Contact: Leah Szarek, Interim Chief External Relations Officer
202-838-1500
lszarek@msrb.org
MSRB FY 2021 BUDGET REFLECTS PRIORITIES OF MODERNIZING EMMA® AND REDUCING COMPLIANCE BURDENS
Washington, DC – The Municipal Securities Rulemaking Board (MSRB) today published its annual budget reflecting the organization’s strategic priorities for safeguarding the integrity of the critical market that enables cities and towns around the country to invest in schools, hospitals, roads and other essential infrastructure. For FY 2021 beginning today, the MSRB budget demonstrates continued investments in data and technology to advance market transparency, as well as sustained pursuit of regulatory initiatives that reduce compliance burdens and costs for regulated entities.
Reforming Governance and Embracing Change
“We begin the new fiscal year with a smaller Board, stronger governance practices and a renewed appreciation for our staff, who consistently demonstrate commitment, creativity and candor,” said MSRB Board Chair Ed Sisk, who was re-elected for another 12-month term on the MSRB Board of Directors. Sisk is one of 17 returning Board members who will continue to serve the market as the Board begins the two-year process to scale down its size to 15 members from 21, a key feature of a comprehensive set of governance enhancements that take effect today.
In a letter from Sisk and MSRB Chief Financial Officer Nanette Lawson, the MSRB noted: “By working together, the MSRB has navigated the new normal of a global pandemic, engaged in thoughtful discussions and ongoing learning about unconscious bias and systemic racism, and tirelessly worked to advance our mission. As we bring in a new CEO to lead our organization into the future, we know we are giving that individual the tools and team needed to succeed.”
Delivering on the Promise of the Cloud
The Board has authorized a $10 million multi-year strategic investment to modernize and enhance the free Electronic Municipal Market Access (EMMA®)website and related market transparency systems. With an enterprise-wide migration of its systems to the cloud now complete, the MSRB is ready to begin delivering on the promise of cloud-based tools and data analytics.
“Our new EMMA Labs platform serves as an innovation hub where market stakeholders can collaborate on active prototypes and share feedback on preliminary concepts that could eventually make their way to the EMMA website,” wrote Sisk and Lawson. One of these prototypes, a powerful keyword search for disclosure documents, has already been used to provide insight into issuers’ disclosures about the impact of the pandemic. In FY 2021, the MSRB will continue to expand the use of EMMA Labs and begin to deliver proven prototypes to the market on the EMMA website.
Reducing Compliance Burdens
In FY 2021, the MSRB will focus on a comprehensive review of the historical body of interpretive guidance in the MSRB Rule Book to identify opportunities to clarify, amend or delete guidance to help ensure it continues to achieve the intended purposes. “The Board has long prioritized initiatives that make it easier and less costly for regulated entities to comply with our rules,” wrote Sisk and Lawson.
Modeling High Standards for Financial Transparency and Accountability
As a self-funded regulatory organization, the MSRB’s revenues come primarily from the entities it regulates, not taxpayer dollars. The MSRB consistently models high standards of public accountability and financial transparency, including publishing its annual budget, which provides insights about the organization’s revenue, expenses and reserves. The MSRB’s operating budget of $41.5 million is a decrease from the prior year. Projected revenues reflect the MSRB’s ongoing work to diversify sources of revenue to ensure an equitable and sustainable financial model that allows the organization to continue to fulfill its statutory mandate as the self-regulatory organization for the municipal securities market.
With respect to reserves, Sisk and Lawson noted: “Maintaining appropriate levels of reserves that balance our need to plan for market uncertainty with our commitment to careful stewardship of industry funding is a priority of the Board. We recognize that we have work to do to advance this priority in FY 2021, and this Board is committed to doing it.”
