MSRB Adopts Policy for Integrating Economic Analysis in Rulemaking Process

Date: September 26, 2013

Contact: Jennifer A. Galloway, Chief Communications Officer
             (703) 797-6600


Alexandria, VA The Municipal Securities Rulemaking Board (MSRB) announced today that it has adopted a policy for the formal use of economic analysis in MSRB rulemaking to ensure regulations that support a fair and efficient municipal market appropriately balance the benefits of protections for investors and municipal issuers with the burdens placed on regulated entities.  

The policy incorporates the core principles of the Securities and Exchange Commission’s guidance on economic analysis in rulemakings, including identifying the need for a proposed rule, articulating a baseline against which to measure a rule’s likely economic impact, evaluating alternative regulatory approaches and assessing the benefits and costs, both quantitative and qualitative, of the proposed rule, among other principles.  

“The MSRB recognizes industry concerns about the costs of regulation and designed the policy to provide additional rigor to its existing practice of evaluating possible alternatives and assessing potential burdens and benefits of rule proposals,” said MSRB Board Chair Jay Goldstone. “The policy will inform the MSRB rulemaking process and better establish the basis for future rule proposals.”  

The policy was developed over the last year by a working group of the MSRB Board of Directors focused on further integrating economic analysis into the MSRB rulemaking process. 

The formal policy comes at a time when the MSRB will begin to advance municipal advisor rulemaking in a series of key areas, including fiduciary duty, fair dealing and supervision. The MSRB is also continuing to streamline its existing rules for municipal securities dealers to promote regulatory efficiency.

The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a self-regulatory organization governed by a 21-member board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.