MSRB’s 2023 audited financials show large jump in revenue

The Municipal Securities Rulemaking Board’s 2023 audited financials show the board ended the year with $76.2 million in total assets, an $8 million jump from the $68 million it ended 2022 with, as well as $49 million in total revenue, a $19 million gain from the $30 million it collected the prior year.

“The value the MSRB delivers to the municipal securities market rests on the independence and expertise that are the defining features of our SRO model,” said MSRB chair Meredith Hathorn and MSRB chief executive officer Mark Kim in the annual report. “The MSRB also delivers value to the market through our market transparency products and services… and by consistently engaging with market stakeholders as we advance key initiatives.”

The board collected $10.8 million in underwriting fees, $17.7 million in transaction fees and $10.5 million in trade count fees. Additionally, it also collected $1.4 million in annual and initial fees, $3 million in municipal advisor professional fees, $1.2 million in 529 plan underwriting fees, $4 million in data subscriber fees and other revenue, as well as $153,694 in rule violation fine revenue.

Despite the board collecting significantly more revenue in 2023 than 2022, it also had expenses of $46.8 million, making the total change in net assets $2.1 million, a change from the 11 million decrease the board posted for 2022. Those expenses included $5.1 million for market regulation, $24.8 million for market transparency and technology, its largest expense by far, $5.1 million for market structure and data, $2.5 million for external relations, $4.9 million for governance and leadership and $4.6 million for finance, human resources and administration.

The MSRB’s liabilities totaled $17.5 million in 2023, up from the $11.5 million in 2022 and making the board’s total net assets without restrictions $58.7 million. 

The board’s investments included $31.5 million in U.S. Treasury Notes, $7.4 million in certificates of deposit and $493,824 in government guaranteed agency securities, totaling $39.4 million, down from the $43.2 the MSRB held at the end of 2022. The board also collected $647,066 in interest and dividends, $492,866 in unrealized gains and $30,105 in realized gains.

Cash investments in the MSRB’s technology systems came down slightly in 2023, as the board spent $6.2 million in 2023 compared to $7.8 million in 2022.

The board is routinely criticized for its investments in technology, which some view as outside of its Congressional mandate, and it used this report as an opportunity to respond. In 2023, the board noted that it upgraded its EMMA system, which included phasing out individual user accounts, enhancing the free daily yield curve by adding the BVAL AAA Municipal Curve, and eliminating unused CUSIPs.

“Future enhancements include upgrading the search function to help users find the data and information they need more quickly and efficiently, including the ability to search by obligor; adding alerts and fixing common pain points on the myEMMA alert service; and updating the continuing disclosure submission process to further enhance how issuer information is displayed on EMMA.”