Federal Register / Vol. 89, No. 187 / Thursday, September 26, 2024 / Notices 78955 

46 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. 99402 (Jan. 19, 

2024), 89 FR 5384 (Jan. 26, 2024) (‘‘Notice’’). 

4See Letters to Secretary, Commission, from 

Michael Noto, FINRA Registered Representative 

dated Jan. 31, 2024 (‘‘Noto Letter’’); J. Ben Watkins, 

Director, Division of Bond Finance, State of Florida 

dated Feb. 13, 2024 (‘‘State of Florida Letter’’); 

Matthew Kamler, President, Sanderlin Securities 

LLC dated Feb. 14, 2024 (‘‘Sanderlin Securities 

Letter’’); J.D. Colwell dated Feb. 15, 2024 (‘‘Colwell 

Letter’’); Gerard O’Reilly, Co-Chief Executive 

Officer and Co-Chief Investment Officer and David 

A. Plecha, Global Head of Fixed Income, 

Dimensional Fund Advisors LP dated Feb. 15, 2024 

(‘‘Dimensional Fund Advisors Letter’’); Michael 

Decker, Senior Vice President, Bond Dealers of 

America (‘‘BDA’’) dated Feb. 15, 2024 (‘‘BDA 

Letter’’); Sarah A. Bessin, Deputy General Counsel 

and Kevin Ercoline, Assistant General Counsel, 

Investment Company Institute dated Feb. 15, 2024 

(‘‘ICI Letter’’); Kenneth E. Bentsen, Jr., President 

and CEO, Securities Industry and Financial Markets 

Association (‘‘SIFMA’’) dated Feb. 15, 2024 

(‘‘SIFMA Letter’’); Howard Meyerson, Managing 

Director, Financial Information Forum (‘‘FIF’’) 

dated Feb. 15, 2024 (‘‘FIF I Letter’’); Gregory 

Babyak, Global Head of Regulatory Affairs, 

Bloomberg L.P. dated Feb. 16, 2024 (‘‘Bloomberg 

Letter’’); Melissa P. Hoots, CEO/COO, Falcon 

Square Capital, LLC (‘‘Falcon Square Capital’’) 

dated Feb. 16, 2024 (‘‘Falcon Square Capital 

Letter’’); Matt Dalton, Chief Executive Officer, Belle 

Haven Investments, LP (‘‘Belle Haven’’) dated Feb. 

16, 2024 (‘‘Belle Haven Letter’’); and Christopher A. 

Iacovella, President & Chief Executive Officer, 

American Securities Association (‘‘ASA’’) dated 

Feb. 16, 2024 (‘‘ASA Letter’’). After the close of the 

comment period, one commenter submitted a 

supplemental letter. See letter to Secretary, 

Commission, from Howard Meyerson, FIF dated 

Feb. 26, 2024 (‘‘FIF II Letter’’). These comment 

letters are available at https://www.sec.gov/ 

comments/sr-msrb-2024-01/srmsrb202401.htm. 

5 15 U.S.C. 78s(b)(2)(B). 

6See Exchange Act Release No. 100003 (Apr. 22, 

2024), 89 FR 32486 (Apr. 26, 2024). 

7See Letters to Secretary, Commission, from 

David C. Jaderlund dated Apr. 23, 2024 (‘‘Jaderlund 

OIP Letter’’); Ronald P. Bernardi, President and 

CEO, Bernardi Securities, Inc. dated May 14, 2024 

(‘‘Bernardi Securities OIP Letter’’); Frank Fairman, 

Managing Director, Piper Sandler & Co. dated May 

17, 2024 (‘‘Piper Sandler OIP Letter’’); Christopher 

A. Iacovella, ASA dated May 17, 2024 (‘‘ASA OIP 

Letter’’); Michael Decker, BDA dated May 17, 2024 

(‘‘BDA OIP Letter’’); Mark D. Griffin, Senior Vice 

President and Risk Control Manager, FHN Financial 

dated May 17, 2024 (‘‘FHN Financial OIP Letter’’); 

Howard Meyerson, FIF dated May 17, 2024 (‘‘FIF 

OIP Letter’’); Richard G. Wallace, Senior Vice 

President and Associate General Counsel, LPL 

Financial LLC (‘‘LPL’’) dated May 17, 2024 (‘‘LPL 

OIP Letter’’); Lisa Gayle Melnyk dated May 17, 2024 

(‘‘Melnyk OIP Letter’’); Kenneth E. Bentsen, Jr., 

SIFMA dated May 17, 2024 (‘‘SIFMA OIP Letter’’). 

These comment letters are available at https://

www.sec.gov/comments/sr-msrb-2024-01/ 

srmsrb202401.htm. 

8 15 U.S.C. 78s(b)(2). 

9See Exchange Act Release No. 100557 (July 18, 

2024), 89 FR 59951 (July 24, 2024). 

10See Letter to Secretary, Commission, from 

Ernesto A. Lanza, Chief Regulatory and Policy 

Officer, MSRB, dated July 18, 2024, available at 

https://www.sec.gov/comments/sr-msrb-2024-01/ 

srmsrb202401.htm (‘‘MSRB Letter’’). 

All submissions should refer to file 

number SR–CBOE–2024–043. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. 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–CBOE–2024–043 and should be 

submitted on or before October 17, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.46

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–22026 Filed 9–25–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101118; File No. SR– 

MSRB–2024–01] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Order Granting Approval of a 

Proposed Rule Change, as Modified by 

Amendment No. 1, To Amend MSRB 

Rule G–14 To Shorten the Timeframe 

for Reporting Trades in Municipal 

Securities to the MSRB 

September 20, 2024. 

I. Introduction 

On January 12, 2024, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’) 

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 

(1) amend MSRB Rule G–14 (‘‘Rule G– 

14’’), on reports of sales or purchases, to 

(i) shorten the amount of time within 

which brokers, dealers, and municipal 

securities dealers (collectively, 

‘‘dealers,’’ and each individually, a 

‘‘dealer’’) must report most transactions 

to the MSRB; and (ii) require dealers to 

report certain transactions with a new 

trade indicator, and make certain 

clarifying amendments, and (2) make 

conforming amendments to MSRB Rule 

G–12, on uniform practice (‘‘Rule G– 

12’’), and the MSRB’s Real-Time 

Transaction Reporting System (‘‘RTRS’’) 

Information Facility (‘‘IF–1’’) to reflect 

the shortened reporting timeframe (the 

‘‘original proposed rule change’’). The 

original proposed rule change was 

published for comment in the Federal 

Register on January 26, 2024.3 The 

Commission received comments in 

response to the original proposed rule 

change.4 On April 22, 2024, the 

Commission issued an order instituting 

proceedings (‘‘OIP’’) under Section 

19(b)(2)(B) of the Act 5 to determine 

whether to approve or disapprove the 

proposed rule change.6 The Commission 

received comments in response to the 

OIP.7 On July 18, 2024, the Commission, 

pursuant to Section 19(b)(2) of the Act,8

designated September 20, 2024, as the 

date by which the Commission shall 

either approve or disapprove the 

original proposed rule change.9 Also on 

July 18, 2024, the MSRB filed a 

comment letter 10 and an amendment to 

the original proposal in response to 

certain comments on the original 

proposed rule change (‘‘Amendment No. 

1’’; the original proposed rule change, as 

modified by Amendment No. 1, the 

‘‘proposed rule change’’). On July 25, 

2024, the Commission published notice 


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11See Exchange Act Release No. 100589 (July 24, 

2024), 89 FR 61516 (July 31, 2024) (‘‘Amendment 

No. 1’’). 

12See Letters to Secretary, Commission, from 

Guerras Global International, University of 

Providence dated July 29, 2024 (‘‘Guerras Global 

Amendment No. 1 Letter’’); Kenneth E. Bentsen, Jr., 

SIFMA dated Aug. 21, 2024 (‘‘SIMFA Amendment 

No. 1 Letter’’); Christopher A. Iacovella, ASA dated 

Aug. 21, 2024 (‘‘ASA Amendment No. 1 Letter’’); 

Matt Dalton, Belle Haven dated Aug. 21, 2024 

(‘‘Belle Haven Amendment No. 1 Letter’’); Melissa 

P. Hoots, Falcon Square dated Aug. 21, 2024 

(‘‘Falcon Square Capital Amendment No. 1 Letter’’); 

Michael Decker, BDA dated Aug. 21, 2024 (‘‘BDA 

Amendment No. 1 Letter’’). These comment letters 

are available at https://www.sec.gov/comments/srmsrb-2024-01/srmsrb202401.htm. 

13See MSRB Letter at 5. 

14 Id. 

15See Securities Exchange Act Release No. 99404 

(Jan. 19, 2024), 89 FR 5034 (Jan. 24, 2024) (‘‘FINRA 

Notice’’), as partially amended by Securities 

Exchange Act Release No. 100594 (July 25, 2024), 

89 FR 61514 (July 31, 2024) (‘‘Partial Amendment 

No. 1,’’ and together with the FINRA Notice, the 

‘‘FINRA proposed rule change’’). 

16See MSRB Letter at 4. 

17 Id. 

18Rule G–14 RTRS Procedures Section (d)(ii) 

defines ‘‘RTRS Business Day’’ as 7:30 a.m. to 6:30 

p.m., Eastern Time, Monday through Friday, unless 

otherwise announced by the MSRB. 

19See Notice, 89 at 5385 n.13 (discussing the 

various portals). 

20 Id. at 5385 n.14 (describing the existing 

exceptions). 

21The two new intra-day reporting exceptions, 

consisting of trades by dealers with limited trading 

activity and trades with a manual component, 

would be designated as Rule G–14 RTRS 

Procedures Sections (a)(ii)(C)(1) and (2), 

respectively. See Notice, 89 FR at 5385 n.15; 

Amendment No. 1. 

22See Notice, 89 FR at 5386. 

23 Id. 

24 Id. 

25 Id. Where a dealer has reasonably designed 

policies, procedures and systems in place, the 

dealer generally would not be viewed as violating 

the ‘‘as soon as practicable’’ requirement because of 

delays in trade reporting due to extrinsic factors 

that are not reasonably predictable and where the 

dealer does not intend to delay the reporting of the 

trade (for example, due to a systems outage). 

26 Id. 

27 Id. 

28 Id. 

29See current Rule G–14 RTRS Procedures 

Section (d)(iii). 

of Amendment No. 1,11 and the 

Commission received comment letters 

in response.12 This order approves the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

As described more fully in the Notice 

and Amendment No. 1, the MSRB is 

proposing amendments to Rule G–14, 

Reports of Sales or Purchases, and 

conforming technical changes to Rule 

G–12(f)(i) and IF–1. 

The MSRB believes that the proposed 

rule change would remove impediments 

to a free and open market in municipal 

securities by making publicly available 

more timely information about the 

market and the prices at which 

municipal securities transactions are 

executed, which is central to fairly 

priced municipal securities and a 

dealer’s ability to make informed 

quotations.13 Additionally, the MSRB is 

of the view that the new intra-day 

exceptions balance potential burdens for 

dealers with limited trading activity and 

address potential burdens faced by 

dealers engaged in complex 

transactions, including voice/ 

electronically negotiated transactions 

involving a manual post-transaction 

component.14

As the proposed rule change was 

developed in close coordination with 

the Financial Industry Regulatory 

Authority (‘‘FINRA’’),15 the MSRB is of 

the view that the proposed rule change 

reduces the risk of potential confusion 

and may reduce compliance burdens 

resulting from inconsistent obligations 

and standards for different classes of 

securities.16 According to the MSRB, a 

shortened trade reporting time would 

promote regulatory consistency, 

reducing potential compliance 

violations caused by market 

participants’ imperfect application of 

differing standards when executing and 

reporting various types of transactions 

in fixed income securities.17

A. New Baseline Reporting 

Requirement: One Minute After the 

Time of Trade 

The proposed amendments to Rule G– 

14 RTRS Procedures Section (a)(ii) 

generally would provide that 

transactions effected with a Time of 

Trade during the hours of an RTRS 

Business Day 18 must be reported to an 

RTRS Portal 19 ‘‘as soon as practicable, 

but no later than one minute’’ after the 

Time of Trade, subject to several 

existing reporting exceptions, which 

would be retained in the amended 

rule,20 and two new intra-day reporting 

exceptions relating to dealers with 

limited trading activity and trades with 

a manual component that would be 

added by the proposed rule change.21

Except for those trades that would 

qualify for a reporting exception, all 

trades currently required to be reported 

within 15 minutes after the Time of 

Trade would, under the proposed rule 

change, be required to be reported no 

later than one minute after the Time of 

Trade. 

i. New Requirement To Report Trades 

‘‘as Soon as Practicable’’ 

Section (a)(ii) of the proposed 

amendment to Rule G–14 RTRS 

Procedures adds a new requirement 

that, absent an exception, trades must be 

reported as soon as practicable (but no 

later than one minute after the Time of 

Trade).22 This ‘‘as soon as practicable’’ 

requirement would also apply to trades 

subject to longer trade reporting 

deadlines under the two new exceptions 

for dealers with limited trading activity 

pursuant to Rule G–14 RTRS Procedures 

Section (a)(ii)(C)(1) and Supplementary 

Material .01, or trades with a manual 

component pursuant to Rule G–14 RTRS 

Procedures Section (a)(ii)(C)(2) and 

Supplementary Material .02.23 Although 

Rule G–14 RTRS Procedures do not 

currently explicitly prohibit a dealer 

from waiting until the existing 15- 

minute deadline to report a trade 

notwithstanding the fact that the dealer 

could reasonably have reported such 

trade more rapidly, the MSRB notes that 

under the proposed rule change a dealer 

could not simply await the deadline to 

report a trade if it were practicable to 

report such trade more rapidly.24

As provided in more detail in the 

Notice, proposed Supplementary 

Material .03 would provide guidance 

relating to policies and procedures for 

complying with the ‘‘as soon as 

practicable’’ reporting requirement.25

The MSRB noted that dealers must not 

purposely withhold trade reports, for 

example, by programming their systems 

to delay reporting until the last 

permissible minute or by otherwise 

delaying reports to a time just before the 

deadline if it would have been 

practicable to report such trades more 

rapidly.26 For trades with a manual 

component, and consistent with 

Supplementary Material .03(b) of FINRA 

Rule 6730, the MSRB recognized that 

the trade reporting process may not be 

completed as quickly as, for example, 

where an automated trade reporting 

system is used.27 The MSRB explained 

that it expected that the regulatory 

authorities that examine dealers and 

enforce compliance with this 

requirement would take into 

consideration the manual nature of the 

dealer’s trade reporting process in 

determining whether the dealer’s 

policies and procedures are reasonably 

designed to report the trade ‘‘as soon as 

practicable’’ after execution.28

ii. Time of Trade Discussion 

The ‘‘Time of Trade’’ is defined as the 

time at which a contract is formed for 

a sale or purchase of municipal 

securities at a set quantity and set 

price.29 For transaction reporting 

purposes, the MSRB stated that the 

Time of Trade is the same as the time 

that a trade is ‘‘executed’’ and, 

generally, is consistent with the ‘‘time of 


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30See Notice, 89 FR at 5386–87 (discussing time 

of execution and note 22 for additional guidance on 

the time of execution); MSRB Letter at 13 (MSRB 

further explaining that the Time of Trade is the time 

at which a meeting of the minds has occurred, for 

example, where parties have already reached 

agreement regarding the terms and elements of 

execution and at what point a contract is formed for 

the transaction). 

31See generally FINRA Regulatory Notice 16–30 

(Trade Reporting and Compliance Engine (TRACE): 

FINRA Reminds Firms of their Obligation to Report 

Accurately the Time of Execution for Transactions 

in TRACE-eligible Securities) (Aug. 2016); MSRB 

Notice 2016–19 (MSRB Provides Guidance on 

MSRB Rule G–14, on Reports of Sales or Purchases 

of Municipal Securities (Aug. 9, 2016) (the ‘‘2016 

RTRS FAQs’’) at questions 1 and 2. 

32See generally MSRB Notice 2004–18 (Notice 

Requesting Comment on Draft Amendments to Rule 

G–34 to Facilitate Real-Time Transaction Reporting 

and Explaining Time of Trade for Reporting New 

Issue Trades) (June 18, 2004); 2016 RTRS FAQs at 

question 1. 

33See Notice, 89 FR at 5386 n.26. 

34 Id. at 5387 (discussing the particulars for when 

transactions have been executed, confirmed, and 

reported). 

35 Id. (explaining how these exceptions have a 

narrowly tailored purpose). 

36The MSRB noted that transactions effected by 

such a dealer with a Time of Trade outside the 

hours of an RTRS Business Day would be permitted 

to be reported no later than 15 minutes after the 

beginning of the next RTRS Business Day pursuant 

to Rule G–14 RTRS Procedures Section (a)(iii). The 

MSRB also noted that, as is the case today, 

transactions for which an end-of-trade-day or posttrade-day reporting exception is available under 

redesignated Sections (A) and (B) would continue 

to have that exception available. See Notice, 89 FR 

at 5387 n.29. 

37The original proposed rule change established 

a threshold of 1,800 trades. See Notice, 89 FR at 

5387. The MSRB recalculated the appropriate 

threshold for the definition of ‘‘dealer with limited 

trading activity’’ to take into account both sell-side 

and buy-side inter-dealer trade reports together 

with reports of dealer trades with customers, 

regardless of whether the dealer bought or sold in 

the customer transaction. See Amendment No. 1; 

MSRB Letter at 22 n.81. The MSRB stated that there 

is no material impact to the economic analysis 

contained in the original proposed rule change as 

a result of the increased threshold. See MSRB Letter 

at 23. 

38See Notice, 89 FR at 5387–88 (MSRB using a 

hypothetical to illustrate variations in dealer 

eligibility for the limited trading exception). 

39As explained by the MSRB, transactions 

effected with a Time of Trade outside the hours of 

an RTRS Business Day would be permitted to be 

reported no later than 15 minutes after the 

beginning of the next RTRS Business Day pursuant 

to Rule G–14 RTRS Procedures Section (a)(iii). See 

Notice, 89 FR at 5388 n.38. 

40Such new indicator would be required for any 

trade with a manual component, whether the dealer 

reports such trade within the new one-minute 

timeframe or the dealer seeks to take advantage of 

the longer timeframes permitted for trades with a 

manual component. See Notice, 89 FR at 5388 n.39. 

41 Id. at 5388. 

execution’’ for recordkeeping 

purposes.30

iii. Valid Contract Discussion 

In general, to form a valid contract, 

there must be at least an offer and 

acceptance of that offer. As a result, the 

MSRB noted that dealers should 

consider the point in time at which an 

offer to buy or sell municipal securities 

was met with an acceptance of that 

offer. This ‘‘meeting of the minds,’’ 31

cannot occur before the final material 

terms, such as the exact security, price 

and quantity, have been agreed to and 

such terms are known by the parties to 

the transaction.32 The MSRB further 

explained that dealers should be clear in 

their communications regarding the 

final material terms of the trade and 

how such terms would be conveyed 

between the parties 33 to ensure that 

such a valid trade contract has been 

formed.34

iv. Exceptions to the Baseline Reporting 

Requirement 

Proposed amendments to Rule G–14 

RTRS Procedures Section (a)(ii) add two 

new exceptions to the proposed oneminute reporting requirement: (a) New 

Section (C)(1) provides an exception for 

a dealer with ‘‘limited trading activity,’’ 

and (b) New Section (C)(2) provides an 

exception for a dealer reporting a ‘‘trade 

with a manual component.’’ 35

a. Exception for Dealers With Limited 

Trading Activity 

Proposed new Section (a)(ii)(C)(1) 

would except a dealer with ‘‘limited 

trading activity’’ from the one-minute 

reporting requirement and would 

instead be required to report its trades 

as soon as practicable, but no later than 

15 minutes after the Time of Trade for 

so long as the dealer remains qualified 

for the limited trading activity 

exception, as further specified in new 

Supplementary Material .01.36 Proposed 

Section (d)(xi) of Rule G–14 RTRS 

Procedures would define a dealer with 

limited trading activity as a dealer that, 

during at least one of the prior two 

consecutive calendar years, reported to 

an RTRS Portal fewer than 2,500 

purchase or sale transactions with 

customers or other dealers,37 excluding 

transactions exempted under Rule G– 

14(b)(v) and transactions specified in 

Rule G–14 RTRS Procedures Sections 

(a)(ii)(A) and (B). A dealer relying on 

this exception to report trades within 

the 15-minute timeframe, rather than 

the new standard one-minute 

timeframe, would have to confirm that 

it meets the criteria for a dealer with 

limited trading activity for each year 

during which it continues to rely on the 

exception (e.g., the dealer could confirm 

its eligibility based on its internal trade 

records and by checking MSRB 

compliance tools which would indicate 

a dealer’s transaction volume for a given 

year).38

b. Exception for Trades With a Manual 

Component 

Rule G–14 RTRS Procedures Section 

(a)(ii)(C)(2) would except a ‘‘trade with 

a manual component’’ as defined in new 

Section (d)(xii) of Rule G–14 RTRS 

Procedures from the one-minute 

reporting requirement. The MSRB noted 

that dealers with such trades would be 

required to report such trades as soon as 

practicable and within the time periods 

specified in new Supplementary 

Material .02, unless another exception 

from the one-minute reporting 

requirement applies under proposed 

Rule G–14 RTRS Procedures Sections 

(a)(ii)(A) and (B) (i.e., transactions 

having an end-of-trade-day or posttrade-day reporting exception) or 

(a)(ii)(C)(1) (i.e., transactions by dealers 

with limited trading activity).39 Section 

(d)(xii) of Rule G–14 RTRS Procedures 

would define a ‘‘trade with a manual 

component’’ as a transaction that is 

manually executed or where the dealer 

must manually enter any of the trade 

details or information necessary for 

reporting the trade directly into an 

RTRS Portal (for example, by manually 

entering trade data into the RTRS Web 

Portal) or into a system that facilitates 

trade reporting (for example, by 

transmitting the information manually 

entered into a dealer’s in-house or thirdparty system) to an RTRS Portal. As 

described below and more fully in the 

Notice, a dealer reporting to the MSRB 

a trade meeting the definition for a 

‘‘trade with a manual component’’ 

would be required to append a new 

trade indicator so that the MSRB can 

identify manual trades.40

As explained by the MSRB, this 

‘‘manual’’ exception would apply 

narrowly, and would normally 

encompass any human participation, 

approval or other intervention necessary 

to complete the initial execution and 

reporting of trade information after 

execution, regardless of whether 

undertaken by electronic means (e.g., 

keyboard entry), physical signature or 

other physical action. To qualify as a 

trade with a manual component, the 

manual aspect(s) of the trade generally 

would have to occur after the relevant 

Time of Trade (i.e., the time at which a 

contract is formed for the transaction).41

As further explained by the MSRB, any 

manual aspects that precede the time of 

trade (e.g., phone calls to locate bonds 

to be sold to a customer before the 

dealer agrees to sell such bonds to a 

purchasing customer) would normally 

not be relevant for purposes of the 

exception unless they have a direct 

impact on the activities that must be 


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42The MSRB provided various scenarios to 

illustrate application of the manual exception 

would apply. See generally id. at 5389 n.40. The 

MSRB further clarified that the exception is 

intended to apply only to the trade execution and 

reporting portions of the workflow. See MSRB 

Letter at 13. 

43See Notice, 89 FR at 5389. 

44See Notice, 89 FR at 5389. 

45 Id. 

46 Id. 

47The MSRB noted that dealers experiencing 

significant levels of post-Time of Trade price 

adjustments due to such post-trade best execution 

processes should consider whether these processes 

are well suited to the dealer’s obligations under 

MSRB Rule G–18 and whether the dealer is 

appropriately evaluating when a contract has in fact 

been formed with its customer. Id. at 5389 n.41. 

48 Id. at 5389. 

49The MSRB explained that in instances where 

a dealer trades a basket of securities at a single price 

for the full basket, rather than individual prices for 

each security based on its then-current market 

price, such price likely would be away from the 

market, requiring inclusion of the ‘‘away from 

market’’ special condition indicator and qualifying 

for an end-of-trade-day reporting exception under 

proposed Rule G–14 RTRS Procedures Section 

(a)(ii)(A)(3). See Notice, 89 FR at 5389 n.42. 

50 Id. at 5389. 

51 Id. 

52 Id. at 5390 (discussing the prohibition on 

purposeful insertion of manual steps in trade 

reporting process). 

53 Id. 

54For trades with a manual component, the 

MSRB explained that it recognized that the trade 

reporting process may not be completed as quickly 

as, for example, where an automated trade reporting 

system is used. The MSRB further explained that 

in these cases, the MSRB expects that the regulatory 

authorities that examine dealers and enforce 

compliance with this requirement would take into 

consideration the manual nature of the dealer’s 

trade reporting process in determining whether the 

dealer’s policies and procedures are reasonably 

designed to report the trade ‘‘as soon as practicable’’ 

after execution. See id. at 5388. 

55 Id. at 5389. 

56 Id. at 5390. 

57 Id. at 5389; Amendment No. 1, Supplementary 

Material .02(b)(i). 

58Under the original proposed rule change, trades 

with a manual component would have been 

required to be reported as soon as practicable, but 

no later than five minutes after the Time of Trades 

after the second calendar year from effectiveness 

and thereafter. See Notice, 89 FR at 5390; 

Amendment No. 1, Supplementary Material 

.02(b)(ii). 

undertaken post-execution to enter 

information necessary to report the 

trade.42

The MSRB provided the following 

non-exhaustive list of situations in 

which trades would be considered to 

have a manual component: 

• where a dealer executes a trade by 

manual or hybrid means, such as voice 

or negotiated trading by telephone, 

email, or through a chat/messaging 

function, and subsequently must 

manually enter into a system that 

facilitates trade reporting all or some of 

the information required to book the 

trade and report it to RTRS; 43

• where a dealer executes a trade 

(typically a larger-sized trade) that 

requires additional steps to negotiate 

and confirm details of the trade with a 

client and manually enters the trade 

into risk and reporting systems; 44

• where a dually-registered brokerdealer/investment adviser executes a 

block transaction that requires 

allocations of portions of the block trade 

to the individual accounts of the firm’s 

advisory clients that must be manually 

inputted in connection with a trade; 45

• where an electronically or manually 

executed trade is subject to manual 

review by a second reviewer for risk 

management (e.g., transactions above a 

certain dollar or par amount or other 

transactions meriting heightened risk 

review) and, as part of or following the 

review, the trade must be manually 

approved, amended or released before 

the trade is reported to RTRS; 46

• where a dealer’s trade execution 

processes may entail further diligence 

following the Time of Trade involving a 

manual step (e.g., manually checking 

another market to confirm that a better 

price is not available to the customer); 47

• where a dealer trades a municipal 

security, whether for the first time or 

under other circumstances where the 

security master information may not 

already be populated (e.g., information 

has been removed or archived due to a 

long lapse in trading the security), and 

additional manual steps are necessary to 

set up the security and populate the 

associated indicative data in the dealer’s 

systems prior to executing and reporting 

the trade; 48

• where a dealer receives a large 

order or a trade list resulting in a 

portfolio of trades with potentially 

numerous unique securities involving 

rapid execution and frequent 

communications on multiple 

transactions with multiple 

counterparties, and the dealer must then 

book and report those transactions 

manually, one by one; 49

• where a broker’s broker engages in 

mediated transactions that involve 

multiple transactions with multiple 

counterparties; 50 and 

• where a dealer reports a trade 

manually through the RTRS Web 

Portal.51

The MSRB noted that appropriateness 

of treating any step in the trade 

execution and reporting process as 

being manual must be assessed in light 

of the anti-circumvention provision 

included in the proposed rule change 

with regard to the delay in execution or 

insertion of manual tasks for the 

purpose of meeting this new 

exception.52

New Supplementary Material .02(a) 

would require all trades with a manual 

component to be reported as soon as 

practicable and would specify that in no 

event may a dealer purposely delay the 

execution of an order, introduce any 

manual steps following the Time of 

Trade, or otherwise modify any steps 

prior to executing or reporting a trade 

for the purpose of utilizing the 

exception for manual trades.53

New Supplementary Material .03 

would require that dealers adopt 

policies and procedures for complying 

with the as soon as practicable reporting 

requirement, including by 

implementing systems that commence 

the trade reporting process without 

delay upon execution and provides for 

additional guidance for regulatory 

authorities that enforce and examine 

dealers for compliance with this 

requirement to take into consideration 

the manual nature of the dealer’s trade 

reporting process.54

The MSRB also noted that dealers 

should consider the types of 

transactions in which they regularly 

engage and whether they can reasonably 

reduce the time between a transaction’s 

Time of Trade and its reporting, and 

more generally should make a good faith 

effort to report their trades as soon as 

practicable.55 The MSRB currently 

collects and analyzes data regarding 

dealers’ historic reporting of 

transactions to RTRS under various 

scenarios and such data will continue to 

be available to the regulators for 

analysis under the proposed one-minute 

standard. Subject to Commission 

approval of the proposed rule change, 

the MSRB explained that it would be 

reviewing the use of the manual 

exception and would share with the 

examining authorities any analyses 

resulting from such reviews.56

1. Phase-In Period for Trades With a 

Manual Component 

New Supplementary Material .02(b) 

would subject trades with a manual 

component to a phase-in period for 

timely reporting over three years 

(‘‘phase-in period’’). During the first 

calendar year of effectiveness of the 

exception, trades meeting this definition 

would be required to be reported as 

soon as practicable, but no later than 15 

minutes after the Time of Trade.57 For 

the second and third calendar years 

from effectiveness of the exception, 

such trades would be required to be 

reported as soon as practicable, but no 

later than 10 minutes after the Time of 

Trade.58

Following the conclusion of the third 

calendar year and thereafter, such trades 


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59See Notice, 89 FR at 5387. The MSRB 

explained that it would be monitoring the 

implementation of the proposed rule change and 

would analyze trade data to determine, among other 

things, whether the eventual five-minute trade 

reporting timeframe continues to be feasible and 

appropriate in light of the empirical data collected 

through the earlier phases of implementation. See 

Amendment No. 1. The MSRB further explained 

that any further reduction in reporting timeframe, 

or elimination of the manual trade exception, could 

not be possible without additional formal 

rulemaking by the MSRB that would be filed with 

the Commission. See Amendment No. 1. 

60See Notice, 89 FR at 5390. 

61See generally id. at 5388–90. 

62 Id. at 5391 n.51 (discussing how the manual 

trade indicator would be used for regulatory 

purposes). 

63Current Rule G–14 RTRS Procedures Section 

(a)(iv) requires that transaction data that is not 

submitted in a timely and accurate manner must be 

submitted or corrected as soon as possible. The 

manual trade indicator is not intended to be used 

to reflect the manual nature of any correction to a 

prior trade report. Id. at 5390 n.50. 

64See generally id. at 5391 n.52 (MSRB 

explaining that late trade designations are currently, 

and would continue to be, available to regulators 

and, through the MSRB compliance tool described 

below in the Notice under ‘‘Purpose—Proposed 

Rule Change—Compliance Tools,’’ to the dealer 

submitting the late trade). 

65 Id. at 5391. 

66 Id. 

67 Id. 

68 Id. 

69 Id. 

70 Id. at 5392. 

71 Id. 

72See generally id. at 5392 n.55. 

would be required to be reported as 

soon as practicable, but no later than 

five minutes after the Time of Trade.59

The MSRB stated that dealers should 

remember that the ‘‘as soon as 

practicable’’ reporting obligation may, 

depending on the facts and 

circumstances, require quicker reporting 

than the applicable outer reporting 

obligation during and after the phase-in 

period. 

2. Prohibition on Purposeful Insertion of 

Manual Steps in Trade Reporting 

Process 

New Supplementary Material .02(a) 

would specifically prohibit dealers from 

purposely delaying the execution of an 

order, introducing any manual steps 

following the Time of Trade, or 

otherwise purposefully modifying any 

steps to execute or report a trade to 

utilize the exception for manual trades. 

The MSRB notes that this requirement 

would not prohibit reasonable manual 

steps that are taken for legitimate 

purposes and would not apply to any 

steps that are taken prior to the time of 

trade that do not have the effect of 

delaying the subsequent reporting of 

such trade.60

3. Manual Trade Indicator 

Proposed amendments to Rule G–14 

RTRS Procedures Section (b)(iv) would 

require the report of a trade meeting the 

MSRB’s definition for a ‘‘trade with a 

manual component,’’ as defined in 

proposed Section (d)(xii) of Rule G–14 

RTRS Procedures,61 to append a new 

trade indicator 62 to such a trade report. 

The MSRB noted that this indicator 

would be mandatory for every trade that 

meets the standard to append the 

indicator,63 regardless of whether the 

trade is actually reported within one 

minute after the Time of Trade, is 

reported within the applicable 

timeframe under the manual trade 

exception or is otherwise subject to 

another reporting exception. 

v. Pattern or Practice of Late Trade 

Reporting 

Current Rule G–14 RTRS Procedures 

Section (a)(iv) requires that transaction 

data that is not submitted in a timely 

and accurate manner must be submitted 

or corrected as soon as possible—even 

when a dealer is late in reporting a 

trade, the dealer remains obligated to 

report such trade as soon as possible. 

The proposed rule change further 

provides that any transaction that is not 

reported within the applicable time 

period shall be designated as ‘‘late.’’ 64

The MSRB stated that a pattern or 

practice of late reporting without 

exceptional circumstances or reasonable 

justification may be considered a 

violation of Rule G–14.65 The MSRB 

further noted that the determination of 

whether exceptional circumstances or 

reasonable justifications exist for late 

trade reporting is dependent on the 

particular facts and circumstances and 

whether such circumstances are 

addressed in the dealer’s systems and 

procedures.66 The MSRB explained that 

it expected that the regulatory 

authorities that examine dealers and 

enforce compliance with the reporting 

timeframes established under Rule G–14 

RTRS Procedures would focus their 

examination for and enforcement of the 

rule’s timing requirements on the 

consistency of timely reporting and the 

existence of effective controls to limit 

late reporting to exceptional 

circumstances or where reasonable 

justifications exist for a late trade report, 

rather than on individual late trade 

report outliers.67 Notwithstanding such 

expectation, where facts and 

circumstances indicate that an 

individual late report was intentional or 

otherwise egregious, or could 

reasonably be viewed as potentially 

giving rise to an associated fair practice, 

fair pricing, best execution or other 

material regulatory concern under 

MSRB or Commission rules with respect 

to that or a related transaction, the 

MSRB noted that the regulatory 

authorities could reasonably determine 

to take action with respect to such late 

trade in the examination or enforcement 

context.68

vi. Compliance Tools 

The MSRB explained that it would 

continue to provide various compliance 

tools to assist dealers with compliance 

and for examining authorities to 

monitor for compliance.69

vii. Other Proposed Amendments 

a. Technical Amendments 

Technical amendments to Rule G–14 

RTRS Procedures Section (a)(ii) regroup 

and renumber its current Sections (A) 

through (C) to new Sections (A)(1) 

through (A)(3), renumber current 

Sections (D) and (E) to new Sections 

(B)(1) and B(2), and correct a crossreference in Section (b)(iv) to certain of 

these Sections to be consistent with 

such renumbering.70 In addition, a 

technical amendment to Rule G–14 

RTRS Procedures Section (a)(ii) changes 

the word ‘‘of’’ to ‘‘after’’ and omits the 

word ‘‘within’’ in the phrase ‘‘within 15 

minutes of Time of Trade’’ for clarity 

and consistency of usage throughout the 

Rule G–14 RTRS Procedures as 

amended.71

b. Clarifying Amendments—Special 

Condition Indicators and Trades on an 

Invalid RTTM Trade Date 

Rule G–14 RTRS Procedures Section 

(b)(iv) currently sets forth information 

regarding certain existing special 

condition indicators while also 

referencing the existence of other 

special condition indicators in Section 

4.3.2 of the Specifications for Real-Time 

Reporting of Municipal Securities 

Transactions. The MSRB stated that the 

proposed clarifying amendments to 

Section (b)(iv) of Rule G–14 RTRS 

Procedures would incorporate into the 

language thereof reference to all 

applicable special condition indicators, 

including the new trade with a manual 

component indicator and existing 

special condition indicators previously 

adopted by the MSRB but that are 

currently only documented explicitly in 

the Specifications for Real-Time 

Reporting of Municipal Securities 

Transactions.72 Other than the addition 

of the new trade with a manual 

component indicator, the MSRB noted 

that the proposed clarifying 

amendments to this provision would 

not make any changes to the types or 

usage of existing special condition 


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73 Id. at 5392. 

74See Section 4.3.2 of the Specifications for RealTime Reporting of Municipal Securities 

Transactions; Exchange Act Release No. 55957 

(June 26, 2007), 72 FR 36532 (July 3, 2007), File No. 

SR–MSRB–2007–01. 

75See Notice, 89 FR at 5392. 

76 Id. 

77See supra notes 4, 7, and 12. Separately, the 

MSRB published a request for information soliciting 

stakeholder input regarding the impact of MSRB 

rules on smaller regulated entities (‘‘Small Firm 

RFI’’) on December 4, 2023. Eight (8) of the 

comments received by the MSRB in response to the 

Small Firm RFI discussed the original proposed 

rule change or a draft version of the original 

proposed rule change previously published for 

comment. See letters to Ronald W. Smith, Corporate 

Secretary, MSRB, from: Mike Petagna, President, 

Amuni Financial, Inc. dated Jan. 8, 2024 (‘‘Amuni 

RFI Letter’’); Mr. Kamler, Sanderlin Securities LLC 

dated Jan. 26, 2024 (‘‘Sanderlin Securities RFI 

Letter’’); Robert S. Searle, President, Searle & Co., 

Inc. dated Feb. 16, 2024 (‘‘Searle RFI Letter’’); Brad 

Harris, Director of Fixed Income—Municipal 

Bonds, Herold & Lantern Investments dated Feb. 22, 

2024 (‘‘HLI RFI Letter’’); Jessica R. Giroux, General 

Counsel, ASA dated Feb. 26, 2024 (‘‘ASA RFI 

Letter’’); Mr. Decker, BDA dated Feb. 26, 2024 

(‘‘BDA RFI Letter’’); Leslie M. Norwood, Managing 

Director and Associate General Counsel, Head of 

Municipal Securities, SIFMA dated Feb. 26, 2024 

(‘‘SIFMA RFI Letter’’); and Stern Brothers & Co. 

dated Feb. 26, 2024 (‘‘Stern Bros. RFI Letter’’). The 

comment letters received in response to the Small 

Firm RFI are available at: https://www.msrb.org/ 

Regulatory-Documents?id=13895. 

78See supra note 10. 

79See MSRB Letter at 4. 

80 Id. 

81 Id. 

82See, e.g., letters from SIFMA; BDA; ICI; 

Dimensional Fund Advisors; Belle Haven; Bernardi 

Securities; Piper Sandler; LPL. 

83See, e.g., letters from BDA, Noto, State of 

Florida, Sanderlin Securities, SIFMA, ASA, Falcon 

Square Capital. 

84See BDA Letter at 1. BDA generally reiterated 

its position in the BDA OIP Letter and BDA 

Amendment No. 1 Letter. 

85See BDA Letter at 1. 

86See Noto Letter. 

87See State of Florida Letter at 1. 

88 Id. at 2. 

89See SIFMA Letter at 2. 

90 Id. 

91 Id. 

92ASA Letter at 1. ASA generally reiterated its 

position in the ASA OIP Letter and ASA 

Amendment No. 1 Letter. 

93 Id. at 2. ASA included its 2022 comment letter 

which already explained that the ‘‘Proposals are 

notable in that they offer scant evidence for why 

current reporting requirements are inadequate or 

how investors would benefit by a shift to a 

mandated one-minute time frame.’’ Id. at 5–6. 

indicators.73 Rule G–14 RTRS 

Procedures Section (a)(iii) would be 

amended to reflect that, in addition to 

trades effected outside the hours of the 

RTRS Business Day, inter-dealer trades 

may be executed on certain holidays 

(other than those recognized as nonRTRS Business Days) that are not valid 

RTTM trade dates (‘‘invalid RTTM trade 

date’’), and in either case such trades are 

to be reported no later than within 15 

minutes after the beginning of the next 

RTRS Business Day. Such invalid RTTM 

trade date transactions are already 

subject to this same next RTRS Business 

Day reporting requirement.74 The MSRB 

believes that a proposed clarifying 

amendment to this provision would not 

make any changes to the circumstances 

or timing of reporting of such trades.75

c. Proposed Conforming Amendments to 

Rule G–12 and RTRS Information 

Facility 

Proposed amendments to Rule G–12, 

on uniform practice, would make 

conforming changes to Section (f)(i) 

thereof to require that each transaction 

effected during the RTRS Business Day 

shall be submitted for comparison as 

soon as practicable, but no later than 

one minute after the Time of Trade 

unless an exception applies. The 

proposed rule change would also 

modify the IF–1 to clarify lateness 

checking against the applicable 

reporting deadline(s) provided for in 

proposed amendments to Rule G–14 

RTRS Procedures, as opposed to the 

current 15-minute requirement.76

III. Summary of Comments Received 

and the MSRB’s Response 

As noted previously, the Commission 

received fourteen (14) comments letters 

in response to the Notice, ten (10) letters 

in response to the OIP, and six (6) letters 

in response to Amendment No. 1.77 The 

MSRB responded to the comment letters 

received on the Notice and OIP in the 

MSRB Letter.78 The MSRB reiterated 

that it continues to believe that the 

proposed rule change would promote 

just and equitable principles of trade 

because it would further reduce 

information asymmetry between market 

professionals (such as dealers and 

institutional investors) and retail 

investors by ensuring progressively 

increased access to more timely 

information about executed municipal 

securities transactions for all 

investors.79 Additionally, the MSRB 

explained that the proposed rule change 

would foster cooperation and 

coordination with persons engaged in 

regulating and processing information, 

facilitating a consistent standard for 

trade reporting across many fixed 

income products, including municipal 

securities.80 The MSRB further noted 

that the proposed rule change would 

remove impediments to a free and open 

market in municipal securities by 

making publicly available more timely 

information about the market and the 

prices at which municipal securities 

transactions are executed and promote 

investor protection and the public 

interest through increased market 

transparency.81 Commenters generally 

supported the MSRB’s goal of 

facilitating equal access to information 

and market transparency.82

A. One-Minute Reporting 

i. Benefit to Municipal Securities 

Market 

Some commenters expressed concern 

that the scope of the proposed rule was 

overly broad and could have 

unintended consequences on the 

municipal securities market as a 

whole.83

One commenter ‘‘generally agree[d] 

with the proposal to have those trades 

which can reasonably be reported 

within one minute be required by 

rulemaking to be reported within such 

time,’’ 84 but challenged the ‘‘benefit of 

an across-the-board shortening of 

reporting times and [had] concerns 

about the costs and risks associated with 

implementation.’’ 85 Another 

commenter questioned ‘‘what sort of 

benefit this almost-immediate reporting 

delivers or if the rule may very well 

adversely impact certain types of 

liquidity.’’ 86 One commenter stated that 

‘‘[a]ccelerating the timeframe for trade 

reporting [would] not result in any 

additional protection for investors and 

may well further inhibit capital being 

deployed in the marketplace,’’ 87 further 

noting that ‘‘increasing the cost and 

compliance burden [would] impair 

liquidity and the willingness of firms to 

commit capital to their municipal 

business.’’ 88 A further commenter noted 

that the ‘‘transition to one-minute 

reporting has neither been adequately 

examined or justified’’ 89 and did not 

‘‘believe that the proposed one-minute 

reporting rule [could] be adopted 

without exposing the broker-dealer 

community to significant liability and 

creating risk to the function of some 

fixed income markets’’ 90 and that 

‘‘subjecting the fixed income market to 

trade reporting requirements that appear 

to be inspired by the equities market is 

misguided.’’ 91 Building on its 2022 

letter, an additional commenter 

reiterated that the ‘‘[p]roposals lack 

evidence of a market failure to justify 

such a change’’ and ‘‘[would] not 

provide a tangible benefit to 

investors.’’ 92 This commenter also 

expressed the view that ‘‘regulatory 

changes based upon incomplete 

assumptions would be harmful to 

investors and threaten the participation 

of small and midsized brokerdealers.’’ 93 A commenter stated that the 

proposed rule change did ‘‘not provide 

evidence to support how the reporting 

change would result in a material 


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94See Falcon Square Capital Letter at 1. Falcon 

Square Capital generally reiterated its position in 

the Falcon Square Capital Amendment No. 1 Letter. 

95See Falcon Square Capital Letter at 1–2. 

96See Belle Haven Letter at 3. 

97 Id. at 1. 

98 Id. Belle Haven generally reiterated its position 

in the Belle Haven Amendment No. 1 Letter. 

99LPL OIP Letter at 1. 

100See Dimensional Fund Advisors Letter at 1. 

101 Id. 

102See FHN Financial OIP Letter at 2. 

103 Id. 

104See MSRB Letter at 6. 

105 Id. at 6–7. 

106 Id. at 7. 

107 Id. at 6. 

108 Id. at 7. 

109See Belle Haven Letter at 3. 

110See MSRB Letter at 8 (citing the Notice, 89 FR 

at 5395 n.74 and 5398). 

111See Belle Haven Letter at 6. 

112 Id. 

113 Id. at 5. 

114See ASA Letter at 9. 

115See ICI Letter at 3. 

116 Id. at 2 n.4. 

117See Sanderlin Securities Letter at 3. 

118 Id. at 3. 

119See MSRB Letter at 10. 

improvement of the fixed-income 

securities market’’ 94 and that the 

proposed rule change ‘‘appear[ed] to 

extrapolate the effects of the 2005 

change in reporting time . . . to support 

the claim that a further reduction in 

reporting time would provide more 

market transparency and immediate 

access to data for the remaining 26.3% 

of trades that were not reported to the 

MSRB within one minute during 

2022.’’ 95 One commenter stated that the 

MSRB failed to ‘‘provide carefully 

detailed analysis of the clear and 

substantial benefit to the municipal 

securities marketplace;’’ 96 ‘‘provide 

adequate evidence upon which the SEC 

can reach a determination as to whether 

to approve or disapprove the proposed 

rule change;’’ 97 and ‘‘advance 

quantifiable data to support its assertion 

that investors will save millions of 

dollars through such radically reduced 

reporting times.’’ 98 A further 

commenter expressed ‘‘concern that the 

[proposed rule change] will expose 

broker-dealers to significant regulatory 

risk and clients to diminished liquidity 

and service from their brokerdealers.’’ 99 Another commenter 

expressed a positive view by stating that 

‘‘transparency fosters a fair and efficient 

market and that market quality is 

improved when public information is 

disseminated evenly to all market 

participants’’ 100 enhancing ‘‘investors’ 

power to negotiate with dealers, leading 

to reduced transaction costs.’’ 101 One 

commenter ‘‘question[ed] whether oneminute trade reporting is suitable across 

the board for all fixed income markets’’ 

and believed that the ‘‘current trade 

reporting framework already strikes an 

appropriate balance between 

transparency, the ability to reasonably 

comply, and market liquidity.’’ 102

Additionally, this commenter noted that 

the proposed rule change ‘‘lack[ed] 

sufficient evidence and reasoning as to 

why shortening the reporting timeframe 

is necessary, much less achievable.’’ 103

In response to comments, the MSRB 

explained that one way to assess the 

magnitude of the benefits of the 

proposed rule change is to compare the 

amount investors are paying (or might 

pay in the future as a result of 

rulemaking) to the amount they would 

otherwise pay in a more efficient 

market.104 The MSRB further explained 

that when it previously shortened the 

trade reporting deadline from end-ofday to 15 minutes from the Time of 

Trade in 2005, the MSRB’s analysis of 

data collected showed a significant 

reduction in average customer trade 

effective spreads.105 The MSRB also 

noted that its analysis also showed that 

effective spreads for customer trades 

continued to decline in the last decade 

with progressively faster trade reporting 

due to technology improvements 

undertaken by the industry to execute 

trades more quickly and efficiently but 

that this downward trend had become 

less pronounced in recent years.106 The 

MSRB stated that it believes that it has 

appropriately demonstrated the 

estimated costs and benefits that the 

proposed rule change would likely 

provide to the municipal securities 

market 107 because the proposed rule 

change would result in reduced 

transaction costs for investors (i.e., 

reduced effective bid-ask spread on 

customer trades) and increased trading 

volume from the effective spread 

reduction because investors are more 

likely to trade when the cost to trade is 

lowered.108 Further, the MSRB 

explained that it expects that the 

universe of potentially benefited 

transactions and trading volume would 

be significantly larger than one 

commenter 109 described and that a 

shorter trade reporting window would 

likely result in yield curves that more 

accurately reflect the prevailing market 

conditions because of lower information 

lags in reported trade prices.110

ii. Impact on Competition and Liquidity 

Some commenters expressed views 

that shortening the reporting timeframe 

disproportionally impacted less active 

and smaller dealers, potentially leading 

to a decline in liquidity, capital 

resources, and concentration of 

municipal bond trading among the 

largest dealers in the industry. One 

commenter noted that the proposed rule 

change ‘‘grossly underestimated the 

costs of the proposed rule’’ 111 and 

forecasted that the proposed rule change 

would put many firms out of 

business.112 Such commenter further 

explained that the ‘‘retail investor’s 

liquidity and negotiating power will be 

eliminated with the competitive 

landscape reduced to the largest of firms 

which do not negotiate with retail 

investors.’’ 113 A further commenter 

raised concerns ‘‘that significant 

regulatory changes—particularly when 

based upon incomplete assumptions— 

would be harmful to investors and 

threaten the participation of small and 

mid-sized broker-dealers in these 

markets.’’ 114 An additional commenter 

raised the concern that a ‘‘unilateral 

reduction to a one-minute reporting 

timeframe could create undue burdens 

on execution quality and liquidity with 

respect to large volume trades or trades 

in less liquid securities’’ 115 because 

‘‘dealers may have insufficient time to 

hedge their positions or allocate risk 

with respect to large-sized trades or 

transactions in thinly trades securities 

and therefore lead to less willingness by 

dealers to provide liquidity’’ for these 

types of trades.116 Another commenter 

noted that the proposed rule change 

‘‘[p]unished’’ 117 small broker-dealers 

and would ‘‘ultimately reduce liquidity 

for investors.’’ 118 In response to 

comments, the MSRB stated that it 

believes that the potential adverse 

impacts on competition and liquidity 

are appropriately mitigated by the two 

exceptions from the one-minute 

reporting requirement included in the 

proposed rule change, which would 

allow dealers of all sizes, levels of 

market activity, manners of executing 

transactions, and business models to 

continue to engage in municipal 

securities activities to promote a fair, 

efficient, robust and more modern 

municipal securities market consistent 

with investor protection.119

iii. Technology Costs 

Some commenters raised concerns 

that the proposed rule change would 

impose increased costs of new 

technology infrastructure. One 

commenter expressed the view that 

small firms that do not qualify for the 

limited trading exception would have to 

‘‘implement more sophisticated and 

expensive automated reporting 


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120See Falcon Square Capital Letter at 2. Falcon 

Square Capital reiterated its position in the Falcon 

Square Capital Amendment No. 1 Letter. 

121See Falcon Square Capital Letter at 2 

122 Id. at 6. 

123See SIFMA Letter at 10. 

124See BDA Letter at 4. 

125 Id. at 3. 

126 Id. at 4. 

127See MSRB Letter at 9. 

128 Id. 

129 Id. at 10. 

130See BDA Letter at 1. 

131See id.; BDA Amendment No. 1 Letter at 2 

(expressing the view that the exceptions are made 

stronger by the changes made by Amendment No. 

1). 

132See, e.g, SIFMA Letter at 2. SIFMA reiterated 

its position in the SIFMA OIP Letter and SIFMA 

Amendment No. 1 Letter at 2 (expressing the view 

that the proposed manual trade exception ‘‘is not 

a panacea since a mandatory one-minute 

requirement remains unworkable even for certain 

fully-electronic trades.’’). 

133See FIF I Letter at 2; FIF OIP Letter at 2 

(expressing the view that the proposed manual 

trade exception ‘‘is important to avoid disruption to 

current trading practices for bonds.’’). 

134See ASA Letter at 1. 

135 Id. at 2. 

136 Id. 137See Dimensional Fund Advisors Letter at 2. 138See Piper Sandler OIP Letter at 1. 139See MSRB Letter at 11. 140 Id. at 12. 

141 Id. at 11. 

142 Id. 

143See ICI Letter at 3. 

144See LPL OIP Letter at 2. 

systems’’ 120 that they estimated at half 

a million dollars each year 121 which 

would be ‘‘cost prohibitive to smaller 

firms’’ and would lead to ‘‘curtail[ing] 

customer access to the fixed income 

securities market.’’ 122 Another 

commenter noted that the ‘‘technology 

to report all transactions involving a 

manual component within five minutes 

does not currently exist and may never 

exist, given the structure of the market’’ 

and expressed the view that ‘‘members 

[would] need significant time to review 

systems to ensure that one-minute 

reporting can be accomplished; create 

systems, policies and procedures for 

manual trade indicators, and train staff’’ 

and also noted the ‘‘high costs of 

systems development’’ necessary to 

make operational changes to effect the 

original proposed rule change.123 A 

further commenter explained that 

‘‘[b]uilding compliant systems for all 

aspects of the Proposals [would] require 

major investments by dealers and 

vendors in technology, training, and 

revisions to supervisory procedures’’ 

and that ‘‘[i]mplementation [would] be 

especially challenging for smaller . . . 

members who have fewer resources to 

commit to not only these changes, but 

the plethora of other new rules and 

amendments on the regulatory 

horizon.’’ 124 Additionally, this 

commenter explained that many firms 

‘‘rely on third-party vendors to report all 

or most of their trades to TRACE and 

RTRS.’’ 125 This commenter stated that 

‘‘vendors that need to update their 

infrastructure to accommodate changing 

reporting timelines will pass on this 

expense to dealers that rely on their 

service.’’ 126

In response to comments, the MSRB 

observed that most small and mid-sized 

firms that would otherwise need to 

shoulder higher technology or service 

costs would likely qualify as dealer with 

limited trading activity for which the 

proposed exception from the oneminute reporting timeframe would 

apply.127 The MSRB further explained 

that such firms would not need to 

obtain additional, and potentially more 

sophisticated, technology infrastructure 

or services beyond their current 

arrangements.128 The MSRB stated that 

it believes that the potential adverse 

impacts on competition and liquidity 

raised by some commenters are 

appropriately mitigated by the two 

exceptions from the one-minute 

reporting which would allow dealers of 

all sizes, levels of market activity, 

manners or executing transactions, and 

business models to continue to engage 

in municipal securities activities to 

promote a fair, efficient, robust and 

more modern municipal securities 

market consistent with investor 

protection.129

B. General Comments on Exceptions to 

One-Minute Reporting 

Commenters expressed several views 

relating to the exceptions. One 

commenter believes that the ‘‘current 

exceptions contained in the proposals 

represent essential elements to ensure 

industry compliance’’ and that ‘‘[w]ith 

the exceptions in place, the Proposals 

strike a reasonable balance between 

regulatory modernization and 

operational limitations which prevent 

may trades from meeting the one-minute 

reporting standard.’’ 130 This commenter 

further emphasized that ‘‘without the 

exceptions for dealers with limited 

trading activity and for trades with a 

manual component, the Proposals 

would be unworkable.’’ 131 Another 

commenter stated that the exceptions 

are critical to protect smaller dealer 

members and would be required if the 

proposed rule change moves forward.132

A further commenter supported the 

manual exception and noted that the 

scope of the manual trade exception 

should be consistent between SROs.133

One commenter, however, noted that 

the ‘‘exceptions do not appreciably alter 

market dynamics’’ 134 and expressed 

concern over the idea that either of the 

‘‘exceptions could be reduced over time 

without being proposed for public 

comment’’ 135 which ‘‘would also set a 

troubling precedent that would allow 

SROs to implement changes without an 

evidentiary or legal justification for 

doing so.’’ 136 One commenter 

advocated for the complete phase out of 

the exceptions so that all trades subject 

to the 15-minute reporting timeframe 

will be reported within one minute.137

An additional commenter stated that its 

support for the original proposed rule 

change is conditioned on retaining the 

exceptions for firms with limited 

trading activity and for trades with a 

manual component.138

In response to comments, the MSRB 

agreed that the exceptions are important 

components of the proposed rule change 

and agreed with commenters that 

asserted that that the exceptions are 

critical to making the proposed rule 

change workable and provide for an 

orderly transition to a more rapid trade 

reporting paradigm 139 and noted that it 

‘‘fully intends for the proposed new 

intra-day exceptions for trade reporting 

of municipal securities work in the 

same manner and at the same pace, and 

therefore consistent with, requirements 

for other fixed income securities.’’ 140

The MSRB further explained that 

‘‘consideration of whether or when one 

or both of the proposed exceptions 

should be phased out is premature, 

because the MSRB currently lacks 

sufficient data so support such a 

decision.’’ 141 The MSRB stated that it 

‘‘intends to monitor trade reporting 

activity and potential impacts on the 

marketplace to determine whether any 

changes to the proposed rule change 

should be considered in the future.’’ 142

i. Trades With a Manual Component 

Exception 

Commenters generally noted that the 

trades with a manual component 

exception balances shortening reporting 

requirements while avoiding undue 

disruptions to the municipal securities 

market. One commenter stated that it 

believed that the trades with a manual 

component exception is an ‘‘appropriate 

balance between shortening reporting 

timeframes and avoiding disruption to 

the marketplace or causing undue 

burdens.’’ 143 Another commenter 

requested that the MSRB should 

‘‘implement a broad exception for 

manual trades.’’ 144 Several commenters 

raised questions about the application of 

the exception where manual steps may 

have been taken prior to trade execution 

but where the execution itself and the 


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145See, generally, BDA Letter; FIF I Letter; ICI 

Letter; SIFMA Letter; ASA Letter. 

146See, e.g., BDA Letter at 4; Searle RFI Letter at 

2; SIFMA Letter at 3, 7–9; FIF I Letter at 3. 

147See, e.g., BDA Letter at 4; SIFMA Letter at 7; 

Falcon Square Capital Letter at 3–4; FIF I Letter at 

3; LPL OIP Letter at 2; SIFMA OIP Letter at 5; BDA 

OIP Letter at 1–2. 

148See ASA Letter at 2. 

149See MSRB Letter at 13 (citing Notice, 89 FR 

5386–87). 

150 Id. at 13. 

151 Id. at 14. 

152 Id. 

153 Id. 

154 Id. 

155 Id. 

156See MSRB Letter at 15 and accompanying 

notes 55 through 57 (citing the Notice, 89 FR at 

5389). 

157 Id. 

158See, e.g., BDA Letter at 3; ICI Letter at 3–4; 

Falcon Square Capital Letter at 4; Falcon Square 

Capital Amendment No. 1 Letter at 3–4; SIFMA 

Letter at 6; SIFMA OIP Letter at 6; SIFMA 

Amendment No. 1 Letter at 3; ASA OIP Letter at 

2; ASA Amendment No. 1 Letter at 1; Belle Haven 

Letter at 5–9; Belle Haven Amendment No. 1 at 3– 

4; BDA OIP Letter at 3, 5; LPL OIP Letter at 2. 

159 Id. 

160See Belle Haven Letter at 6. 

161 Id. at 9. 

162 Id. at 7. 

163 Id. at 7. 

164 Id. at 5. 

165See SIFMA Letter at 6–7. See generally ICI 

Letter at 3–4 (noting potential impacts of 

implementing the proposed phase-in timeframes 

and requesting that the MSRB propose for notice 

and comment each reduced outer limit timeframe 

to allow market participants the opportunity to 

submit valuable data and comments prior to 

potentially shortening reporting timeframes). 

166See LPL OIP Letter at 2. 

167See ASA Letter at 2. 

168See MSRB Letter at 17. 

169 Id. 

subsequent trade reporting workflow 

may be fully automated.145 Commenters 

provided examples where systems 

processing limitations would prevent 

certain fully automated trades to be 

reported within one minute.146 Some 

commenters requested clarification in 

the context of dual registrants and 

situations where a dealer allocates a 

block trade to allocate trades.147 One 

such commenter noted that 

‘‘maintaining the reporting time at 15 

minutes is necessary, considering the 

complexities involved in the manual 

trade reporting process.’’ 148

With respect to qualifying as a trade 

with a manual component, the MSRB 

reiterated that ‘‘the manual aspect of the 

trade workflow generally would only 

occur after the relevant Time of 

Trade.’’ 149 The MSRB explained that 

‘‘where trade execution and reporting 

processes are fully electronic, a minimal 

triggering action (e.g., click ‘‘accept’’) to 

prompt the electronic execution of a 

trade at the beginning of the process, by 

itself, typically would not be sufficient 

to constitute a manual step qualifying 

the trade for the manual trade 

exception.’’ 150 As it relates to system 

processing limitations, including trades 

involving large post-trade automated 

allocations, portfolio trades, trades 

involving batch processing, and trades 

where multiples systems are involved in 

a trade workflow, the MSRB stated that 

‘‘analysis of such scenarios related to 

fully automated trades under the 

[proposed rule change] is likely to be 

highly fact specific.’’ 151 Because it is a 

facts and circumstances determination, 

the MSRB further explained that it is 

impossible to create an exhaustive list of 

examples and that ‘‘dealers should 

document the circumstances giving rise 

to [any reporting] delays and consider 

potential alternatives for reasonable 

ways to improve the timing of trade 

reporting such circumstances.’’ 152 The 

MSRB reminded dealers of the 

‘‘overarching obligation to report trades 

as soon as practicable in light of the 

effects of such circumstances or 

justification’’ 153 even if not within the 

applicable one-minute timeframe.154

The MSRB further explained that 

‘‘failure to report such trades as soon 

practicable could be a factor weighing 

against the determination of whether the 

exceptional circumstances or reasonable 

justification provisions of the [proposed 

rule change] would be available to a 

dealer making such late reports.’’ 155

With respect to large or block 

transaction, the MSRB explained that 

depending on the specific facts and 

circumstances, ‘‘where a dealer executes 

a large or block transaction that requires 

allocations of portions of the trade to 

individual accounts, unless the initial 

large or block trade independently 

qualifies for the manual trade exception 

and absent another exception, the large 

or block transaction normally would not 

qualify for the manual trade exception 

and instead would be subject to the oneminute reporting requirement.’’ 156 The 

MSRB further noted that the ‘‘manual 

trade exception may, however, be 

available for any resulting allocations to 

individual accounts that may be 

required to be reported and such 

reporting involves manual input or 

other manual steps.’’ 157

a. Phase-In Period 

Several commenters addressed the 

phase-in of the shortening reporting 

timeframe for trades with a manual 

component.158 Some commenters 

requested that the MSRB propose for 

notice and comment each reduced outer 

limit timeframe for the trades with a 

manual component exception to allow 

market participants the opportunity to 

submit valuable data and comment prior 

to the MSRB shortening the reporting 

timeframe.159 One commenter 

expressed the view that this exception 

was not a true exception 160 and 

requested that the MSRB ‘‘collect data to 

support a reduction in reporting time for 

manual trades before it proposes a rule 

to do so’’ 161 as, according to this 

commenter, the MSRB did not ‘‘cite a 

scintilla of statistical or objective 

support for the need to ‘‘phase in’’ a 

reduction of reporting for manual 

reporters’’ 162 or ‘‘provide the SEC with 

evidence that manual reporters are not 

currently reporting as fast as 

practicable.’’ 163 This commenter also 

raised the concern that the phase-in 

period may eliminate small firms which 

are incapable of meeting the phased-in 

time periods.164 One commenter noted 

uncertainty regarding the technological 

capabilities to meet the proposed phasein timeframes, and requested the MSRB 

to undertake ongoing monitoring, 

analysis, and stakeholder 

engagement.165 A further commenter 

requested that the MSRB ‘‘[e]xamine 

impacts to liquidity, depth, 

concentration, and transparency prior to 

decreasing reporting times to shorter 

intervals to ensure markets are not 

harmed.’’ 166 One commenter also 

expressed being troubled by the 

language of the manual trade exception 

because it ‘‘suggests the possibility of 

reassessing the reporting timeframe, 

potentially leading to further reductions 

or even the elimination of the manual 

trade exception altogether.’’ 167

The MSRB noted that ‘‘it does not 

have specific evidence that dealers are 

currently, as a matter of practice, 

reporting trades less rapidly than as 

soon as practicable’’ 168 but ‘‘believes 

that the new 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, fiveminute or 15-minute deadline, 

potentially translating into significant 

improvement in market-wide average 

reporting times.’’ 169 The MSRB also 

stated that it ‘‘would monitor the 

implementation of the [proposed rule 

change] and, going forward, would 

analyze trade data related to the 

operation of the proposed two new 

exceptions to, among other things, 

determine whether the eventual fiveminute trade reporting timeframe that 

would become applicable after two 

years continues to be feasible and 

appropriate in light of the empirical 

data collected through the earlier phases 


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170 Id. at 20. 

171 Id. 

172See MSRB Letter at 20 (citing 15 U.S.C. 78s). 

173See BDA Letter at 3; SIFMA Letter at 9; SIFMA 

OIP Letter at 7–8; FIF Letter I at 3–4; FIF Letter II 

generally. 

174See BDA Letter at 3; SIFMA Letter at 9; SIFMA 

OIP Letter at 7–8. 

175See FIF I Letter at 4. 

176 Id. at 6; SIFMA OIP Letter at 8. 

177See generally FIF I Letter (scenarios where a 

firm corrects a technical issue and then submits 

automatically); FIF II Letter (consisting of examples 

of such scenarios and requesting corresponding 

clarification); FIF OIP Letter (FIF requested 

clarification on the use of a portfolio trade modifier 

to RTRS where a dealer receives a large order or a 

trade list resulting in a portfolio of trades with 

potentially numerous unique securities involving 

rapid execution and frequent communications on 

multiple transactions with multiple counterparties, 

with the dealer having to book and report those 

transactions manually. In response, the MSRB 

clarified that the ‘‘Notice was not intended to create 

a requirement for portfolio trades to be reported 

with a trade indicator under MSRB Rule G–14, and 

no such portfolio indicator is proposed or would be 

required pursuant to the proposed rule change.’’ 

See MSRB Letter at 16. The MSRB further explained 

‘‘that it has not made a determination as to whether 

an ‘‘away from market’ indicator would be required 

in connection with any particular portfolio 

transaction.’’). Id. at 17. 

178See MSRB Letter at 14. 179 Id. at 18–19. 180 Id. at 24. 181 Id. at 18 n.66. 182 Id. 

183See, e.g., SIFMA Letter; BDA Letter; Falcon 

Square Capital Letter; Belle Haven Letter; FIF I 

Letter. See also BDA OIP Letter; SIFMA OIP Letter. 

184See SIFMA Letter at 9. 

185 Id. 

186See BDA Letter at 2. 

187See Falcon Square Capital Letter at 3. 

188 Id. at 3. 

189See MSRB Letter at 22 n.81 (explaining that 

‘‘upon further review of the methodology used for 

proposing a 1,800-trade threshold for qualifying for 

the dealer with limited trading activity exception in 

the original proposed rule change, the MSRB has 

determined to increase the threshold to 2,500 trades 

based on a modification of its methodology 

described below. In establishing the original 

proposed threshold of 1,800 trades, the MSRB had 

used an approach consistent with other instances 

where MSRB rules and related transparency 

activities are based on inter-dealer trade report 

activity that rely solely on the sell-side inter-dealer 

trade reports so as to avoid, for those specific 

purposes, potential double counting if both the sellside and buy-side were to be used. For example, the 

manner in which the MSRB disseminates trade 

reports for compared inter-dealer trades and 

assesses its transaction and trade count fees for 

inter-dealer trades under MSRB Rule A–13(d) is 

based solely on sell-side trade reports for the 

reasons described in Amendment No. 1. As a result, 

the calculations discussed in the MSRB Filing 

Notice underlying the 1,800-trade threshold in the 

proposed definition of ‘‘dealer with limited trading 

activity’’ was lower and did not fully account for 

inter-dealer trade reports since only the sell-side 

inter-dealer trade reports were taken into account. 

In order to maintain compatibility with the plain 

meaning of the language of the MSRB’s proposed 

definition of ‘‘dealer with limited trading activity,’’ 

the MSRB has recalculated the applicable threshold 

for such definition to be 2,500 trades, taking into 

account both sell-side and buy-side inter-dealer 

trade reports together with reports of dealer trades 

with customers, regardless of whether the dealer 

bought or sold in the customer transaction.’’). See 

also Amendment No. 1. 

190See MSRB Letter at 23. 

of implementation.’’ 170 To address 

concerns expressed by commenters 

regarding potential difficulties in 

meeting the shortened reporting 

timeframes and make the necessary 

changes to processes and technology to 

achieve such shortened timeframes, the 

MSRB has ‘‘determined to modify the 

pace of phasing-in the shortened 

reporting timeframe for trades with a 

manual component to extend the period 

during which such trades would be 

reportable by no later than 10 minutes 

after the Time of Trade from one year 

to two years.’’ 171 To alleviate 

commenters concerns related to the the 

elimination of the of the trades with a 

manual component exception, the 

MSRB explained that the proposed rule 

change ‘‘sets out a phased-in 

implementation of the exception for 

manual trades that would provide for an 

ultimate five-minute timeframe for the 

reporting of such trades. No further 

reductions in such timeframe, and no 

elimination of the manual trade 

exception could be possible without 

additional formal rulemaking by the 

MSRB that would be filed with the 

Commission, and any such change 

would be subject to the required notice 

and comment process under Section 19 

of the Exchange Act.’’ 172

b. Manual Trade Indicator 

Several commenters addressed the 

manual trade indicator.173 Commenters 

requested that the trade indicator apply 

instead to fully automated trades subject 

to the one-minute reporting 

requirement.174 One commenter 

recommended that the MSRB default 

the manual trade indicator for any 

transaction that is reported initially 

through the RTRS web portal.175

Commenters requested that the MSRB 

institute an interim period where firms 

are permitted, but not required, to report 

the manual trade indicator.176 One 

commenter also requested clarification 

on the use of a portfolio trade modifier 

in specific scenarios.177

After considering comments, the 

MSRB explained that ‘‘to the extent that 

these trades are fully automated—both 

the execution and the trade reporting— 

the manual trade indicator would not 

apply and should not be used, and the 

exception for trades with a manual 

component also would not apply.’’ 178

The MSRB further noted that since 

‘‘dealers are already successfully 

processing other trade indicators that 

must be applied on an individualized 

basis in the context of manual and 

electronic trades[,] the MSRB believes 

that existing processes can be modified 

to include the manual trade indicator 

with only limited additional effort and 

expense.’’ 179 In response to the 

requested interim period for optional 

use, the MSRB ‘‘contemplates providing 

dealers with sufficient time to 

implement and test the use of the 

indicator and does not intend at this 

time to provide an optional reporting 

period.’’ 180 Additionally, the MSRB 

explained that since ‘‘one of the 

intended purposes of the manual trade 

indicator is to provide regulators with 

the information necessary to make 

thoughtful and pragmatic changes and 

identify roadblocks to achieving faster 

trade reporting for trades with a manual 

component’’ 181 the MSRB stated that it 

‘‘will be using the manual trade 

indicator to assess whether taking 

further action in the course of such 

phase-in might be warranted.’’ 182

C. Limited Trading Activity Exception 

Several commenters addressed the 

limited trading activity exception.183

One commenter noted that the ‘‘[limited 

trading activity] exception is 

appropriately based on trade numbers 

that are correctly sized to protect 

minority, veteran and women owned 

business enterprises and small dealers 

from incurring the significant costs 

associated with the proposed rule’’ 184

while the proposed two-year look back 

period ‘‘[would] allow newly impacted 

members some time to attempt to 

implement systems to attempt to 

achieve compliance.’’ 185 Another 

commenter supported the limited 

trading activity exception, believing 

many firms in the market will benefit 

greatly from this exception.186 An 

additional commenter expressed the 

view that the proposed 1,800-trade 

threshold is ‘‘far too low’’ 187 and 

requested that the MSRB either 

significantly expand the threshold or 

conduct further analysis and provide 

data to support the 1,800 threshold.188

After considering comments received, 

the MSRB determined to increase the 

threshold to 2,500 trades.189 As 

explained by the MSRB, ‘‘the revised 

2,500 threshold is expected to exempt a 

clear majority of dealers, i.e., 476 out of 

651 dealers or approximately 73 percent 

of dealers based on 2021 and 2022 trade 

reporting data and these dealers would 

remain eligible to report their trades in 

15 minutes or less.’’ 190 As stated by the 

MSRB, ‘‘these limited activity dealers 

account for 1.4 percent of total trades 

and 2.3 percent of the total par value 

traded, and therefore would have a 


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191 Id. at 23 (referring to Table 2 in Amendment 

No. 1). 

192See, e.g., BDA Letter at 4; FIF I Letter at 5– 

6; ICI Letter at 2; SIFMA Letter at 10. 

193See MSRB Letter at 12. 

194See BDA Letter at 4; SIFMA Letter at 10. 

195See FIF I Letter at 5–7; SIFMA OIP Letter at 

8. 

196See MSRB Letter at 24. 

197 Id. 

198 Id. 

199 Id. 

200See generally Belle Haven Letter; ASA Letter; 

ASA OIP Letter; Falcon Square Capital Letter. 

201See Belle Haven Letter at 2. 

202 Id. 

203See ASA Letter at 3. 

204 Id. 

205See Falcon Square Capital Letter at 6. 

206See ASA Letter at 3; ASA OIP Letter at 2. 

207See, e.g., Bernardi Securities OIP Letter at 2; 

Piper Sandler OIP Letter at 1–2. 

208See MSRB Letter at 24. 

209 Id. at 24–25. All comment letters received in 

response to the 2022 Request for Comment are 

available at https://www.msrb.org/sites/default/ 

files/2023-03/All-Comments-to-Notice-2022-07.pdf. 

210See MSRB Letter at 25. 

211 Id. 

212 Id. 

213 Id. at 25 n.95 (listing MSRB Notice 2013–02 

(Jan. 17, 2013); MSRB Notice 2013–14 (July 31, 

2013); MSRB Notice 2014–14 (Aug. 13, 2014). 

214 15 U.S.C. 78o–4(b)(2)(C). 

minimal impact on market 

transparency.’’ 191

D. Consistency in Implementation 

Commenters recommended an 

implementation path for municipal 

securities that is staggered with other 

fixed income securities.192 In response 

to comments, the MSRB ‘‘emphasize[d] 

that greater consistency in 

implementing changes across the 

various fixed income markets can be 

better achieved if the proposed 

requirements are applied to the entire 

fixed income industry at the same time. 

Consistency, not only in reporting 

requirements but also implementation 

of those requirements, helps avoid 

confusing and different reporting 

standards for the industry.’’ 193

E. Implementation Period 

Two commenters requested a twoyear implementation period and 

requested that the MSRB remain open to 

the creation of FAQs or the provision of 

implementation guidance to achieve 

greater compliance.194 One commenter 

requested an eighteen-month 

implementation period from the date 

the MSRB publishes technical 

specifications and guidance, requested a 

testing period with additional supports 

and enhancements ahead of final 

implementation, and a transitional 

period during which dealers would not 

be required to include the manual 

indicator on trades with a manual 

component.195 In response to 

comments, the MSRB stated that it 

‘‘continues to intend to maintain an 

implementation schedule for the 

proposed rule change that is aligned 

with the implementation for other fixed 

income securities.’’ 196 The MSRB also 

explained that it will ‘‘endeavor to 

publish updated technical specifications 

as far as possible in advance of the 

effective date(s) and will work with 

dealers to provide interpretive guidance, 

where needed’’ 197 as is generally the 

protocol for RTRS and Information 

Facility changes and ‘‘will facilitate free 

testing that would include test CUSIP 

numbers and other appropriate support 

to ensure that all dealers have a 

significant opportunity to prepare their 

systems and processes to achieve full 

compliance with the requirements of the 

proposed rule change, if approved.’’ 198

In response to the requested interim 

period for optional use of the manual 

trade indicator, the MSRB 

‘‘contemplates providing dealers with 

sufficient time to implement and test 

the use of the indicator and does not 

intend at this time to provide an 

optional reporting period.’’ 199

F. Consistency With the Act 

Some commenters challenged the 

proposed rule change as circumventing 

regulatory obligations and requested 

that the MSRB conduct further analysis 

before implementation of the proposed 

rule change.200 One commenter 

expressed the view that the MSRB relied 

on ‘‘conclusory statements without 

background data in support’’ 201 and 

requested that the Commission deny 

and return the proposed rule change to 

the MSRB for further study and 

consideration.202 Another commenter 

asserted that the Commission ‘‘want[ed] 

to avoid conducting a robust economic 

cost/benefit analysis’’ 203 and ‘‘strongly 

recommend[ed] these Proposals be 

abandoned in their entirety.’’ 204 An 

additional commenter strongly 

encouraged the Commission to require 

the MSRB to revisit the proposed rule 

change in order to ‘‘consider the 

economic challenges of smaller firms 

before modifying the current rule.’’ 205

Another commenter raised issues 

regarding whether the proposed rule 

change conforms with the requirements 

of the Administrative Procedure Act 

(‘‘APA’’).206 Some commenters 

defended the process undertaken by the 

MSRB in connection with the proposed 

rule change.207

In response, the MSRB stated that it 

‘‘is confident that the current 

rulemaking has been undertaken fully in 

compliance with applicable statutory 

and regulatory requirements and has 

had the benefit of fulsome input from 

market participants and is backed by 

extensive data analysis.’’ 208 The MSRB 

further stated that while not statutorily 

required, the MSRB ‘‘published a draft 

version of the proposal for comment in 

October 2022, including a preliminary 

economic analysis of such draft 

proposal, and received over 50 comment 

letters in response.’’ 209 The MSRB 

explained how the MSRB ‘‘revised the 

draft version in response to comments 

received and, upon approval by the 

MSRB’s board of directors, filed it with 

the Commission as the original 

proposed rule change as required under 

Section 19(b) of the Exchange Act. Also 

as required by Section 19(b) of the 

Exchange Act, the Commission 

published the MSRB Filing Notice for 

comment.’’ 210 The MSRB further 

explained how, in response to 

comments received, the Commission 

instituted proceedings to obtain further 

input on the original proposed rule 

change and the MSRB has now 

addressed the comments received on the 

MSRB Filing Notice in this letter.’’ 211

The MSRB further stated that ‘‘[i]n part 

due to such extensive input, the MSRB 

has determined to file Amendment No. 

1 to the original proposed rule 

change.’’ 212 The MSRB further stated 

that ‘‘while the MSRB has consulted 

with FINRA and the Commission 

throughout this rulemaking process, the 

MSRB board of directors and staff have 

exercised their independent judgment 

in formulating the proposed rule 

change, which represents the 

culmination of MSRB deliberation on 

this topic stretching back to 2013.’’ 213

IV. Discussion and Commission 

Findings 

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 Commission 

believes that 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.214 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 


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215 Id. 

216See Notice, 89 FR at 5393. 

217 Id. 

218The Commission did not direct the MSRB to 

file the proposed rule change and is not using the 

MSRB as a conduit to enact the proposed rule 

change. One commenter cites a speech by the Chair 

in stating to the contrary, but that speech does not 

specifically address the RTRS trade reporting 

timeframe at all. See ASA Amendment No. 1 Letter 

at 2 n.4 (citing Gary Gensler, Chair, Securities and 

Exchange Commission, Prepared Remarks before 

SEC Speaks: U.S. Capital Markets and the Public 

Good (Apr. 2, 2024) (transcript available at https:// 

www.sec.gov/newsroom/speeches-statements/ 

prepared-remarks-sec-speaks-us-capital-marketspublic-good). And, in any event, the speech reflects 

the views of the Chair alone, not the Commission. 

219See supra note 15. 

220See Notice, 78 FR at 5393. 

221 15 U.S.C. 78c(f). 

222 15 U.S.C. 78o-4(b)(2)(C). 

information with respect to, and 

facilitating transactions in municipal 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market in municipal securities, 

and, in general, to protect investors and 

the public interest.215

The Commission believes that the 

proposed rule change is consistent with 

the Exchange Act because the proposed 

rule change is reasonably designed to 

remove impediments to and perfect the 

mechanism of a free and open market in 

municipal securities by bringing about 

greater market transparency through 

more timely disclosures and 

dissemination of information provided 

through the RTRS. Accordingly, the 

Commission finds that the proposed 

rule change is consistent with Section 

15B(b)(2)(C) of the Act, as further 

described below, because the proposed 

rule change will (i) promote just and 

equitable principles of trade; (ii) 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; (iii) remove 

impediments to and perfect the 

mechanism of a free and open market in 

municipal securities and municipal 

financial products; and (iv) protect 

investors and the public interest. 

A. Promote Just and Equitable 

Principles of Trade 

The Commission finds the proposed 

rule change will promote just and 

equitable principles of trade by 

providing the market with more timely 

pricing information. As noted by the 

MSRB, some market professionals may 

in some circumstances have better or 

more rapid access to information about 

trade prices which retail investors do 

not have access.216 The Commission 

believes that such reduced timeframe 

for trade reporting would improve 

market transparency by reducing 

information asymmetries between 

market participants and enhancing 

investor confidence in the market. The 

Commission also anticipates that the 

MSRB will monitor trade reporting 

activity and potential impacts on the 

marketplace to determine whether any 

changes to the proposed rule change 

should be considered in the future. The 

Commission will consider any future 

proposed rule changes filed with the 

Commission. 

B. Foster Cooperation and Coordination 

The Commission finds that the 

proposed rule change would foster 

cooperation and coordination between 

the SEC, the MSRB, and FINRA by 

establishing consistent trade reporting 

requirements across various classes of 

fixed income securities. As noted by the 

MSRB, consistent trade reporting 

requirements reduce the risk of 

potential confusion and may reduce 

compliance burdens resulting from 

inconsistent obligations and standards 

for different classes of securities.217 A 

similar proposed rule change by FINRA, 

on which the MSRB closely coordinated 

with FINRA,218 would result in a 

consistent standard for trade reporting 

for municipal securities and the TRACEeligible securities covered by the FINRA 

proposed rule change.219 Accordingly, 

the Commission believes that the 

proposed rule change will provide 

regulatory clarity and would foster 

cooperation and coordination between 

the MSRB and FINRA by establishing 

consistent trade reporting requirements 

across various classes of fixed income 

securities. Consistent trade reporting 

requirements for municipal securities 

covered by the proposed rule change 

and the TRACE-eligible securities 

covered by the FINRA proposed rule 

change also may reduce compliance 

burdens resulting from inconsistent 

obligations and standards for different 

classes of fixed income securities. 

Additionally, the Commission finds that 

the proposed rule change will allow the 

municipal securities market to produce 

more timely transaction data which will 

enhance surveillance of the market by 

enforcement agencies. 

C. Remove Impediments to and Perfect 

the Mechanism of a Free and Open 

Market in Municipal Securities and 

Municipal Financial Products 

The Commission finds that the 

proposed rule change would remove 

impediments to, and perfect the 

mechanism of, a free and open market 

in municipal securities by making 

publicly available more timely 

transaction data at which municipal 

securities transactions are executed. As 

noted by the MSRB, prices at which 

transactions are executed is central to 

fairly priced municipal securities and a 

dealer’s ability to make informed 

quotations.220 The Commission believes 

that the proposed rule change could 

mitigate certain information 

asymmetries that may exist, thereby 

enabling market participants to make 

more informed decisions. Further, the 

proposed exceptions reasonably balance 

the benefits to market participants of 

increased transparency while mitigating 

commenters’ concern of a shortened 

trade reporting deadline. In this regard, 

the proposed rule change is reasonably 

designed to not permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

D. Protect Investors, Municipal Entities, 

Obligated Persons, and the Public 

Interest 

The Commission finds that the 

proposed rule change will protect 

investors and the public interest by 

increasing market transparency and 

providing the market with more 

efficient pricing information. 

In approving the proposed rule 

change, the Commission has considered 

the proposed rule change’s impact on 

efficiency, competition, and capital 

formation.221 Exchange Act Section 

15B(b)(2)(C) 222 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 Commission does not believes 

that the proposed rule change would 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act 

because the proposed rule change 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 lead some dealers to exit the 

market, curtail their activities or 

consolidate with other firms. The MSRB 

has made efforts to minimize the impact 

of the proposed rule change on dealers 

in response to commenters including: (i) 

amending the definition of a dealer with 

limited trading activity in proposed 

subparagraph (d)(xi) of Rule G–14 RTRS 

Procedures by increasing the threshold 

for qualifying as a dealer with limited 

trading activity from 1,800 transactions 

to 2,500 transactions; and (ii) extending 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 89, No. 187 / Thursday, September 26, 2024 / Notices 78967 

223See MSRB Letter at 24. 

224 15 U.S.C. 78s(b)(2). 

225 17 CFR 200.30–3(a)(12). 

the phase-in period for the manual trade 

exception in proposed new 

Supplementary Material .02(b) of Rule 

G–14 RTRS Procedures by one 

additional year. While the MSRB does 

not intend at this time to provide an 

interim period for optional use of the 

manual trade indicator, the MSRB 

intends to provide a sufficient 

implementation timeframe, publish 

updated technical specifications and 

will work with dealers to provide 

interpretive guidance, facilitate free 

testing and other appropriate support to 

ensure that all dealers have significant 

opportunity to prepare systems and 

processes to achieve full compliance 

with the proposed rule change.223 The 

Commission believes that the MSRB, 

through its responses and through 

proposed changes in Amendment No. 1 

has addressed commenters’ concerns. 

The Commission has also reviewed 

the record for the proposed rule change 

and notes that the record does not 

contain any information to indicate that 

the proposed rule change would have a 

negative effect on capital formation. 

Further, the Commission finds that the 

possible increased investor protections 

offered by reducing the timeframe for 

trade reporting could foster greater faith 

in the integrity of the municipal 

securities market, increasing 

participation in this market, thereby 

increasing capital formation. 

The Commission also finds that the 

proposed rule change includes 

provisions that help promote efficiency. 

In particular, the Commission believes 

that the reduced timeframe for trade 

reporting could further reduce 

information asymmetries between 

market professionals and retail investors 

by increasing access to more timely 

information about executed 

transactions. 

For the reasons noted above, the 

Commission believes 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,224 that the 

proposed rule change (SR–MSRB–2024– 

01), as modified by Amendment No. 1, 

be, and hereby is, approved. 

For the Commission, pursuant to delegated 

authority.225

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–22028 Filed 9–25–24; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 12554] 

Notice of Public Meeting: International 

Information and Communications 

Policy Division Stakeholder Briefing 

ACTION: Notice of public meeting. 

SUMMARY: The State Department will 

hold a public meeting at 1 p.m.–2:30 

p.m. (ET) on WebEx with the Bureau of 

Cyberspace and Digital Policy’s 

International Information and 

Communications Policy (CDP/ICP) 

division. The purpose of the meeting is 

to brief stakeholders on CDP/ICP’s past 

and upcoming international 

engagements. These include engagement 

at the International Telecommunication 

Union (ITU), the Organization of 

American States Inter-American 

Telecommunication Commission 

(CITEL), the Organization for Economic 

Cooperation and Development (OECD), 

the Asia Pacific Economic Cooperation 

(APEC) Forum Telecommunications and 

Information Working Group, the Group 

of Seven (G7) Digital & Tech Working 

Group, the Group of Twenty (G20) 

Digital Economy Task Force, and other 

multilateral processes and bilateral 

digital and ICT dialogues. 

DATES: The meeting will be on October 

9, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Please contact Coreene White, Foreign 

Affairs Officer, CDP/ICP, at WhiteCE@

state.gov or 771–205–9909. 

SUPPLEMENTARY INFORMATION: 

Additional information about the 

Bureau of Cyberspace and Digital Policy 

is accessible at https://www.state.gov/ 

bureaus-offices/deputy-secretary-ofstate/bureau-of-cyberspace-and-digitalpolicy/. 

We encourage anyone wanting to 

attend this virtual meeting to register 

using the following link by 5 p.m. 

Monday, October 7: https://

statedept.webex.com/statedept/ 

j.php?MTID=m5a8fd865411e9795f1

b79405cceed2ed. 

Requests for reasonable 

accommodation made after Wednesday, 

October 2 will be considered but might 

not be able to be accommodated. The 

public may have an opportunity to 

provide comments at this meeting. 

Agenda 

Wednesday, October 9, 2024, at 1:00 

p.m. (ET) 

Opening Remarks 

Briefings on CDP/ICP’s past and 

upcoming activities 

Public Comment 

Adjournment 

Stephan A. Lang, 

U.S. Coordinator and Deputy Assistant 

Secretary, International Information and 

Communications Policy, Bureau of 

Cyberspace and Digital Policy, Department 

of State. 

[FR Doc. 2024–21987 Filed 9–25–24; 8:45 am] 

BILLING CODE 4710–10–P 

SURFACE TRANSPORTATION BOARD 

[Docket No. EP 290 (Sub-No. 5) (2024–4)] 

Quarterly Rail Cost Adjustment Factor 

AGENCY: Surface Transportation Board. 

ACTION: Approval of rail cost adjustment 

factor. 

SUMMARY: The Surface Transportation 

Board has adopted the fourth quarter 

2024 Rail Cost Adjustment Factor and 

cost index filed by the Association of 

American Railroads. 

DATES: Applicability Date: October 1, 

2024. 

FOR FURTHER INFORMATION CONTACT: 

Pedro Ramirez, (202) 245–0333. If you 

require an accommodation under the 

Americans with Disabilities Act, please 

call (202) 245–0245. 

SUPPLEMENTARY INFORMATION: The rail 

cost adjustment factor (RCAF) is an 

index formulated to represent changes 

in railroad costs incurred by the nation’s 

largest railroads over a specified period 

of time. The Surface Transportation 

Board (Board) is required by law to 

publish the RCAF on at least a quarterly 

basis. Each quarter, the Association of 

American Railroads computes three 

types of RCAF figures and submits those 

figures to the Board for approval. The 

Board has reviewed the submission and 

adopts the RCAF figures for the fourth 

quarter of 2024. The fourth quarter 2024 

RCAF (Unadjusted) is 0.961. The fourth 

quarter 2024 RCAF (Adjusted) is 0.375. 

The fourth quarter 2024 RCAF–5 is 

0.354. Additional information is 

contained in the Board’s decision, 

which is available at www.stb.gov. 

Decided: September 20, 2024. 

By the Board, Board Members Fuchs, 

Hedlund, Primus, and Schultz. 

Zantori Dickerson, 

Clearance Clerk. 

[FR Doc. 2024–21985 Filed 9–25–24; 8:45 am] 

BILLING CODE 4915–01–P 


khammond on DSKJM1Z7X2PROD with NOTICES