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[Release No. 34-104154; File No. SR-MSRB-2025-02]

Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing

of a Proposed Rule Change to Amend MSRB Rules A-11 and A-13 Pursuant to a MultiYear Rate Card and to Make Related Technical Amendments

September 30, 2025.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange

Act”)1 and Rule 19b-4 thereunder,2 notice is hereby given that on September 30, 2025, the

Municipal Securities Rulemaking Board (“MSRB” or “Board”) filed with the Securities and

Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in

Items I, II, and III below, which Items have been prepared by the MSRB. The Commission is

publishing this notice to solicit comments on the proposed rule change from interested persons.

Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed

Rule Change

The MSRB filed with the Commission a proposed rule change to amend MSRB Rule A-

11, on assessments for municipal advisor professionals (“Rule A-11”), and Rule A-13, on

underwriting and transaction assessments for brokers, dealers, and municipal securities dealers

(“Rule A-13”), to establish new rates of certain assessments on municipal advisors under Rule

A-11 and brokers, dealers and municipal securities dealers (collectively, “dealers” and, together

with municipal advisors, “regulated entities”) under Rule A-13 pursuant to a multi-year rate card,

as well as to make certain related technical amendments (the “proposed rule change”). The

15 U.S.C. 78s(b)(1).

17 CFR 240.19b-4.

MSRB requests that the proposed rule change be approved with an effective date of January 1,

2026, provided that if approved by the Commission after January 1, 2026, the proposed rule

change be made effective as of the first day of the month following Commission approval.

The text of the proposed rule change is available on the MSRB’s website at

https://msrb.org/2025-SEC-Filings and at the MSRB’s principal office.

II.

Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the

Proposed Rule Change

In its filing with the Commission, the MSRB included statements concerning the purpose

of and basis for the proposed rule change and discussed any comments it received on the

proposed rule change. The text of these statements may be examined at the places specified in

Item IV below. The MSRB has prepared summaries, set forth in Sections A, B, and C below, of

the most significant aspects of such statements.

Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis

for, the Proposed Rule Change

1. Purpose

Background

Rule A-13 currently requires dealers to pay (a) an underwriting fee under Rule A-13(b)

(the “Underwriting Fee”) for municipal securities purchased from an issuer by or through such

dealer as part of a primary offering,3 (b) a transaction fee under Rule A-13(d)(i) and (ii) (the

“Transaction Fee”) based on the par amount traded in inter-dealer trades and customer sales, and

number of inter-dealer trades and customer sales (collectively, the “Market Activity Fees”). Rule

Underwriting assessments charged pursuant to Rule A-13(c) to dealers acting as

underwriters of certain municipal fund securities are not included in the assessment rates

that would be amended by this proposed rule change.

A-11 currently requires municipal advisors to pay to the MSRB a recurring annual fee (the

“Municipal Advisor Professional Fee” and, together with the Market Activity Fees, the “Rate

Card Fees”) for each associated person qualified as a municipal advisor representative under

MSRB Rule G-3 and for whom the municipal advisor has on file with the Commission an active

Form MA-I as of January 31 of the applicable year (“covered professional”). The purpose of the

proposed rule change is to amend the rates of assessment for the Rate Card Fees and to revise the

MSRB’s existing model for establishing Rate Card Fees from an annual process to a multi-year

process based on the factors described below.

The MSRB established its current rate card model in 2022 with the stated goals of

facilitating the MSRB’s ability to manage its organizational reserves year-to-year, mitigating the

impact of market volatility on fee revenue, and maintaining a fair and equitable balance of

reasonable fees and charges among regulated entities, while prudently funding the MSRB’s

anticipated near-term operating expenses.4 Pursuant to the current rate card model, in November

2023, the MSRB filed with the Commission proposed amendments to Rules A-11 and A-13 to

institute the rate card fees for 2024 (the “2024 Rate Card Proposal”).5 Five comment letters were

submitted to the Commission in response to the 2024 Rate Card Proposal, which highlighted

See Exchange Act Release No. 95417 (Aug. 3, 2022), 87 FR 48530, 48533-36 (Aug. 9,

2022), File No. SR-MSRB-2022-06. See also MSRB Notice 2022-06, MSRB Revises

and Resubmits Annual Rate Card Amendments (July 29, 2022), available at

https://www.msrb.org/sites/default/files/2022-09/2022-06.pdf. The amendments to Rules

A-11 and A-13 made by the 2022 filing, together with the MSRB’s then-current funding

policy, constituted the rate card model instituted at that time.

Exchange Act Release No. 99096 (Dec. 6, 2023), 88 FR 86188 (Dec. 12, 2023), File No.

SR-MSRB-2023-06. See also MSRB Notice 2023-10, MSRB Establishes 2024 Annual

Rate Card Fees for Dealers and Municipal Advisors (Nov. 30, 2023), available at

https://www.msrb.org/sites/default/files/2023-11/2023-10.pdf. The MSRB filed the 2024

Rate Card Filing for immediate effectiveness.

concerns, among others, related to the MSRB’s rate setting processes and the volatility and

unpredictability of rates under the current rate card model.6 On January 26, 2024, the MSRB

submitted a response letter to the Commission that outlined undertakings the MSRB intended to

pursue to address the concerns expressed by commenters with respect to the MSRB’s rate setting

process, including the MSRB’s determination to undertake a retrospective review of this

process.7 On January 29, 2024, the Commission temporarily suspended and instituted

proceedings to determine whether to approve or disapprove the 2024 Rate Card Proposal,

resulting in the MSRB’s Rate Card Fees reverting to the rates previously in effect.8 The MSRB

then withdrew the 2024 Rate Card Proposal on February 16, 2024,9 in order to meaningfully

engage with stakeholders to better understand and address their concerns, as well as to fulfill its

retrospective rule review commitment by conducting a comprehensive review of the current rate

card model.

Since withdrawing the 2024 Rate Card Proposal, the MSRB engaged in what it believes

to be substantive outreach with stakeholders, particularly those who submitted comments in

Comments are available at https://www.sec.gov/comments/sr-msrb-202306/srmsrb202306.htm.

See https://www.sec.gov/comments/sr-msrb-2023-06/srmsrb202306-416059-985442.pdf

(the “2024 MSRB Response Letter”).

Exchange Act Release No. 99444 (Jan. 29, 2024), 89 FR 7424 (Feb. 2, 2024), File No.

SR-MSRB-2023-06. The 2024 Rate Card Fees applied to activity subject to the Rate Card

Fees occurring between January 1, 2024 and January 28, 2024. See also MSRB Notice

2024-02, Current Dealer and Municipal Advisor Fees Upon SEC Suspension of 2024

Annual Rate Card Fees (January 30, 2024), available at

https://www.msrb.org/sites/default/files/2024-01/2024-02.pdf.

Exchange Act Release No. 99577 (Feb. 21, 2024), 89 FR 14552 (Feb. 27, 2024), File No.

SR-MSRB-2023-06. See also MSRB Notice 2024-04, Existing Dealer and Municipal

Advisor Fees Maintained Upon Withdrawal of 2024 Annual Rate Card (February 16,

2024), available at https://www.msrb.org/sites/default/files/2024-02/2024-04.pdf.

response to that proposal, to better distill and understand the most important concerns that the

MSRB could meaningfully address in the near term and in the future. As one example of this

substantive outreach, the MSRB issued a Request for Information (“RFI”) on its rate card

process on October 30, 2024, soliciting feedback from stakeholders on the MSRB’s rate setting

process, the distribution of fees across regulated entities generally, and the MSRB’s management

of its organizational reserve funds.10 The MSRB received comments from six commenters in

response to the RFI, focusing on, among other matters, the volatility and unpredictability of the

current rate card model, the fee distribution between dealers and municipal advisors, and

strategies for management of reserve levels.11

See MSRB Notice 2024-14, Request for Information on the MSRB’s Rate Card Process

(Oct. 30, 2024), available at https://www.msrb.org/sites/default/files/2024-10/MSRBNotice-2024-14.pdf. Prior to publication of the RFI and informing many aspects of the

questions posed therein, the MSRB held outreach meetings with industry groups

representing regulated entities and other stakeholders to discuss the MSRB’s budget and

rate card process, including joint meetings with the National Association of Municipal

Advisors (“NAMA”), Bond Dealers of America (“BDA”) and the Securities Industry and

Financial Markets Association (“SIFMA”) on March 14, 2024, and with the American

Securities Association (“ASA”), the Investment Company Institute, the Government

Finance Officers Association, the National Federation of Municipal Analysts, NAMA,

BDA and SIFMA on April 16, 2024. The MSRB also met individually with SIFMA on

June 17, 2024, NAMA on June 18, 2024, ASA on June 20, 2024 and BDA on June 20,

2024. Additional examples of such outreach include meetings held after the MSRB

received comments on the RFI with industry groups representing regulated entities to

further discuss the MSRB’s budget and Rate Card Fees, including meetings with NAMA

on July 8 and 21, 2025; BDA on July 11 and 21, 2025; and SIFMA on July 15, 2025.

See infra Self-Regulatory Organization’s Statement on Comments on the Proposed Rule

Change Received from Members, Participants, or Others. Comments were received from

Susan Gaffney, Executive Director, NAMA (Jan. 28, 2025) (“NAMA Letter”); Thomas

F. Huestis, Senior Managing Director, Public Resources Advisory Group, Inc. (Jan. 27,

2025) (“PRAG Letter”); Leslie M. Norwood, Managing Director and Associate General

Counsel and Gerald O'Hara, Vice President and Assistant General Counsel, SIFMA (Jan.

28, 2025) (“SIFMA Letter”); Michael Decker, Senior Vice President, BDA (Jan. 28,

2025) (“BDA Letter”); Jessica R. Giroux, General Counsel and Head of Fixed Income

Policy, ASA (Jan. 28, 2025) (“ASA Letter”); and Robert Laorno, General Counsel, ICE

Bonds Securities Corporation (Jan. 21, 2025) (“ICE Bonds Letter”).

After carefully considering the RFI responses and feedback received from the MSRB’s

outreach to stakeholders,12 the MSRB has determined to revise the current fee setting process

from an annual rate card model to a multi-year process and to propose new Municipal Advisor

Professional Fees assessed pursuant to Rule A-11 and Market Activity Fees assessed pursuant to

Rule A-13 based on the new multi-year rate setting model (the “Multi-Year Rate Card Process”),

as described below.

The new Multi-Year Rate Card Process is designed to enhance the stability and

predictability of Rate Card Fees, maintain fairness of assessments on regulated entities, and

allow the MSRB to manage organizational reserves responsibly while minimizing uncertainty

and possible operational disruptions to regulated entities that could result from more frequent

and less predictable changes in assessment rates.13 To that end, the proposed rule change

implements a revised approach to fee setting, intended to address stakeholder concerns, by

moving the process for determining Rate Card Fees from an annually calculated adjustment to a

fixed multi-year rate schedule for Rate Card Fees, establishing appropriate parameters to limit

the degree of annual changes to Rate Card Fees, establishing a framework to effectively address

surplus reserves through rate adjustments to Market Activity Fees, and maintaining the target

balance of Rate Card Fees between dealers and municipal advisors.

See supra note 10.

These proposed rule changes are intended to address the primary concerns of regulated

entities that can reasonably be implemented in the course of establishing this new set of

Rate Card Fees for 2026 – 2029 without undue delay. The MSRB remains committed to

on-going engagement with stakeholders to continue to explore whether additional,

longer-term changes to the MSRB’s approach should be implemented in the course of

developing future rate cards beyond 2029.

Proposed Multi-Year Rate Card Fees

To provide greater predictability and stability of the Rate Card Fees, the proposed rule

change would establish Rate Card Fees for the next four calendar years: 2026, 2027, 2028, and

2029 (the “proposed Multi-Year Rate Card”).14 The Municipal Advisor Professional Fee

included in the Rate Card Fees for each of these years would be operative from January 1 of each

calendar year until December 31 for that year and the Market Activity Fees included in the Rate

Card Fees would be operative from January 1, 2026 until December 31, 2029.15 The MSRB

anticipates that it would adopt a new set of Rate Card Fees established through the Multi-Year

Rate Card Process to become effective beginning on January 1, 2030.16 Any subsequent multiyear rate cards would be established by amendment to Rules A-11 and A-13 and in accordance

with the principles and guidelines of the MSRB’s revised funding policy, available at

https://www.msrb.org/MSRB-Funding-Policy-1 (the “Revised Funding Policy”).17

As discussed below, due to both the accumulation of excess reserves (in part resulting

from the suspension and subsequent withdrawal of the 2024 Rate Card Proposal, as well as

The Municipal Advisor Professional Fee included in the proposed new Rate Card Fees,

for each year covered by the proposed rule change, would be set out in Supplementary

Material .01 of Rule A-11. Each of the Market Activity Fees included in the proposed

new Rate Card Fees would be set out in Supplementary Material .01(a)(i) – (iii) of Rule

A-13.

If the proposed rule change is approved with an effective date after January 1, 2026, the

Rate Card Fees would instead become operative from the first day of the month following

Commission approval, with the end dates for the respective Rate Card Fees remaining

unchanged.

If no new Rate Card Fees are established by January 1, 2030, the then-effective Rate

Card Fees for 2029 would remain in effect until any new fees are established.

The Revised Funding Policy becomes effective as of October 1, 2025. Any future

revisions to the Revised Funding Policy, including any changes to the provisions relating

heightened Market Activity Fee revenues during a period of record trading and issuance

volume18) and a reduction in the MSRB’s reserves target, the MSRB has determined to reduce

excess reserves through credits (“Temporary Credits”) of 45% applied to Market Activity Fees in

2026 and 2027, which would produce a reduction in the amounts to be assessed to and paid by

dealers for Market Activity Fees during such years.19 The Rate Card Fees, together with the net

amount of Rate Card Fee assessments (taking into account the Temporary Credits),20 are set forth

in the following table:

to the Multi-Year Rate Card Process and to organizational reserve requirements, must be

approved by the MSRB’s board of directors and would be posted on the MSRB website

at https://www.msrb.org/MSRB-Funding-Policy-1. Revisions to the Revised Funding

Policy would not result in changes to the rates of filed Rate Card Fees absent a rule filing

with the Commission, but instead would have an impact on future rate-setting through

MSRB rulemaking. The proposed rule change would amend Supplementary Material .01

to Rule A-11 and Supplementary Material .01(b) to Rule A-13 to delete language

describing aspects of the prior rate setting process that would be superseded by the MultiYear Rate Card Process, to explicitly state that if no new rate card is established at the

end of the period covered by the proposed rule change then the applicable rates would

remain at the same level as in effect prior to the end of that period, and to provide for the

on-going availability of the Revised Funding Policy, and any future revisions thereto, on

the MSRB website so long as the Revised Funding Policy sets forth, in whole or in part,

the MSRB’s rate card process.

See infra note 47.

The Temporary Credits that would be applied to the Market Activity Fees included in the

proposed new Rate Card Fees for the calendar years 2026 and 2027 would be set out in

Supplementary Material .01(c) of Rule A-13.

The net amount of Market Activity Fees, taking into account any applicable Temporary

Credits, would be set out in Supplementary Material .01(c)(i) – (iii) of Rule A-13.

Underwriting Fee

Transaction Fee

Trade Count Fee

Assessment/

Credit Basis

Per $1,000 Par

Underwritten

45% Temporary

Credit

Net Rate of

Assessment

2026

2027

2028

2029*

$0.0297

($0.0134) ($0.0134)

Per $1,000 Par

Transacted

45% Temporary

Credit

Net Rate of

Assessment

Per Trade

45% Temporary

Credit

$0.0163

$0.0297

$0.0107

($0.0048) ($0.0048)

Net Rate of

Assessment

$0.0059

$0.0107

$1.10

($0.49)

$0.61

$1.10

Municipal Advisor

Per Covered

$1,130

$1,200

$1,270

$1,340

Professional Fee**

Professional

* As noted above, if no new Rate Card Fees are established by January 1, 2030, the theneffective Rate Card Fees for 2029 would remain in effect until any new fees are established.

** The Temporary Credits included in this proposed rule change would not apply to the

Municipal Advisor Professional Fee.

Multi-Year Rate Card Process and Reserves Management

The Multi-Year Rate Card Process is designed to address stakeholders’ concerns related

to fee volatility inherent in the current annual rate setting process and to facilitate the MSRB’s

management of its organizational reserves. A multi-year rate card is a fixed rate schedule for its

multi-year term (four years in the case of the proposed rule change) and is not intended to be

modified during its effective term, except as described below.21 In developing a fixed set of Rate

See Revised Funding Policy, supra note 17, at “Multi-Year Rate Card”.

Card Fees for a multi-year period under the Multi-Year Rate Card Process, the MSRB utilized a

five-year historical average of market volume for its underlying assumptions to smooth the

annual volatility in market activity.22 The Multi-Year Rate Card Process seeks to provide

certainty and enhanced stability in rates across the multi-year period as compared to the existing

annual process, with the Revised Funding Policy reducing the maximum annual increase or

decrease in any baseline Rate Card Fee to 15% (the “Annual Rate Change Limit”)23 within a

multi-year rate card period, as compared to the 25% cap on increases and no cap on decreases

that existed under the annual rate card process, subject to potential Temporary Credits, as

discussed below.

In the case of the Rate Card Fees proposed in this proposed rule change, the baseline

rates of the Market Activity Fees would remain unchanged both from the rates currently in effect

under the prior rate card and throughout the course of the proposed Multi-Year Rate Card.24 The

Municipal Advisor Professional Fee for 2026 would increase by approximately 6.6% from the

rate currently in effect and would increase on an annual basis during the course of the proposed

The five-year historical averages of market volume used in connection with the proposed

rule change are based on the MSRB’s fiscal years 2021-2024 and its projections for fiscal

year 2025. The five-year market activity averages MSRB used are: $474 billion par

underwritten, $1.64 trillion par transacted, and 9.2 million trades. Use of the five-year

average is intended to mitigate the impact of market volatility from year-to-year. For

example, par underwritten was $367 billion in fiscal year 2023 and $498 billion in fiscal

year 2024.

The Annual Rate Change Limit would be set out in Supplementary Material .01 of Rule

A-11 and Supplementary Material .01(b) of Rule A-13. See also Revised Funding Policy,

supra note 17, at “Multi-Year Rate Card”.

While the baseline Market Activity Fees would remain the same for all four years of the

proposed Multi-Year Rate Card, future rate cards established under the Multi-Year Rate

Card Process could have fees that differed from year to year within the period covered by

such new rate card, subject to the Annual Rate Change Limit.

Multi-Year Rate Card by approximately 6% per year.25 Thus, all baseline Rate Card Fees would

be consistent with the Annual Rate Change Limit under the Multi-Year Rate Card Process.

In the event the MSRB determines that it has a significant surplus level of reserves to

draw down upon, the MSRB may elect to utilize one or more Temporary Credits within the

proposed Multi-Year Rate Card or in a future multi-year rate card.26 If Temporary Credits are

applied to a baseline Rate Card Fee, the Annual Rate Change Limit may be exceeded. For

example, to reduce the current surplus reserves described above, the proposed Multi-Year Rate

Card includes Temporary Credits during the first two years which result in the net rate of

assessments for the Market Activity Fees increasing between 2027 and 2028 by more than the

percentage of the Annual Rate Change Limit, notwithstanding the fact that the baseline rates

would not change.27 To achieve further stability and mitigate potential increases in Rate Card

Fees (for example, when market volume is materially reduced), the MSRB would consider its

The rates for the Municipal Advisor Professional Fee are designed to generate a target

8% of total rate card revenue from the Municipal Advisor Professional Fee by 2029. The

8% target was initially established in the rate card model implemented in 2022. See supra

note 4, 87 FR 48530 at 48537-38. To enhance stability and predictability, the Municipal

Advisor Professional Fee increases are the same dollar amount ($70) each year during the

four years 2026 – 2029. Based on the assumption that the number of covered

professionals will decrease by 25 individuals per year and using the five-year market

activity averages to project revenue from Market Activity Fees, the MSRB projects that

the Municipal Advisor Professional Fee would generate 8% of rate card revenue in 2029.

See Revised Funding Policy, supra note 17, at “Organizational Reserves” and “MultiYear Rate Card”.

Based on written comments from stakeholders responding to the RFI, the MSRB

determined to prioritize the reduction of reserves through Temporary Credits over either

more significant year-to-year changes that could be allowed with a higher Annual Rate

Change Limit or mechanisms such as one-time rebates. See supra note 11, BDA Letter at

2 and SIFMA Letter at 6, 11. This is due in part to the additional certainty and stability in

rates the MSRB is able to provide through a multi-year rate card that would not depend

on unscheduled lump sum adjustments.

reserves and could draw down upon reserve levels rather than adjust the established rates of Rate

Card Fees or the amounts of previously approved Temporary Credits, which rate or credit

adjustments would remain as potential options but would require formal rulemaking to

effectuate.

A primary goal of a rate card is to effectively manage organizational reserves, which at

times may accumulate surplus funds (or may experience deficits) driven by extraordinary market

activity volume or from other unexpected circumstances. The MSRB maintains a targeted level

of reserve funding in accordance with its Revised Funding Policy, which is determined through a

comprehensive analysis of its operating environment. The MSRB’s Revised Funding Policy

establishes a tolerance for variation from the organizational reserves target of +/- 20% of its

target level (the “Reserve Target Tolerance”).28 Under the Multi-Year Rate Card Process, the

MSRB seeks to establish Rate Card Fees that appropriately balance organizational reserves

within the Reserve Target Tolerance over the effective period of the rate card.

The MSRB approved an organizational reserves target for 2026 of $30 million at its July

23-24, 2025, board of directors meeting. This level of reserves translates to approximately eight

months of MSRB operating expenses.29 To ensure the MSRB maintains fiscal discipline and

responsibly manages reserves during the effective term of a multi-year rate card, the Revised

See Revised Funding Policy, supra note 17, at “Organizational Reserves”.

The board of directors of the MSRB has approved a budget of $46.2 million for the fiscal

year ending September 30, 2026. See MSRB Press Release, MSRB Approves FY 2026

Budget, Amended Rate Card Filing, Elects Board Leadership at Quarterly Board Meeting

(July 24, 2025), available at https://www.msrb.org/Press-Releases/MSRB-ApprovesFY26-Budget-Amended-Rate-Card-Filing-Elects-Board-Leadership-Quarterly. The

MSRB will publish on its website its fiscal year 2026 budget at the start of the fiscal year,

on or around October 1, 2025, which will be available at https://www.msrb.org/MSRBNews/About-Us#About_Us_Publications.

Funding Policy provides for an evaluation, at the mid-point of a multi-year rate card, as to

whether the Reserve Target Tolerance has been exceeded.30 If, at the midpoint of the effective

multi-year rate card, organizational reserves are in excess or deficient by more than the Reserve

Target Tolerance, the MSRB would consider increases or decreases for future rate card filings.

The Revised Funding Policy requires the MSRB to affirmatively address a reserves surplus over

the 20% Reserve Target Tolerance. A primary method to address the surplus reserves would be

to draw down on reserves in a subsequent multi-year rate card to mitigate annual rate changes. In

the alternative, if there is a significant accumulation of reserves the MSRB would engage with

stakeholders and discuss options to address the surplus and may choose to utilize a Temporary

Credit during the course of the existing rate card period to reduce reserve levels more

expeditiously than waiting until the next multi-year rate card.31

Related Technical Amendments

The proposed rule change would include certain technical language changes designed to

ensure that the rule language reflects the proposed Multi-Year Rate Card and the related changes

to institute the Multi-Year Rate Card Process. References to the current “annual” process would

be eliminated throughout Rules A-11 and A-13 and instead would reflect the four-year term of

the proposed Multi-Year Rate Card in the proposed rule change.32 In particular, the proposed rule

See Revised Funding Policy, supra note 17, at “Organizational Reserves”.

See Revised Funding Policy, supra note 17, at “Multi-Year Rate Card”.

Thus, the word “annual” would be removed in references to “annual rate card” in Rule A11(b), Supplementary Material .01 to Rule A-11, Rule A-13(b), Rule A-13(d)(i) – (ii),

Rule A-13(d)(iv)(a) – (b), and Supplementary Material .01 and .01(b). Other uses of the

term “annual” in Rule A-11(b) are either retained without change or are deleted as part of

broader deletions of language described above with respect to the change in the rate card

model. See supra note 17.

change language refers to the rates that would be in effect (including any net rates due to

Temporary Credits, as applicable) for each year within the course of the proposed Multi-Year

Rate Card.33

2. Statutory Basis

Section 15B(b)(2)(J) of the Exchange Act states that the MSRB’s rules shall provide that

each municipal securities broker, municipal securities dealer, and municipal advisor shall pay to

the MSRB such reasonable fees and charges as may be necessary or appropriate to defray the

costs and expenses of operating and administering the MSRB.34 Such rules must specify the

amount of such fees and charges, which may include charges for failure to submit to the MSRB,

or to any information system operated by the MSRB, within the prescribed timeframes, any

items of information or documents required to be submitted under any rule issued by the

MSRB.35

The MSRB believes that the proposed rule change establishes reasonable fees and

charges to be paid by regulated entities consistent with Section 15B(b)(2)(J) of the Exchange

In the case of the Municipal Advisor Professional Fee, language would be added in

Supplementary Material .01 to Rule A-11 to make explicit that the charge is based on the

number of covered professionals in the respective year for which the fee is to be assessed,

and the rates for each year would be listed in clauses (a) – (d) thereof. While the Market

Activity Fees themselves would not change from year to year within the four-year period

covered by the proposed rule change, since the Temporary Credit that would be applied

pursuant to Supplementary Material .01(c) to Rule A-13 for the first two years, the net

rate of assessment of the Market Activity Fees for the first two years would be listed in

clauses (i) – (iii) thereof.

15 U.S.C. 78o-4(b)(2)(J).

Id.

Act.36 The proposed rule change is designed to promote the collection of reasonable, predictable,

and stable fees from MSRB regulated entities as may be necessary or appropriate to defray the

costs and expenses of operating and administering the MSRB, including maintaining a

responsible level of organizational reserves. The MSRB’s fiscal year 2026 budgeted expenses

total $46.2 million.37 This represents a 5.2% decrease in expenses compared to the fiscal year

Id.

See supra note 29. As in past years, the MSRB’s fiscal year 2026 budget will include,

among other things, information regarding budgeted expenses by major organizational

activities. Technology-related activities generally comprise the largest share of budgeted

expenses, with such activities being generally divided between information technology

services and market transparency products and services. Information technology services

pertain to ensuring security, availability and resiliency for both internal organizational

technology needs and external market and regulatory transparency systems, and such

services generally bridge internal and external technology needs and only less frequently

are confined to one or the other. Similarly, market transparency products and services

pertain to the various different market and regulatory transparency systems, and such

systems generally operate using shared technology platforms, data resources and

information technology services and only less frequently have such platforms, resources

and services that are confined to a single system. As such, the MSRB does not budget

based on systems. However, consistent with the MSRB’s commitment made in the 2024

MSRB Response Letter, supra note 7, at 6-7, the MSRB has developed reasonable

allocation assumptions to assist in the understanding of the MSRB’s technology systemrelated expenses. Figures developed using those assumptions, however, may not reflect

the actual manner in which funds are expended and effort is applied to a particular

system. Using such assumptions, the MSRB estimates that, of the combined information

technology services and market transparency products and services budgets for fiscal

year 2026 totaling $27.1 million, slightly more than one-quarter would be allocable to

trade data collection and processing through the Real-Time Transaction Reporting

System (RTRS) under MSRB Rule G-14, on reports of sales or purchases, and

Information Facility 1 (IF-1). Approximately half of this combined technology budget

would be allocable, in approximately equal shares, to: (i) the combined services for

primary market disclosures through the Electronic Municipal Market Access (EMMA®)

Primary Market Disclosure Service under MSRB Rule G-32, on disclosures in connection

with primary offerings, and Information Facility 3 (IF-3), and continuing disclosures

through the EMMA Continuing Disclosure Service under IF-3 and Commission Rule

15c2-12, on municipal securities disclosure, adopted by the Commission under the

Exchange Act; (ii) data dissemination services (including the EMMA website for public

dissemination as well as subscription services under IF-3 for the MSRB’s various market

2025 budgeted expenses.38 In its underlying analysis, the MSRB assumes an annual average

expense growth rate of 3.4% for fiscal years 2027 through 2029. In determining the

reasonableness of this expense growth rate, the MSRB consulted the average annual growth rate

of the Consumer Price Index, a standard index of inflation, which over the prior 4-year period

ranged from 3-5% annual increases. At the end of fiscal year 2024, the MSRB’s reserves balance

was $48.4 million and is projected to be $60.8 million by the end of fiscal year 2025. To achieve

a goal of reducing the MSRB’s reserves balance to within the 20% Reserve Target Tolerance of

its reserve target level of $30 million, the MSRB believes the 45% Temporary Credit for the

Market Activity Fees would effectively reduce reserve levels, which were driven largely by

market activity fee revenue performance in recent years. With respect to its revenue expectations

for fiscal year 2026, the MSRB anticipates the revenue from the Rate Card Fees to represent

78% of total revenues, with the remaining 22% of revenues comprised of data subscription fees,

underwriting assessments for certain municipal fund securities offerings under Rule A-13(c),

transparency systems to subscribers for use either internally, to make available to their

client-base, or to develop or populate their data products for re-dissemination to their

customers); and (iii) regulatory, compliance and administration services (including but

not limited to maintenance of the MSRB.org website, data/services for use solely by

other regulators through the Regulator Web (RegWeb) service, the system for registering

regulated entities with the MSRB under MSRB Rule A-12, on registration, and

authentication systems for secure submissions to and other uses of MSRB transparency

and other systems, including MSRB Gateway). The final portion, constituting

approximately 20% of the combined technology budget, would be allocable to (i) the

system for variable rate securities interest rate and documentation collection through the

Short-Term Obligation Rate Transparency (SHORT) System under MSRB Rule G-34, on

CUSIP numbers, new issue, and market information requirements, and Information

Facility 2 (IF-2), and (ii) all internal technology needs. These figures are likely to vary

from year to year. EMMA is a registered trademark of the MSRB.

See https://www.msrb.org/sites/default/files/2024-10/MSRB-FY-2025-BudgetSummary.pdf.

annual and initial fees under Rule A-12(b) and (c), investment income, fine revenue, and other

miscellaneous revenue (including examination fees under Rule A-16).

Thus, the MSRB believes that the proposed rule change is necessary and appropriate to

fund the operation and administration of the MSRB and, thereby, satisfies the requirements of

Section 15B(b)(2)(J)39 through the achievement of a reasonable fee structure that (i) improves

the stability and predictability of Rate Card Fees over time; (ii) maintains an appropriate balance

of assessments on regulated entities;40 and (iii) improves the MSRB’s ability to manage

organizational reserves responsibly while minimizing fee volatility and other operational

disruptions to regulated entities.

Self-Regulatory Organization’s Statement on Burden on Competition

Section 15B(b)(2)(C) of the Exchange Act requires that MSRB rules not be designed to

impose any burden on competition that is not necessary or appropriate in furtherance of the

purposes of the Exchange Act.41 The proposed rule change, including the modifications to the

MSRB Rate Card Process through the proposed amendments to Rule A-11 and Rule A-13,

would not create any burden on competition. As intended under the proposed rule change, the

Rate Card Fees are applicable to all dealers and municipal advisors over the course of the four

years covered by the proposed Multi-Year Rate Card. The MSRB therefore does not believe the

15 U.S.C. 78o-4(b)(2)(J).

See supra note 25. The proposed rule change maintains the contribution targets set forth

when the MSRB established the rate card process in 2022, which the MSRB believes

remain appropriate as no durable, material shift in market structure has occurred to

warrant alteration of current target contribution levels. The proposed rule change’s

Temporary Credits apply to dealer Market Activity Fees because the MSRB’s excess

reserves resulted from revenue derived from extraordinary market trading and issuance

volume between 2023 and 2025. See infra note 47.

15 U.S.C. 78o-4(b)(2)(C).

proposed rule change would create any burden on competition for regulated entities, as the

projected fee proportions would maintain balance between Municipal Advisor Professional Fees

and Dealer Market Activity Fees, as well as among the three dealer fees that make up the Market

Activity Fees, and would enhance fairness in fees across regulated entities by providing a clear

blueprint of financial expectations for the four years of the proposed Multi-Year Rate Card.

Therefore, since the proposed rule change would not create any burden on competition, the

MSRB believes that the proposed rule change would meet the statutory requirement that its rules

not impose any burden on competition that is not necessary or appropriate in furtherance of the

purposes of the Exchange Act.

In determining whether the proposed rule change is necessary and appropriate, the MSRB

was guided by the MSRB’s Policy on the Use of Economic Analysis in MSRB Rulemaking.42 In

accordance with this policy, the MSRB evaluated the potential impacts of the proposed rule

change relative to the current baseline fee structure. The Multi-Year Rate Card Process, proposed

by the proposed rule change, is intended to introduce a new fee structure that would (i) better

mitigate the impact of market volatility on the MSRB’s revenue structure (and, consequently,

also better mitigate the impact of market volatility on the MSRB’s organizational reserves), and

(ii) establish rates for a four year cycle that would provide greater predictability and stability of

See MSRB Policy on the Use of Economic Analysis in MSRB Rulemaking, available at

https://www.msrb.org/Policy-Use-Economic-Analysis-MSRB-Rulemaking. In evaluating

whether there was any burden on competition that is not necessary or appropriate in

furtherance of the purposes of the Exchange Act, the MSRB was guided by its principles

that required the MSRB to consider costs and benefits of a rule change, its impact on

efficiency, capital formation and competition, and the main reasonable alternative

regulatory approaches.

Rate Card Fees over the long term than the MSRB’s current fee structure.43 Furthermore, the

Multi-Year Rate Card Process would maintain balance between Municipal Advisor Professional

Fees and dealers’ Market Activity Fees. This would be achieved by raising the Municipal

Advisor Professional Fee by 6.6% for 2026, and then increasing it by approximately 6% per year

through 2029, thereby maintaining the contribution target for the Municipal Advisor Professional

fee at 8% of all Rate Card Fees collected by the fourth year of the proposed Multi-Year Rate

Card.44 Additionally, the MSRB would provide a 45% discount, through the Temporary Credits,

for Market Activity Fees in 2026 and 2027. The MSRB believes that these actions would provide

balance for regulated entities. Lastly, as part of the Revised Funding Policy, the MSRB would

address its surplus reserves by providing dealers with Temporary Credits in an effort to draw

down the organization’s reserves. The current reserve levels exceeded the 20% threshold45 in

large measure resulting from the suspension and subsequent withdrawal of the 2024 Rate Card

Proposal and a period of record trading and issuance volume that increased the excess reserve.46

See related discussion supra under Self-Regulatory Organization’s Statement of the

Purpose of, and Statutory Basis for, the Proposed Rule Change – Purpose – Proposed

Multi-Year Rate Card Fees.

See supra note 25.

See supra Self-Regulatory Organization’s Statement of the Purpose of, and Statutory

Basis for, the Proposed Rule Change – Purpose – Multi-Year Rate Card Process and

Reserves Management. The MSRB’s reserves balance at the end of fiscal year 2024 was

$48.4 million and is projected to be $60.8 million by the end of fiscal year 2025.

Between 2022 and 2024 the market experienced three consecutive years of record trade

count, culminating with 14.5 million total trades in the calendar year of 2024, including

trades that MSRB does not bill for such as variable rate securities, a 10% increase from

the previous record year of 2023. Similarly, in calendar year 2024, new issuance volume

also reached record levels exceeding $500 billion for the first time. The consecutive

record years for trading volume and new issuance volume have contributed significantly

to the MSRB exceeding its funding levels. See John Bagley, Carol Converso and Marcelo

The MSRB anticipates that the Temporary Credits would address stakeholder concerns regarding

the organization’s current reserve levels.

The MSRB believes that the proposed rule change would address industry concerns

regarding the stability and predictability47 of the proposed Rate Card Fees; enhance fairness in

fee burdens between dealers and municipal advisors as mentioned above; and allow the MSRB to

manage organizational reserves responsibly while minimizing uncertainty and possible

operational disruptions to regulated entities. The proposed rule change is designed to provide

greater predictability and stability of the Rate Card Fees for the next four years: 2026, 2027,

2028, and 2029. Additionally, the proposed technical amendments to Rule A-11 and Rule A-13

are intended to provide greater clarity on the assessment of fees referenced in MSRB rules by

removing references to “Annual” Rate Card throughout. Without the proposed rule change, the

MSRB would be less able to maintain its target balance of Rate Card Fees between dealers and

municipal advisors or to manage fee volatility while also ensuring that its organizational reserves

are reflective of the Revised Funding Policy.

Baseline and Reasonable Alternative Approaches

The MSRB’s Policy on the Use of Economic Analysis in MSRB Rulemaking outlines

that rulemaking must articulate a baseline against which to measure the likely economic impact

of the proposed rule change,48 which is essential in considering the likely costs and benefits of a

Vieira, “2024 Municipal Market Year in Review,” MSRB, January 2025, available at

https://www.msrb.org/sites/default/files/2025-01/MSRB-2024-Municipal-Market-Yearin-Review.pdf.

See supra note 11, SIFMA Letter at 5-6, 8; BDA Letter at 1 and 3; and ICE Letter at 1-2.

See supra note 43. The policy identifies the baseline (in point 2, titled “Articulate a

baseline against which to measure the likely economic impact of the proposed rule

proposed rule change when the proposal is fully implemented (future state). For the proposed

rule change, the baseline is Rule A-11, on assessments for municipal advisor professionals and

Rule A-13, on underwriting and transaction assessments for brokers, dealers and municipal

securities dealers currently in effect. The relevant portions of Rule A-11 and Rule A-13, the

aforementioned baseline, were last amended in 2022 and established a rate card model intended

to be amended on a yearly basis. However, as discussed in previous sections, the MSRB

withdrew its 2024 Rate Card Proposal based on industry feedback and now seeks to establish a

multi-year process.

In addition to the proposed Multi-Year Rate Card Process, the MSRB also considered

other fee assessment alternatives but ultimately decided that the proposed Multi-Year Rate Card

Process is the best approach to provide greater predictability and stability for regulated entities

along with ensuring a stable revenue stream for the MSRB. In one alternative, the MSRB

considered the development of a new fee structure without a specified time horizon for its

applicability. The alternative fee structure would become effective on January 1, 2026 and would

remain in place indefinitely until modified by a subsequent rule filing. This alternative would

provide regulated entities predictable fees that would not be altered without a process of

stakeholder outreach and advanced notice. However, without the built-in combination of

flexibility and structure of the Multi-Year Rate Card Process, the MSRB may, for example,

develop accumulated excess reserves resulting from additional revenue collected as compared to

budget expectations and, thereby, would be more likely to face the potential need for one-time

change”), as “an assessment of the status of the markets and participants potentially

affected directly or indirectly by a proposed rule change (collectively, the “affected

parties”) in the absence of the proposed rule change being implemented.”

rate amendments in the form of more significant, ad hoc temporary fee reductions or rebates.49 In

comparison, the proposed rule change establishing a Multi-Year Rate Card Process would create

a formalized process for the MSRB to reevaluate fees in comparison to the MSRB’s reserves and

make adjustments at the end of each multi-year period. Thus, comparing to the current no-enddate fee structure, the proposed Multi-Year Rate Card framework would result in more regular

and potentially more frequent, but also more incremental, adjustments to the four Rate Card Fees

that generate the vast majority of the MSRB’s annual revenue. Following the implementation of

the proposed rule change, the MSRB will continue to take additional steps to collect stakeholder

feedback for future multi-year Rate Card Fee adjustment. The proposed rule change is meant to

avoid either the accumulation of excess reserves resulting from additional revenue collected or

unexpected reserves and revenue shortfall due to market volatility and, thereby, the need for rate

amendments in the form of more significant, ad hoc temporary fee adjustments. In summary, this

alternative of a fixed set of fees does not help achieve the reserve management goals of the

MSRB, and it is for this reason that the MSRB assesses that the proposed rule change is superior

to this alternative.

Relatedly, the MSRB also considered different time horizons to be used for the MultiYear Rate Card Process, such as three years, five years or more than five years. However, the

MSRB ultimately decided that a four-year time horizon is most appropriate. The MSRB made

this determination to balance stability and predictability in rates with the potential risks of

For example, in Fiscal Year 2020, the MSRB collected $4.9 million more than budgeted

from market activity fess due to a variety of factors including the COVID-19 pandemic

and a low-interest rate environment. See MSRB 2020 Annual Report, available at

https://www.msrb.org/sites/default/files/MSRB-2020-Annual-Report.pdf. Conversely, in

a slow trading environment, MSRB’s reserves may fall below the target amount and may

require rulemaking to potentially implement a one-time fee increase to make up the

shortfall.

changes in market activity over a longer period that could result in insufficient or excess

reserves. Therefore, the MSRB determined that two or three years would be too short and may

add fee uncertainty for regulated entities, while five years or longer would be too long because

market dynamics may change over that period, rendering the established outdated or ineffective

for reserves management.50

Another alternative the MSRB reviewed was to include other sources of revenue in the

Multi-Year Rate Card Process, such as revenue derived from bulk data users, initial and annual

registration fees under MSRB Rule A-12, and underwriting assessments for underwriters of

certain municipal fund securities under Rule A-13(c).51 However, the MSRB ultimately decided

not to include those fees for a variety of reasons. Fees from bulk data users are voluntary while

assessments on regulated entities are mandatory. Also, each of the other noted fees constitutes a

much smaller proportion than the four categories in the proposed Multi-Year Rate Card

Process.52

The four-year time period is also consistent with the length of the forthcoming MSRB

Strategic Plan 2026 - 2029.

See e.g., MSRB 2024 Annual Report at p. 20, stating revenues collected from such

sources in fiscal year 2024, available at https://www.msrb.org/sites/default/files/202501/MSRB-2024-Annual-Report_0.pdf.

The MSRB determined not to include initial and annual registration fees in the Rate Card

Fees and the Multi-Year Rate Card Process. Historically, initial registration fee amounts

have been set with the intention of defraying a significant portion of the administrative

and operational costs associated with the processing of a regulated entity’s initial

registration. In addition, annual registration fees are intended to serve as a fixed, baseline

contribution from all registered regulated entities, irrespective of a regulated entity’s

actual total market activities. Furthermore, underwriting assessments for municipal fund

securities are not based on activity during a particular period but instead on aggregate

assets and therefore give rise to different considerations than do the Rate Card Fees. The

MSRB determined that, at this time, it was not appropriate to incrementally adjust such

fees each year through the Multi-Year Rate Card Process.

Finally, the MSRB also considered a different way to apportion fees within each class of

fee payer but decided that the proposed Multi-Year Rate Card Process is the best way to achieve

proportionate revenue based on the MSRB’s available information, i.e., underwriters pay based

on their volume underwritten, trading firms pay based on their trading activities (in par value and

trade count), and municipal advisory firms pay based on the headcount of a firm. A fee

assessment method based on a percentage of each regulated entity’s revenue, for example, would

not be feasible at this time as the MSRB does not currently have such information. In addition,

many municipal advisory firms would likely have business activities not solely related to

municipal advisory services. At this time, the MSRB believes that the Municipal Advisor

Professional Fee for each person associated with the firm who is qualified is a reasonable proxy

for the size of relevant business activities conducted by each municipal advisory firm. However,

the MSRB commits to engage with stakeholders to discuss possible alternative methods for

municipal advisor fees.

Benefits, Costs and Effect on Competition

The proposed rule change is intended to benefit regulated entities by providing greater

regulatory clarity for the assessment of fees on MSRB regulated entities for a period of four

years under the rules. The proposed rule change also is intended to benefit dealers by providing a

two-year reduced rate for underwriting fees, transaction fees, and trade count fees, as these

Market Activity Fees were mainly responsible for driving the MSRB’s excess reserves from

2023 through 2025 because of unprecedent market trading volume as described earlier. The

proposed Multi-Year Rate Card Process would likely result in smaller downward or upward

quadrennial adjustments to keep revenues more closely aligned with budgeted expenses.

Benefits

The proposed rule change would result in a revised fee approach intended to align

revenues and expenses more closely and to reduce the year-to-year volatility in the amount of

fees collected by the MSRB. In addition, the MSRB expects that the four-year period would

improve the stability and predictability of Rate Card Fees for regulated entities and remove the

variability that was present with the year-to-year approach. Furthermore, the MSRB also expects

that the proposed rule change would ensure that there is a fair and equitable balance of fees

between all regulated entities. Lastly, the proposed rule change would enhance the MSRB’s

ability to manage organizational reserves while minimizing fee volatility and other operational

disruptions to regulated entities.

Costs

The MSRB anticipates that regulated entities would incur minor costs from the MultiYear Rate Card Process as part of their assessed fees. While there may be additional costs

associated with the Multi-Year Rate Card Process for municipal advisors through the fee

assessment, dealers would see lower fees in 2026 and 2027. The MSRB believes that the fees are

reasonable and appropriate as they would improve stability and predictability over time; enhance

fairness of fee burdens between regulated entities; and improve the MSRB’s ability to

responsibly manage organizational reserves.

Proposed Rule Change

Some regulated entities would incur costs in the form of newly assessed fees under the

proposed Multi-Year Rate Card Process. This includes the fact that the Municipal Advisor

Professional Fee would increase each of the four years; however, this is intended to maintain an

appropriate balance of assessments between dealers and municipal advisors.53 In total, the MSRB

does not believe the proposed Multi-Year Rate Card Process would create any additional costs

for regulated entities when compared to the annual rate card process that was established in

2022, as the aggregate fees assessed under the proposed Multi-Year Rate Card Process – which

would become effective in January 2026 with a two-year discounted rate for Market Activity

Fees – are expected to remain consistent.

Regulated entities are expected to make minor one-time revisions to their policies and

procedures, including accounting systems or processes, to address the technical amendments to

Rule A-11 and Rule A-13. It is possible that regulated entities may need to work with in-house

legal, compliance and accounting professionals to revise the policies and procedures to comply

with the proposed rule change.54 The MSRB anticipates that regulated entities would need

approximately 5.75 hours on making the appropriate changes as they pertain to Rule A-11 and

Rule A-13, and estimates that the total upfront costs to implement the technical amendments to

be $1,990, as set forth in the following table:55

For example, in future iterations of the Multi-Year Rate Card Process, the Municipal

Advisor Professional Fee may either decrease or increase less than other fees based on

the MSRB’s reserves and the proportionate fee contribution.

For example, the new issue fee may have to be changed in the programs dealers use for

new issues.

The hourly rate data was gathered from the Commission’s Amendments to Exchange Act

Rule 3b-16. See Exchange Act Release No. 94062 (Jan. 26, 2022), 87 FR 15496, 15624,

n. 1102 (March 18, 2022) (File No. S7-02-22) (citing the original source of the data from

Securities Industry and Financial Markets Association Management & Professional

Earnings in the Securities Industry 2013). The data reflects the 2025 hourly rate level

after adjusting for the annual wage inflation between 2013 and 2025, using the Federal

Reserve Bank of St. Louis Employment Cost Index: Wages and Salaries: Private Industry

Workers, available at: https://fred.stlouisfed.org/series/ECIWAG.

Estimated Technical Amendments Upfront Costs for Each Regulated Entity56

Cost Components

Hourly Rate

Number of

Hours

Cost per Firm

Upfront Costs

a) Revision of Policies,

Procedures and Accounting

Systems

Compliance Manager

In-House Compliance Counsel

System Analyst

General Accounting Supervisor

Chief Compliance Officer

$389

$459

$331

$269

$687

Total Upfront Costs

0.5

0.25

$389

$230

$661

$538

$172

5.75

$1,990

Effect on Competition, Efficiency and Capital Formation

The MSRB believes that the proposed Multi-Year Rate Card Process would not impose

any burden on competition, as it is intended to have a fair and equitable balance of fees between

all regulated entities. The MSRB believes the proposed rate change for the Calendar Years 2026,

2027, 2028 and 2029 is necessary and appropriate to ensure prudent funding for the MSRB and

that such fee increases are reasonably and fairly designed to be proportionately distributed across

regulated entities in such a way that would not harm competition among regulated entities,

impede capital formation, reduce market efficiency, nor otherwise harm the functioning of the

municipal securities market.

Numbers in the table have been rounded to the dollar; therefore, totals may not exactly

match.

Section 15B(b)(2)(L)(iv) of the Exchange Act57 requires that MSRB rules not impose a

regulatory burden on small municipal advisors that is not necessary or appropriate in the public

interest and for the protection of investors, municipal entities, and obligated persons, provided

that there is robust protection of investors against fraud. The MSRB believes that the proposed

Municipal Advisor Professional Fee would not impose an unnecessary or inappropriate

regulatory burden on small municipal advisors since the total amount of the assessment payable

by each municipal advisory firm would continue to be proportional to the number of Form MA-I

filed by a firm and, therefore, would result in lower relative assessments for smaller firms. Based

on the number of persons engaging in municipal advisory activities on behalf of a firm, the total

fee would therefore bear a reasonable relationship to the level of regulated municipal advisory

activities that are undertaken by each firm.

For the reasons noted above, the MSRB does not believe that the proposed rule change

would result in any burden on competition that is not necessary or appropriate in furtherance of

the purposes of the Exchange Act.

Self-Regulatory Organization’s Statement on Comments on the Proposed Rule

Change Received from Members, Participants, or Others

The MSRB did not solicit comment on the proposed rule change. However, the MSRB

received comments from six commenters on the RFI, with comments on the Rate Card Fees

having informed the MSRB in formulating the proposed rule change.58

15 U.S.C. 78o-4(b)(2)(L)(iv).

See NAMA Letter, PRAG Letter, SIFMA Letter, BDA Letter, ASA Letter and ICE

Bonds Letter, supra note 11. Comments are available at

https://www.msrb.org/sites/default/files/2025-02/All-Comments-to-Notice-2024-14.pdf.

Some commenters also addressed MSRB budgetary processes and related MSRB

technology costs. The MSRB has engaged in direct conversations on these matters with

While two commenters on the RFI supported the existing rate card process,59 three

commenters expressed the view that the existing rate card process permits too much fee volatility

and unpredictability from year to year.60 One commenter suggested that the current cap on yearover-year increases in Rate Card Fees should be reduced from 25% to 15%,61 with another

commenter suggesting that such cap be reduced to 10%.62 Two commenters agreed that, when

organizational reserves are too high, fees should be lowered to reduce reserve levels to

established targets,63 with one commenter stating that the existing reserve target is appropriate64

while the other commenter suggested that the MSRB reduce its reserve target to six months of

operating expenses.65 These two commenters agreed that reserves should be used to help keep

rates stable from year to year but did not support the establishment of a separate rate stabilization

fund.66 One commenter noted that there may be value in a multi-year fee-setting process to help

stakeholder groups in connection with the MSRB’s budget, including its adoption of the

2026 annual budget, both prior to and after publishing the RFI. See supra note 10. While

the MSRB addresses certain key budget, revenue and technology cost matters above, see

supra Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis

for, the Proposed Rule Change – Statutory Basis, the discussion of comments herein is

generally confined to those comments addressing the Rate Card Fees.

See NAMA Letter at 1; PRAG Letter at 1.

See SIFMA Letter at 5; BDA Letter at 1; ICE Bonds Letter at 1.

See SIFMA Letter at 5.

See BDA Letter at 1.

See SIFMA Letter at 6; BDA Letter at 2.

See BDA Letter at 2.

See SIFMA Letter at 6.

See SIFMA Letter at 11; BDA Letter at 2.

stabilize fees67 and another commenter did not oppose a multi-year process so long as there is a

mechanism to adjust fees if reserves grew too large.68

The MSRB believes that the proposed Multi-Year Rate Card Process incorporates key

elements that are responsive to these comments. The Annual Rate Change Limit that would be

included in the Multi-Year Rate Card Process would be set at 15%, lower than the current 25%

cap. The proposed Temporary Credits for 2026 and 2027, and the potential use of Temporary

Credits in the future to reduce any excess reserves, is responsive to commenters desire to use

reserves for such purpose without creating a separate stabilization fund. The MSRB believes that

these and other aspects of the Multi-Year Rate Card Process, including the establishment of fees

over a multi-year period rather than on an annual basis, appropriately address the desire to reduce

volatility and unpredictability of fees.

Two commenters generally agreed that activity-based fees for the Market Activity Fees

are appropriate.69 One commenter suggested that Market Activity Fees be based on activity in

the preceding year rather than on projections of activity,70 while another commenter suggested

that, in the case of a dealer operating an alternative trading system (“ATS”), the MSRB should

have an alternative method for assessing market activity more tailored to the nature of the ATS

business.71

See BDA Letter at 2.

See SIFMA Letter at 6.

See SIFMA Letter at 5, 9; BDA Letter at 1.

See SIFMA Letter at 5-6, 8-9.

See ICE Bonds Letter at 1-2.

The MSRB would maintain the existing Market Activity Fees under the proposed rule

change and believes that they remain the appropriate mechanisms for assessing activity-based

fees for dealers. The MSRB believes that the use of a five-year historical average of market

volume for its underlying assumptions under the Multi-Year Rate Card Process would better

smooth the annual volatility in market activity and therefore the amount of assessments imposed

than would a model that, on an annual basis, relies on the past year’s levels of activities, which

can fluctuate considerably from year to year. The MSRB appreciates the concerns expressed

regarding ATS-related fees and will continue to assess in the future whether the current model

remains appropriate in the context of considering more broadly the full range of sources of

MSRB revenues, including whether certain business models merit alternative manners of

assessments, whether existing fees and charges not included in the Rate Card Fees should be

modified, whether any regulated entity activities that may not currently be subject to any MSRB

fees or charges should be made subject to assessment, and whether current fee models for

subscriptions to MSRB data products should be revisited.

Three commenters suggested that the MSRB develop an activity-based or revenue-based

fee model for municipal advisors, which they believed would be appropriate to address what they

view as an imbalance in the share of MSRB costs borne by dealers as compared to municipal

advisors.72 Two of these commenters suggested that the MSRB require municipal advisors to

report to the MSRB on their municipal advisory activities and/or revenues.73 In contrast, two

commenters argued that the current Municipal Advisor Professional Fee based on covered

professionals of a municipal advisor should be maintained and that activity-based fees for

See SIFMA Letter at 3-5, 9-10; BDA Letter at 2; ASA Letter at 1-2.

See SIFMA Letter at 4, 10; BDA Letter at 2.

municipal advisors should not be considered.74 These commenters stated that the MSRB had

considered the proper model and level of municipal advisor fees, including as compared to dealer

fees, in the course of developing the rate card model and that no material changes had occurred

since then that would justify a change in the MSRB’s approach.75 These commenters also noted

that municipal advisors engage in a variety of types and scopes of municipal advisory and other

activities and use a variety of compensation structures, and that a reporting regime for such

information would be burdensome.76

The MSRB continues to believe that, for purposes of the Multi-Year Rate Card Process

for establishing the Rate Card Fees pursuant to this proposed rule change, it is appropriate to

maintain the existing Municipal Advisor Professional Fee, with a measured year-to-year increase

to maintain the balance between dealer and municipal advisor fees determined by the MSRB

when it established its original rate card process. However, with respect to municipal advisor rate

card assessments, the MSRB believes that it would be appropriate, over the course of this

upcoming multi-year period, to undertake a review of municipal advisory activities and any

potential mechanisms for gauging levels and types of such activities that might be appropriate for

use in future municipal advisor rate settings under the Multi-Year Rate Card Process. The MSRB

has launched a broader retrospective rule review of its suite of municipal advisor rules77 adopted

by the MSRB since enactment in 2010 of the Dodd-Frank Wall Street Reform and Consumer

See NAMA Letter at 4-5; PRAG Letter at 1.

See NAMA Letter at 2-3; PRAG Letter at 2.

See NAMA Letter at 5; PRAG Letter at 1.

See MSRB Press Release dated Jan. 31, 2025, available at: https://www.msrb.org/PressReleases/MSRB-Discusses-Market-Regulation-Structure-and-Transparency-InitiativesQuarterly.

Protection Act,78 which first defined the term “municipal advisor” and granted rulemaking

authority to the MSRB in this area. The MSRB will incorporate its review of potential alternative

methods of assessing municipal advisors within the scope of the retrospective rule review, which

will entail outreach to market participants and opportunities for interested parties to provide

comment on any proposed changes to the municipal advisor assessment process.

III.

Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

Within 45 days of the date of publication of this notice in the Federal Register or within

such longer period of up to 90 days (i) as the Commission may designate if it finds such longer

period to be appropriate and publishes its reasons for so finding or (ii) as to which the selfregulatory organization consents, the Commission will:

(A) by order approve or disapprove such proposed rule change, or

(B) institute proceedings to determine whether the proposed rule change should be

disapproved.

IV.

Solicitation of Comments

Interested persons are invited to submit written data, views, and arguments concerning

the foregoing, including whether the proposed rule change is consistent with the Exchange Act.

Comments may be submitted by any of the following methods:

Electronic Comments:

•

Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or

•

Send an email to rule-comments@sec.gov. Please include File Number SR-MSRB-202502 on the subject line.

Pub. L. No. 111-203, 124 Stat. 1376 (2010), Section 975; 15 U.S.C. 78o-4(b)(2).

Paper Comments:

•

Send paper comments in triplicate to Secretary, Securities and Exchange Commission,

100 F Street, NE, Washington, DC 20549.

All submissions should refer to File Number SR-MSRB-2025-02. This file number should be

included on the subject line if email is used. To help the Commission process and review your

comments more efficiently, please use only one method. The Commission will post all

comments on the Commission’s Internet website (http://www.sec.gov/rules/sro.shtml). Copies of

the filing will be available for inspection and copying at the principal office of the MSRB. Do

not include personal identifiable information in submissions; you should submit only information

that you wish to make available publicly. We may redact in part or withhold entirely from

publication submitted material that is obscene or subject to copyright protection. All submissions

should refer to File Number SR-MSRB-2025-02 and should be submitted on or before [INSERT

DATE 21 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER].

For the Commission, pursuant to delegated authority.79

Sherry R. Haywood,

Assistant Secretary.

17 CFR 200.30-3(a)(12).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.