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

MSRB TESTIFIES AT SEC FIELD HEARING ON THE STATE OF
THE MUNICIPAL SECURITIES MARKET

Alexandria, VA - The Municipal Securities Rulemaking Board (MSRB) testified on July 29, 2011 at the Securities and Exchange Commission (SEC) field hearing on the state of the municipal market regarding MSRB initiatives to enhance municipal market transparency, specifically in the area of pre-trade price transparency. The hearing is one of several conducted by the SEC to gather information from key municipal market participants to help in preparing an SEC staff report.

MSRB General Counsel and Deputy Executive Director Ernesto Lanza noted the increased individual investor participation and reduced information asymmetries in the municipal market that have resulted from the MSRB’s post-transparency efforts, most notably through the 2008 creation of the MSRB’s Electronic Municipal Market Access (EMMA) website, which publishes real-time prices of municipal bonds for free. “EMMA serves as a free, user-friendly platform that brought retail investors for the first time onto a more even playing field with market professionals.”

Lanza discussed the MSRB study that was recently undertaken with the assistance of Erik Sirri, professor of finance at Babson College and former SEC Chief Economist and Director of the Commission’s Division of Trading and Markets. Lanza explained the study would focus on the effect of municipal market transparency, including pre-trade transparency, on investor protection and would likely result in MSRB initiatives in these areas.

Lanza told SEC staff, “Perhaps Professor Sirri’s most challenging task is to develop a preliminary assessment of the impact of current forms of pre-trade transparency, such as through alternative trading systems or other market mechanisms, in light of the private nature of these venues and the limited dissemination of information from them to the broader market.”

Lanza concluded by emphasizing the importance of continued coordination between the MSRB and SEC in their efforts to enhance transparency for participants in the municipal market.

Access the MSRB’s written testimony submitted to the SEC.

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.

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