MSRB Update: Fall 2023

Image

Warren "Bo" Daniels 

Image

Omer Ahmed

Last month, the MSRB Board voted to approve the MSRB's 2024 rate card to adjust rates for the three market activity fees assessed on municipal securities dealers and the municipal advisor professional fee. The new rate card will be filed with the Securities and Exchange Commission this month, and the new rates will be operative January 1, 2024.

Each year, under a formulaic rate card approach, we will adjust rates to account for the organization's funding needs as well as actual and expected market activity. As a result, the MSRB’s underwriting and transaction fees, along with the municipal advisor professional fee, will be changing for 2024.

We ended FY 2023 with a market activity revenue surplus of over $3 million, which under our old fee model would have been added to the MSRB’s reserves, however under the new rate card that money will be returned to regulated entities through reductions to transaction and trade count fees. On the other hand, underwriting fees and municipal advisor fees will increase to reflect less revenue assessed in FY 2023 relative to budget.

The new rate card process reflects feedback we have received from stakeholders regarding our reserves management, ability to adapt to market volatility, and the need to ensure that the MSRB does not collect more fees than it needs to operate. We know it has been a difficult year for underwriting, and we understand that this is the first year of our new approach. We encourage all market participants to continue to provide feedback on our new rate card process.

View the resources below for more information related to the new rate card:

October 2023 Board Meeting press release
Understanding the Annual Rate Card
Fiscal Year 2024 Budget 

Warren "Bo" Daniels is a securities firm member of the MSRB Board of Directors and serves as Chair of the Finance Committee and is a member of the Steering Committee. He is the Managing Director and Head of Public Finance of Loop Capital Markets, a minority-owned firm based in Chicago, IL.

Omer Ahmed is Chief Financial Officer of the Municipal Securities Rulemaking Board, where he oversees the MSRB’s accounting, finance, enterprise risk management and strategic planning activities. Mr. Ahmed previously served in the roles of Chief Risk Officer and Head of Internal Audit at the MSRB.