SIFMA
A multi-year charge card proposal filed with the Securities and Change Fee by the Municipal Securities Rulemaking Board on Tuesday drew a mixture of reactions from trade teams representing broker-dealers and municipal advisors.
The Securities Trade and Monetary Markets Affiliation “applauds the hassle the MSRB has put into revising its charge card,” Leslie Norwood, managing director, affiliate normal counsel and head of municipal securities at SIFMA, mentioned in an announcement.
“The MSRB’s Multi-12 months Price Card gives for extra stability in vendor charges, which is necessary for sellers calculating their regulatory prices of doing enterprise,” Norwood mentioned. “SIFMA appreciates the proposed 45% credit score on market exercise charges in 2026 and 2027 to return extra MSRB reserves to the regulated dealer vendor neighborhood that funded the reserves.”
SIFMA appears to be like ahead to “the SEC approving this charge card, and the ensuing charge reductions,” Norwood mentioned.
Michael Decker, senior vice chairman for analysis and public coverage on the Bond Sellers of America, mentioned BDA appears to be like ahead to reviewing the speed card proposal and appreciates “the MSRB’s outreach on finances and charge points” because it developed the amendments referring to multi-year charge card. Nonetheless, Decker sounded a bit much less enthusiastic concerning the proposal than Norwood.
“I just like the 45% credit score too, however once you dig down just a little bit you see that actually it is simply returning cash to sellers that they have been over-paying for the final two years,” Decker mentioned, including that “BDA will file feedback on the initiative with the fee.”
The brand new multi-year charge card replaces the MSRB’s annual
“Over the previous 18 months we have now listened to suggestions from our stakeholders and labored to handle their considerations relating to our finances, reserves and charges following the suspension of our proposed 2024 charge card,” MSRB CEO Mark Kim mentioned within the launch. “The brand new Multi-12 months Price Card gives larger transparency, stability and certainty in charges for regulated entities, leading to a extra predictable, rate-setting mannequin for MSRB.”
In November 2023, the MSRB filed with the SEC proposed amendments to MSRB Guidelines A-11 and A-13 to institute charge card charges for 2024. Remark letters submitted to the SEC relating to the 2024 charge card proposal cited considerations “associated to the MSRB’s charge setting processes and the volatility and unpredictability of charges below the present charge card mannequin,” the submitting mentioned.
The SEC subsequently suspended the MSRB’s proposed 2024 charge card.
In response, the MSRB withdrew its proposed 2024 charge card, reverted to charges within the 2023 charge card “and started conducting in depth stakeholder outreach to solicit suggestions previous to proposing the subsequent iteration of its charge card,” in response to FAQs on its web site which have been up to date on Sept. 30 to handle questions regarding the new charge card proposal.
Throughout its ultimate quarterly
The MSRB’s proposal would hold charges of evaluation the identical because the charges in impact at present for the underwriting charge, transaction charge and commerce rely charge described in MSRB Rule A-13, in response to the FAQs, which referred to these charges collectively as market exercise charges.
The prevailing 2023 charges will keep in place via 2029 “with no charge enhance,” in response to the FAQs.
“Moreover, a brief 45% credit score for all market exercise charges in 2026 and 2027 is projected to return surplus reserves to the trade,” in response to the FAQs. “The credit score would outcome within the Market Exercise Charges for 2026 and 2027 to be assessed at a web charge 45% under their present ranges.”
The MSRB’s municipal advisor skilled charge described in MSRB Rule A-11 will endure a rise of $70 per yr, rising to $1,340 in 2029 from $1,060 in 2025 “with a view to preserve goal contribution charges and improve the equity of charge burdens between broker-dealers and municipal advisors,” in response to the FAQs.
“We’re conscious of the rise in MA charges over the subsequent 4 years, and are reviewing the submitting,” Susan Gaffney, govt director of the Nationwide Affiliation of Municipal Advisors, mentioned.
Gaffney added that NAMA’s feedback to SEC relating to the speed card submitting will doubtless deal with the next gadgets: “how charge assessments relate to the MSRB’s finances, the change from an annual to a multi-year charge card, the significance of sustaining a per-MA charge evaluation, and whether or not the charge will increase burden MA companies, particularly small MA companies.”
