expects to file with the SEC in the coming months but will be holding off on D-15 in order to gather more information and conduct more outreach with the market to inform its next steps.

The board also received an update on EMMA, including updates to its market transparency systems, user personalization and improvements to EMMA’s search and disclosure submission process.

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