Stakeholders prepare for MSRB fee meetings

The Municipal Securities Rulemaking Board is gearing the industry up for two meetings aimed at addressing the now discarded 2024 rate card fee model.

The board recently announced these meetings, the first of which will gather four trade associations and focus on the comments received, market projections and fee volatility as part of the board’s review of the fee model in its entirety. The board signalled in its open letter to the municipal securities market that the four groups it plans to engage with are those that submitted comment letters on the rate card: The Securities Industry and Financial Markets Association, the Bond Dealers of America, the American Securities Association, and the National Association of Municipal Advisors.

Those trade groups, which represent the broker-dealers and municipal advisors regulated by the MSRB, are encouraged by the move, as they’ve long bemoaned the lack of outreach and transparency from the MSRB.

“SIFMA was actively engaged in the comment process on the 2024 rate card fees, both in standalone comments and jointly with other trade associations,” said Leslie Norwood, managing director, associate general counsel and head of municipal securities at SIFMA. “We look forward to continuing to engage with the MSRB regarding its fee model and budget.”

“NAMA appreciates the MSRB’s outreach and efforts to talk with stakeholders about the MSRB fees and organizational transparency,” said Susan Gaffney, executive director of NAMA. “We look forward to learning more about the MSRB’s expanded approach to these matters and being able to engage in constructive discussions.”

“BDA always welcomes the opportunity to talk with the MSRB about issues that affect our members,” said Michael Decker, senior vice president of federal policy and research at the Bond Dealers of America. “We are encouraged that the Board is conducting stakeholder outreach on their budget- and fee-setting processes.”

“ASA is pleased the MSRB is organizing these industry gatherings to shed some light on its budget allocations,” said Jessica Giroux, general counsel & head of fixed income policy at ASA. “Without visibility into expenditure specifics, neither the public nor the industry can effectively gauge the integrity or reasonableness of the MSRB’s budget.”

That meeting will be held in March. The second, which will address specific comments related to the MSRB’s budget, enhancements to financial transparency as it relates to the board’s technology expenses, as well as to “explore avenues for stakeholders to provide feedback to the MSRB in advance of the adoption of our annual budget,” the MSRB said, will be held in April.

Developments on the MSRB’s fee model have been moving at breakneck speed in the past few months, as the comment period for its rate card model closed early in the year. The proposed fees were promptly suspended by the Securities and Exchange Commission, which supervises the MSRB, and subsequently withdrawn by the MSRB.

The fees for 2023 will be in place until the board can settle on a path forward. The stakeholder groups have said the entire saga was disruptive, as many firms had already aligned their automated processes with the 2024 rates.