Change in Threshold for Municipal Securities Transparency Reporting: Rule G-14
On November 12, 2002, the SEC approved a rule change regarding the MSRB’s Transaction Reporting Program.[1] Currently the MRSB provides a daily public report with details of each transaction in any municipal security that was traded three or more times on the previous day. This change to the MSRB’s Rule G-14 alters the threshold for reporting a municipal security from three to two trades per day and, as a result, the number of trades reported each day will increase substantially.
Impact of Proposed Report on Transparency
This threshold change will increase substantially the proportion of municipal securities market activity that is reported on the day after trading. On a typical day, there are approximately 26,000 transactions in about 10,000 issues, with a total par value traded of about $9.5 billion. The present Daily Transaction Report, with a threshold of three or more trades per day, includes an average of 14,400 trades in 2,600 different issues, with a total par value of about $5.2 billion. Under the new threshold, the report will include an average of 19,760 trades in 5,600 issues, with a total par value of about $7.7 billion. This represents a 37 percent increase in the number of trades reported, a more-than-twofold increase in the number of issues reported, and a 48 percent increase in par value reported.[2]
Description of Service
The report with the two-trade threshold will replace the current report and will be available each day to subscribers via the Internet. Subscribers to the current report obtain it free of charge, and their subscriptions will continue with the new threshold. New subscriptions will be available free to parties who sign a subscription agreement. In addition, recent reports will continue to be available for examination, also free of charge, at the MSRB’s Public Access Facility in Alexandria, VA.
Beginning of Operation
The MSRB plans to make the Daily Transaction Report with the two-trade threshold available beginning December 3, 2002.
November 22, 2002
