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The MSRB recently launched a new online education center to make it easier for investors and state and local governments to access digital resources about the municipal market. The new MSRB Education Center consolidates videos, fact sheets and other educational content in a single location to ensure investors and issuers have access to free, objective information they need to make informed decisions.
 The MSRB Education Center organizes resources by topic and
target audience. It features content about the following topics, among others:
- Features and risks of municipal securities
- Preparing to invest in bonds
- Buying and selling municipal bonds
- Monitoring municipal securities
- The process of issuing municipal securities
- Issuer disclosure to investors
- 529 college savings plans
Providing educational content is fundamental to the MSRB’s
mission to protect investors, state and local government issuers, and other
municipal entities.
Explore
the new MSRB Education Center.
In a major milestone in its development of a federal
regulatory framework for municipal advisors, the MSRB is seeking approval from
the Securities and Exchange Commission of proposed MSRB Rule G-44 to establish supervisory
standards and ensure compliance with all applicable securities laws. View
the rule filing.
The MSRB also is requesting public comment on a revised draft rule on core standards of conduct for municipal advisors. The revised draft
MSRB Rule G-42 addresses a number of issues raised by commenters on the initial
draft rule published in January 2014. Comments should be submitted no later than
August 25, 2014. Read
the request for comment. The MSRB will host a webinar
to review the proposed changes to the request for comment on draft Rule G-42 on
Thursday, August 14, 2014 at 3:30 p.m.
The MSRB plans to seek comment on draft amendments to its pay-to-play
rule to address the potential for pay-to-play activities by municipal advisors,
as well as draft amendments to its existing gifts rule to establish limitations
on gifts given by municipal advisors in their professional capacity.
At its
recent Board of Directors meeting, the MSRB continued to focus on enhancing price
transparency for municipal securities investors. The Board developed a proposal
regarding disclosure of information by municipal securities dealers to their retail
customers to help them better understand some of the factors associated with the
costs of their transactions. The proposed approach would provide investors with information generally already publicly available on the MSRB’s EMMA website but would provide it directly to investors in connection with their transactions so they can independently assess the prices they are receiving from dealers. The proposal, which will be published for public comment this fall, will also broadly seek input on alternative regulatory approaches, including markup disclosure on confirmations for trades that could be considered riskless principal transactions.
In a related effort on
price transparency, the MSRB Board approved a forthcoming request for comment
on enhancing its Real-time Transaction Reporting System (RTRS) to collect
additional post-trade information for public display on EMMA. MSRB market
structure staff also will continue engaging in outreach with market
participants to gather additional input for the first phase of an incremental
approach for collecting and disseminating bid-wanted information and other
pre-trade data on EMMA.
Additionally,
the Board agreed to proceed with its proposed rule establishing a “best-execution” standard for
transactions in the municipal market that includes an exception for transactions with
sophisticated municipal market professionals. Read more
about recent MSRB Board decisions.
The MSRB recently
added a graphical display of yield information on the Electronic
Municipal Market Access (EMMA®) website to allow users to view historical yields over time. The new yield
graphs are integrated into EMMA’s price discovery tool to enable investors and others to visually compare yield information
for multiple securities with similar characteristics.
In other EMMA news,
the MSRB plans
to make public finance ratings from Kroll Bond Rating Agency (KBRA) available
to the public through EMMA. The KBRA credit ratings will give investors
another tool to make more informed decisions about municipal bonds.
 The MSRB published a report on municipal market trading patterns, associated pricing and the effect of price transparency on pricing. The Report on Secondary Market Trading in the Municipal Securities Market provides a baseline set of statistics about municipal bond trading to enable market stakeholders and the MSRB to make further advancements toward a fairer, more efficient and more transparent municipal securities market.
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One particular analysis in the study reviewed average price differences, by year, of municipal securities transactions between customers conducted through one or two dealer intermediaries. The table below shows the average difference in prices between these customer-to-customer transactions from 2003-2010.
 Average total customer-to-customer price difference dropped
from 213 basis points in calendar year 2003 to 178 basis points in 2005, the
year in which the MSRB implemented its Real-time Transaction Reporting System,
and continued trending down until 2006.
The average price difference then rose steadily to a high of 225 basis
points in 2009—the period of the U.S. financial crisis and its immediate
aftermath. The analysis also showed that the average total customer-to-customer
differential began to drop in 2010.
For detailed information on the methodology used to create
these customer-to-customer price differences and other findings, please see Part II of the report.
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SEC Approves Amendments to MSRB Rule G-3, on Professional Qualification Requirements August 4, 2014
Proposed Rule Change Consisting of Proposed
New Rule G-44, on Supervisory and Compliance Obligations of Municipal Advisors;
Proposed Amendments to Rule G-8, on Books and Records to be Made by Brokers,
Dealers and Municipal Securities Dealers; and Proposed Amendments to Rule G-9,
on Preservation of Records
July 24, 2014
Request for Comment on Revised Draft MSRB
Rule G-42, on Duties of Non-Solicitor Municipal Advisors July, 23, 2014
Proposed Rule Change Consisting of Amendments
to Rule G-3, on Professional Qualification Requirements, Regarding Continuing
Education Requirements July
22, 2014 |
