MSRB NOTICE 2005-09 (JANUARY 31, 2005)


NEW YORK,  Jan. 31 – The Municipal Securities Rulemaking Board (MSRB) today announced it has begun making “real-time” pricing information for all municipal bond trades available for the marketplace within 15 minutes of a trade. Previously, the MSRB, the self-regulatory organization that makes rules for the municipal bond market, had disseminated price information the day after a trade. 

The Bond Market Association, which represents fixed-income broker-dealers, jointly announced it will post the new MSRB data free of charge on its award winning and redesigned website,, replacing the “day after a trade” (“T+1”) data it has carried since 2003.

“Real time pricing data, reported within 15 minutes of a trade, will make sure investors have the most up-to-date information they need to make investment decisions,” said Christopher Taylor, executive director of the MSRB. “Investors – indeed, all participants – can be confident that transparency in pricing has been taken to the highest level in the municipal bond marketplace.”

 “We are extremely pleased to be able to offer investors real-time municipal bond pricing information,” said Micah S. Green, BMA president.  “The Association has long supported transparency in the bond markets and, given the retail nature of the municipal bond market – individuals directly own one-third of the securities and mutual funds, which are largely retail, own another third – we want to ensure that retail investors have access to the data as quickly as possible, in a format they can easily use.”

The move to real-time pricing culminates the MSRB’s long standing commitment and decade-long effort to increase price transparency in the municipal bond market. The MSRB implemented a limited transaction reporting facility for the municipal securities market in 1995 and followed up with a series of measured steps, all aimed at increasing transparency. By 2003, the MSRB was making all trading data publicly available on a “day after the trade” (“T+1”) basis.

The MSRB has always made its trading data available to any vendor, with no restrictions on how the vendor chose to use the data.  “Through the years, the Board has been gratified that the Association has chosen to make our data available to investors free of charge.  It’s a ‘win’ for everyone, particularly the investor,” said Mr. Taylor.

The Association’s website,, which will carry the free pricing information, is being substantially redesigned and re-launched later this week, in part to accommodate the new data. Through a searchable database, investors will be able to view municipal bonds by state, credit rating or maturity. They can also view detailed information about a particular security’s insurance coverage, rating and call date, as well as its daily high and low prices and its yield-to-maturity. In addition, investors will be able to view the security’s trading history and use an on-site calculator to compare taxable and tax-free yields.

With the addition of real time municipal bond trading data, the redesigned will feature price data for all three major bond categories: municipal, corporate and US Treasury (Treasuries are available with a one-hour delay). The availability of this data, on even a delayed basis, has been popular:  the site registered over 1.5 million visitors last year and received an average of 4.5 million “hits” per month.

“Working together, regulators and dealers have made real-time transparency a reality in the retail dominated municipal bond market, giving investors rapid access to pricing data,” said Mr. Green.

The Municipal Securities Rulemaking Board (MSRB) is a self-regulatory organization created by Congress in 1975, to write rules regulating the behavior of bank and securities firm dealers in the municipal securities market.  The Board is subject to oversight by the Securities and Exchange Commission (SEC), and its rules, once approved by the SEC, have the force and effect of Federal law.

The Bond Market Association (BMA), with offices in New York, Washington, D.C., and London, represents securities firms and banks that underwrite, trade and sell debt securities and other financial products globally.


Questions and Answers About the Real Time Reporting System
  with Frank Ingrassia, the MSRB's Chairman for Fiscal Year 2005
[Mr. Ingrassia is a Managing Director at Goldman, Sachs & Co.]

Why has the MSRB begun real time transaction reporting?

The MSRB has been committed to increasing price transparency in the municipal securities market for many years because, simply put, markets function better with more information.  We've been moving at a measured pace, gradually releasing more data more quickly, to get to where we are today.  Now, for the first time, investors have the ability to look at the pricing of individual trades and establish what a bond issue is worth in the market on a real time basis.  This is an important step for our industry.

Why did it take a so long to develop a real time reporting system?

The municipal bond marketplace is dispersed and most bond issues are infrequently traded.  Given this reality, we had to overcome a number of technology hurdles as we proceeded, step by step, toward the goal of real time reporting.  The MSRB began limited collection and distribution of municipal bond prices in 1995, and by the year 2000 we were making all trading data public.  By 2003, all data was being released on a “day after the trade” or “T+1” basis.  Advancements in technology have allowed us to put our current real time reporting system into place.

What is the benefit of real time reporting over “T+1”?

Real time data is the ultimate in transparency, and it has always been the MSRB's goal to reach this level.  Investors and all participants in the municipal securities market can be confident that everything has been done to make this a fair and transparent market for all participants. 

Where will investors be able to get real time pricing data?

We are happy to say that our long term partnership with The Bond Market Association continues, as they are making real time pricing data available free of charge on their recently re-designed website,  It has long been the MSRB's policy to make transaction pricing data available at a reasonable price to any vendor, with no restrictions on how that data is disseminated.  We are grateful to the Association for giving the data the wide and free distribution through its award winning investor education website.

What impact will real time pricing data have on the municipal securities market?

Increased transparency is always good for a market, and the municipal securities market now has the ultimate in price transparency.  It will make it more likely that people will want to participate in this marketplace and increase overall efficiency, as well as boost confidence in the fairness of the market.

What does real time transaction reporting mean for bond issuers?

Issuers are concerned about raising capital at the best price.  Real time transaction reporting gives them an increased ability to view the progress of their bonds in the marketplace and compare them to those of other issuers.  The information allows them to track both new issues and their bonds in the aftermarket.  Just as transparency leads to greater efficiency in other parts of the market, real time transaction information will help issuers make better financing decisions.

What does this mean for dealers?

Dealers understand the beneficial impact of price transparency and increased investor confidence on the market.  There is good reason to believe that this information will likely bring more participants to this market and give dealers a more complete picture of trading patterns in all sectors of the market.

How soon will we see changes in the market due to real time transaction reporting?

Because it takes time for people to change their behavior, and it will take some time for people to begin to use this data, it's unlikely there will be noticeable change in the near term.  Real time transaction data will provide a better, more transparent market for municipal bonds over the long term.


Real-Time Municipal Bond Prices
Background and Facts

Municipal Securities

Municipal securities are vital for the provision of public services in America.  They are debt instruments issued by state and local governments to fund public works that touch the lives of all citizens.  Roads, schools, waterworks and hospitals are only a few of the public projects funded by municipal securities.  In recognition of this crucial function, most municipal bond interest is free of federal tax and state tax in the states where issued.

The Municipal Securities Market

§         One of the largest in the world, with over $2 trillion in par value outstanding

§         More than 50 thousand issuers – and two million separate bond issues outstanding

§         One third of all muni bonds are owned by individual investors (Federal Reserve estimate) – almost two thirds (64 percent) if muni bond mutual funds, mostly owned by individuals, are included

§         High degree of safety – some 65 percent hold AAA rating, if insured bonds are counted as AAA

§         Most muni bond investors use a “buy and hold” strategy – bonds not frequently traded

Municipal Securities Rulemaking Board

The Municipal Securities Rulemaking Board (MSRB) is a self-regulatory organization created by Congress in 1975, to write rules regulating the behavior of bank and securities firm dealers in the municipal securities market in order to “protect investors and the public interest.”  The MSRB is subject to oversight by the Securities and Exchange Commission (SEC), and its rules, once approved by the SEC, have the force and effect of Federal law.  Rules are enforced by the National Association of Securities Dealers (NASD) for securities firms and by the various bank regulatory agencies for bank dealers, as well as the SEC.

The Board is made up of 15 members, five from securities firms, five from bank dealers, and five public members, including at least one issuer of municipal securities and one investor.  The Board meets five times a year to consider current and future rules designed to promote just and equitable principles of trade, foster coordination and cooperation in the industry, facilitate transactions and perfect the mechanism of a free and open market, as part of its core function to protect investors.

Real Time Price Reporting

The MSRB began the limited dissemination of prices for the municipal securities market in 1995, and increased price transparency in a series of measured steps.  By 2000, the MSRB was making all trade data public on a one-day delay.  On January 31, 2005, the MSRB began disseminating real-time, or immediate, municipal bond prices, which are posted for free on The Bond Market Association's investor education website,

The Bond Market Association

The Bond Market Association, with offices in New York, Washington, D.C., and London, represents securities firms and banks that underwrite, trade and sell debt securities and other financial products globally.