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Dealer-dealer teams cheered the Securities and Alternate Fee’s approval of a proposed Municipal Securities Rulemaking Board rule change that referred to as for rescinding a beforehand authorized one-minute commerce reporting normal that had but to take impact.
The SEC’s order approving the proposed rule change – dated Sept. 16 – got here after the MSRB introduced in June that the board had authorized the submitting of amendments to MSRB Rule G-14 to rescind beforehand authorized however not-yet-effective rule provisions in order that the present 15-minute normal for reporting municipal securities trades to the MSRB could be maintained.
The Securities Trade and Monetary Markets Affiliation “strongly helps” the MSRB “reverting to 15-minute commerce reporting,” Leslie Norwood, managing director, affiliate basic counsel and head of municipal securities at SIFMA, mentioned in a Sept. 17 assertion.
“The fastened earnings markets—together with the municipal securities market—stay predominantly over-the-counter, the place components of buying and selling and post-execution processing depend on guide processes, or are topic to nonetheless growing and non-comprehensive automation,” Norwood mentioned. “An across-the-board one-minute reporting requirement just isn’t possible because of the lack of full post-trade automation stemming from the significance of bilateral negotiation in lots of fastened earnings markets.”
The SEC’s Sept. 16 order approving the MSRB’s proposed rule change in addition to a separate SEC order – additionally dated Sept. 16 – approving the same rule change proposed by the Monetary Trade Regulatory Authority have been welcomed by the Bond Sellers of America.
“BDA applauds the fee in addition to FINRA and the MSRB on the ultimate withdrawal of the twin one-minute commerce reporting amendments,” Michael Decker, senior vice chairman for analysis and public coverage at BDA, mentioned in a Sept. 17 e mail. “The rule adjustments authorized final 12 months would have imposed substantial compliance prices on the business with none materials enchancment in market transparency.”
The MSRB’s choice to rescind the one-minute commerce reporting normal underneath Rule G-14 adopted “months of dialogue and engagement with market members,” MSRB President and CEO Mark Kim mentioned in a June 9 press launch. The MSRB filed the proposed rule change with the SEC on June 10.
“The SEC’s approval of our most up-to-date amendments to MSRB Rule G-14 permits us to finalize this acceptable algorithm on commerce reporting,” Ernie Lanza, the MSRB’s chief regulatory and coverage officer, mentioned in a Sept. 17 assertion. “The authorized amendments retain the present 15-minute commerce reporting normal and, beginning subsequent summer season, would require sellers to report trades as quickly as practicable.”
In a discover printed Sept. 17, the MSRB mentioned it had acquired approval from the SEC “of the MSRB’s most up-to-date amendments to Rule G-14 RTRS Procedures underneath MSRB Rule G-14, on stories of gross sales or purchases, and MSRB Rule G-12, on uniform observe.” RTRS is brief for Actual-time Transaction Reporting System.
The amendments modify sure amendments to these guidelines that have been authorized by the SEC in 2024 however had but to develop into efficient.
The MSRB in a press release referring to the Sept. 17 discover mentioned that collectively the 2 units of rule amendments hold the present 15-minute timeframe for sellers to report trades to the MSRB as a substitute of decreasing the timeframe to at least one minute.
As well as, the 2 units of rule amendments: set forth a brand new requirement underneath Rule G-14 RTRS Procedures that requires sellers to report transactions which are topic to the present 15-minute reporting timeframe to the MSRB, require underneath Rule G-12(f) that transactions which are topic to the brand new as-soon-as-practicable reporting requirement be submitted to the Depository Belief and Clearing Company for comparability and require that sellers undertake insurance policies and procedures referring to the brand new as-soon-as-practicable reporting requirement. In addition they make sure clarifying and technical adjustments, the MSRB’s assertion mentioned.
The amendments will take impact in two phases, the MSRB mentioned. The amendments that implement the clarifying and technical adjustments to the Rule G-14 RTRS Procedures, Rule G-12(f) and IF-1 will develop into efficient Oct. 1, the MSRB mentioned.
The amendments that set up “the brand new as-soon-as-practicable commerce reporting and associated insurance policies and procedures necessities underneath the Rule G-14 RTRS Procedures, and the as-soon-as-practicable submission for comparability requirement underneath Rule G-12(f),” will take impact on July 1, 2026, the MSRB mentioned.
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