MSRB Monthly Update: January 2018

Having trouble viewing this email? View it as a Web page.

January Monthly Update Header

The Year Ahead: Tax Reform, Market Structure and Compliance Support

Lynnette Kelly, Executive Director

The municipal securities market is bracing for a year of change as provisions of the Tax Cuts and Jobs Act are set to alter market practices for issuers and investors. At the MSRB, we are studying the potential impact of tax reform on our market. With the elimination of tax-exempt advance refundings, local government borrowers may begin to offer bonds with shorter call dates, which provide flexibility to the issuer but typically carry a greater cost. Issuers may also participate in more complex swap transactions with additional and different risks that may not be well understood. Meanwhile, the need for budgetary flexibility by issuers may lead to greater reliance on bankers and advisors regarding complex transactions, with possible added expense. For investors, the tax law may mean changes in the types of municipal bonds they purchase. The MSRB is watching these developments closely as part of its mandate to protect municipal securities issuers and investors.

Another key development this year is the ongoing implementation of the MSRB’s mark-up disclosure rule on customer confirmations. This important investor protection rule represents a historic improvement to municipal market structure, a topic that will be addressed by the new Securities and Exchange Commission Fixed Income Market Structure Advisory Committee (FIMSAC), on which the MSRB is represented by Chief Market Structure Officer John Bagley. MSRB representation, and that of other municipal professionals on FIMSAC, recognizes the importance of municipal bonds in the fixed income market structure conversation.

Our ongoing efforts to support compliance with MSRB rules will be a continued focus in 2018. As we receive feedback from stakeholders on how we can most effectively facilitate compliance (see MSRB Seeks Comment on Compliance Support), we are developing resources that are responsive to input we have already received. These include a template to assist municipal advisors in drafting written supervisory procedures and a companion checklist, FAQs on the advice and recommendation provisions of Rule G-42 for municipal advisors, and updated and expanded FAQs on mark-up disclosure. We are also discussing with our Compliance Advisory Group considerations for municipal advisors regarding common cybersecurity concerns, among other topics.

Market Reports

As part of the MSRB’s strategic goal to leverage its status as the market’s self-regulatory organization, it will share new information and expertise to help inform practitioners and policymakers. In 2018, market stakeholders will see the publication of reports that seek to advance or address market topics, including a report on self-regulation in the municipal market, and on municipal exchange-traded funds. The MSRB also will share with the market its findings from its outreach and analysis on minimum denominations.

SRO Icon

Read more about the MSRB’s strategic objective to leverage the MSRB’s unique perspective and expertise as an independent self-regulatory organization.

New Board Member Application Window Opens January 8

The MSRB will be accepting applications for its Board of Directors beginning January 8, 2018. The Board sets the strategic direction of the organization, makes policy decisions, authorizes rulemaking and market transparency initiatives, and oversees MSRB operations. The MSRB is seeking applicants to fill two public and three regulated-entity positions, including applicants with substantial experience in municipal securities retail sales, and trading desk and syndicate operations. The MSRB is also interested in retail and institutional investor applicants, particularly those with expertise in separately managed municipal accounts and market structure issues, and applicants with a securities law or legal background. As always, qualified candidates representing the municipal market’s gender and minority diversity are encouraged to apply.

Interested candidates must submit an application, which will be available on the MSRB Board of Directors Application Portal starting January 8, 2018. MSRB Rule A-3 outlines requirements for all applicants to the Board, including specific eligibility requirements to serve as a public or regulated-entity Board member.

Arthur Miller: At-a-Glance

A regular feature on members of the MSRB Board of Directors

Arthur Miller, Board Vice Chair

With nearly 40 years of experience in virtually every aspect of public finance, Arthur Miller is one of the Board’s most seasoned members. As Managing Director of the Public Sector and Infrastructure Group at Goldman, Sachs & Co., where he has worked since 1985, Miller serves on the Board as a securities firm representative. While his contributions to policy development reflect his own professional experience, Miller says his views are informed and balanced by the diverse representation on the Board, and through engagement with market stakeholders and participants.

“Although I work at a large, institutionally oriented investment bank, I fully recognize that the perspective of the municipal securities market that I bring to the Board is just one among many,” he says. “Smaller firms, regional firms and minority firms play a vital role in the municipal market, as do the range of municipal issuers. Their involvement, input and participation in MSRB initiatives on an ongoing basis are an absolute necessity.”

As a fourth-year Board member, Miller has played a significant role in the development of the MSRB’s municipal advisory regulatory framework, and in overseeing the continued enhancement of the MSRB’s EMMA website. “EMMA has become THE portal for information about municipal bonds and the disclosures of municipal issuers — it’s Facebook of the muni market,” he says. Over the past year, the MSRB has rigorously examined EMMA’s functionality and ease-of-use, and improvements will be released this spring. “As part of its core mission in helping to further develop a fair and efficient market, the MSRB can and must continue to invest in and develop transparency tools that benefit all market stakeholders.”

Miller says that the MSRB’s market leadership and investor protection activities, including those that contribute to the availability of pricing information for smaller investors who may not have access to tools used by professional investors, are particularly important. The recent addition of third-party yield curves to EMMA gives retail investors free access to helpful benchmarks. 

Miller also supports the MSRB’s plan to request information from the public and market stakeholders about the accessibility and utility of indices, yield curves and other market benchmarks. “From a market transparency perspective, we think this is an area that would benefit further exploration of market views,” Miller says. “The MSRB has no jurisdiction over benchmark providers, but it can seek industry feedback on the use of benchmarks and other market-based data that would benefit investors, other market participants and the public interest more generally.”

Upcoming Events

Please join the MSRB at one or more of our Town Hall meetings that will provide municipal market stakeholders the opportunity to discuss municipal market self-regulation, the MSRB's compliance support initiative and the future of the MSRB. Each Town Hall meeting will be exclusively in person, and is intended to support the municipal market community by creating a forum to communicate regulatory concerns and capture ideas to inform the MSRB's future activity. Details and registration information for each event is listed below.


MSRB Arizona Town Hall 

Hosted in coordination with the National Association of Bond Lawyers’ 16th Annual Tax & Securities Law Institute
Wednesday, February 21, 2018 
4:00 p.m. – 6:00 p.m. MT
JW Marriott Desert Ridge, Stonegrill 

5350 E. Marriott Drive
Phoenix, AZ 85054
Register to attend.


MSRB California Town Hall 
Hosted in coordination with the National Association of Municipal Advisors 
Thursday, February 22, 2018 
4:00 p.m. – 6:00 p.m. PT

Newport Beach Marriott Hotel 

900 Newport Center Drive 
Newport Beach, CA 92660 
Register to attend.


MSRB Chicago Town Hall 
Hosted in coordination with the Municipal Bond Club of Chicago 
Thursday, May 17, 2018 
4:00 p.m. – 6:00 p.m. CT

JW Marriott Chicago 

151 West Adams Street 
Chicago, IL 60603 
Register to attend.


Recent Press Releases

Read the MSRB’s latest press releases on

Rules and Guidance Roundup

Visit the Rules and Guidance page of to stay up-to-date with the latest requests for comment, proposed rule changes, rule approval notices and market advisories.