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Remarks at MSRB Dinner to Celebrate Milestones in Municipal Market Transparency

Washington, D.C.

April 24, 2018

Thank you, Lucy [Hooper], for that kind introduction. Thanks also to Lynnette [Kelly] for inviting me to speak at this celebratory event.[1]

And we should be celebrating. Tonight is a well-deserved moment for us to stop and appreciate all that the Municipal Securities Rulemaking Board (“MSRB”) has done in recent years. I do not think we have these types of events nearly enough. The productive work of regulators – at Self-Regulatory Organizations (“SROs”), at the Securities and Exchange Commission (“SEC” or “Commission”), at other federal regulatory agencies, or at state securities regulatory agencies – ensures the proper functioning of our capital markets and deserves to be recognized from time to time.

I am clearly not alone in this sentiment. We are joined in the room tonight by a host of notable figures in the municipal securities market – including current regulators, former regulators, and market participants alike – all here to commend the MSRB for its work in bringing transparency to this market. Looking out over this crowd, I am reminded of the truly bipartisan nature of the MSRB’s work on behalf of retail investors and the support that is has received over the years. The presence of former SEC Chairman Harvey Pitt and former SEC Commissioner Annette Nazareth is a demonstration of that legacy.

We are gathered to celebrate “Milestones in Municipal Market Transparency,” and I will touch on some of those specific milestones shortly, but first I would like to marvel at the overall impact that Lynnette and her entire team have had on the municipal securities market, especially when compared to the MSRB’s size. I have heard people describe the MSRB in a variety of ways, from “punching above its weight” to representing the “little engine that could” of the regulatory community. Regardless of the description, it is obvious that the MSRB has transformed the municipal securities market, accomplishing more than anyone could have expected given its limited resources.

Imagine, if you will, that I approach you to join a team embarking on a very important mission to survey uncharted territory, with Lewis and Clark, perhaps. Think of the challenge of mapping a continent, blazing a trail through virgin wilderness, with only a compass, a few basic supplies and resources, and a 12-gauge (or dare I say, a “15c2-12-gauge”[2]) shotgun. What if I told you that on this mission, you will be responsible for surveilling and mapping 50,000[3] unique physical features across the country, from the smallest foothills to the highest peaks, as well as cataloguing 1 million[4] different species of flora and fauna? Would you be intimidated? What if I followed up by telling you that only 125 brave souls would join you on this mission? Would you be daunted? Oh, and I forgot to mention that a giant Tower [Amendment][5] stands between you and these hills and mountains, preventing you from inspecting them directly.

So I ask, would you sign up for this mission? As you all have guessed, this is precisely the task that the intrepid staff of the MSRB embark upon each day.

Despite the enormous challenges inherent to its mission, when I look back over the past four plus years of my term as a Commissioner, the municipal securities market – through the work of the MSRB – has seen greater regulatory advancements than any other sector of the securities markets.

I am not saying this just because the municipal securities market holds a special place in my heart, as it was the subject of some of my early academic research. Rather, over the past decade – and particularly over the past few years – we have seen numerous tangible changes to this market that directly benefit retail investors. These milestones include following:

In 2008, the MSRB launched the pilot program for the Electronic Municipal Market Access (“EMMA”) website, which provides free public access to disclosure documents, real-time trade price data, and educational resources for the municipal securities market. I will have more to say about EMMA in a moment, but suffice to say it has been a game changer for municipal market transparency.

In 2010, the Dodd-Frank Act ushered in an ambitious period of rulemaking by, among other things, directing the MSRB to set up a regulatory regime to oversee municipal advisors.[6] The MSRB proved up to the task, rewriting its rulebook and successfully bringing this entirely new category of registrants into the regulatory fold.

In 2016, the MSRB implemented a new best execution standard for municipal securities transactions requiring municipal securities dealers to exercise due diligence in obtaining the most favorable terms available when executing transactions for retail investors.[7] This project included extensive work with the Financial Industry Regulatory Authority (“FINRA”) to develop and publish coordinated guidance on how best execution requirements applied to their respective markets.[8] The extensive coordination with FINRA on best execution is emblematic of the overall constructive relationship between these two organizations. Although that level of coordination between two SROs is no easy task, it ultimately benefits the entire securities market and both groups should be commended for making it a priority.

In 2017, the MSRB published its “MSRB Report Card: Completed Initiatives Aligned with Recommendations of the SEC’s 2012 Report on the Municipal Securities Market” showing that it had completed 48 different initiatives to enhance market structure, improve disclosure practices, and promote regulatory efficiency.[9] The results of this report highlight the ongoing commitment of the MSRB to address issues both large and small that have been identified in the municipal securities market.

The MSRB has also been a leading voice advocating for greater disclosure of municipal issuer loan obligations. Through notices, requests for comment, speeches, and other writings[10] the MSRB helped pave the way for the SEC’s proposal last year to expand Rule 15c2-12 to require disclosures of certain financial obligations.[11] I know that SEC staff – some of whom are in this room – are actively reviewing comments received on that proposal and developing a final recommendation to the Commission, which I hope we will consider in the near term.

One of the most profound, and surely the hardest fought milestone for municipal market transparency will finally come to fruition in just a couple of weeks. As you are all well aware, MSRB and FINRA rules requiring markup disclosures will take effect on May 14th.[12] That deadline represents the culmination of an effort that pre-dates even the existence of EMMA itself. I recognize that providing this disclosure has been exceedingly challenging, from the perspective of both regulators and market participants. But I believe that all the blood, sweat, and tears (and I actually do think there may have been tears from some reluctant holdouts) that went into this undertaking will prove worthwhile, as we finally provide investors with clear disclosure about how much they are paying for their fixed income transactions. This project encountered tremendous headwinds, and its completion is proof of incredible perseverance by the MSRB and many others, including staff at FINRA and the Commission.

In addition to these milestones, the purpose of tonight’s event is to recognize the profound impact that EMMA has had on municipal market transparency. Tonight we celebrate the 10-year anniversary of EMMA, which as we all know launched in 2008. What you may not know, however, is that 2008 was also the first year that “Emma” became the top name for newborn girls in the United States. And in fact “Emma” has maintained a place in the top 10 ever since. Is this merely a coincidence? I will let each of you decide.

Some might ask, why is it so important to celebrate the 10-year anniversary of what is ultimately just a website? The obvious response to that question is that EMMA is much more than just a website. EMMA, for the first time, allowed all investors to access comprehensive data and information about municipal bonds in a single location. Having this information at their fingertips has empowered investors with a level of transparency that was previously unknown in this market and has transformed the municipal securities industry.

One of the greatest testaments to the impact of EMMA is how easy it is to forget what transparency in this market looked like just 10 years ago. I am sure that many of you in this room remember looking through Nationally Recognized Municipal Securities Information Repositories (“NRMSIRs”) to find annual financial information and event disclosures related to municipal securities. This painstaking and costly process kept information outside the hands of all but the most sophisticated investors and analysts. Yet today that same information is available free of charge across the entire market with just a few clicks of a mouse.

However, the beauty of EMMA is not just that it provides a comprehensive repository for financial statements and event notices. EMMA also merges those reports with public access to real-time trade information and historical data and statistics. As a result, EMMA has become a one-stop shop for information on the municipal securities market.

I think the truly remarkable thing about EMMA – and I am sure Lynnette agrees with me given how many times I have heard her gush over this point – is not just the information contained within it, but the way that the information is presented. Over and over again, the MSRB has worked to revise and refine the functionality and presentation of information on EMMA in ways that make it comprehensible to everyone. Thus ten years after it was launched, EMMA is just as useful for individuals as it is for professional analysts and institutional investors.

It is clear that the MSRB is not resting on its laurels as we celebrate 10 years of EMMA. In fact, we may expect an announcement in the near term about further enhancements to EMMA’s incredible scope of functionalities aimed at enriching the user experience. These types of changes are not easy to develop or implement, and they require dedicated effort from across the organization. In fact, I have joked that the MSRB may look more like a FinTech firm than a traditional regulator, given that the vast majority of the 125 MSRB staff members touch EMMA in one way or another, whether interfacing with market participants, developing additional data and functionality for the website, or supporting EMMA’s users directly.

What these individuals share – along with all of their colleagues at the MSRB – is a dedication to making the municipal securities market the most transparent, well-functioning market possible. I want to personally thank them for their efforts, and I am honored to join the rest of you in acknowledging this important work.

And, so, I would like to end with a toast to celebrate the great successes of the MSRB, including EMMA, over the past 10 years. (Please raise your glasses.) To Lynette and everyone at the MSRB: thank you for all that you do to protect investors and issuers; thank you for your leadership to ensure that the municipal market operates fairly, transparently, efficiently, and with integrity; and we wish continued success as you carry out your important mission.

Thank you.

[1] The views I express today are my own and do not necessarily reflect those of the Commission or my fellow Commissioners.

[2] In addition to general enforcement of the antifraud provisions of the federal securities laws and oversight of the MSRB, the Commission’s main supervisory tool for the municipal securities market is the regulation of broker-dealers and municipal securities dealers pursuant to Securities Exchange Act of 1934 (“Exchange Act”) Rule 15c2-12. Exchange Act Rule 15c2-12 establishes standards for the procurement and dissemination of disclosure documents by underwriters as a means of enhancing the accuracy and timeliness of disclosure to municipal securities investors. Exchange Act Rule 15c2-12 also requires underwriters to review issuer disclosure documents before commencing sales to investors. See generally U.S. Securities and Exchange Commission, Report on the Municipal Securities Market at 30 (July 2012) available at (“2012 Muni Report”).

[3] The municipal securities market is currently comprised of more than 50,000 unique issuers. See Municipal Securities Rulemaking Board, Muni Facts (March 2018) available at

[4] The municipal securities market currently has approximately 1 million outstanding municipal securities. See id.

[5] Amendments to the federal securities laws in 1975 contained provisions commonly known as the “Tower Amendment” that expressly limited the Commission’s and the MSRB’s authority to require municipal securities issuers, either directly or indirectly, to file any application, report, or document with the Commission or the MSRB prior to any sale by the issuer. See Exchange Act § 15B(d)(1) and Securities Acts Amendments of 1975, Pub. L. No. 94-29, 89 Stat. 131 (1975). The Tower Amendment also prohibited the MSRB, either directly or indirectly, from requiring municipal issuers to furnish purchasers, prospective purchasers or the MSRB with any “application, report, document, or information” not generally available from a source other than the issuer. See Exchange Act § 15B(d)(2). For a discussion of the Tower Amendment see 2012 Muni Report at 27.

[6] Section 975 of the Dodd-Frank Act, among other things, amended Section 15B of the Exchange Act to require the registration of municipal advisors with the Commission and their regulation by the

MSRB. See The Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, § 975, 124 Stat. 1376 (2010).

[7] See Press Release, MSRB Adopts Best-Execution Rule to Enhance Fairness and Efficiency in the Municipal Securities Market (Dec. 8, 2014), available at

[8] See Implementation Guidance on MSRB Rule G-18, on Best Execution (Nov. 20, 2015), available at; FINRA Regulatory Notice 15-46, Guidance on Best Execution Obligations in Equity, Options and Fixed Income Markets (Nov. 2015), available at

[9] See MSRB Report Card: Completed Initiatives Aligned with Recommendations of the SEC’s 2012 Report on the Municipal Securities Market (Aug. 2017) available at

[10] See Municipal Securities Rulemaking Board, Bank Loan Disclosure, (last visited Apr. 24, 2018).

[11] See Proposed Amendments to Municipal Securities Disclosure, Exchange Act Release No. 34-80130 (Mar. 1, 2017), 82 FR 13928 (Mar. 15, 2017) available at

[12] See MSRB Regulatory Notice 2016-28, New Disclosure Requirements Under MSRB Rule G-15 and Prevailing Market Price Guidance Pursuant to Rule G-30 (Nov. 29, 2016) available at; FINRA Regulatory Notice 17-08, Pricing Disclosure in the Fixed Income Markets (Feb. 2017) available at

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