MSRB issues request for information on small firms

The Municipal Securities Rulemaking Board has issued a request for information asking how its rules and market regulation generally affects small firms operating in the muni market.

The request asks firms eleven specific questions such as what are those factors that make a regulated entity, small, medium or large, what rules have had a disproportionate impact on smaller regulated entities and whether there are circumstances in which the application of an MSRB rule has required firms to spend additional resources or retain third party vendors that have had a negative impact on the firm. It also encourages all muni market participants to respond to any aspect they wish to address.

“By seeking to understand the impact of our rules on market participants, we strive to ensure that the municipal securities market is both fair and efficient,” said Mark Kim, chief executive officer at the MSRB. “I believe that an impactful way to support the efforts of regulated entities to comply with our rules is to assess whether a rule is no longer achieving its intended purpose or if there are disproportionate costs or burdens associated with compliance for certain types of firms.”

The request does not propose any specific rulemaking and notes that commenters should not focus solely on existing MSRB rules. The MSRB hopes this request will aid generally in future rulemaking proposals.

The board is conducting the information search due to the number of comments it has received in recent requests for comment that focus on the ways in which the draft proposals could have a differing effect on small firms. The MSRB also said it has been encouraged to produce compliance or education resources that could be tailored to small firms.

For those with questions concerning the RFI should be aimed at Carol Converso, director, market practice, the MSRB’s dedicated small firm contact.

Comments should be submitted to the MSRB by Feb. 26, 2024.