The Municipal Securities Rulemaking Board has voted to move ahead with its controversial amendments to Rule G-14 on trade reporting, changing the trade reporting window to one minute from 15 minutes.
That was approved during its quarterly board meeting that took place July 26-27, during which the board also approved a new $47 million budget for FY 2024, including $3.5 million of reserves for its systems modernization fund, and voted to seek SEC approval on its amendments to Rule G-12 on uniform practice.
“Moving to a one-minute standard for trade data reported to the MSRB will achieve greater price transparency for investors who rely on this information to make informed decisions when buying or selling municipal bonds,” said MSRB Chief Executive Officer Mark Kim. “The proposal we plan to file with the SEC recognizes the role that small firms and manual trades play in the municipal securities market.”
Changes to MSRB Rule G-12 on uniform practice will add requirements related to the change to T+1, such as completion of allocations as well as confirmations and affirmations related to municipal securities transactions. These are also consistent with those applicable to broker-dealers under the newly adopted SEC Rule 15c6-2.
This was the board’s last quarterly meeting for the fiscal year and accordingly, the board approved a $47 million budget for FY 2024, which factors in the MSRB’s new fee-setting process so they can avoid having excess reserves. This budget allows for $3.5 million in reserves, compared with the $19 million in excess reserves the MSRB had in 2021, which caused them to return much of it via an 18-month 40% fee reduction.
“The MSRB’s FY 2024 budget effectively manages costs in an inflationary environment and reduces organizational reserves to within target levels, all while continuing to make the necessary investment in modernizing our rule book, our technology systems and our data capabilities to serve the market of the future,” said MSRB chair Meredith Hathorn. “Under the leadership of the Finance Committee and Committee Chair Angelia Schmidt, the Board has demonstrated the highest commitment to fiscal discipline and stewardship of industry dollars.
The board also voted on a new board member to finish out Jill Jaworski’s term, who left the board to become the chief financial officer for the City of Chicago. Jerry Ford has been filling in for the year but the MSRB will announce next week who will serve the remaining three years in Jaworski’s term.
The MSRB will also be adding a structured data lab to its EMMA Labs platform, which will contain a few case studies from issuers who’ve already experimented with structured data ahead of the Financial Data Transparency Act.