The Municipal Securities Rulemaking Board announced Friday that Meredith Hathorn will be its next chair of the board on the same day that the Securities and Exchange Commission announced the withdrawal of the board’s controversial fee proposal and the MSRB submitted a new version.
Hathorn is a managing partner at Foley & Judell in Baton Rouge, Louisiana, and is finishing out her term as vice chair and head of the board’s nominating committee. She began her career as a law clerk at Foley & Lardner in 1985 and is also the president of the Louisiana Chapter of Women in Public Finance.
“Each year, we cast a wide net to identify a new class of market experts to join us on the Board,” Hathorn said. “We thank each applicant for their willingness to give back to our market and we could not be more pleased to welcome four new members who each bring a distinct perspective, a wealth of experience and an outstanding commitment to overseeing the execution of the MSRB’s long-term strategic goals.”
Carol Kostik, the retired former deputy comptroller for public finance for the City of New York, will be vice chair.
Selected from its pool of over 70 applicants were Institutional investor representative David Belton, director, American Family Insurance, municipal issuer representative Horatio Porter, chief financial officer of North Texas Tollway Authority, bank representative Patrick Haskell, managing director, head of municipal securities and co-head of fixed income retail capital markets and municipal advisor representative Jill Jaworski, managing director and partner at PFM financial advisors.
The FY 2023 board will have 15 members, the now permanent size under governance rule changes adopted in 2020. Donna Simonetti and Frank Fairman’s contracts have been extended a year. Daniel Kiley will also stay on another year to take the place of a regulated board member, per the board’s transition plan.
The board also authorized its staff to prepare a new request for comment on MSRB Rule G-47 on time of trade disclosure, expected later this year, and is also preparing to issue a request for comment on proposed amendments to MSRB Rule G-14 on reports of sales or purchases next week.
The board’s meeting also discussed the ongoing changes to its EMMA, MSRB.org and EMMA Labs platforms in addition to its efforts in collecting more pre-trade data in fixed-income markets.
“A common theme in our long-term strategic plan is the objective of advancing market efficiency, improving price transparency, and enhancing overall market liquidity, especially in light of the opportunities presented by evolving technology and market practices across the fixed income market,” MSRB chief executive Mark Kim said.
But the news of its board meeting comes on the day the SEC announced the withdrawal of its controversial fee proposal and the rollout of an amended version.
The board’s new amended fee proposal is fundamentally the same as the previous one, but aims to provide clarity on its annual rate card process, its cap on annual rate increases and the percentage of relative revenue contributions with respect to each of the board’s different rates.
The amended proposal appears to have done little to appease the complaints of the broker-dealer community, who said in comments on the first version that the MSRB should be creating a fee structure that shifts some of the burden of funding the board away from dealers.
“Although SIFMA and its members are pleased that the MSRB withdrew its fee proposal and refiled with the additional transparency of its funding policy, we are disappointed that many of our comments were not incorporated into the new fee filing,” Securities Industry and Financial Markets Association head of municipals Leslie Norwood told The Bond Buyer Friday. “Dealers continue to bear a disproportionate burden in funding the MSRB, which we believe is neither fair nor equitable.”
“In the spirit of fairness, we again urge the MSRB to institute a requirement for municipal advisors to self-report their related revenues, so that the MSRB can make a more informed decision regarding fee allocations,” Norwood added. “SIFMA and its members will be reviewing the new filing in full, and may submit additional comments to the SEC.”
Departing chair Patrick Brett reflected on his time with the board in a release. He will leave the board with the expiration of his term Sept. 30.
“The work of an SRO is never more important than at a time of profound evolution and modernization of financial markets,” Brett said. “I am proud and grateful to have served alongside a dedicated Board of experts steeped in the characteristics of our unique market, who have not shied from advancing an ambitious agenda. With engagement from a broad universe of market stakeholders, the MSRB has taken meaningful steps to enhance the efficiency and transparency of municipal market structure, to deepen our own and the broader market’s understanding of how market practices are evolving, and to create opportunities for collaboration that will yield powerful new technology platforms and data analytics capabilities.”