MSRB Monthly Update - February 2015

Upcoming Events

Municipal Securities Rulemaking Board and Municipal Advisory Council of Texas Education and Outreach Seminar

March 5, 2015
2:00 p.m. to 5:00 p.m. CT
Dallas, TX and via Webcast

The MSRB will host a public education and outreach seminar for municipal market professionals to discuss municipal market structure issues and development of new regulations for professionals that provide financial advice to state and local governments, among other topics. View the seminar agenda.

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Coming Soon

The MSRB will soon publish its annual Fact Book, a free and comprehensive reference document for historical municipal market trading and other statistics.  Prior editions of the Fact Book are available here

Did You Know?


The MSRB Education Center has a video library with brief videos on understanding the municipal market, working with financial professionals and other topics.

MSRB Renews Call for Transparency of Undisclosed Debt

In its latest effort to promote transparency for investors, the MSRB recently published a second advisory promoting more transparency of undisclosed debt of municipal bond issuers. The MSRB is concerned that investors and other market participants are often unaware of the potential impact of bank loans and other debt-like obligations on the seniority status of existing bondholders and the credit or liquidity profile of an issuer, among other implications.

The MSRB has been encouraging state and local governments to disclose bank loans voluntarily on the MSRB’s Electronic Municipal Market Access (EMMA®) website since 2012, when the MSRB the released its first notice on bank loans. While many hundreds of bank loans by municipalities are outstanding, only 88 bank loan disclosures have been properly submitted to EMMA in that time.

In its advisory issued in January, the MSRB recommends that issuers voluntarily disclose bank loan information through EMMA. Issuers should also have a full understanding of the terms of a bank loan and its implications for existing debt.

In addition to its leadership on municipal disclosure, the MSRB last month offered to assist any efforts by the Securities and Exchange Commission (SEC) to review the federal municipal market disclosure regime established by SEC Rule 15c2-12. The MSRB suggested that the SEC look to its disclosure standards for the corporate market as a precedent for disclosure of off-balance sheet obligations such as bank loans. 

Read about the MSRB’s market leadership on bank loans


MSRB Finalizes Content for Municipal Advisor Exam

At its January Board of Directors meeting, the MSRB continued to advance its development of a professional qualification exam for municipal advisors by agreeing to the scope and content of the exam. The MSRB plans to file with the Securities and Exchange Commission (SEC) a content outline of the topics to be covered by the test. The outline also provides sample questions and reference material to assist municipal advisor professionals in preparing for the exam.

The outline will be filed after the SEC completes its review of a related MSRB proposal to establish two classes of municipal advisor professionals – representative and principal – both of whom would be required to pass a basic competency examination. The proposed Series 50 exam will cover the role and responsibilities of municipal advisor professionals as well as the rules and regulations governing their activities.

The MSRB invites municipal advisors to participate in a pilot exam later this year to help validate test questions and determine the passing score for the exam. Click here to receive email updates about the pilot test.

In addition to advancing its professional qualification test, the Board considered comments received on draft amendments to MSRB Rule G-20 on gifts and gratuities to extend the rule’s provisions to municipal advisors. The MSRB intends to file a revised proposed rule with the SEC.

View a complete summary of the MSRB’s January Board meeting.


Municipal Trading Slows in 2014


Municipal securities trading, which is reported directly to the MSRB by dealers, decreased last year compared to a year earlier. Par amount of municipal securities traded decreased 11 percent in 2014 while the number of trades decreased 16 percent in 2014 compared to 2013. 

A more in-depth view of municipal trading and other statistics will soon be available in the MSRB’s annual Fact Book. It will be published later this month and contain detailed statistics on trading activity across different types of trades and municipal securities, as well as statistics on yield distributions, continuing disclosure and interest rate resets. Additionally, the MSRB will be seeking input on how to improve its Fact Book through a short survey.

For additional information on municipal new issuance and trading activity, continuing disclosures or variable rate resets, visit the MSRB’s EMMA website.


Regulatory Roundup

SEC Request for Extension of Time on Proposed Amendments to MSRB Rule G-3 to Create Municipal Advisor Professional Qualifications February 12, 2015

Bank Loan Disclosure Market Advisory January 29, 2015