MSRB Monthly Update - September 2014

Coming Soon

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.

Did You Know?

The MSRB Education Center includes both printable and video resources about the municipal securities market. Later this month, the MSRB will add podcasts. 

MSRB to Establish Best-Execution Rule for Municipal Securities Transactions

The MSRB is seeking approval from the Securities and Exchange Commission (SEC) to require municipal securities dealers to seek the most favorable price possible when executing transactions for retail investors. This so-called “best-execution” standard for transactions in the municipal market aims to protect investors and improve the structure and efficiency of the municipal market. The new rule is part of an ongoing effort to enhance the transparency and fairness of pricing in the municipal securities market through rulemaking and enhancements to the MSRB’s Electronic Municipal Market Access (EMMA®) website

Read the SEC rule filing and proposed rule language.

The MSRB’s ongoing efforts on transparency and fair pricing include a proposal to make additional trade price information available to investors, and a planned proposal regarding disclosure of information to investors about municipal trades to help them better understand some of the factors associated with the costs of their transactions. 


MSRB Advances Rules for Municipal Advisors

In the next step of the development of a regulatory framework for municipal advisors, the MSRB is seeking comment on amended draft MSRB Rule G-37 to extend the rule to cover municipal advisors. The draft amendments are designed to address potential pay-to-play practices by municipal advisors and provide greater transparency regarding their political contributions. Comments on the MSRB’s draft rule are due no later than October 1, 2014.

The MSRB also is reviewing comments received on revised draft MSRB Rule G-42, on core standards of conduct and duties of municipal advisors.

This fall, the MSRB plans to publish a request for comment on amending MSRB Rule G-20, which would establish limitations on gifts given by municipal advisors in their professional capacity.

Read more about the status of municipal advisor rulemaking.


Financial Disclosure Submissions Spike in May and June


The number of financial and operating disclosures submitted to the MSRB by issuers of municipal securities rose sharply in May and June of this year when compared to the same months in 2013. The higher volume in May and June 2014 could be attributed to underwriters’ and issuers’ participation in the SEC's Municipal Continuing Disclosure Cooperation initiative, which was announced in March 2014. The initiative provides issuers and underwriters the opportunity to self-report to the MSRB previously unreported disclosure documents in an effort to comply with continuing disclosure obligations specified in SEC Rule 15c2-12.

The MSRB will soon publish a report on continuing disclosure activity over the last year. For data on municipal new issuance, trading activity, continuing disclosures or variable rate resets, visit the MSRB’s EMMA website.  


Regulatory Roundup

MSRB Proposal to Establish Best-Execution Rule Published in Federal Register September 8, 2014

MSRB Seeks Input on Strategic Priorities September 8, 2014

Proposed Rule Change Consisting of Rule G-18, on Best Execution of Transactions in Municipal Securities, and Amendments to Rule G-48, on Transactions with Sophisticated Municipal Market Professionals ("SMMP"), and Rule D-15, on the Definition of SMMP August 20, 2014

Request for Comment on Draft Amendments to MSRB Rule G-37 to Extend its Provisions to Municipal Advisors August 18, 2014

Request for Comment on Enhancements to Post-Trade Transaction Data Disseminated Through a New Central Transparency Platform August 13, 2014