The Municipal Securities Rulemaking Board reported total net assets of $67 million for its fiscal year ended Sept. 30, 2024, up 14% from $58.7 million a year earlier as growth in underwriting fees helped boost revenue.
MSRB reported $57.5 million in total revenue as of Sept. 30, 2024, up 17% from $49.1 million year-over-year, according to its 2024 Annual Report, published Tuesday. Underwriting fees totaled $14.99 million, up nearly 38% from $10.89 million a year earlier.
"This is not surprising given that underwriting volume exceeded $500 billion in 2024 and set a new record high for the municipal securities market," an MSRB spokesperson said in an email Wednesday.
Transaction fees rose to $18.49 million, up 4.4% from $17.71 million the prior year.
"MSRB serves an essential role in safeguarding the integrity of our nation's $4 trillion capital market, which finances stronger, more resilient communities for all Americans," according to a message signed by MSRB Chair Warren "Bo" Daniels and MSRB CEO Mark Kim that was included in the report.
Congress established MSRB in 1975 as a self-regulatory organization "to protect investors, issuers and the public interest by ensuring a fair and efficient municipal securities market," their message said.
"As we celebrate our 50th anniversary in 2025, MSRB remains resolute in upholding its congressional mandate through market regulation, market transparency and market integrity," the message said.
The report highlighted several initiatives reflecting MSRB strategic priorities, which according to an MSRB press release issued Tuesday include modernizing market regulation; enhancing market transparency via technology and data; and advancing public trust.
In order to fulfill its congressional mandate successfully, "MSRB must continually review its rules and associated guidance to ensure they keep pace with evolving market practices and appropriately achieve their investor and issuer protection goals without placing undue compliance burdens on regulated entities," the report said.
"MSRB strives to address market harms to advance its mission to promote a more fair and efficient municipal securities market," the report said. "An important part of this process is to achieve regulatory harmony, where appropriate, with other capital markets by coordinating MSRB's efforts with those of fellow regulators."
In 2024, MSRB advanced a key initiative that marks "a significant modernization of the trade reporting paradigm in the municipal securities market," the report said. After more than two years of rule-making efforts, MSRB was granted Securities and Exchange Commission approval to amend MSRB Rule G-14. The rule change, which includes exceptions for manual trades and firms with limited trading activity, reduces the reporting time for most municipal securities trades to no later than a minute after the trade, down from the 15-minute standard previously.
"By giving investors and other market participants access to more contemporaneous prices, it will allow them to make more informed decisions when buying and selling bonds," the report said.
Also during the year, MSRB advanced its efforts to modernize its rule book by codifying certain interpretive guidance into the rules and retiring outdated guidance. It received SEC approval to amend MSRB Rule G-47 "to provide three new time of trade disclosure scenarios and to codify, consolidate and retire certain interpretive guidance," the report said.
In addition, MSRB amended MSRB Rule G-27 to permit dealers to conduct supervisory activities remotely, the report said. "MSRB acknowledges that the way dealers conduct business has changed over recent years with an increasing move to hybrid workplace models," the report said.
As for market transparency, the report said in 2024 MSRB expanded the availability of yield curves and indices on its EMMA website with the addition of the Tradeweb AAA Municipal Curve. In 2025, MSRB plans to launch a modernized EMMA that will offer improved navigation as well as enhanced search features and functionality, the report said.
The 2024 report also highlighted MSRB efforts to advance public trust. MSRB engaged with stakeholders through town hall meetings focused on MSRB's budget and rate card fee-setting process, the report said, adding that the perspectives shared helped to inform how MSRB communicates its budget and strategic priorities to the public.
"As a result, the budget MSRB published for the FY 2025 fiscal year provided more detail and context about its strategic investments, particularly in technology, and helped to bolster stakeholder confidence in its financial stewardship," the report said.
Perspectives gleaned from stakeholders have also contributed to the ongoing review of MSRB's fee-setting process, the report said. The report noted that as an independent SRO, MSRB depends on fees paid by regulated entities in order to fund its operations.
"MSRB recognizes and upholds its commitment to maintaining reasonable fees that are necessary or appropriate to advance its congressional mandate," the report said. "To this end, MSRB has issued an RFI to inform potential modifications to its fees and rate card model."
Responses to the request for information are due by Jan. 28.
