86188 Federal Register / Vol. 88, No. 237 / Tuesday, December 12, 2023 / Notices 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 95417 (Aug. 3, 

2022), 87 FR 48530 (Aug. 9, 2022), File No. SR– 

MSRB–2022–06 (establishing the MSRB’s Annual 

Rate Card Process with respect to the setting of 

certain fee rates each calendar year (an ‘‘Annual 

Rate Card’’) and setting the initial Rate Card Fees 

through December 31, 2023) (the ‘‘Annual Rate Card 

Process Notice’’). 

4The MSRB has designated the proposed rule 

change as establishing or changing a due, fee, or 

other charge under Section 19(b)(3)(A)(ii) of the 

Exchange Act (15 U.S.C. 78s(b)(3)(A)(ii)) and Rule 

19b–4(f)(2) (17 CFR 240.19b–4(f)(2)) thereunder. 

5Rate Card Fees for activities occurring prior to 

the January 1, 2024 effectiveness of the new rates 

will continue to accrue at the rates in effect prior 

to that date. 

6See supra note 3. 

7Available at https://www.msrb.org/MSRBFunding-Policy-0. The board of directors of the 

MSRB approved its current Funding Policy on July 

28, 2022 with an effective date of October 1, 2022. 

8See Section 15B(b)(2)(J) of the Exchange Act (15 

U.S.C. 78o–4(b)(2)(J)). 

9The MSRB anticipates amending the rates of 

assessment for the Rate Card Fees specified in the 

2024 Rate Card with a subsequent rule filing with 

the Commission that would become effective as of 

January 1, 2025 for the calendar year 2025. 

information in submissions; you should 

submit only information that you wish 

to make available publicly. We may 

redact in part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. All submissions should refer 

to file number SR–FICC–2023–016 and 

should be submitted on or before 

January 2, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27160 Filed 12–11–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99096; File No. SR–MSRB– 

2023–06] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Establish the 2024 Rate 

Card Fees for Dealers and Municipal 

Advisors Pursuant to MSRB Rules A– 

11 and A–13 

December 6, 2023. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on November 30, 2023, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’ 

or ‘‘Board’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the MSRB. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The MSRB filed with the Commission 

a proposed rule change to amend, 

consistent with the MSRB’s annual ratesetting process (‘‘Annual Rate Card 

Process’’): 3 (i) Supplementary Material 

.01 to Rule A–11 to modify the rate of 

assessment for the annual rate card fees 

on municipal advisors for covered 

professionals under Rule A–11(b) (the 

‘‘Municipal Advisor Professional Fee’’); 

and (ii) Supplementary Material .01 to 

Rule A–13 to modify the rate of 

assessments for the annual rate card fees 

on brokers, dealers, and municipal 

securities dealers (collectively, 

‘‘dealers’’) for certain underwriting fees 

under Rule A–13(b), transaction fees 

under Rule A–13(d)(i) and (ii), and trade 

count fees under Rule A–13(d)(iv)(a) 

and (b) (collectively, the ‘‘Market 

Activity Fees’’ and, together with the 

Municipal Advisor Professional Fee, the 

‘‘Rate Card Fees’’). The proposed 

amendments to Supplementary Material 

.01 to Rule A–11 and Supplementary 

Material .01 to Rule A–13 collectively 

make up the ‘‘proposed rule change’’. 

The MSRB has designated the 

proposed rule change for immediate 

effectiveness.4 The new Rate Card Fees 

reflected in the proposed rule change 

will become effective as of January 1, 

2024.5

The text of the proposed rule change 

is available on the MSRB’s website at 

https://msrb.org/2023-SEC-Filings, at 

the MSRB’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

MSRB included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. The MSRB has 

prepared summaries, set forth in 

Sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the rate of 

assessments for the MSRB’s Rate Card 

Fees under its Annual Rate Card 

Process. The Annual Rate Card Process 

was established in 2022 to create a 

process by which the four individual 

Rate Card Fees would be adjusted on an 

annual basis under a single rate setting 

process.6 In conjunction with the 

establishment of the Annual Rate Card 

Process, the MSRB established its initial 

Annual Rate Card to implement Rate 

Card Fees intended to remain in effect 

through calendar year 2023 (the ‘‘2023 

Rate Card’’), with new Rate Card Fees 

expected to be established for 

subsequent calendar years. Pursuant to 

this process and consistent with the 

MSRB’s funding policy (the ‘‘MSRB 

Funding Policy’’),7 the MSRB has 

conducted its annual review of the Rate 

Card Fees and has determined that an 

adjustment is necessary and appropriate 

to defray the costs and expenses of 

operating and administering the MSRB.8

Accordingly, the proposed rule change 

would effectuate a new Annual Rate 

Card (the ‘‘2024 Rate Card’’) which will 

remain in effect until a subsequent 

proposed rule change amending the 

Rate Card Fees becomes effective.9

MSRB Review of the Proposed Rate 

Card Fees for Fiscal Year 2024 

The MSRB undertook the Annual Rate 

Card Process as described in the MSRB 

Funding Policy to establish the 

proposed Rate Card Fees for 2024. The 

Annual Rate Card Process is intended to 

establish a fee structure that is more 

transparent and predictable for the 

MSRB’s stakeholders while also 

retaining the MSRB’s flexibility to react 

to changing market or budgetary 

circumstances when establishing 

reasonable fees to be paid by regulated 

entities. The Annual Rate Card Process 

consists of: (i) developing the fiscal year 

operational funding level for the 

upcoming fiscal year, (ii) reconciling 

any material reserves variances, (iii) 

incorporating other anticipated revenue 

for the upcoming fiscal year, (iv) 

validating contribution targets and 

reconciling any rate card fee variances 

from the prior fiscal year, and (v) setting 

rates of assessment for the Annual Rate 

Card based on forecasted volume of 

activity for the coming fiscal year. 

Development of the Fiscal Year 

Operational Funding Level. In July 

2023, the board of directors of the MSRB 


ddrumheller on DSK120RN23PROD with NOTICES1
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10See MSRB Fiscal Year 2024 Budget, available 

at https://www.msrb.org/sites/default/files/2023-09/ 

MSRB-FY-2024-Budget-Summary.pdf. 11See MSRB Funding Policy, supra note 7. 12See MSRB Fiscal Year 2024 Budget, supra note 

10. 

13Contribution targets used for the 2023 Rate 

Card Fees were: underwriting fee 37%, transaction 

fee 39%, trade count fee 16%, Municipal Advisor 

Professional Fee 8%. See the Annual Rate Card 

Process Notice, supra note 3. 

14These contribution targets were determined by 

averaging the distribution of revenue assessed for 

Rate Card Fees over the past two fiscal years (Fiscal 

Year 2022 and Fiscal Year 2023) and the 

distribution of revenue assessed for Rate Card Fees 

over the past five fiscal years (Fiscal Year 2019 

through Fiscal Year 2023). These two periods of 

time were used to reflect a balance of current 

market conditions and a longer-term historical 

precedent. To make the data comparable across 

fiscal years, the calculations were completed using 

the Market Activity Fee rates that were in place 

prior to the 2023 Rate Card, excluding the impact 

of the temporary fee reductions, and calculated as 

if the Municipal Advisor Professional Fee rate of 

$1,000 per covered professional that was in place 

for Fiscal Years 2021 and 2022 had been in place 

for all Fiscal Years used in the calculations. 

Resulting contribution targets were rounded to the 

nearest whole percent. See MSRB Fiscal Year 2024 

Budget, supra note 10. 

15 In Fiscal Year 2023, the underwriting fee had 

a shortfall of $3.37 million versus budget. This 

shortfall was added to the Proportional 

Contribution Amount for the underwriting fee of 

$12.15 million to determine the Final Contribution 

Amount of $15.52 million. The transaction fee and 

trade count fee had surpluses versus budget of 

$2.73 million and $4.35 million, respectively. These 

surpluses were subtracted from the Proportional 

Contribution Amounts to determine the Final 

Contribution Amounts of $13.88 million for the 

transaction fee and $4.16 million for the trade count 

fee. Finally, the Municipal Advisor Professional Fee 

had a shortfall $0.04 million versus budget in FY 

2023. This amount was added to the Proportion 

Contribution Target for the Municipal Advisor 

Professional Fee to determine the Final 

Contribution Amount of $3.28 million. See MSRB 

Fiscal Year 2024 Budget, supra note 10. See also 

MSRB Funding Policy, supra note 7. 

16Consistent with the MSRB Funding Policy (see 

supra note 7), the assumptions used for expected 

volume of activity in Fiscal Year 2024 are as 

follows: underwriting fee of $400 billion in par 

underwritten; transaction fee of $1.527 trillion in 

par transacted (five-year average volume); trade 

count fee of 7.34 million trades (five-year average 

volume); Municipal Advisor Professional Fee of 

2,830 municipal advisor professionals. The board of 

directors of the MSRB uses the best available 

information and business judgment to set expected 

volumes of activity for the coming fiscal year, 

which consists of an evaluation of and reliance on 

historical volume and averages, as well as 

observable trends and patterns. See also MSRB 

Fiscal Year 2024 Budget, supra note 10. 

17 If the full amount of a negative Rate Card Fee 

variance cannot be recaptured in a single year due 

to these limitations, the remaining amount of such 

variance will carry over into the calculation of the 

Rate Card Funding Amount for the following fiscal 

year(s) and, all else being equal, increase the rate 

of assessment for such Rate Card Fee. Conversely, 

there are no limits on potential decreases to the 

rates of assessment for the Rate Card Fees that may 

result from Positive Rate Card Fee Variances and, 

Continued 

approved an annual expense budget of 

approximately $47.4 million for Fiscal 

Year 2024, which represents a 4.8% 

increase over the prior fiscal year, and 

thereby established the baseline revenue 

that the organization will need to 

operate (i.e., the ‘‘Operational Funding 

Level’’).10

Reconciliation of Any Material 

Reserves Variances. Material reserves 

variances versus the MSRB’s reserves 

target at the end of the prior fiscal year 

are also considered and may be added 

to or subtracted from the Operational 

Funding Level to develop a final 

‘‘Budgeted Revenue Target’’ for a given 

fiscal year. For the 2024 Rate Card, 

based on the current reserves target and 

reserves philosophy, there were no 

resulting adjustments to the Operational 

Funding Level; therefore, the Budgeted 

Revenue Target is equal to the 

Operational Funding Level of 

approximately $47.4 million.11

Incorporation of Other Anticipated 

Revenue. Forecasted revenue for Fiscal 

Year 2024 from sources other than the 

Rate Card Fees (e.g., annual and initial 

fees, data subscriptions, municipal fund 

underwriting fees and fine revenue) was 

established as part of the annual budget 

approved by the board of directors in 

July 2023, and that estimate was 

subtracted from the Budgeted Revenue 

Target to determine the total amount of 

funding needed to be generated from the 

Rate Card Fees established in the 2024 

Rate Card (the ‘‘Rate Card Funding 

Amount’’). For Fiscal Year 2024, 

approximately $6.9 million is expected 

from other revenue sources, which 

reduced the Rate Card Funding Amount 

for 2024 to approximately $40.5 

million.12

Validation of Contribution Targets 

and Reconciliation of Any Rate Card 

Fee Variances from the Prior Fiscal 

Year. Each of the four Rate Card Fees 

are responsible for a proportionate 

amount of the overall Rate Card 

Funding Amount (each a ‘‘Proportional 

Contribution Amount’’). The MSRB 

maintains a fair and equitable balance of 

the Proportional Contribution Amounts 

by calculating contribution targets in 

line with recent historical precedents. 

The MSRB intends to maintain fairness 

and equity in fees through relatively 

stable contribution targets. Annually, 

the MSRB considers the historical 

revenue performance of each fee over 

time to assess whether there is a 

durable, material shift in market 

structure or circumstances that would 

indicate that the expectations for the 

relative contributions from one or more 

fees are no longer reasonable or 

appropriate. For the initial Rate Card 

Fees established in 2022 under the 

Annual Rate Card Process for 2023, the 

MSRB established contribution targets 

based on the distribution of revenue 

assessed over the prior two completed 

fiscal years (Fiscal Year 2020 and Fiscal 

Year 2021).13 Since that time, material 

changes in the municipal market and 

broader macroeconomic conditions, 

including significantly higher interest 

rates, have materially shifted the 

balance of market activity. Specifically, 

primary market activity has been 

significantly lower and secondary 

market activity has been significantly 

higher. As a result, the MSRB 

determined that a durable, material shift 

in market structure or circumstances 

warranted adjustments to the 

contribution targets. For the Rate Card 

Fees proposed in this filing intended to 

be effective beginning on January 1, 

2024, the Rate Card Funding Amount 

was allocated to the Rate Card Fees 

based on the following contribution 

targets: underwriting fee at 30%; 

transaction fee at 41%; trade count fee 

at 21%; and Municipal Advisor 

Professional Fee at 8%.14 This resulted 

in Proportional Contribution Amounts 

as follows for Fiscal Year 2024: 

underwriting fee of $12.15 million; 

transaction fee of $16.61 million; trade 

count fee of $8.51 million; and 

Municipal Advisor Professional Fee of 

$3.24 million. 

Rate Card Fee variances between the 

budget and actual results of the Rate 

Card Fees for Fiscal Year 2023 were 

added to or subtracted from the 

respective Proportional Contribution 

Amount for each fee (‘‘Final 

Contribution Amount’’).15

Forecast of Expected Activity and 

Setting the Annual Rate Card. The 

MSRB used historical and current data 

to inform the expectations for volume of 

activity for the coming fiscal year. Based 

on the anticipated volume of activity, 

the MSRB calculated rates of assessment 

for each of the Rate Card Fees to 

generate their respective Final 

Contribution Amounts for Fiscal Year 

2024.16 To the extent that the volume of 

activity for Fiscal Year 2024 varies from 

the expectations used to calculate the 

rates of assessment, the resulting Rate 

Card Fee Variances in Fiscal Year 2024 

will be incorporated into the next 

Annual Rate Card using the same 

process as described in the prior 

paragraph. The rates of assessment are 

subject to the limitations described 

below as applicable. 

Limitations on Rate Changes To 

Promote Predictability and Stability 

The MSRB included in the Annual 

Rate Card Process limitations on fee 

increases from year-to-year to promote 

greater predictability and stability.17


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if warranted, Positive Reserves Variances. See the 

Annual Rate Card Process Notice, supra note 3. See 

also MSRB Funding Policy, supra note 7. 

18There is an additional limitation of a 10% cap 

on the maximum increase in the targeted revenue 

for an individual Rate Card Fee based on the 

highest amount of such targeted revenue in the 

previous two Annual Rate Cards. This cap is 

intended to limit large increases in the rate of 

assessment for the Rate Card Fees to ensure that fee 

increases remain incremental and, accordingly, 

regulated entities have the time to operationalize 

such increases into their business models. In Fiscal 

Year 2024, no targeted revenue exceeded the 10% 

cap. Because the rates of assessment for Rate Card 

Fees are based on both the targeted revenue for the 

Rate Card Fee and the underlying volume or 

activity level on which the Rate Card Fee is 

assessed, the rates themselves are subject to a 

potentially higher level of variability than the 

underlying targeted revenue intended to be 

generated by each Rate Card Fee. As the Annual 

Rate Card Process returns any Positive Rate Card 

Fee Variances in the subsequent year, 

outperforming volume in one year cannot be used 

to buffer under-performing volume in another year. 

The 10% maximum cap on targeted revenue is 

intended to be the primary limitation on revenue 

increases. The 25% maximum cap on assessment 

rate increases is intended to be a supplemental 

limitation that balances the potential impact of rate 

changes driven by underlying volume changes 

while retaining the MSRB’s ability to assess and 

collect sufficient revenue to fund the organization’s 

expenses. See the Annual Rate Card Process Notice, 

supra note 3. See also MSRB Funding Policy, supra 

note 7. 

19See MSRB Funding Policy, supra note 7. 

20While the MSRB anticipates amending the rates 

of assessment for the Rate Card Fees specified in the 

2024 Rate Card with a subsequent rule filing with 

the Commission that would become effective as of 

January 1, 2025 for the calendar year 2025, if the 

MSRB does not make such anticipated change, the 

Municipal Advisor Professional Fee for 2025 would 

be based on the number of covered professionals as 

of January 31, 2025. 

21 15 U.S.C. 78o–4(b)(2)(J). 

22 Id. See also MSRB Fiscal Year 2024 Budget, 

supra note 10. 

This included a 25% cap on the 

maximum increase in the assessment 

rate for an individual Rate Card Fee 

based on the highest assessment rate in 

the previous two annual rate cards. This 

cap is intended to limit large increases 

in rates of assessment for the Rate Card 

Fees in instances where expected 

volume decreases significantly from the 

prior year.18 For the 2024 Rate Card, the 

initial calculation for the underwriting 

fee resulted in a rate of assessment that 

exceeded 25% over the underwriting fee 

rate in the 2023 Rate Card. As a result, 

the underwriting fee rate for 2024 was 

capped at a 25% increase over the 2023 

rate. Due to this limitation, the MSRB 

anticipates that the full amount of the 

negative Rate Card Fee variance for the 

underwriting fee in 2023 will not be 

fully recaptured in 2024 and the 

remaining shortfall will carry over into 

the calculation for the next Annual Rate 

Card. 

Proposed 2024 Rate Card. The MSRB 

uses adjustments to the Annual Rate 

Card to set and revise the Rate Card Fees 

in the 2024 Rate Card to levels that it 

anticipates will be sufficient to: (i) cover 

anticipated expenses for the related 

fiscal year, (ii) maintain target 

contribution balances between fees on 

regulated entities, (iii) address any 

prior-year variance between the 

amounts of each of the Rate Card Fees 

actually collected versus budget, and 

(iv) address any variance between the 

amount of the MSRB’s organizational 

reserves versus the MSRB’s reserves 

target. 

The proposed rule change would 

establish the Municipal Advisor 

Professional Fee specified in Rule A–11 

and the Market Activity Fees specified 

in Rule A–13 in accordance with the 

chart below. 

Basis 

Current 

rate for 

2023 

Proposed 

rate for 

2024 

Underwriting Fee .......................................................... Per $1,000 Par Underwritten ........................................ $0.0297 $0.0371 

Transaction Fee ............................................................ Per $1,000 Par Transacted .......................................... 0.0107 0.0091 

Trade Count Fee .......................................................... Per Trade ...................................................................... 1.10 0.57 

Municipal Advisor Professional Fee ............................. Per Covered Professional ............................................ 1,060 1,160 

Consistent with the MSRB Funding 

Policy, the proposed Rate Card Fees in 

the 2024 Rate Card reflect the formulaic 

results of executing the Annual Rate 

Card Process as detailed above.19

In order to effect these changes and 

set the Rate Card Fees in the 2024 Rate 

Card, the MSRB proposes to amend 

Supplementary Material .01, on Annual 

Rate Card Fee, to MSRB Rule A–11 to 

modify the 2023 rate contained therein 

for the Municipal Advisor Professional 

Fee to the proposed rate for 2024 

identified in the chart above and to 

clarify that the calculation of the 

Municipal Advisor Professional Fee is 

based on the number of covered 

professionals as of January 31, 2024, 

rather than 2023, and as of January 31 

of each subsequent, applicable year 

thereafter.20 The MSRB also proposes to 

amend the second sentence of 

Supplementary Material .01, on Annual 

Rate Card Fee, to MSRB Rule A–11 to 

replace the initial word ‘‘The’’ with 

‘‘Any’’ to clarify the process for future 

Annual Rate Card Fee amendments. In 

addition, the MSRB proposes to amend 

Supplementary Material .01, on Annual 

Rate Card Fees, to MSRB Rule A–13 to 

modify the 2023 rates contained therein 

for the underwriting fee, transaction fee 

and trade count fee to the respective 

proposed rates for 2024 identified in the 

chart above. The MSRB also proposes to 

amend Supplementary Material .01, on 

Annual Rate Card Fees, to MSRB Rule 

A–13 to change the month that rates of 

assessment become effective, from 

‘‘October’’ to ‘‘January’’ as the reference 

to ‘‘October’’ was applicable only to 

establish the first Annual Rate Card, as 

discussed in the Annual Rate Card 

Process Notice. Lastly, the MSRB 

proposes to amend the first word of the 

last paragraph of Supplementary 

Material .01, on Annual Rate Card Fees, 

to MSRB Rule A–13 to replace the word 

‘‘The’’ with ‘‘Any’’ to clarify the process 

for future Annual Rate Card Fee 

amendments. 

These revised rates would become 

effective on January 1, 2024 and are 

expected to apply to activities occurring 

until a subsequent proposed rule change 

amending the Rate Card Fees becomes 

effective. The MSRB anticipates 

amending the rates of assessment 

specified in this proposed Annual Rate 

Card with a subsequent rule filing with 

the Commission that would become 

effective as of January 1, 2025. 

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with Section 

15B(b)(2)(J) of the Exchange Act,21

which states that the MSRB’s rules shall 

provide that each municipal securities 

broker, municipal securities dealer, and 

municipal advisor shall pay to the 

MSRB such reasonable fees and charges 

as may be necessary or appropriate to 

defray the costs and expenses of 

operating and administering the 

MSRB.22 Such rules must specify the 

amount of such fees and charges, which 

may include charges for failure to 

submit to the MSRB, or to any 

information system operated by the 

MSRB, within the prescribed 


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23 15 U.S.C. 78o–4(b)(2)(J). 

24 Id. 

25See the Annual Rate Card Process Notice, supra 

note 3. 

26 15 U.S.C. 78o–4(b)(2)(J). 

27 15 U.S.C. 78o–4(b)(2)(C). 

28See Policy on the Use of Economic Analysis in 

MSRB Rulemaking, available at https://

www.msrb.org/Policy-Use-Economic-AnalysisMSRB-Rulemaking. In evaluating whether there was 

any burden on competition that is not necessary or 

appropriate in furtherance of the purposes of the 

Exchange Act, the MSRB was guided by its 

principles that required the MSRB to consider costs 

and benefits of a rule change, its impact on 

efficiency, capital formation and competition, and 

the main reasonable alternative regulatory 

approaches. For those rule changes which the 

MSRB files for immediate effectiveness under 

Section 19(b)(3)(A) of the Exchange Act (15 U.S.C. 

78s(b)(3)(A)), while not subject to the policy, the 

MSRB usually focuses its examination exclusively 

on the burden of competition on regulated entities. 

29Because of the timing of the adoption of the 

Annual Rate Card Process, the 2023 Rate Card’s 

effective date was October 1, 2022, and the Rate 

Card Fees thereunder remain effective until this 

proposed rule change amending those rates is filed 

and becomes effective as of January 1, 2024. 

Thereafter, the Rate Card Fees under the 2024 Rate 

Card would be effective for calendar year 2024 and 

would remain effective until a subsequent proposed 

rule change amending such Rate Card Fees is filed 

and becomes effective. 

30See Annual Rate Card Process Notice, supra 

note 3. 

31See id. 

32See id. The MSRB adopted the new approach 

to reduce the variability in fee assessments from the 

impact of market volatility by adjusting for budget 

surpluses or shortfalls annually, therefore providing 

a better mechanism for effectively managing fee 

rates and reserve levels. 

33See id. Fees not included in the Annual Rate 

Card are Municipal Fund Securities Underwriting 

Fee, Annual Assessment, Initial Registration Fee, 

Professional Qualification Exam Fees, and Late 

Fees. 

34For example, change in annual expenses, 

change in projected market volume, prior year 

revenue changes as compared to budget, change in 

reserve target and certain limitations on fee 

increases. 

timeframes, any items of information or 

documents required to be submitted 

under any rule issued by the MSRB.23

The MSRB believes that the 2024 Rate 

Card provides for reasonable fees and 

charges to be paid by regulated entities. 

Moreover, the MSRB believes that the 

Rate Card Fees established in the 2024 

Rate Card are necessary and appropriate 

to fund the operation and 

administration of the MSRB and, 

thereby, satisfy the requirements of 

Section 15B(b)(2)(J) 24 through a 

reasonable fee structure that ensures (i) 

an equitable balance of necessary and 

appropriate fees among regulated 

entities and (ii) a fair allocation of the 

burden of defraying the costs and 

expenses of the MSRB. Specifically, the 

MSRB believes that the 2024 Rate Card 

will achieve reasonable fees to be paid 

by regulated entities that (i) are 

necessary and appropriate to sustain the 

operation and administration of the 

MSRB by defraying the MSRB’s 

anticipated Fiscal Year 2024 operating 

and administrative expenses; (ii) 

reasonably and appropriately allocate 

fees among firms by equitably 

distributing fees in accordance with 

each individual firm’s overall market 

activities; and (iii) reasonably and 

appropriately adjust for the annual 

fluctuations in the volume of market 

activity as compared to budget 

expectation by incorporating the actual 

amounts of Market Activity Fees and 

Municipal Advisor Professional Fees 

collected as compared to budget into 

this and future rate-setting processes.25

As a result, the MSRB believes that the 

proposed rule change satisfies the 

applicable requirements of Section 

15B(b)(2)(J) of the Exchange Act.26

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Section 15B(b)(2)(C) of the Exchange 

Act 27 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. The 

MSRB has considered the economic 

impact of the proposed rule change to 

Rule A–11 and Rule A–13.28 The MSRB 

believes that the proposed Rate Card 

Fees established in the 2024 Rate Card 

for the calendar year of 2024 equitably 

and non-discriminatorily distribute the 

fee burden across all MSRB regulated 

entities who participate in the 

municipal securities market. In the 2024 

Rate Card, the MSRB has proposed a 

rate increase for the underwriting fee, 

which would apply to all dealers who 

conduct underwriting activity, and for 

the Municipal Advisor Professional Fee, 

which would apply to all municipal 

advisor firms. In addition, the MSRB 

has proposed a rate decrease for the 

transaction fee and the trade count fee, 

which would apply to all dealers who 

conduct trading activities. While some 

firms may pay a higher (lower) share of 

fees than other firms when compared to 

Fiscal Year 2023,29 the increases 

(decreases) are the result of the MSRB’s 

reconciliation of Rate Card Fee 

variances from Fiscal Year 2023 and 

changes in contribution targets for the 

various fee categories, as well as the 

expected market activities for Fiscal 

Year 2024. As intended under the 

Annual Rate Card Process, no firm 

would be unduly burdened when 

compared to another firm over the 

course of multiple years; the MSRB 

therefore does not believe the proposed 

rule change would create any burden on 

competition for regulated entities, as the 

projected fee proportions for 2024 are in 

line with the targeted contribution 

balance previously set in connection 

with the 2023 Rate Card. Finally, the 

MSRB believes the proposed Rate Card 

Fees under the 2024 Rate Card would 

not impose any burden on competition 

that is not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. 

As a background to this analysis, the 

adoption by the MSRB in 2022 of its 

Annual Rate Card Process and the 2023 

Rate Card introduced a new fee 

structure that would (i) maintain a fair 

and equitable balance of fees; (ii) better 

mitigate the impact of market volatility 

on the MSRB’s revenue and reserve 

structure; and (iii) maintain rates within 

a reasonably predictable range.30 The 

MSRB determined it was necessary and 

appropriate to devise a methodology 

that reasonably and appropriately 

defrays the costs and expenses of 

operating and administering the MSRB, 

with a goal of arriving at a long-term 

solution for the MSRB’s revenue 

generation process and ensuring a 

sustainable financial position.31 In 

addition, the MSRB believes the Rate 

Card Fee framework is more transparent 

and predictable for the MSRB’s 

stakeholders in a manner that would 

reduce year-to-year variability in the 

MSRB’s total fee assessments while also 

retaining the MSRB’s ability to react to 

changing circumstances when 

establishing reasonable fees.32

The MSRB’s Annual Rate Card 

Process devised an annual rate-setting 

method to recalculate fee rates every 

year for the underwriting fee, 

transaction fee, trade count fee, and 

Municipal Advisor Professional Fee.33

The Annual Rate Card Process was 

designed to have more frequent but 

smaller downward and upward 

adjustments to keep budgeted revenues 

more closely aligned with budgeted 

expenses. It allows the MSRB to review 

a change in budgeted revenues and 

expenses relative to the prior year and 

any change in the actual reserves 

relative to the targeted reserves, assess 

the projected market activities for each 

category of fees in the upcoming year 

and incorporate any needed adjustments 

directly into the Annual Rate Card 

Process. Any over/under assessment in 

the prior year within each class of fee 

payer would be factored into any change 

in the fee rate for the subsequent year, 

in addition to accommodating any 

change in other considerations.34

Effect on Competition 

The Rate Card Fees under the 2024 

Rate Card established pursuant to the 


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86192 Federal Register / Vol. 88, No. 237 / Tuesday, December 12, 2023 / Notices 

35For example, in 2022, the municipal securities 

market had the highest par value traded since 2008 

and the highest number of trades since 2005, and 

the market continues to experience higher-thannormal trading activities in 2023. On the other 

hand, the underwriting volume was below the 

yearly average in recent years between October 

2022 and September 2023. 

36 15 U.S.C. 78o–4(b)(2)(L)(iv). 

37 15 U.S.C. 78o–4(b)(2)(C). 

38 15 U.S.C. 78s(b)(3)(A). 

39 17 CFR 240.19b–4(f). 

proposed rule change represent the first 

calendar-year adjustments for Rate Card 

Fees since the adoption of the Annual 

Rate Card Process and the initial 2023 

Rate Card. During Fiscal Year 2023, the 

MSRB collected below-the-projected 

amount from the underwriting fee and 

Municipal Advisor Professional Fee, but 

above-the-projected amount from the 

transaction fee and trade count fee. The 

results were largely driven by market 

activities that featured heavy secondary 

market trading but relatively light 

primary market issuance.35 For the 2024 

Rate Card, the MSRB has proposed a 

rate increase for the underwriting fee 

and the Municipal Advisor Professional 

Fee, and a rate decrease for the 

transaction fee and the trade count fee. 

These changes in rates are intended to 

reconcile with the Rate Card fee changes 

from Fiscal Year 2023 and are also 

based on the MSRB’s Fiscal Year 2024 

budget and projected revenues and 

expenses, reserve target, and projected 

activities in each category for calendar 

year 2024, to maintain in general the 

targeted contribution balance between 

fee categories. 

The MSRB does not believe the 

proposed rule change would create any 

burden on competition for regulated 

entities, as the projected fee proportions 

for 2024 are in line with the targeted 

contribution balance previously set in 

connection with the 2023 Rate Card 

when the MSRB first adopted the 

Annual Rate Card Process. The MSRB 

believes the proposed rule change is 

necessary and appropriate to ensure 

prudent funding for the MSRB and that 

the changes to the Rate Card Fees are 

reasonably and fairly designed to be 

proportionately distributed across 

regulated entities in such a way that 

would not harm competition among 

regulated entities, nor otherwise harm 

the functioning of the municipal 

securities market. For example, while 

firms with underwriting activity may 

incur higher fees in 2024 than in Fiscal 

Year 2023 as a result of an increase in 

the underwriting fee, the transaction 

and trade count fees tied to their trading 

activity is expected to decrease 

assuming the same level of trading 

activity compared to the prior year. In 

addition, the increases and decreases 

are by design intended to reconcile with 

the changes year to year such that no 

firm would be unduly burdened as 

compared to another firm over the 

course of multiple years and the fee 

burden would be distributed equitably 

across all MSRB regulated entities. 

Section 15B(b)(2)(L)(iv) of the 

Exchange Act 36 requires that MSRB 

rules not impose a regulatory burden on 

small municipal advisors that is not 

necessary or appropriate in the public 

interest and for the protection of 

investors, municipal entities, and 

obligated persons, provided that there is 

robust protection of investors against 

fraud. The MSRB believes that the 

increase for the Municipal Advisor 

Professional Fee would not impose an 

unnecessary or inappropriate regulatory 

burden on small municipal advisors. As 

the total amount of the assessment 

payable by each municipal advisory 

firm would continue to be proportional 

to the number of Forms MA–I filed by 

a firm and, therefore, would result in 

lower relative assessments for smaller 

firms. Based on the number of persons 

engaging in municipal advisory 

activities on behalf of a firm, the total 

fee would therefore bear a reasonable 

relationship to the level of regulated 

municipal advisory activities that are 

undertaken by each firm. 

For the reasons noted above, the 

MSRB believes that the proposed rule 

change would not impose any burden 

on competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Exchange Act.37

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 38 and 

paragraph (f) of Rule 19b–4 

thereunder.39 At any time within 60 

days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MSRB–2023–06 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–MSRB–2023–06. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the MSRB. Do not include 

personal identifiable information in 

submissions; you should submit only 

information that you wish to make 

available publicly. We may redact in 

part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. All submissions should refer 

to File Number SR–MSRB–2023–06 and 

should be submitted on or before 

January 2, 2024. 


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Federal Register / Vol. 88, No. 237 / Tuesday, December 12, 2023 / Notices 86193 

40 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 ‘‘MEO Interface’’ or ‘‘MEO’’ means a binary 

order interface for certain order types as set forth 

in Rule 516 into the MIAX Pearl System. See the 

Definitions Section of the Fee Schedule and 

Exchange Rule 100. 

4The proposed fee change is based on a recent 

proposal by Nasdaq Phlx LLC (‘‘Phlx’’) to adopt fees 

for purge ports. See Securities Exchange Act 

Release No. 97825 (June 30, 2023), 88 FR 43405 

(July 7, 2023) (SR–Phlx–2023–28). 

5The term ‘‘Member’’ means an individual or 

organization that is registered with the Exchange 

pursuant to Chapter II of Exchange Rules for 

purposes of trading on the Exchange as an 

‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ 

Members are deemed ‘‘members’’ under the 

Exchange Act. See the Definitions Section of the 

Fee Schedule and Exchange Rule 100. 

6The term ‘‘Market Maker’’ or ‘‘MM’’ means a 

Member registered with the Exchange for the 

purpose of making markets in options contracts 

traded on the Exchange and that is vested with the 

rights and responsibilities specified in Chapter VI 

of the Exchange Rules. See the Definitions Section 

of the Fee Schedule and Exchange Rule 100. 

7The term ‘‘Electronic Exchange Member’’ or 

‘‘EEM’’ means the holder of a Trading Permit who 

is a Member representing as agent Public Customer 

Orders or Non-Customer Orders on the Exchange 

and those non-Market Maker Members conducting 

proprietary trading. Electronic Exchange Members 

are deemed ‘‘members’’ under the Exchange Act. 

See the Definitions Section of the Fee Schedule and 

Exchange Rule 100. 

8The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

9See Securities Exchange Act Release No. 98733 

(October 12, 2023), 88 FR 71907 (October 18, 2023) 

(SR–PEARL–2023–52). 

10See Cboe BXZ Exchange, Inc. (‘‘BZX’’) Options 

Fee Schedule, Options Logical Port Fees, Purge 

Ports ($750 per purge port per month); Cboe EDGX 

Exchange, Inc. (‘‘EDGX’’) Options Fee Schedule, 

Options Logical Port Fees, Purge Ports ($750 per 

purge port per month); Cboe Exchange, Inc. 

(‘‘Cboe’’) Fee Schedule ($850 per purge port per 

month). See also Nasdaq GEMX, Options 7, Pricing 

Schedule, Section 6.C.(3). Nasdaq GEMX, LLC 

(‘‘Nasdaq GEMX’’) assesses its members $1,250 per 

SQF Purge Port per month, subject to a monthly cap 

of $17,500 for SQF Purge Ports and SQF Ports, 

applicable to market makers. See also Securities 

Exchange Act Release No. 97825 (June 30, 2023), 88 

FR 43405 (July 7, 2023) (SR–Phlx–2023–28). 

11A Matching Engine is a part of the Exchange’s 

electronic system that processes options quotes and 

trades on a symbol-by-symbol basis. Some matching 

engines will process option classes with multiple 

root symbols, and other matching engines will be 

dedicated to one single option root symbol (for 

example, options on SPY will be processed by one 

single matching engine that is dedicated only to 

SPY). A particular root symbol may only be 

assigned to a single designated matching engine. A 

particular root symbol may not be assigned to 

multiple matching engines. 

12See supra note 10. 

13The Exchange notes that each Matching Engine 

corresponds to a specified group of symbols. 

Certain Market Makers choose to only quote in 

certain symbols while other Market Makers choose 

to quote the entire market. 

For the Commission, pursuant to delegated 

authority.40

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27159 Filed 12–11–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99090; File No. SR– 

PEARL–2023–65] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the MIAX Pearl 

Options Fee Schedule for Purge Ports 

December 6, 2023. 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

22, 2023, MIAX PEARL, LLC (‘‘MIAX 

Pearl’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

MIAX Pearl Options Exchange Fee 

Schedule (the ‘‘Fee Schedule’’) to 

amend fees for MIAX Express Network 

(‘‘MEO’’) 3 Purge Ports (‘‘Purge Ports’’).4

The text of the proposed rule change 

is available on the Exchange’s website at 

https://www.miaxglobal.com/markets/ 

us-options/pearl-options/rule-filings at 

MIAX Pearl’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to amend 

the fees for Purge Ports, which is a 

function enabling the Exchange’s two 

types of Members,5 Market Makers 6 and 

Electronic Exchange Members 7

(‘‘EEMs’’), to cancel all open orders or 

a subset of open orders through a single 

cancel message. The Exchange currently 

provides Members the option to 

purchase Purge Ports to assist in their 

quoting activity. Purge Ports provide 

Members with the ability to send purge 

messages to the Exchange System.8

Purge Ports are not capable of sending 

or receiving any other type of messages 

or information. The use of Purge Ports 

is completely optional and no rule or 

regulation requires that a Market Maker 

utilize them. 

The Exchange initially filed the 

proposal on September 29, 2023 (SR– 

PEARL–2023–52) (the ‘‘Initial 

Proposal’’).9 On November 22, 2023, the 

Exchange withdrew the Initial Proposal 

and replaced it with this filing. 

Unlike other options exchanges that 

charge fees for Purge Ports on a per port 

basis,10 the Exchange assesses a flat fee 

of $750 per month, regardless of the 

number of Purge Ports utilized by a 

Market Maker. Currently, a Market 

Maker may request and be allocated two 

(2) Purge Ports per Matching Engine 11

to which it connects and not all 

Members connect to all of the 

Exchange’s Matching Engines. 

The Exchange now proposes to amend 

the fee for Purge Ports to align more 

closely with other exchanges who 

charge on a per port basis by providing 

two (2) Purge Ports per Matching Engine 

for a monthly flat fee of $600 per month 

per Matching Engine. The only 

difference with a per port structure is 

that Members receive two (2) Purge 

Ports per Matching Engine for the same 

proposed monthly fee, rather than being 

charged a separate fee for each Purge 

Port. The Exchange proposes to charge 

the proposed fee for Purge Ports per 

Matching Engine, instead on a per Purge 

Port basis, due to its System architecture 

which provides two (2) Purge Ports per 

Matching Engine for redundancy 

purposes. In addition, the proposed fee 

is lower than the comparable fee 

charged by competing exchanges that 

also charge on a per port basis, 

notwithstanding that the Exchange is 

providing up to two (2) Purge Ports for 

that same lower fee.12

Similar to a per port charge, Members 

are able to select the Matching Engines 

that they want to connect to,13 based on 

the business needs of each Market 

Maker, and pay the applicable fee based 

on the number of Matching Engines and 

ports utilized. The Exchange believes 


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