MSRB Update: Tell Us What You Think of Our Governance Proposal

Municipal Securities Rulemaking Board sent this bulletin at 03/06/2020 12:21 PM EST

Tell Us What You Think of Our Governance Proposal

Bob Brown, Chair, MSRB Governance Review Special Committee

The MSRB recognizes the importance of continually enhancing its governance practices. In FY 2020, the MSRB formed a Governance Review Special Committee, which developed a request for public comment on draft amendments to the MSRB rule specifying the composition and selection of the Board of Directors.

The proposal addresses governance improvements suggested by Senator Kennedy (R-LA) and co-sponsors Senators Warren (D-MA) and Jones (D-AL) in their bill, S. 1236, the Municipal Securities Rulemaking Board Reform Act of 2019, as well as recommendations identified as a result of the Special Committee’s review and assessment of the Board’s governance practices. The MSRB is subject to oversight by both Congress and the Securities and Exchange Commission (SEC).

Proposed amendments to MSRB Rule A-3 include tightening the independence standard required of public representatives on the Board by requiring a minimum of five years of separation from a regulated entity before an individual would be eligible to serve as a public member. Since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the MSRB has been led by a majority-public Board, with more than half of the public members representing issuers and investors and other public members coming from a rating agency, academia, bond insurer and legal background.

The amendments would also reduce the size of the Board to 15 members, with eight members representing the public and seven representing regulated entities. To facilitate the possible transition to the new Board size, the MSRB currently is not seeking applicants for new Board members for Fiscal Year 2021.

The MSRB welcomes comments on this proposal by March 30, 2020. After considering comments on the proposal, the MSRB will file proposed changes to its rule with the SEC for approval.

Comment on our proposal.

Enhancing Market Transparency

EMMA Submission Calculator

The MSRB has received approval from the SEC of a proposal to more prominently display existing information on the timing of issuers’ annual and audited financial disclosures on the MSRB’s free Electronic Municipal Market Access (EMMA®) website. The EMMA “Submission Calculator,” proposed in November 2019, would become visible on the EMMA website by July 2020 to allow time for stakeholders to preview the new display and provide feedback on educational tools. Read more about the enhancements. The MSRB will host a free educational webinar on March 19, 2020 from 3 p.m. to 4 p.m. Eastern Time to discuss the Submission Calculator and demonstrate other upcoming EMMA enhancements that will provide a “modification history” to clearly indicate how a continuing disclosure filing has been amended over time. Register for the webinar.

Volunteer for a New Advisory Group

To formalize engagement with stakeholders on market transparency initiatives and technology modernization, the MSRB is now soliciting volunteers for a new Market Transparency Advisory Group (MTAG). The group would advise the Board of Directors on strategic initiatives to modernize and enhance the free EMMA® website and related systems in support of market transparency. Volunteers are invited to submit applications by March 13, 2020. Read more information about volunteering for MTAG.

CEO Search Qualifications

In early January, the Board released information on the qualifications it seeks in a new CEO, who will lead the organization responsible for safeguarding the integrity of the roughly $4 trillion municipal securities market. The preferred candidate is described as a mission-driven leader with understanding of regulation in the securities industry, ideally with municipal securities.

The CEO position summary and candidate profile are available on the MSRB’s website here.

Sign Up for Compliance Corner

Want additional regulatory updates and resources to help with your understanding of MSRB rules? Sign up for the MSRB’s Compliance Corner, our quarterly newsletter designed to deliver compliance obligation information to dealers and municipal advisors. Read the Winter 2020 edition.

With continuing retrospective rule review and Regulation Best Interest (Regulation BI) changes coming, there’s no better time to stay in the loop on compliance considerations.

New Publications and Resources

2019 Fact Book

The annual Fact Book highlights 2019 municipal market trends and statistics on trading and disclosures.

Read the Fact Book

Different Buying Patterns of Retail and Institutional Investors in Municipal Bonds

This issue brief highlights different investor buying patterns and informs investors buying lower coupon bonds about the potential risks they may face if they decide to sell before maturity in a rising interest rate environment.

Read the issue brief.

2019 Annual Report

The MSRB’s 2019 annual report details the organization’s commitment to engaging with stakeholders to advance regulatory and strategic initiatives last year.

Read the report

Investor’s Guide to ABLE Programs

This guide provides information about ABLE programs, including basic program characteristics, expenses, benefits and risks, and investment options, as well as additional resources.

Read the guide.

Rules and Guidance Roundup

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

Compliance Resources

Visit the online Compliance Center for resources and information to help regulated entities understand and comply with MSRB rules.

Recent Press Releases

Read the MSRB’s latest press releases on msrb.org.

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