The Municipal Securities Rulemaking Board held the first of its two stakeholder meetings on Thursday, gathering trade groups representing the professionals from which the board derives its fees to discuss its now abandoned rate card model, the volatility of its fees and how many of its fees and expenses are allocated.
According to both members of the MSRB and some of the groups participating in the discussions, the meeting was productive and was a step in the right direction in terms of the board's outreach.
"We value the engagement and constructive dialogue that took place today on the MSRB's fee setting process," said Mark Kim, chief executive officer of the MSRB. "Specifically, we appreciated the conversation regarding the potential volatility of fees under the rate card model, causes of that volatility and ways to mitigate that volatility. Additionally, it was important for us to hear stakeholder perspectives on the fair and reasonable allocation of fees across regulated entities."
"I think we have a better understanding of some of the concerns of the industry, particularly with respect to the volatility of fees and how that might impact their business," Kim added.
The meeting, which brought together representatives from the Bond Dealers of America, Securities Industry and Financial Markets Association, and the National Association of Municipal Advisors, was structured as a dialogue around three principal topics: the volatility of fees, the use of projections and the allocation of fees amongst regulated entities.
"As a regulated member of the board, I've appreciated this opportunity from stakeholders who pay the MSRB's fees," said Angelia Schmidt, vice chair of the MSRB board of directors. "The goal of the rate card model is to promote strong fiscal management practices and we welcomed the stakeholder feedback received today. We look forward to incorporating it into our retrospective review of the rate card model."
Another meeting, which will be held in April, will center on the comments received regarding the board's budget, enhancements to financial transparency related to technology expenses in addition to exploring "avenues for stakeholders to provide feedback to the MSRB in advance of the adoption of our annual budget," the MSRB said.
"We had a very productive conversation with MSRB board members and staff on the Rate Card model," said Michael Decker, senior vice president, federal policy and research, Bond Dealers of America. "We appreciate the Board's outreach on this and we look forward to the next stakeholder meeting on MSRB budget issues next month."
"SIFMA appreciates the MSRB's engagement with regulated entities on its examination of its fee model," said Leslie Norwood, managing director, associate general counsel and head of municipal securities at SIFMA. The group also felt that "the meeting was productive, and looks forward to continuing to engage with the MSRB on discussions surrounding budget and fees."
The groups present on Thursday are also invited to the meeting in April, which is expected to be a much larger meeting and will join representatives from the trade organizations with investor and issuer representatives.
"ASA is looking forward to meeting with the MSRB to discuss items included in the comment letter ASA and others submitted in January," said Jessica Giroux, general counsel and head of fixed income policy at ASA. "In particular, we would like to discuss enhancements to the MSRB's financial transparency with respect to technology-related expenses, and to explore avenues for stakeholders to provide further feedback to the MSRB before it adopts its annual budget."
