MSRB Files With SEC to Eliminate Fee Exemptions

Date: September 30, 2009

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


MUNICIPAL SECURITIES RULEMAKING BOARD FORMALIZES PLAN
TO ELIMINATE CERTAIN UNDERWRITING FEE EXEMPTIONS
Change Will Assess Fees More Uniformly and Strengthen Revenues

Alexandria, VA- The Municipal Securities Rulemaking Board (MSRB) today filed a proposed rule change with the Securities and Exchange Commission to eliminate most exemptions related to underwriting assessments for primary offerings of municipal securities.  The filing follows the MSRB's August 2009 announcement that it would change its fee structure to establish a more equitable distribution of fees among dealers and banks active in the municipal securities market and better match MSRB revenues with operating costs.

Beginning December 1, 2009, the MSRB will apply its underwriting assessment of $.03 per $1,000 paid by underwriters of primary offerings that were previously exempt from the assessment.  These securities include those (i) with a par value of less than $1 million, (ii) sold in certain limited offerings or private placements, (iii) that are puttable back to the issuer every nine months or less, such as variable rate demand obligations, and (iv) with a final stated maturity of nine months or less.  Commercial paper will continue to be exempt from the assessment.  The change in assessments will also apply the $.03 per $1,000 assessment rate rather than the current rate of $.01 per $1,000 to all securities with a maturity of less than two years.

"Our fee revenue has become skewed as the volume of primary offerings in notes and other types of exempted offerings has grown while our resources have been devoted to regulatory support of all types of securities," said Lynnette Kelly Hotchkiss, MSRB Executive Director.  "Eliminating exemptions for these offerings will better reflect dealer participation in the market and the focus of our regulatory activities."


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.