MSRB rescinds one-minute trade reporting standard

The Municipal Securities Rulemaking Board announced on Monday that the board, in response to industry concerns, has decided to rescind a one-minute trade reporting standard that had yet to go into effect.

The board approved the filing of amendments to MSRB Rule G-14 to rescind previously approved, but not yet effective, rule provisions so that the existing 15-minute trade reporting standard would be retained, a June 9 MSRB press release said. 

The board’s move comes after the MSRB announced in March that it would not set an effective date for the prior rule amendments, which the Securities and Exchange Commission  had approved in September 2024, in order to “make substantive changes to the transaction reporting requirements.”

The new amendments to MSRB Rule G-14, which the board approved during a scheduled June 5 meeting, will be filed with the SEC in the coming days, an MSRB spokesperson said. 

The MSRB’s decision to rescind the one-minute trade reporting deadline and revert to the existing 15-minute standard, “comes after months of dialogue and engagement with market participants,” MSRB President and CEO Mark Kim said in the release. 

“Updated data on reporting timeframes since the initial trade data analysis from the 2022 filing, together with certain implementation issues raised by stakeholders, suggested that the recently approved amendments were not necessary to improve market transparency,” Kim said. 

The board’s move also follows the Financial Industry Regulatory Authority’s notice in February relating to amending its similar rule for trade reporting of Trade Reporting and Compliance Engine-eligible securities under FINRA Rule 6730, the MSRB release said, adding that “MSRB’s shared goal with FINRA has been to maintain regulatory consistency across the corporate and municipal bond markets in trade reporting.” 

Still, some aspects of the amendments approved in September 2024 will be retained, including  provisions requiring that transactions be reported “as soon as practicable” and that dealers adopt policies and procedures in line with that requirement, the MSRB release said. Those changes were widely supported by market participants commenting on the September 2024 amendments and would be consistent with requirements for trade reports to TRACE under existing FINRA rules, MSRB’s release said. 

Rule G-14 would also maintain language added in the September 2024 amendments that is “designed to focus examination and enforcement efforts primarily on ‘patterns or practices’ of trade reporting failures, rather than isolated cases of late reporting, as well as certain clarifying language designed to improve the understandability of existing reporting requirements,” the MSRB release said. 

“Streamlining our rules by rescinding unnecessary provisions makes good on MSRB’s promise to modernize our rulebook and eliminate undue compliance burdens on the industry,” MSRB Board Chair Bo Daniels said in the release.