Daily Rules, Proposed Rules, and Notices of the Federal Government
RTRS is a facility for the collection and dissemination of information about transactions occurring in the municipal securities markets. MSRB Rule G-14 requires brokers, dealers, and municipal securities dealers (collectively, "dealers") to report all transactions in municipal securities to RTRS within fifteen minutes of the time of trade, with limited exceptions. The MSRB makes transaction information available to the public through subscription services as well as for free on the Electronic Municipal Market Access ("EMMA(r)") Web site.
Currently, transaction information disseminated from RTRS includes the exact par value on all transactions with a par value of $1 million or less, but includes an indicator of "1MM+" in place of the exact par value on transactions where the par value is greater than $1 million. The exact par value of transactions having a par value greater than $1 million is disseminated from RTRS five business days later. The MSRB implemented this approach in response to concerns that, given the prevalence of thinly traded securities in the municipal securities market, it is sometimes possible to identify institutional investors and dealers by the exact par value included on trade reports.
The MSRB now proposes to include in transaction data publicly disseminated from RTRS in real-time
According to the MSRB, a foundational principle of RTRS is that all market participants have equal access to transaction information. In a recent report on municipal securities market structure, the Government Accountability Office ("GAO") observed that certain market participants are able to determine, through their relationships with dealers, the par amount of large transactions for which the par value is masked in RTRS subscription services and on EMMA.
The Commission has carefully considered the proposed rule change, as well as the comment letters received and the MSRB's response, and 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.
The Commission recently urged the MSRB promptly to pursue enhancements to its EMMA Web site so that retail investors have better access to pricing and other municipal securities information, noting that retail investors continue to have access to substantially less pricing information than institutional investors and dealers.
For the foregoing reasons, 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 and, in particular, Section 15B(b)(2)(C)