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Amendment to Rule A-14, on Annual Fee


On August 13, 2009, the Municipal Securities Rulemaking Board (“Board” or “MSRB”) filed with the Securities and Exchange Commission (“SEC”) an amendment to Rule A-14, on annual fee, which will be applied as of October 1, 2009.[1]  The purpose of the amendment is to assess reasonable fees necessary to defray the costs and expenses of operating and administering the MSRB.  The rule change would partially accomplish this purpose by amending Rule A-14 to adjust the annual fee assessed to dealers from $300 to $500 per dealer.

The MSRB currently levies three types of fees that are generally applicable to dealers.  Rule A-12 provides for a $100 initial fee paid once by a dealer when it enters the municipal securities business.  Rule A-13 provides for an underwriting fee of $.03 per $1000 par value of bonds and $.01 per $1000 par value of notes (with specified exceptions), and a transaction fee of $.005 per $1000 par value of sale transactions of specified securities.  Rule A-14 provides for an annual fee of $300 from each dealer who conducts municipal securities activities.  The annual fee imposed by Rule A-14 was last increased from $200 to $300 in 2003.

The underwriting and transaction fees in Rule A-13 assess fees that are generally proportionate to a dealer’s activity within the industry.  However, MSRB’s regulatory activities affect all participants in the dealer community and a number of dealers do not participate in traditional municipal securities underwriting activities or are not actively involved in the trading of traditional municipal securities subject to a transaction fee.  

The MSRB accordingly is raising the annual fee from $300 to $500, which will result in an increase of approximately $280,000 to the MSRB’s revenues in fiscal year 2010.  The amendment will enhance the equitable distribution of fees among dealers in the municipal securities market and increase the MSRB’s revenues, in order to partially offset a decrease in revenue and increased costs associated with operating market information services and regulating the municipal securities market.

Questions about the amendment may be directed to Lawrence P. Sandor, Associate General Counsel, at (703) 797-6600.

August 13, 2009

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Rule A-14:  Annual Fee

In addition to any other fees prescribed by the rules of the Board, each broker, dealer and municipal securities dealer shall pay an annual fee to the Board of [$300] $500, with respect to each fiscal year of the Board in which the broker, dealer or municipal securities dealer conducts municipal securities activities.  Such fee must be received at the office of the Board no later than October 31 of the fiscal year for which the fee is paid, accompanied by the invoice sent to the broker, dealer or municipal securities dealer by the Board, or a written statement setting forth the name, address and Commission registration number of the broker, dealer or municipal securities dealer on whose behalf the fee is paid.


[1] File No. SR-MSRB-2009-13.  Comments on the amendments should be submitted to the SEC and should reference the file number.

[2] New language is underlined; deletions are in brackets.