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Contact: Leah Szarek, Director of Communications




Washington, DC – Taking a major step in its year-long governance improvement undertaking, the Municipal Securities Rulemaking Board (MSRB) today filed proposed changes to its governance rules with the Securities and Exchange Commission (SEC).

“At the start of this fiscal year, the Board committed to improving governance and transparency in ways that will ensure the MSRB continues to fulfill its mission of municipal market regulation in the public interest,” said Bob Brown, MSRB Board member and Chair of the Board’s Governance Review Special Committee.

In September 2019, the Board began a comprehensive review of its governance practices, led by the Governance Review Special Committee. A major focus of that review has been Board composition, including independence requirements for public Board members. In addition, the Board has examined the efficiency and transparency of its operations. In January 2020, the Board solicited public comment on a number of proposed changes to MSRB Rule A-3, dealing with Board membership, qualifications and elections. The comment period occurred during the early stages of the COVID-19 pandemic, and in response to requests from stakeholders, the Board extended the original 60-day comment period to 90 days to ensure all interested persons had sufficient time to prepare comments.

The proposed amendments to MSRB Rules A-3 and A-6 would tighten the eligibility requirement for public Board members to require separation from a regulated entity of at least five years. The proposed amendments would also reduce the size of the 21-member Board, initially moving to 17 members in Fiscal Year 2021 before ultimately shrinking to 15 members in FY 2022.

“An efficient and fair municipal market, with well-managed, transparent regulation, is essential to state and local governments across America,” Brown said. “Effective governance at the MSRB ensures that municipal securities investors, issuers, regulated market participants, and members of the public can have confidence in that $4 trillion market.”

Some commenters noted that, were the MSRB to immediately move to a 15-member Board, it would have only one issuer member next year. Brown said, “The Dodd-Frank Act added protection of municipal entities and obligated persons to the MSRB’s regulatory mission, and we need the valuable perspective of state and local officials on the Board. Particularly at a time when state and local governments are facing immense financial pressures due to COVID-19, it is important that the issuer perspective be vigorously represented. Thus, we modified our originally proposed transition plan so that the Board can include a second issuer representative next year.”

The MSRB’s filing includes additional technical amendments to the Board’s administrative rules, including the re-organization of certain provisions. The MSRB’s proposal will be published for public comment in the Federal Register and must be approved by the SEC before becoming effective. The filing proposes an effective date of October 1.

Read the filing.

The Municipal Securities Rulemaking Board (MSRB) protects and strengthens the municipal bond market, enabling access to capital, economic growth, and societal progress in tens of thousands of communities across the country. The MSRB fulfills this mission by creating trust in our market through informed regulation of dealers and municipal advisors that protects investors, issuers and the public interest; building technology systems that power our market and provide transparency for issuers, institutions, and the investing public; and serving as the steward of market data that empowers better decisions and fuels innovation for the future. The MSRB is a self-regulatory organization governed by a 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.