Notice2025-18148
Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving a Proposed Rule Change To Amend Rule G-14 RTRS Procedures Under MSRB Rule G-14 Regarding the Timing of Reporting Transactions in Municipal Securities to the MSRB and To Make a Related Amendment to Rule G-12
Primary source
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Published
September 19, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 180 (Friday, September 19, 2025)</title>
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[Federal Register Volume 90, Number 180 (Friday, September 19, 2025)]
[Notices]
[Pages 45274-45278]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18148]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103987; File No. SR-MSRB-2025-01]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Order Approving a Proposed Rule Change To Amend Rule G-14 RTRS
Procedures Under MSRB Rule G-14 Regarding the Timing of Reporting
Transactions in Municipal Securities to the MSRB and To Make a Related
Amendment to Rule G-12
September 16, 2025.
I. Introduction
On June 10, 2025, the Municipal Securities Rulemaking Board
(``MSRB'' or ``Board'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\
and Rule 19b-4 thereunder,\2\ a proposed rule change to (i) amend Rule
G-14 RTRS Procedures under MSRB Rule G-14, on reports of sales or
purchases, to rescind a previously approved but not yet effective
shortening of the amount of time within which brokers, dealers and
municipal securities dealers (``dealers'') must report most
transactions to the MSRB, reverting such timeframe to the currently
operative 15-minute reporting timeframe, (ii) amend the Rule G-14 RTRS
Procedures to eliminate two previously approved but not yet effective
reporting exceptions and a manual trade indicator relating to the
rescinded shortened timeframes, and (iii) make a related conforming
amendment to MSRB Rule G-12, on uniform practice (``Rule G-12''), as
described herein (the ``proposed rule change'').\3\ The proposed rule
change was published for comment in the Federal Register on June 20,
2025.\4\ On July 22, 2025, the Commission extended until September 18,
2025, the time period within which to approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to disapprove the proposed rule change.\5\ The
Commission received comment letters on the proposed rule change.\6\ The
MSRB filed a response to comments on File No. SR-MSRB-2025-01.\7\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Exchange Act Release No. 103262 (June 16, 2025), 90 FR
26390 (June 20, 2025) (``Notice''). Comments on the proposed rule
change are available at <a href="https://www.sec.gov/comments/sr-msrb-2025-01/srmsrb202501.htm">https://www.sec.gov/comments/sr-msrb-2025-01/srmsrb202501.htm</a>.
\4\ See Notice, 90 FR at 26390.
\5\ See Exchange Act Release No. 103516 (July 22, 2025), 90 FR
35325 (July 25, 2025).
\6\ See Letters to Secretary, from Christopher A. Iacovella,
President & Chief Executive Office, American Securities Association
(July 10, 2025) (``ASA Letter''); Gerar O'Reilly, Co-CEO and Co-
Chief Investment Officer, and David A. Plecha, Global Head of Fixed
Income, Dimensional Fund Advisors LP (July 10, 2025) (``Dimensional
Fund Advisors Letter''); Kenneth E. Bentsen Jr., President and CEO,
SIFMA and SIFMA Asset Management Group (July 11, 2025) (``SIFMA
Letter''); Howard Meyerson, Managing Director, Financial Information
Forum (``FIF Letter''); Michael Decker, Senior Vice President,
Research and Public Policy, Bond Dealers of America (July 11, 2025)
(``BDA Letter''); Tyler Gellasch, President and CEO, Healthy Markets
Association (Aug. 8, 2025) (``HMA Letter''). One of these commenters
also commented on the governance practices and rulemaking processes
of the MSRB. See ASA Letter at 2-5. Those comments are outside of
the scope of the proposed rule change.
\7\ See Letter to Secretary, Commission, from Ernesto A. Lanza,
Chief Regulatory and Policy Officer, MSRB, dated September 5, 2025,
available at <a href="https://www.sec.gov/comments/sr-msrb-2025-01/srmsrb202501-648967-1945034.pdf">https://www.sec.gov/comments/sr-msrb-2025-01/srmsrb202501-648967-1945034.pdf</a> (``MSRB Letter'').
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II. Description of the Proposed Rule Change
On September 20, 2024, the Commission issued an order approving
proposed rule change SR-MSRB-2024-01, as modified by Amendment No. 1,
which modified, among other things, the baseline 15-minute reporting
requirement for reporting trades to MSRB's Real-time Transaction
Reporting System (``RTRS'') in two ways: (i) reducing the deadline for
reporting such trades to no later than one minute after the Time of
Trade (the ``one-minute reporting requirement'') and (ii) requiring
that trades be reported as soon as practicable, regardless of the
amended deadline (the ``as soon as practicable requirement'').\8\ Under
file No. SR-MSRB-2024-01, the MSRB also added two new exceptions to the
new one-minute reporting requirement for trades with a manual component
\9\ and for trades by dealers with limited trading activity \10\ and
included a requirement that dealers append a new manual trade indicator
to identify all manual trades.\11\ The 2024 Amendments were intended to
make publicly available more timely information about the market and
the prices at which municipal securities transactions are executed.\12\
The MSRB has not
[[Page 45275]]
implemented the changes approved in File No. SR-MSRB-2024-01.
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\8\ See Exchange Act Release No. 101118 (Sept. 20, 2024), 89 FR
78955 (Sept. 26, 2024), File No. SR-MSRB-2024-01 (the ``2024
Amendments''). The 2024 Amendments were developed in close
coordination with the Financial Industry Regulatory Authority
(``FINRA,'' and together with the MSRB, the ``SROs'').
\9\ See 2024 Amendments, 89 FR at 78957-59.
\10\ See id. at 78957.
\11\ See id. at 78959.
\12\ See id. at 78956.
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Following the approval of the amendments, the MSRB stated that it
``continued to engage with market participants and received further
feedback expressing various concerns regarding aspects of the one-
minute reporting requirement.'' \13\ According to the MSRB, these
concerns emerged as dealers began to consider the ``specific steps they
would need to undertake'' to comply with the 2024 Amendments.\14\
According to the MSRB, these concerns related to additional scenarios
involving potential trades with a manual component beyond those
discussed in the 2024 Amendments, and to issues that could arise in the
case of certain fully automated trades.\15\ Specifically, the MSRB
noted that the scenarios identified by the dealers raised the prospect
that a potentially broader array of circumstances than previously
anticipated during the course of the rulemaking for the 2024 Amendments
may exist where, at this time, the adjustment of dealer systems and
workflows, including those dependent on third party vendors or market
utilities associated with achieving and complying with the shortened
reporting timeframes under the 2024 Amendments might not be feasible in
the near-term.\16\
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\13\ See Notice, 90 FR at 26391.
\14\ See id.
\15\ See id.
\16\ See id.
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The MSRB also explained that in reviewing trade reporting data
through the end of 2024 that reflected market practices since the 2022
trade reporting data used in connection with the 2024 Amendments, it
had observed that trades that were likely reported electronically were
being reported more rapidly in 2024 as compared to 2022.\17\ In
addition, the MSRB noted that, to the extent dealers are not already
reporting trades as soon as practicable, the inclusion of the
requirement for reporting as soon as practicable would have the effect
of increasing the proportion of trades being reported within shorter
timeframes than they currently are, without regard to a one-minute,
five-minute or 15-minute deadline, potentially translating into
significant improvement in market-wide average reporting times and in
turn reducing market-wide lags in pricing information being made more
widely available and reduce information arbitrage.\18\ The MSRB
explained that it believed that the inclusion of the as soon as
practicable requirement may, by itself, result in improvements in the
timing of trade reporting, with greatest improvements likely to occur
for those trades currently being reported nearer to the 15-minute
deadline.\19\
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\17\ See id. at 26396, Table 2--Trade Report Time Comparison:
2022 and 2024 and accompanying text.
\18\ See id. at 26392.
\19\ See id.
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Consistent with the MSRB's goal to enhance market transparency
without the potential compliance burdens and costs associated with the
one-minute reporting requirement and the use of a special condition
indicator for trades with a manual component, the MSRB determined that
it would be appropriate to rescind the one-minute reporting requirement
and related provisions of the 2024 Amendments, and revert the rule
language to maintain the currently-operative 15-minute RTRS reporting
standard.\20\ In addition, the MSRB has also determined to retain the
as soon as practicable requirement and related provisions, as well as
certain other clarifying amendments, of the 2024 Amendments. Therefore,
and as described more fully in the Notice, the MSRB filed the proposed
rule change to: (i) amend the Rule G-14 RTRS Procedures under MSRB Rule
G-14, on reports of sales or purchases, to rescind a previously
approved but not yet effective shortening of the amount of time within
which dealers must report most transactions to the MSRB, reverting such
timeframe to the currently operative 15-minute reporting timeframe,
(ii) amend the Rule G-14 RTRS Procedures to eliminate two previously
approved reporting exceptions and a manual trade indicator relating to
the rescinded shortened timeframes, and (iii) make a related conforming
amendment to Rule G-12.\21\
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\20\ See id.
\21\ See id. The proposed rule change would also partially
revert the change made by the MSRB in the 2024 Amendments to Rule G-
12(f)(i), relating to the timing for submission of trades to be
compared, to reflect the reversion from one minute to 15 minutes
under the proposed rule change.
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In addition to the changes described above, and more fully in the
Notice, the 2024 Amendments included certain changes that would, as a
matter of substance, be retained and not be affected by the proposed
rule change. The addition by the 2024 Amendments to paragraph (a)(ii)
of Rule G-14 RTRS Procedures of the requirement that transactions
effected with a Time of Trade during the hours or the RTRS Business Day
must be reported as soon as practicable would be retained without
change.\22\ The addition by the 2024 Amendments to Supplementary
Material .03 would be retained and renumbered as Supplementary Material
.01, with minor non-substantive grammatical and clarifying changes.\23\
The amendment by the 2024 Amendments of paragraph (a)(iv) of Rule G-14
RTRS Procedures regarding designation of late trades and patterns or
practices of late reporting without exceptional circumstances or
reasonable justification \24\ would also not be affected by the
proposed rule change. Additional clarifying amendments from the 2024
Amendments that reorganize certain existing materials into more logical
groupings, such as previously established special condition indicators,
and clarifying the reporting timeframe for trades on an invalid RTTM
trade date, would also be retained.\25\
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\22\ See id.
\23\ The word ``reporting'' would be added to the phrase
``trades with a manual reporting component'' to provide greater
clarity in light of the deletion of the substantive provisions and
definition relating to the exception for trades with a manual
component. See Notice, 90 FR at 26392.
\24\ See Exchange Act Release No. 99402 (Jan. 19, 2024), 89 FR
5384, 5391 (Jan. 26, 2024) (``2024 Notice''), at Section II.A.1,
discussion under heading Pattern or Practice of Late Trade
Reporting, for a full discussion of these provisions. See also MSRB
Notice 2024-12 (SEC Approves Amendments to MSRB Rule G-14 to Shorten
Timeframe for Reporting Transactions in Municipal Securities) (Sept.
20, 2024) (``2024 MSRB Notice''), Section F. Pattern or Practice of
Late Trade Reporting; Exceptional Circumstances or Reasonable
Justification, at 18-20.
\25\ See 2024 Notice, 89 FR at 5392, Section II.A.1, discussion
under heading Technical Amendments, for a full discussion of these
provisions.
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III. Summary of Comments and MSRB's Response
The Commission received six (6) comment letters in response to the
Notice. The MSRB responded to the comment letters received in the MSRB
Letter.\26\ The MSRB reiterated its view that the proposed rule change
is appropriate given the additional information obtained since the
approval of the 2024 Amendments.\27\ In particular, the MSRB explained
that the additional information suggested that the balance of burdens
and benefits of the 2024 Amendments appears to have shifted over that
period, as (1) the burdens of the shortened reporting timeframe in the
2024 Amendments may be higher than initially estimated; and (2) the net
positive impact of the tightened timeframe, as compared to not changing
the timeframe, may not be as large as originally estimated in light of
observed improvements in actual reporting performance by dealers
[[Page 45276]]
between 2022 and 2024 under the current 15-minute standard.\28\
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\26\ See supra note 7.
\27\ See MSRB Letter at 2.
\28\ See MSRB Letter at 2-3; Notice, 90 FR at 26391-92.
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A. Reversion to a 15-Minute Baseline Reporting Requirement
Four of the six commenters expressed support for the proposed rule
change's reversion to a 15-minute baseline reporting requirement.\29\
One commenter stated that they support the ``current proposals to
restore and clarify the 15-minute reporting timeframe'' because the
SROs ``failed to demonstrate a substantive problem in trade reporting
that required shortening the reporting window from 15 minutes to 1
minute.'' \30\ This commenter also stated that the SROs ``ignored or
dismissed [. . .] obvious problems [with the 2024 Amendments], pressing
forward without meaningful engagement [with stakeholders].'' \31\
Another commenter reiterated that ``implementation of one minute trade
reporting, even in its final form that includes an exception for so-
called manual trades, would have serious negative implications for the
corporate bond, agency debt, securitized product, and municipal
securities market,'' in particular for smaller broker-dealers, and
``commend[ed] FINRA and the MSRB for reconsidering their fixed-income
trade reporting rules and for proposing changes they believe to be in
the best interest of fair, liquid, and transparent markets.'' \32\ A
further commenter stated that the ``vast majority of corporate and
municipal bond trades are already reported within one minute'' and that
some trades are ``simply not physically possible to report'' within 60
seconds.\33\ This commenter also stated that those ``trades that take
longer than one minute to report would generally be subject to one of
the two exceptions and would remain subject to 15-minute reporting in
the first year the [2024] Amendments are in effect'' so, the 2024
Amendment would ``not improve market transparency in any meaningful
way.'' \34\ This commenter supported rescinding the 2024 Amendments as
compliance ``would not have been justified by the negligible
improvements in market transparency that would have resulted from
allowing the changes to take full effect.'' \35\
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\29\ See ASA Letter; SIFMA Letter; FIF Letter; BDA Letter.
\30\ See ASA Letter at 1-2.
\31\ See id. at 2.
\32\ See SIFMA Letter at 1-2.
\33\ See BDA Letter at 2.
\34\ See id.
\35\ See id.
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Two commenters opposed the proposed rule change.\36\ One commenter
stated that ``shortening the time between trade execution and price
dissemination would enhance transparency and reduce information
asymmetries in the municipal securities market'' and ``strongly
believed that transparency fosters a fair and efficient market and that
market quality is improved when public information is disseminated
evenly and in real time to all market participants.'' \37\ Another
commenter stated that the SROs had ``made a compelling case for
shortening the timeframe for reporting from 15 minutes to 1 minute''
\38\ and that the record before the Commission now ``is not materially
different'' from the record for the 2024 Amendments.\39\ This commenter
also stated that ``neither FINRA nor the MSRB offered new facts or
material analysis'' in their respective proposed rule changes \40\ to
``support backtracking on the timelines of trade reporting.'' \41\
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\36\ See Dimensional Fund Advisors Letter; HMA Letter.
\37\ See Dimensional Fund Advisors Letter at 1-2.
\38\ See HMA Letter at 6.
\39\ See id. at 7.
\40\ See id.
\41\ See id. at 2.
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In response to these comments, the MSRB explained that it continues
to believe that the proposed rule change is appropriate at this time,
given the additional information obtained since approval of the 2024
Amendments.\42\ In particular, the MSRB described how the balance of
burdens and benefits appeared to have shifted since the approval of the
2024 Amendments.\43\ Specifically, the MSRB stated that the percentage
of all trades reported within 15 seconds of time of trade increased
from 24.8% in 2022 to 34.2% in 2024, representing a 9.6 percentage
improvement in the two-year period since 2022; trades reported within
30 seconds of time of trade increased from 52.7% in 2022 to 56.7% in
2024, representing a 4.0 percentage improvement during the two-year
period since 2022; and trades reported within one minute of time of
trade increased from 78.1% in 2022 to 80.8% in 2024, representing a 2.7
percentage improvement during the two-year period since 2022.\44\ Based
on this new data that was not yet available at the time of the 2024
Amendments, the MSRB observed that more than four out of five trades
were already being reported within the one-minute proposed timeframe
under the 2024 Amendments, and trades reported faster than one minute
showed substantial rates of improvements over the two-year period from
2022 to 2024, without regard to either the manual trade exception or
the exception for dealers with limited trading activity provided for
under the 2024 Amendments.\45\ While the percentage of total trades of
all trade sizes reported within 10 or 15 minutes after the time of
trade remained relatively steady from 2022 to 2024, the MSRB stated
that the percentage of the largest trades--those greater than $5
million, generally viewed as having the greatest influence on market
prices--showed material improvements during this period.\46\ Trades
with par size greater than $5 million reported within 10 minutes of
time of trade showed a 2.4 percentage improvement from 2022 (91.7% of
all such trades) to 2024 (94.1%), and those reported within 15 minutes
showed a 1.5 percentage improvement from 2022 (94.6%) to 2024
(96.1%).\47\
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\42\ See MSRB Letter at 2.
\43\ See id.
\44\ See id.; Notice, 90 FR at 26396.
\45\ See MSRB Letter at 3.
\46\ See MSRB Letter at 3, n.13 (explaining that in 2022, 99.3%
of all trades were reported within 10 minutes after the time of
trade and 99.6% were reported within 15 minutes, as compared to
99.2% within 10 minutes and 99.5% within 15 minutes in 2024).
\47\ See MSRB Letter at 3, n.14 (explaining that for the largest
trades, reporting occurred faster in 2024 as compared to 2022 at all
levels).
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The MSRB also obtained additional information regarding the
practical difficulties associated with complying with the 2024
Amendments.\48\ The MSRB stated that these practical difficulties
raised the prospect that a potentially broader array of circumstances
than previously anticipated during the course of the rulemaking for the
2024 Amendments may exist where, at this time, the adjustment of dealer
systems and workflows, including those dependent on third party vendors
or market utilities, associated with achieving and complying with the
shortened reporting timeframes under the 2024 Amendment may not be
feasible in the near-term.\49\ Although the MSRB recognized that the
2024 Amendments without change would likely incrementally accelerate
the trade reporting process when compared to the current state, the
MSRB found that it would also impose substantial technology
subscription or upgrade expenses for active dealers who are currently
not close to reporting all fully automated trades within one minute,
and additional compliance and system costs for all dealers to provide a
new trade indicator.\50\ Thus, the MSRB
[[Page 45277]]
stated that it believes that it has offered new facts and provided
material analysis in support of the proposed rule change and has not
merely relied upon the same set of facts and analysis relied upon in
connection with the 2024 Amendments.\51\
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\48\ See Notice 90, FR at 26391.
\49\ See id.
\50\ See id.; Notice, 90 FR at 26398.
\51\ See MSRB Letter at 4.
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Commenters also addressed the exceptions for dealers with limited
trading activity and for trades with a manual component. According to
one commenter, both exceptions are vital to the workability of the 2024
Amendments.\52\ Another commenter who supported the rule change stated
that even with the exception for manual trades, some trades would not
be reported in a timely manner as the reporting time frame shrinks from
15 minutes ultimately to 5 minutes.\53\ This commenter stated that
large amounts of customer allocation may not be able to pass through
trade processing and network infrastructure within one minute even if
automated.\54\ A further commenter, although believing that the 2024
Amendments were imperfect, supported developing amendments that
narrowed the manual trade exception to avert a potential return to
manual trading by those seeking to avoid transparency.\55\
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\52\ See BDA Letter at 2.
\53\ See SIFMA Letter at 3, n.12.
\54\ See SIFMA Letter at 3.
\55\ See HMA Letter at 2, 7-8.
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In response to these comments, the MSRB stated that a narrowed
version of the manual trade exception ``could result in the same or
greater compliance burden on dealers since a narrower exception would
leave a greater proportion of trades subject to the compressed one-
minute reporting timeframe'' \56\ and ``may have only limited
likelihood of succeeding in inducing materially more rapid reporting as
compared to the natural evolution of trade reporting performance
observed between 2022 and 2024.'' \57\ As it relates to customer
allocations, the MSRB acknowledged that although a customer allocation
may be subject to trade reporting under Rule G-14 in certain
circumstances, in the case of a purchase of a block order by a dually
registered dealer/investment advisor of municipal securities that are
then allocated internally to advisory accounts at the same price as the
block order, the MSRB has only required that the original block order
be reported and not the subsequent related allocations to customers in
advisory accounts where, with respect to any such allocation, the
dually registered dealer/investment adviser is acting as an investment
adviser to such account directing an internal delivery of a portion of
such block of municipal securities acquired by the dually registered
broker/investment adviser firm to the advisory account.\58\ The MSRB
clarified that such treatment would continue, based on the core
principle that RTRS seeks to disseminate publicly only such pricing
information that is indicative of market prices.\59\ The MSRB further
stated that it believes that publishing price information for smaller
customer allocations that were priced based on the larger block price
of the original block trade is unlikely to be indicative of market
prices, but could also be misleading.\60\
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\56\ See MSRB Letter at 4.
\57\ See id.
\58\ See id.
\59\ See id. at 5.
\60\ See MSRB Letter at 6, n.21 (citing to MSRB Notice 2003-20,
Notice on Reporting and Comparison of Certain Transactions Effected
by Investment Advisors: Rule G-12(f) and G-14 (May 23, 2003)).
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B. Retention of the New Requirement To Report Trades ``as Soon as
Practicable''
Certain commenters supported the requirement to report trades as
soon as practicable by explaining that dealers are, in practice already
reporting trades as soon as practicable and that any instances where a
broker-dealer ``purposely refrain[ed] from reporting trades until just
before the 15-minute deadline'' would be violating MSRB rules, such as
Rule G-17.\61\ Another commenter supported the implementation of the
``as soon as practicable'' requirement, stating that it would align
MSRB and FINRA rules while promoting fair and transparent markets.\62\
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\61\ See BDA Letter at 2.
\62\ See SIFMA Letter at 2, 3.
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In response to these comments, the MSRB explained that it
``believes that the retention of the requirement for reporting as soon
as practicable would have the effect of increasing the proportion of
trades being reported within shorter timeframes than they currently
are, without regard to a one-minute, five-minute or 15-minute
deadline.'' \63\
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\63\ See MSRB Letter at 4.
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IV. Discussion and Commission Finding
The Commission has carefully considered the proposed rule change,
as well as comment letters received, and the MSRB Letter. The
Commission finds that the proposed rule change is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to the MSRB.
In particular, the proposed rule change is consistent with the
provisions of Section 15B(b)(2)(C) of the Exchange Act and the rules
and regulations thereunder.\64\ Section 15B(b)(2)(C) of the Exchange
Act provides, in part, that the MSRB's rules shall be designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in municipal securities, to remove impediments to and
perfect the mechanisms of a free and open market in municipal
securities, and, in general, to protect investors and the public
interest.\65\
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\64\ 15 U.S.C. 78o-4(b)(2)(C).
\65\ See id.
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The Commission agrees that the proposed rule change is reasonably
designed to remove impediments to and perfect the mechanism of a free
and open market in municipal securities, and will protect investors and
the public interest, because it reasonably balances the benefits of
greater market transparency through more timely disclosures and
dissemination of information provided through RTRS with the continued
feasibility and compliance concerns raised by market participants. The
proposed rule change will also foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in municipal
securities and municipal financial products.
A. Remove Impediments to and Perfect the Mechanism of a Free and Open
Market in Municipal Securities and Municipal Financial Products, and
Protect Investors and the Public Interest
The proposed rule change reasonably balances the benefits of more
timely trade reporting with the continued feasibility and compliance
concerns raised by market participants.\66\ As an initial matter, the
MSRB is not required to demonstrate that the Exchange Act requires
rescinding the 2024 Amendments. Rather, the MSRB must demonstrate that
its proposal to maintain the current reporting requirements in light of
market participant feedback is consistent with the requirements of the
Act and the rules and regulations thereunder. As the MSRB explained,
comments and information obtained by the MSRB since the approval of the
2024 Amendments
[[Page 45278]]
suggest that the burdens of the shortened reporting timeframe (together
with the associated exceptions and manual trade flag) in the 2024
Amendments may be higher than initially estimated, and the net positive
impact of the tightened timeframe, as compared to not changing the
timeframe, may not be as large as originally estimated in light of
observed improvements in actual reporting performance by dealers
between 2022 and 2024 under the current 15-minute standard.\67\ While
retaining the 2024 Amendments without the changes included in the
proposed rule change would likely incrementally accelerate the trade
reporting process when compared to the current state, the MSRB
explained that it would also impose substantial technology subscription
or update expenses for those active dealers that are currently not
close to reporting all fully automated trades within one minute, and
additional compliance and system costs for all dealers to provide a new
trade indicator.\68\
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\66\ See id. at 26393.
\67\ See id.
\68\ See Notice, 90 FR at 26398; MSRB Letter at 4.
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Because the proposed rule change represents a reasonable response
to market participants' feasibility and compliance concerns that could
have impeded the achievement of the expected benefits the 2024
Amendments, the proposed rule change is reasonably designed to remove
impediments to, and perfect the mechanisms of, a free and open market
in municipal securities, and to protect investors and the public
interest.\69\
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\69\ See id.
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B. Foster Cooperation and Coordination
The MSRB explained that the 2024 Amendments were developed in close
coordination with FINRA, which adopted a similar shortened trade
reporting requirement for many TRACE-eligible securities, and the MSRB
and FINRA continue to work in coordination on issues that have
presented since such adoption.\70\ In addition, the MSRB noted that
fostering a consistent approach across classes of securities would
facilitate greater and more efficient compliance among MSRB-registered
dealers, the majority of which also transact in other fixed income
securities that are subject to FINRA's regulatory authority.\71\ The
MSRB further explained that consistent trade reporting requirements
tend to reduce the risk of potential confusion and may reduce
compliance burdens resulting from inconsistent obligations and
standards for different classes of securities.\72\ The MSRB stated that
the proposed rule change would continue to promote regulatory
consistency, reducing potential errors caused by market participants'
imperfect application of differing standards when executing and
reporting transactions in municipal securities.\73\ In particular, the
MSRB stated that retaining the as soon as practicable provision added
to the Rule G-14 RTRS Procedures by the 2024 Amendments, will have a
positive impact on reporting times while harmonizing with existing as
soon as practicable provisions of FINRA's TRACE requirements for
reporting TRACE-eligible securities.\74\ The Commission agrees that
harmonizing reporting requirements across classes of securities would
facilitate greater and more efficient compliance among MSRB-registered
dealers. Harmonized reporting requirements also reduce the risk of
potential confusion from disparate obligations and reduces the
potential of reporting errors. Thus, the proposed rule change would
foster cooperation and coordination \75\ between the SEC, the MSRB, and
FINRA by establishing consistent trade reporting requirements across
various classes of fixed income securities.
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\70\ See Notice, 90 FR at 26394, n.25 (citing to FINRA, Updating
TRACE Reporting Timeframes (Feb. 5, 2025), available at <a href="https://www.finra.org/media-center/blog/updating-trace-reporting-timeframes">https://www.finra.org/media-center/blog/updating-trace-reporting-timeframes</a>;
MSRB, MSRB Board Authorizes Further Amendments to Rule G-14,
Withdraws Pre-Trade Concept Release (Mar. 7, 2025), available at
<a href="https://www.msrb.org/Press-Releases/MSRB-Board-Authorizes-Further-Amendments-Rule-G-14-Withdraws-Pre-Trade-Concept">https://www.msrb.org/Press-Releases/MSRB-Board-Authorizes-Further-Amendments-Rule-G-14-Withdraws-Pre-Trade-Concept</a>).
\71\ See Notice, 90 FR at 26394.
\72\ See id.
\73\ See id.
\74\ See Notice, 90 FR at 26392; MSRB Letter at 4.
\75\ See 15 U.S.C. 78o-4(b)(2)(C).
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In approving the proposed rule change, the Commission has
considered the proposed rule change's impact on efficiency,
competition, and capital formation.\76\ Exchange Act Section
15B(b)(2)(C) \77\ requires that MSRB rules not be designed to impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Exchange Act.
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\76\ 15 U.S.C. 78c(f).
\77\ 15 U.S.C. 78o-4(b)(2)(C).
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The proposed rule change would not impose any burden on competition
not necessary or appropriate in furtherance of the purposes of the
Exchange Act because it takes into account competitive and liquidity
concerns that could arise as a result of the costs associated with
complying with a shortened reporting timeframe that could cause some
dealers to exit the market, curtail their activities or consolidate
with other firms. The MSRB's proposal addresses market participants'
feasibility and compliance concerns with the 2024 Amendments.\78\ The
MSRB also intends to continue monitoring for further improvements in
trade reporting timing and to publish findings for market participants
and the general public.\79\ The 2024 Amendments, as modified by the
proposed rule change, should continue to enhance market transparency
without the potential compliance burdens and costs associated with the
one-minute reporting requirement and the use of a special condition
indicator for trades with a manual component.\80\
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\78\ See Notice, 90 FR at 26393; MSRB Letter at 3-4.
\79\ See Notice, 90 FR at 26392.
\80\ See id.
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For the reasons noted above, the Commission finds that the proposed
rule change is consistent with the Act.
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\81\ that the proposed rule change (SR-MSRB-2025-01) be, and hereby
is, approved.
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\81\ 15 U.S.C. 78s(b)(2).
For the Commission, pursuant to delegated authority.\82\
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\82\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2025-18148 Filed 9-18-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on September 19, 2025.
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