MSRB Holds Quarterly Meeting

Date: October 27, 2008

Contacts:            Lynnette Kelly Hotchkiss, Executive Director
                          (703) 797-6600
                          lhotchkiss@msrb.org

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


Transparency Issues and Market Conditions Dominate Quarterly
Meeting of the Municipal Securities Rulemaking Board

Alexandria, VA – The Municipal Securities Rulemaking Board held its quarterly meeting October 22-24, 2008 and agreed to proceed with the next steps of its transparency programs involving short-term securities and continuing disclosures from municipal bond issuers. The Board also discussed intensifying its communications with federal officials on the need to address the severe liquidity problems facing the municipal market.

“The Board is urging the Federal Reserve and Treasury Department to address the liquidity needs of the municipal bond market to avoid further loss of investor confidence,” said MSRB Chair Ronald A. Stack.  “Because of the severe liquidity crisis, highly-rated municipal governments are unable to meet their borrowing needs at a reasonable cost, and it is taxpayers who ultimately bear that expense.” 

The Board has joined others, including members of Congress and state officials, in urging federal action on municipal liquidity issues.  “The overwhelming consensus is that local and state governments and investor confidence require solutions at the federal level,” Mr. Stack said.

Board members heard from two industry representatives, Mr. T. Timothy Ryan, Jr., President and Chief Executive Officer, Securities Industry and Financial Markets Association, and Mr. Ken Williams, Vice Chair, Regional Bond Dealers Association, on the state of the municipal bond market and ways the Board can be helpful in restoring efficiency.

The current market conditions emphasize even more the importance of the Board’s ongoing work on transparency of market information.  At the meeting, the Board agreed to seek SEC approval to begin collecting and disseminating ARS and VRDO interest rate information beginning January 30, 2009.  “This program is going to give complete transparency to floating-rate securities,” Chair Stack said.  “The market will be able to clearly see the prices being paid for these securities.”  The MSRB plans to add components to its information system on variable-rate securities and when completed, it will include additional market data, including details about liquidity arrangements.

The Board also agreed to proceed with the next stages of EMMA, the MSRB’s Electronic Municipal Market Access System, by requesting SEC approval to develop a pilot program to accept continuing disclosures from municipal issuers as well as voluntary submissions of other disclosures, such as quarterly financial statements and notices of other types of material events.  This will allow municipal issuers time to establish accounts with the MSRB and test the submission process ahead of a full implementation next summer.

In other business, the Board discussed its long-range plan and identified priorities in rulemaking, information systems and outreach.  Those priorities include undertaking a comprehensive review of the Board’s General Rules (G-Rules) to ensure that they appropriately address market issues and practices.

As it seeks to strengthen its interaction with market participants, the Board agreed to continue to support the MSRB’s Issuer and Investor Advisory Groups, and the Uniform Practice Group that last year provided input to the Board on selected issues.  These consultative groups, made up of a broad-cross section of industry representatives, meet periodically throughout the year to discuss issues related to their areas of expertise and to provide feedback to the Board.

Finally, MSRB staff updated Board members on implementation of the Depository Trust and Clearing Corporation’s New Issue Information Dissemination Service, which went into effect September 2.  The system centralizes collection and dissemination of critical information about newly issued municipal securities to improve the timeliness and accuracy of the reporting and processing of new-issue trades to MSRB.  From September 2 through October 8, 2008, underwriters successfully submitted more than 1,500 new issues of municipal securities through NIIDS.


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.