36164 Federal Register / Vol. 87, No. 115 / Wednesday, June 15, 2022 / Notices 

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

2 17 CFR 240.19b–4. 

3 ‘‘Form MA–I: Information Regarding Natural 

Persons Who Engage in Municipal Advisory 

Activities,’’ is an SEC form that must be completed 

and filed by a municipal advisory firm with respect 

to each natural person associated with the firm and 

engaged in municipal advisory activities on the 

firm’s behalf, including employees of the firm. 

Independent contractors are included in the 

definition of ‘‘employee’’ for these purposes. A 

natural person doing business as a sole proprietor 

must complete and file Form MA–I in addition to 

Form MA. Form MA–I is also used to amend a 

previously submitted form, including in such cases 

where an individual is no longer an associated 

person of the municipal advisory firm or no longer 

engages in municipal advisory activities on the 

firm’s behalf. See ‘‘Instructions for the Form MA 

Series,’’ available at https://www.sec.gov/about/ 

forms/formmadata.pdf. For purposes of Rule A–11 

and the calculation of the Municipal Advisor 

Professional Fee, if a firm has filed an amendment 

to indicate that an individual is no longer an 

associated person of the municipal advisory firm or 

no longer engages in municipal advisory activities 

on its behalf, then that individual’s Form MA–I 

would not be deemed as active for purposes of the 

Municipal Advisor Professional Fee and would not 

be counted in the January 31st calculation regarding 

the assessment of the Municipal Advisor 

Professional Fee. 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication by August 15, 2022. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. 

Please direct your written comment to 

David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: June 9, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12848 Filed 6–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–332, OMB Control No. 

3235–0378] 

Proposed Collection; Comment 

Request: Extension; Form F–8 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Form F–8 (17 CFR 239.38) may be 

used to register securities of certain 

Canadian issuers under the Securities 

Act of 1933 (15 U.S.C. 77a et seq.) that 

will be used in an exchange offer or 

business combination. The information 

collected is intended to ensure that the 

information required to be filed by the 

Commission permits verification of 

compliance with securities law 

requirements and assures the public 

availability of such information. We 

estimate that Form F–8 takes 

approximately one hour per response to 

prepare and is filed by approximately 5 

respondents. We estimate that 25% of 

one hour per response (15 minutes) is 

prepared by the company for a total 

annual reporting burden of one hour (15 

minutes/60 minutes per response × 5 

responses = 1.25 hours rounded to the 

nearest whole number one hour). 

Written comments are invited on: (a) 

whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden imposed by the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication by August 15, 2022. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. 

Please direct your written comment to 

David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: June 9, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12849 Filed 6–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95075; File No. SR–MSRB– 

2022–03] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of a Proposed 

Rule Change To Amend Certain Rates 

of Assessment for Rate Card Fees 

Under MSRB Rules A–11 and A–13, 

Institute an Annual Rate Card Process 

for Future Rate Amendments, and 

Provide for Certain Technical 

Amendments to MSRB Rules A–11, A– 

12, and A–13 

June 9, 2022. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

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

thereunder,2 notice is hereby given that 

on June 2, 2022 the Municipal 

Securities Rulemaking Board (‘‘MSRB’’ 

or ‘‘Board’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the MSRB. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The MSRB filed with the Commission 

a proposed rule change to amend: 

(i) Rule A–11, on assessments for 

municipal advisor professionals, to 

modify the rate of assessment for the 

annual professional fee for each person 

associated with a municipal advisory 

firm who is qualified as a municipal 

advisor representative in accordance 

with Rule G–3, on professional 

qualification requirements, and for 

whom the municipal advisory firm has 

an active Form MA–I on file with the 

Commission as of January 31st of each 

year (each individual being a ‘‘covered 

professional’’ and such fee amount on 

each covered professional the 

‘‘Municipal Advisor Professional 

Fee’’); 3

(ii) Rule A–13, on underwriting and 

transaction assessments for brokers, 

dealers, and municipal securities 

dealers (collectively, ‘‘dealers’’), to 

modify the rate of assessments on 


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4As further described herein, the proposed rule 

change would provide a technical amendment to 

Rule A–13 to change the terminology for this fee 

from ‘‘technology fee’’ to ‘‘trade count fee.’’ To 

avoid confusion, the proposed rule change utilizes 

the amended name except as context requires for 

clarity, such as describing this specific technical 

amendment and providing certain historical 

revenue data in Exhibit 3. See discussion infra 

entitled ‘‘Technical Amendments to Rule A–13 and 

Related Cross-References.’’ 

5Underwriting assessments charged pursuant to 

Rule A–13(c)(ii) to certain dealers acting as 

underwriters of municipal fund securities are not 

included in the Market Activity Fees that would be 

amended by this proposed rule change. 

6The MSRB has designated the Rate Card 

Amendments as establishing or changing a due, fee, 

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

Act (15 U.S.C. 78s(b)(3)(A)(ii)) and Rule 19b–4(f)(2) 

(17 CFR 240.19b–4(f)(2)) thereunder. The MSRB has 

designated the Technical Amendments as being 

immediately effective upon filing pursuant to 

Section 19(b)(3)(A)(iii) of the Exchange Act (15 

U.S.C. 78s(b)(3)(A)(iii)) and Rule 19b–(f)(6) (17 CFR 

240.19b–4(f)(6)) thereunder. 

7See discussion infra under ‘‘Proposed Annual 

Rate Card Approach.’’ As further described therein, 

the Board presently anticipates filing proposed rule 

changes with the Commission to amend the rates 

of assessment of the Rate Card Fees on an annual 

basis going forward, as applicable, with the first set 

of such amendments filed with the Commission 

prior to or in the last quarter of calendar year 2023 

to become operative on January 1, 2024. 

8See Section 15B(b)(2)(J) of the Act (15 U.S.C. 

78o–4(b)(2)(J)). 

9Unlike these anticipated future amendments, 

the Rate Card Amendments for Fiscal Year 2023 are 

expected to be effective for a 15-month period from 

October 1, 2022 to December 31, 2023. 

10See Section 15B(b)(2)(J) of the Act (15 U.S.C. 

78o–4(b)(2)(J)). 

11 Id. 

dealers for certain underwriting, 

transaction, and trade count fees 4

(collectively, the ‘‘Market Activity Fees’’ 

and, such Market Activity Fees together 

with the Municipal Advisor 

Professional Fee, the ‘‘Rate Card 

Fees’’); 5 and 

(iii) Rule A–11, Rule A–12, on 

registration, and Rule A–13 to provide 

greater regulatory clarity for the 

assessment of fees on municipal 

securities brokers, municipal securities 

dealers, and municipal advisors 

(collectively, ‘‘MSRB regulated 

entities’’) under these rules. 

The proposed amendments to the 

rates of assessment of the Rate Card Fees 

are referred to as the ‘‘Rate Card 

Amendments.’’ The Rate Card 

Amendments would effectuate the Rate 

Card Fees in accordance with the 

following table. 

Basis Proposed rate 

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

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

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

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

The proposed technical amendments to 

Rule A–11, Rule A–12, and Rule A–13 

are referred to as the ‘‘Technical 

Amendments.’’ The Rate Card 

Amendments and the Technical 

Amendments together are referred to as 

the ‘‘proposed rule change.’’ 

The MSRB has designated the 

proposed rule change for immediate 

effectiveness.6 The Rate Card 

Amendments and the Technical 

Amendments are designated to have an 

operative date of October 1, 2022. The 

Board currently anticipates the 

amended Rate Card Fees proposed by 

the Rate Card Amendments to be 

operative for a period of fifteen months 

from October 1, 2022 to December 31, 

2023 and an amended set of Rate Card 

Fees to become operative on January 1, 

2024 in accordance with a subsequent 

proposed rule change and the internal 

rate setting process described herein.7

The text of the proposed rule change 

is available on the MSRB’s website at 

www.msrb.org/Rules-andInterpretations/SEC-Filings/2022- 

Filings.aspx, at the MSRB’s principal 

office, and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

MSRB included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. The MSRB has 

prepared summaries, set forth in 

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

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the Rate Card 

Amendments is to amend the rate of 

assessment for the Board’s Rate Card 

Fees effective on October 1, 2022. The 

description of the Rate Card 

Amendments also provides 

transparency regarding the internal 

process for how the Board intends to 

amend such fees on an annual basis 

going forward. Specifically, subsequent 

to this proposed rule change, and 

commencing with the filing of a 

proposed rule change prior to or in the 

last quarter of calendar year 2023, the 

Board anticipates filing a proposed rule 

change with the Commission each year 

to effectuate an ‘‘Annual Rate Card’’ that 

would revise the Rate Card Fees as 

necessary or appropriate to defray the 

costs and expenses of operating and 

administering the Board.8 The MSRB 

anticipates filing such proposed rule 

changes to be effective as of January 1 

each calendar year and operative until 

December 31 for that year.9 In addition 

to the proposed Rate Card Amendments, 

the proposed rule change also proposes 

the Technical Amendments to Rule A– 

11, Rule A–12, and Rule A–13 to 

provide greater regulatory clarity for the 

assessment of fees on MSRB regulated 

entities under these rules. 

Purpose and Description of the Rate 

Card Amendments 

As a self-regulatory organization, the 

Board discharges its statutory mandate 

under the Exchange Act by establishing 

rules for regulated entities, enhancing 

the transparency of the municipal 

securities market through technology 

systems, and publicly disseminating 

data about the municipal securities 

market. The Board funds its activities 

primarily through the assessment of fees 

and charges on regulated entities as is 

necessary or appropriate to defray the 

costs and expenses of operating and 

administering the Board.10 The Board 

independently manages and monitors 

its financial position on an ongoing 

basis to ensure that the organization has 

sufficient revenue and organizational 

reserves to maintain its operations in 

accordance with the Act,11 without 

interruption, even in economic 

downturns and other unforeseen 

circumstances. 

Current Fee Structure 

The Board has previously established, 

and currently applies, the following fee 


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12The Market Activity Fees listed do not indicate 

the current temporary fee reductions that expire on 

September 30, 2022. See Rule A–13(h) (specifying 

a temporary underwriting assessment of .00165% 

($0.0165 per $1,000) of the par value; a temporary 

transaction assessment of .0006% ($0.006 per 

$1,000) of the par value; and a temporary 

technology assessment of $0.60 per transaction); see 

also Exchange Act Release No. 91247 (Mar. 3, 

2021), 86 FR 13593 (Mar. 9, 2021) File No. SR– 

MSRB–2021–02 (hereinafter, ‘‘2021 Temporary Fee 

Reduction’’). Consistent with the language of the 

2021 Temporary Fee Reduction, these reduced fee 

rates will expire on September 30, 2022; and the 

related rule text would be deleted effective as of 

October 1, 2022 by operation of the Technical 

Amendments proposed herein. 

13Current Rule A–11(a)(i). 14Rule A–12(b). Initial registration assessments 

charged pursuant to Rule A–12(b) are not included 

in the Rate Card Fees that would be amended by 

this proposed rule change. Given that the amount 

of the initial registration fee historically has been 

set with the intention of defraying a significant 

portion of the administrative and operational costs 

associated with the processing of a regulated 

entity’s initial registration, the Board determined 

that, at this time, it was not beneficial or necessary 

to incrementally adjust such fees each year through 

an annual rate setting process. See Exchange Act 

Release No. 75751 (Aug. 24, 2015), 80 FR 52352 

(Aug. 28, 2015) File No. SR–MSRB–2015–08 

(stating the initial registration fee is to help defray 

a significant portion of the administrative and 

operational costs associated with processing an 

initial registration). See also discussion infra under 

‘‘Board Review of the Current Fee Structure’’ and 

‘‘Proposed Annual Rate Card Approach.’’ 

15Rule A–12(c). Annual registration assessments 

charged pursuant to Rule A–12(c) are not included 

in the Rate Card Fees that would be amended by 

this proposed rule change. Given that the rate of 

assessment for the annual registration fee is 

intended to serve as a fixed, baseline contribution 

from all registered regulated entities, irrespective of 

a regulated entity’s actual total market activities, the 

Board determined that, at this time, it was not 

beneficial or appropriate to incrementally adjust 

such fees each year through an annual rate setting 

process. See also discussion infra under ‘‘Board 

Review of the Current Fee Structure’’ and 

‘‘Proposed Annual Rate Card Approach.’’ 

16Rule A–11(b) and Rule A–12(d). As discussed 

herein, the Technical Amendments would remove 

the current reference in Rule A–12(d) to late fees 

for payments due pursuant to Rule A–13 and 

incorporate this concept into Rule A–13. See Rule 

A–12(d) (‘‘Any broker, dealer, municipal securities 

dealer or municipal advisor that fails to pay any fee 

assessed under this rule or Rule A–13 within 30 

days of the invoice date shall pay a monthly late 

fee of $25 and a late fee on the overdue balance, 

computed according to the Prime Rate, as provided 

for in the MSRB Registration Manual, until paid.’’ 

(emphasis added)). 

17Current Rule A–13(c)(i). 

18Current Rule A–13(c)(ii). Assessments charged 

pursuant to Rule A–13(c)(ii) related to certain 

municipal fund securities are not included in the 

Rate Card Fees that would be amended by this 

proposed rule change. The basis upon which the 

municipal funds underwriting fee is assessed (i.e., 

the total aggregate assets for the reporting period) 

is not subject to the same type of volatility as the 

Market Activity Fees, but instead is expected to 

generally continue to grow over time. For example, 

municipal funds underwriting fee revenue 

amounted to approximately $1,332,000 in Fiscal 

Year 2021, approximately $1,167,000 in Fiscal Year 

2020, and approximately $991,000 in Fiscal Year 

2019. See MSRB 2021 Annual Report, available at 

https://www.msrb.org/-/media/Files/Resources/ 

MSRB-2021-Annual-Report.ashx?. As a result, the 

Board determined that, at this time, it was not 

beneficial or necessary to incrementally adjust the 

rate of assessment each year through an annual rate 

setting process. See discussion infra under ‘‘Board 

Review of the Current Fee Structure’’ and 

‘‘Proposed Annual Rate Card Approach.’’ 

19Rule A–13(d)(i) (transaction fee on inter-dealer 

sales) and Rule A–13(d)(ii) (transaction fee on 

customer sales). 

20As further described herein, the proposed rule 

change would provide a technical amendment to 

this provision of Rule A–13 to rename this fee to 

the ‘‘trade count fee.’’ 

21Rule A–13(d)(vi). 

22Rule A–16. Assessments charged pursuant to 

Rule A–16 related to such examination fees are not 

included in the Rate Card Fees that would be 

amended by this proposed rule change. Given that 

the rate of assessment for the examination fee 

historically has been set with the intention of 

defraying a portion of the overall costs of the 

MSRB’s professional qualification and testing 

program, the Board determined that, at this time, it 

was not beneficial or necessary to incrementally 

adjust the rate of assessment of such fee each year 

through an annual rate setting process. See 

Exchange Act Release No. 85135 (Feb. 14, 2019), 84 

FR 5513 (Feb. 21, 2019) File No. SR–MSRB–2019– 

02 (stating the examination fee is intended to 

partially offset the overall program costs to the 

MSRB of its professional qualification and testing 

program). See also discussion infra under ‘‘Board 

Review of the Current Fee Structure’’ and 

‘‘Proposed Annual Rate Card Approach.’’ 

23Fine revenue became a revenue source as first 

provided in 2010 under the Dodd-Frank Wall Street 

Reform and Consumer Protection Act (the ‘‘DoddFrank Act’’). See 15 U.S.C. 78o–4(c)(9). 

24The MSRB charges data subscription service 

fees for subscribers, including regulated entities and 

non-regulated entities, seeking direct electronic 

delivery of municipal trade data and disclosure 

documents associated with municipal bond issues. 

This information is also available without direct 

electronic delivery on the EMMA website without 

charge. 

25For example, fine-sharing revenue amounted to 

approximately 0.9% of the MSRB’s overall revenue 

in Fiscal Year 2021 (or approximately $322,000), 

3.3% in Fiscal Year 2020 (or approximately $1.5 

million), and 0.4% (or approximately $151,000) in 

Fiscal Year 2019. See MSRB 2021 Annual Report, 

available at https://www.msrb.org/-/media/Files/ 

Resources/MSRB-2021-Annual-Report.ashx?. Given 

that this revenue is collected by FINRA and the SEC 

for violations of MSRB rules and the fact that the 

Board does not set the rates of assessment for the 

collection of such fines, the Board does not believe 

that it is appropriate to separately consider finesharing revenue for potential rebates to regulated 

entities by operation of the proposed Annual Rate 

Cards and the annual rate setting process. 

26While engaging in the Fee Review, and 

consistent with the MSRB Funding Policy, the 

Board considered how potential modifications to 

assessments on regulated entities to 

ensure the MSRB’s ongoing operations 

(the ‘‘current fee structure’’): 12

(i) Municipal Advisor Professional 

Fee: A fee of $1,000 for each covered 

professional as of January 31 of each 

year; 13

(ii) Initial Registration Fee: A $1,000 

one-time registration fee to be paid by 

each dealer to register with the MSRB 

before engaging in municipal securities 

activities and by each municipal advisor 

to register with the MSRB before 

engaging in municipal advisory 

activities; 14

(iii) Annual Registration Fee: A 

$1,000 annual fee to be paid by each 

dealer and municipal advisor registered 

with the MSRB; 15

(iv) Late Fee: A $25 monthly late fee 

and a late fee on the overdue balance 

(computed according to the prime rate) 

until paid on balances not paid within 

30 days of the invoice date by the dealer 

or municipal advisor; 16

(v) Underwriting Fee: A fee amount of 

$.0275 per $1,000 of the par value paid 

by a dealer on all municipal securities 

purchased from an issuer by or through 

such dealer, whether acting as principal 

or agent as part of a primary offering 

(the ‘‘Underwriting Fee’’); 17

(vi) Municipal Funds Underwriting 

Fee: A fee amount of $.005 per $1,000 

of the total aggregate assets for the 

reporting period (i.e., the 529 savings 

plan fee on underwriters), in the case of 

an underwriter (as defined in Rule G– 

45) of a primary offering of certain 

municipal fund securities; 18

(vii) Transaction Fee: A fee amount of 

.001% ($.01 per $1,000) of the total par 

value to be paid by a dealer, except in 

limited circumstances, for inter-dealer 

sales and customer sales reported to the 

MSRB pursuant to Rule G–14(b), on 

transaction reporting requirements (the 

‘‘Transaction Fee’’); 19

(viii) Technology Fee: 20 A fee of $1.00 

paid per transaction by a dealer for each 

inter-dealer sale and for each sale to 

customers reported to the MSRB 

pursuant to Rule G–14(b) (the ‘‘Trade 

Count Fee’’); 21 and 

(ix) Examination Fee: A $150 test 

development fee assessed per candidate 

for each MSRB examination.22

In addition to these fees assessed on 

regulated entities, the Board also 

receives revenues from certain other 

sources, such as investment income, 

regulatory fine sharing,23 and MSRB 

data subscription fees.24 These revenue 

sources contribute a much smaller 

portion to the overall MSRB funding.25

Board Review of the Current Fee 

Structure 

Early in Fiscal Year 2021, the Board 

determined that it should review the 

current fee structure in relation to the 

MSRB’s long term financial position and 

near-term anticipated funding needs 

(the ‘‘Fee Review’’). Through its Fee 

Review, the Board sought to identify 

potential improvements to the MSRB’s 

current fee structure that would: (i) 

maintain a fair and equitable balance of 

reasonable fees and charges among 

regulated entities; 26 (ii) mitigate the 


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the current fee structure would impact the diversity 

of the MSRB’s funding sources. See MSRB Funding 

Policy, available at https://www.msrb.org/AboutMSRB/Financial-and-Other-Information/FinancialPolicies/Funding-Policy (hereinafter, the ‘‘MSRB 

Funding Policy’’) (stating that the ‘‘MSRB strives to 

diversify funding sources among regulated entities 

and other entities that fund MSRB services in a 

manner that ensures long-term sustainability, 

seeking to achieve an equitable balance among 

regulated entities and a fair allocation of the costs 

of systems and services among other users and 

regulated entities to the extent allowed by law.’’) 

27Market Activity Fees are driven by market 

dynamics and are inherently unpredictable. 

Because of this unpredictability, the amount of 

Market Activity Fees collected by the MSRB has 

often exceeded the amount budgeted in recent fiscal 

years. The MSRB’s Financial Statements for recent 

fiscal years are available at http://msrb.org/AboutMSRB/Financial-and-Other-Information/AnnualReports.aspx. See ‘‘Chart 2—Historical Budget vs. 

Actual Revenue for the Rate Card Fees’’ and ‘‘Chart 

4—Rate Card Fees: Historical Activity Volume 

Variance Budget to Actual.’’ 

28The Board established a reserves target to 

ensure that the organization maintains a prudent 

level of financial resources to fund operations and 

ensure the long-term financial sustainability of the 

organization, taking into consideration a range of 

reasonably foreseeable market conditions and 

expected expenditures over a three-year time 

horizon. The reserves target is determined after 

conducting a detailed and comprehensive analysis 

of the liquidity needs in four categories: (1) working 

capital, (2) risk reserves, (3) strategic investment 

reserves, and (4) regulatory reserves. See MSRB 

Funding Policy (link at note 26 supra) (these four 

categories are identified in the discussion under 

‘‘Reserve Considerations’’). The Board reviews and 

adjusts the reserves target on an annual basis to 

ensure that it remains appropriately aligned with 

the organization’s needs. See MSRB Fiscal Year 

2022 Budget for a further discussion of the MSRB’s 

budget and reserves, available at https://

www.msrb.org/-/media/Files/Resources/MSRB-FY2022-Budget-Summary.ashx?. 

29See, e.g., Exhibit 3, ‘‘Chart 8—Historical Actual 

Expenses,’’ ‘‘Chart 10—Historical and Projected 

Revenue without Rate Card Model Compared to 

Historical and Pro Forma Expenses,’’ ‘‘Chart 11— 

Historical and Projected Revenue with Rate Card 

Model Compared to Historical and Pro Forma 

Expenses.’’ 

30The Board considered market data from various 

external and internal sources, such as the Texas 

Bond Review Board State and Local Annual Reports 

(http://www.brb.state.tx.us/publications.aspx), the 

California State Treasurer’s Office—California Debt 

and Investment Advisory Commission (CDIAC) 

(https://data.debtwatch.treasurer.ca.gov/ 

Government/CDA-All-Data/yng6-vaxy), primary 

market data included in official statements and 

other offering documents, and trading and other 

secondary market data. See also, e.g., the MSRB’s 

published Fact Books, which provide various 

historical data sets related to market activities, such 

as the distribution of municipal trades by dealers, 

available at https://www.msrb.org/MarketTransparency/Market-Data-Publications/MSRBFact-Book.aspx. 

31See, e.g., Exhibit 3, ‘‘Chart 9—Historical 

Budgeted Expense by Function.’’ 

32See Exhibit 3, ‘‘Chart 1—Historical Revenue 

Variances: Budget vs. Actual’’ and ‘‘Chart 2— 

Historical Budget vs. Actual Revenue for the Rate 

Card Fees.’’ 

33As non-exhaustive examples, the Board 

considered fee distribution across the business 

models of: (i) small, medium, and large firms, (ii) 

dually registered firms versus firms registered only 

as dealers or municipal advisors, and (iii) firms that 

engage in underwriting activities versus secondary 

market activities. See also Exhibit 3, ‘‘Chart 14— 

Distribution of Registrants by Range of Total Fees 

Assessed Under Current Fee Structure Compared to 

Projected Distribution Under the Rate Card Model 

(Exclusive of Late Fees and Examination Fees).’’ 

34See, e.g., MSRB Notice 2020–19: ‘‘MSRB 

Requests Input on Strategic Goals and Priorities’’ 

(Dec. 7, 2020), available at https://msrb.org/-/ 

media/Files/Regulatory-Notices/RFCs/2020- 

19.ashx??n=1, and related stakeholder comments 

(hereinafter, the ‘‘Stakeholder Comments to the 

MSRB’s Strategic Priorities’’), available at https://

msrb.org/Rules-and-Interpretations/RegulatoryNotices/2020/2020-19?c=1. See also, e.g., comments 

provided on Exchange Act Release No. 87075 (Sep. 

24, 2019), 84 FR 51698 (Sep. 30, 2019) File No. SR– 

MSRB–2019–11, available at https://www.sec.gov/ 

comments/sr-msrb-2019-11/srmsrb201911.htm, and 

comments provided on Exchange Act Release No. 

81264 (July 31, 2017), 82 FR 36472 (Aug. 4, 2017) 

File No. SR–MSRB–2017–05, available at https://

www.sec.gov/comments/sr-msrb-2017-05/ 

msrb201705.htm. 

35See, e.g., Exhibit 3, ‘‘Chart 1—Historical 

Revenue Variances: Budget vs. Actual’’ and ‘‘Chart 

2—Historical Budget vs. Actual Revenue for the 

Rate Card Fees.’’ 

36See Exhibit 3, ‘‘Chart 1—Historical Revenue 

Variances: Budget vs. Actual,’’ ‘‘Chart 2—Historical 

Budget vs. Actual Revenue for the Rate Card Fees,’’ 

and ‘‘Chart 4—Rate Card Fees: Historical Activity 

Volume Variance Budget to Actual.’’ Relatedly, the 

Board determined that such recurring variances 

could not be fully addressed with further 

refinements to the MSRB’s budgeting process; 

rather, the variances were inherent to the 

imprecision associated with budgeting future 

market volumes related to underwriting and trading 

activity that exists within the overall dynamic of 

the municipal securities market. 

37Compare, e.g., Exhibit 3, ‘‘Chart 2—Historical 

Budget vs. Actual Revenue for the Rate Card Fees,’’ 

Chart 5—Historical Effective Fee Rate Changes’’ and 

‘‘Chart 12—Total Reserves vs. Target: Historical and 

Projected without Rate Card Model.’’ 

impact of market volatility on the 

amount of fee revenue actually paid 

each year 27 and, correspondingly, 

facilitate the Board’s ability to manage 

the amount held by the MSRB in 

organizational reserves year-to-year; 28

and (iii) prudently fund the MSRB’s 

anticipated near-term operating 

expenses.29

Maintaining a Fair and Equitable 

Balance of Fees. As part of its Fee 

Review, the Board evaluated the 

MSRB’s current fee structure to 

determine whether the fees and charges 

assessed upon regulated entities remain 

reasonable, fair, and equitable. Among 

other factors considered during the Fee 

Review, the Board: (i) analyzed publicly 

available data on the revenue models of 

dealers and municipal advisors across 

geographic areas; 30 (ii) examined MSRB 

expense allocations to inform its 

understanding of how much of the 

MSRB’s expense budget relates to 

various activities; 31 (iii) evaluated 

historical budgeted revenue versus 

actual revenues generated for the 

existing fee categories; 32 (iv) gauged the 

MSRB’s fee distribution across varying 

business models of dealer and 

municipal advisory firms; 33 and (v) 

deliberated upon feedback from 

stakeholder discussions and prior 

written comments on the topic of the 

MSRB’s fees and expenses.34

Based on these factors considered, the 

Board found that the current fee 

structure—including the basis on which 

fees are assessed and the relative 

contribution of revenue from each of the 

current fees assessed on regulated 

entities—overall remains reasonable, 

fair, and equitable. However, as further 

discussed below, the Board also 

determined that the current fee structure 

could be improved with certain process 

changes and targeted rule amendments 

to address the challenges associated 

with (i) the revenue impact of market 

volatility and (ii) the MSRB’s 

anticipated near-term funding needs. 

Mitigating the Impact of Market 

Volatility. As part of the Fee Review, the 

Board analyzed the historical revenue 

generated under the MSRB’s current fee 

structure as compared to the historical 

amounts budgeted over the same fiscal 

years.35 While the various fees actually 

paid by regulated entities have, in some 

recent fiscal years, marginally exceeded 

or underperformed their budgeted 

amounts, the Board found that the 

amount of the three Market Activity 

Fees actually collected have often 

exceeded their annual budget targets by 

more than marginal amounts.36 The 

Board also found that the recurring 

variances between budgeted amounts 

and actual amounts of Market Activity 

Fees collected directly contributed to 

the periodic build-up of excess reserves 

and, consequently, precipitated the 

need for the MSRB to use rebates or 

temporary fee reductions as a 

mechanism to rightsize organizational 

reserve positions back to the Board’s 

target.37 Based on these causal links 

between fluctuations in market activity 

year-to-year, variances in the amount of 

Market Activity Fees actually collected 

versus budgeted amounts, and the need 

for rebates or temporary fee reductions 

to rightsize organizational reserves, the 

Board prioritized the identification of 

alternative fee approaches that would 

better mitigate the impact of the 

inevitable, year-to-year fluctuations in 

activity in the municipal securities 

market. 

After considering alternatives, the 

Board first determined that the 

Municipal Advisor Professional Fee and 

the current set of Market Activity Fees— 

i.e., Underwriting Fees, Transaction 

Fees, and Trade Count Fees—remain the 

most reasonable and practical 

mechanisms for assessing fees on 

regulated entities and so should not be 

replaced with alternative fee 


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38See also related discussion infra under ‘‘SelfRegulatory Organization’s Statement on Burden on 

Competition—Baseline and Reasonable Alternative 

Approaches.’’ 39The Board considers the distribution of its fees 

among regulated entities of differing sizes, 

complexities, and business models and strives for 

proportionality in the distribution of fees as much 

as feasible within the broader set of considerations 

described in the MSRB Funding Policy. See, e.g., 

related discussion supra under ‘‘Board Review of 

the Current Fee Structure—Maintaining a Fair and 

Equitable Balance of Fees’’ and Exhibit 3, ‘‘Chart 

14—Distribution of Registrants by Range of Total 

Fees Assessed Under Current Fee Structure 

Compared to Projected Distribution Under the Rate 

Card Model (Exclusive of Late Fees and 

Examination Fees).’’ See also Release No. 34–87075 

(Sep. 24, 2019), 84 FR 51698 (Sep. 30, 2019) File 

No. SR–MSRB–2019–11 (providing for increases to 

the Municipal Advisor Professional Fee and 

discussing the superiority of maintaining the 

Municipal Advisor Professional Fee in light of 

possible alternatives that would require creating a 

novel and, therefore, likely more burdensome 

reporting requirement). 

40See related discussion infra under ‘‘Proposed 

Annual Rate Card Approach—Limitations on Rate 

Changes to Promote Predictability and Stability’’ 

(discussing various limitations on future increases 

of the Rate Card Fees). See also Exhibit 3, ‘‘Chart 

5—Historical Effective Fee Rate Changes.’’ 

41Specific to the scope of the Board’s near-term 

funding analysis, the Board considered various 

funding scenarios for Fiscal Year 2023 through 

Fiscal Year 2025. See, e.g., Exhibit 3, ‘‘Chart 8— 

Historical Actual Expenses’’ (showing a ten-year 

historical compound annual growth rate of 4.2%), 

‘‘Chart 10—Historical and Projected Revenue 

without Rate Card Model Compared to Historical 

and Pro Forma Expenses,’’ ‘‘Chart 11—Historical 

and Projected Revenue with Rate Card Model 

Compared to Historical and Pro Forma Expenses.’’ 

42See Exhibit 3, ‘‘Chart 8—Historical Actual 

Expenses.’’ 

43See, e.g., ‘‘Controlling Expenses’’ in MSRB 

Fiscal Year 2022 Budget at page 12 and related 

discussion, available at https://msrb.org/-/media/ 

Files/Resources/MSRB-FY-2022-BudgetSummary.ashx?. See also Exhibit 3, ‘‘Chart 6— 

Historical Expense Variances: Budget vs. Actual.’’ 

44The MSRB’s Strategic Plan—Fiscal Years 2022– 

25 is available at https://msrb.org/-/media/Files/ 

Resources/MSRB-Strategic-Plan-2022-2025.ashx? 

(the ‘‘Strategic Plan’’). 

45See Exhibit 3, ‘‘Chart 6—Historical Expense 

Variances: Budget vs. Actual’’ and ‘‘Chart 9— 

Historical Budgeted Expense by Function.’’ 

46See, e.g., Stakeholder Comments to the MSRB’s 

Strategic Priorities (link at note 34 supra). 

47 Id. 

48The MSRB notes that its anticipated 

expenditures for the near-term fiscal years beyond 

Fiscal Year 2023 are subject to greater uncertainty 

caused by the higher potential for changing 

circumstances and, correspondingly, its budgetary 

assumptions for these years are also less certain. 

49See Exhibit 3, ‘‘Chart 8—Historical Actual 

Expenses.’’ 

mechanisms. The Board came to this 

determination primarily because it 

continues to believe that the respective 

mechanisms for assessing the Municipal 

Advisor Professional Fee and the Market 

Activity Fees remain superior to 

potential alternatives—some of which 

may require significantly more 

burdensome firm reporting to achieve 

comparatively greater precision in the 

alignment of the total amount of the fees 

assessed on a given firm with such 

firm’s total regulated activities; 38 and, 

therefore, these fee mechanisms remain 

the best option among alternatives to 

ensure that the amount of the Municipal 

Advisor Professional Fees and Market 

Activity Fees paid by a given firm is 

both (i) appropriately balanced to the 

burdens and benefits of the MSRB’s 

regulatory and transparency activities, 

and also (ii) generally proportional to 

the differing resources devoted to the 

regulation of firms with different 

business models and differing degrees of 

complexity.39 These existing fee 

methods also have the advantage of 

being established mechanisms for 

assessing fees on regulated entities; and, 

in this regard, the Board believes that 

maintaining this current set of fee 

methods is more advantageous than 

other alternatives because firms already 

understand and have embedded such 

assessments into their business 

operations. 

While the Board determined that the 

mechanisms for assessing the Municipal 

Advisor Professional Fee and the Market 

Activity Fees should not be replaced, 

the Board also determined it would be 

beneficial to refine its approach to 

review and amend these fee rates for 

each calendar year on an annual basis 

going forward. Specifically, to avoid the 

MSRB accumulating excess reserves 

through the collection of fee revenue 

above budgeted amounts over multiple 

fiscal years and then utilizing short-term 

fee reductions to return the excess 

revenues to the regulated entities who 

paid the fees, the Board is proposing to 

review and incrementally refine the 

rates of assessment for each of these fees 

each year. This revised approach would 

more closely align the rates of 

assessment for the Municipal Advisor 

Professional Fee and the Market 

Activity Fees to the MSRB’s annual 

revenue requirements, including by 

factoring revenue surpluses and 

shortfalls against budgeted amounts for 

each of these fees from the prior year 

directly into the annual rate calculation 

process. As further described in the 

section below entitled ‘‘Proposed 

Annual Rate Card Approach,’’ the 

Board’s proposed approach would (i) 

better mitigate the impact of market 

volatility on the MSRB’s revenue 

structure (and, consequently, also better 

mitigate the impact of market volatility 

on the MSRB’s organizational reserves), 

and (ii) maintain rates within a 

reasonably predictable range that, while 

subject to more incremental changes 

each year, would be comparably more 

stable over the long term than the 

MSRB’s current fee structure.40

Funding the MSRB’s Anticipated 

Near-Term Operating Expenses. In 

addition to analyzing the impact of 

variable market activity as part of its Fee 

Review, the Board also analyzed the 

MSRB’s current budget projections for 

Fiscal Year 2023 and the anticipated 

funding needs in the near term beyond 

Fiscal Year 2023.41 Specific to the 

projections for Fiscal Year 2023, the 

MSRB’s pro forma estimate currently 

anticipates an operating deficit for the 

twelve-month period, based on 

preliminary projected expenses and 

projected revenue under the current fee 

structure (and without the Rate Card 

Amendments). Beyond Fiscal Year 

2023, the Board assumed at least modest 

expense growth in the near-term fiscal 

years in line with the MSRB’s ten-year 

compound annual growth rate,42

particularly in consideration of the 

current impacts of inflation and other 

key expenses associated with 

modernizing and operating the MSRB’s 

technology systems. Based on these 

budgetary expectations, the Board 

analyzed options for how expense 

control and additional revenue 

generation could address both the 

projected operating deficit for Fiscal 

Year 2023 and the likelihood of expense 

growth in future near-term fiscal years. 

In terms of expense control, the MSRB 

remains committed to responsibly 

managing expenses and aligning its 

resources to the fulfillment of the 

Board’s statutory mandate.43

Accordingly, the Board reviewed 

anticipated expenses against various 

factors, including (i) the MSRB’s 

‘‘Strategic Plan—Fiscal Years 2022– 

2025;’’ 44 (ii) actual historical expenses 

versus budgeted expenses for certain 

activities; 45 and (iii) stakeholder 

feedback and comments.46 Based on 

these and other aspects of its Fee 

Review, the Board determined that the 

MSRB’s Strategic Plan should serve as 

the main budgetary guidepost for how 

the MSRB allocates its limited resources 

and resolves competing fiscal priorities, 

particularly because various 

stakeholders provided significant 

written input regarding the Strategic 

Plan.47 Consequently, the Board 

determined that the MSRB’s 

expenditures in Fiscal Year 2023 and 

future near-term fiscal years generally 

should align with the expenses 

necessary to discharge its statutory 

mandate in accordance with the 

Strategic Plan.48 As a result, at least 

modest expense growth, in line with the 

MSRB’s ten-year compound annual 

growth rate,49 is assumed given various 


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50See Exhibit 3, ‘‘Chart 10—Historical and 

Projected Revenue without Rate Card Model 

Compared to Historical and Pro Forma Expenses’’ 

and ‘‘Chart 11—Historical and Projected Revenue 

with Rate Card Model Compared to Historical and 

Pro Forma Expenses.’’ 

51See, e.g., letter from Mike Nicholas, Chief 

Executive Officer, Bond Dealers of America 

(‘‘BDA’’), (Jan. 11, 2021) (hereinafter, the ‘‘BDA 

Comment Letter’’) (responding to the MSRB’s 

Request for Input on Strategic Goals and Priorities 

and stating ‘‘[w]e strongly urge the Board to take a 

comprehensive look at its finances with the goal of 

once and for all establishing a funding mechanism 

that fairly allocates the MSRB’s expenses among 

regulated entities and does not assess the industry 

for more money than the MSRB needs’’), available 

at https://www.msrb.org/rfc/2020-19/ 

Dbamerica.pdf. 

52See Exhibit 3, ‘‘Chart 12—Total Reserves vs. 

Target: Historical and Projected without Rate Card 

Model’’ and ‘‘Chart 13—Total Reserves vs. Target: 

Historical and Projected with Rate Card Model.’’ 

53See the 2021 Temporary Fee Reduction 

(citation and link at note 12 supra); Release No. 34– 

85400 (Mar. 22, 2019), 84 FR 11841 (Mar. 28, 2019) 

File No. SR–MSRB–2019–06 (providing for a 

temporary fee reduction); and Release No. 34–83713 

(July 26, 2018), 83 FR 37538 (Aug. 1, 2018) File No. 

SR–MSRB–2018–06 (providing for a temporary fee 

reduction). See also Exhibit 3, ‘‘Chart 1—Historical 

Revenue Variances: Budget vs. Actual,’’ ‘‘Chart 2— 

Historical Budget vs. Actual Revenue for the Rate 

Card Fees,’’ ‘‘Chart 5—Historical Effective Fee Rate 

Changes,’’ and ‘‘Chart 7—Historical Budgeted 

Revenue and Budgeted Expense.’’ 

54See the MSRB’s Fiscal Year 2022 Budget, at 

page 13 (discussing the MSRB’s system 

modernizations investments), available at https://

msrb.org/-/media/Files/Resources/MSRB-FY-2022- 

Budget-Summary.ashx?. See also, e.g., the MSRB’s 

2021 Annual Report, at page 2 (link at note 25 

supra); the MSRB’s 2020 Annual Report, at page 35 

(discussing certain modernization investment 

efforts), available at https://msrb.org/-/media/Files/ 

Resources/MSRB-2020-Annual-Report.ashx?; and 

the MSRB’s 2019 Annual Report, at page 11 

(discussing the MSRB’s cloud investments), 

available at https://msrb.org/-/media/Files/ 

Resources/MSRB-2019-Annual-Report.ashx?. 

55See Exhibit 3, ‘‘Chart 13—Total Reserves vs. 

Target: Historical and Projected with Rate Card 

Model.’’ 

56See Exhibit 3, ‘‘Chart 10—Historical and 

Projected Revenue without Rate Card Model 

Compared to Historical and Pro Forma Expenses,’’ 

‘‘Chart 11—Historical and Projected Revenue with 

Rate Card Model Compared to Historical and Pro 

Forma Expenses,’’ and ‘‘Chart 12—Total Reserves 

vs. Target: Historical and Projected without Rate 

Card Model,’’ and ‘‘Chart 13—Total Reserves vs. 

Target: Historical and Projected with Rate Card 

Model.’’ 

57Because of the expiration of the 2021 

Temporary Fee Reduction on September 30, 2022, 

the proposed rule change’s Annual Rate Card for 

Fiscal Year 2023 and the first quarter of Fiscal Year 

2024 will become effective on October 1, 2022, and, 

in this way, is intended to be operative for a fifteenmonth period running from October 1, 2022, to 

December 31, 2023. 

58As the proposed rule change is structured, a 

given Annual Rate Card would remain effective and 

operative until a subsequent proposed rule change 

amending such rates is filed, effective, and 

operative. As stated, the MSRB anticipates that 

subsequent Annual Rate Cards for future years will 

be filed with the Commission through a proposed 

rule change and the MSRB would seek to have such 

rates operative for twelve months running from 

January 1 to December 31 (i.e., a calendar-year 

basis). In order to execute the Annual Rate Card 

Process, the MSRB determined to establish the 

Annual Rate Card on a calendar-year basis. This 

allows the MSRB to determine any prior fiscal year 

variances and return excess revenue or assess 

revenue shortfalls through the new Rate Card Fees. 

Nevertheless, as changing fiscal circumstances may 

warrant, the MSRB will retain the flexibility to 

amend the rates of assessment specified by a given 

Annual Rate Card under this modified approach in 

accordance with applicable statutory requirements 

governing any such proposed rule change. 

59The proposed rule change would not amend 

the underlying activities that are the subject of such 

assessments. In other words, the respective volumes 

of underwriting and transaction activities of a 

dealer firm would continue to serve as the basis 

upon which Market Activity Fees are assessed 

under Rule A–13; and the number of covered 

professionals associated with a municipal advisory 

firm would continue to serve as the basis upon 

Continued 

considerations, including the current 

Strategic Plan’s emphasis on the 

modernization of the MSRB’s 

technology systems and the MSRB’s 

ongoing efforts to advance the quality, 

accessibility, security, and value of the 

MSRB’s market data for all participants 

in the municipal securities market. The 

Board will continue to actively monitor 

and manage its financial position to 

ensure prudent expense alignment to 

the MSRB’s statutory mandate and the 

corresponding objectives of the MSRB’s 

Strategic Plan. 

In terms of revenue, the Board 

determined that the current fee structure 

should be amended to increase total 

revenue and, thereby, reduce the 

likelihood of a near-term operating 

deficit for Fiscal Year 2023.50 The Board 

is proposing to raise this additional 

revenue in accordance with a new rate 

setting approach as described in the 

following section entitled ‘‘Proposed 

Annual Rate Card Approach.’’ The 

Board considered comments from 

regulated entities about the 

consequences associated with the MSRB 

collecting more fee revenue than needed 

and with the MSRB maintaining 

organizational reserves in excess of 

what is required.51 In response to such 

concerns, the Board has undertaken 

significant efforts to determine the level 

of organizational reserves needed and, 

correspondingly, refined and reduced 

its organizational reserves target.52 To 

bring the MSRB’s excess organizational 

reserves in-line with this refined target, 

the Board has intentionally budgeted 

operating deficits in recent fiscal years, 

primarily by temporarily reducing 

certain fees on regulated entities and, 

thereby, collecting less revenue as a 

result of those fee reductions.53 At the 

same time, the Board has designated 

funds from the MSRB’s organizational 

reserves for necessary multiyear systems 

modernization initiatives, which has 

further aligned organizational reserves 

to target.54 As a result of these efforts, 

the MSRB’s organizational reserves 

presently are on track to be aligned with 

the Board’s reserves target for Fiscal 

Year 2023.55 In this way, while the 

Board determined that additional 

funding is needed for Fiscal Year 2023, 

the Board also determined that such 

funding would be best obtained through 

an increase in fees as opposed to the 

further drawing down of organizational 

reserves below target.56

Proposed Annual Rate Card Approach 

Consistent with the Board’s analysis 

and conclusions discussed above, the 

Board proposes to amend the Municipal 

Advisor Professional Fee assessed 

pursuant to Rule A–11 and the Market 

Activity Fees assessed pursuant to Rule 

A–13 (i.e., the Rate Card Fees). 

Underlying the proposed textual 

amendments to Rule A–11 and Rule A– 

13 is a revised fee approach, whereby 

the Board anticipates reviewing the Rate 

Card Fees each year and modifying 

them through the filing of a proposed 

rule change with the Commission. In 

this way, the MSRB’s Annual Rate Cards 

will propose amended rates of 

assessment for each of the four fees on 

regulated entities that make up the Rate 

Card Fees (i.e., Underwriting Fees, 

Transaction Fees, Trade Count Fees, and 

Municipal Advisor Professional Fees). 

Subsequent to the Annual Rate Card 

described in this proposed rule 

change,57 the Board anticipates filing 

such proposed rule changes 

enumerating the Annual Rate Cards to 

be effective as of January 1st of each 

calendar year beginning with January 1, 

2024.58

The Annual Rate Card approach is 

expected to ensure the MSRB’s financial 

model remains sustainable, while (i) 

adequately funding future MSRB 

expenses and also (ii) providing a 

greater degree of flexibility than the 

MSRB’s current fee structure to mitigate 

the impact of market volatility (and 

effectively manage organizational 

reserve levels). The Annual Rate Card 

approach differs from the MSRB’s 

current approach by instituting a 

framework of more frequent, but also 

more incremental adjustments, to the 

four fees that generate the vast majority 

of the MSRB’s annual revenue. The 

increased frequency of the MSRB’s 

amendments to the Rate Card Fees is 

meant to avoid the accumulation of 

excess reserves resulting from 

additional revenue collected due to 

market volatility as compared to budget 

expectations and, thereby, the need for 

rate amendments in the form of more 

significant, ad hoc temporary fee 

reductions or rebates.59 To ensure that 


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which the rate of the Municipal Advisor 

Professional Fee is assessed under Rule A–11. Other 

fees assessed on regulated entities—specifically, the 

initial registration fee, annual registration fee, late 

fee, municipal funds underwriting fee, and 

examination fees—will be unchanged. 

60 If the proposed rule change becomes operative, 

the MSRB Funding Policy will be updated as of 

such operative date to reflect this Annual Rate Card 

approach, including with respect to certain 

maximum caps incorporated into the Annual Rate 

Card Process (as defined infra) regarding (i) a 

maximum cap on targeted revenue, which would 

generally cap a year-over-year increase in the total 

targeted revenue for a Rate Card Fee at 10% when 

applicable, and (ii) a maximum cap on assessment 

rate increases, which would generally cap the 

maximum year-over-year increase in the assessment 

rate for a Rate Card Fee at 25% when applicable. 

See related discussion infra under ‘‘Limitations on 

Rate Changes to Promote Predictability and 

Stability.’’ The current MSRB Funding Policy is 

publicly available, presently at https://

www.msrb.org/About-MSRB/Financial-and-OtherInformation/Financial-Policies/Funding-Policy. 

61As noted, the MSRB anticipates that, 

subsequent to the Annual Rate Card proposed 

herein and currently anticipated to be operative for 

the fifteen months from October 1, 2022 to 

December 31, 2023, future Annual Rate Cards 

would become effective on January 1, while the 

MSRB fiscal year would start on the prior October 

1. See also Exhibit 3, ‘‘Chart 11—Historical and 

Projected Revenue with Rate Card Model Compared 

to Historical and Pro Forma Expenses.’’ 

62That is, this factor is intended to maintain a 

proportionate percentage amount of the MSRB’s 

anticipated expenses for the fiscal year among each 

of the Market Activity Fees and the Municipal 

Advisor Professional Fee. See, e.g., Exhibit 3, 

‘‘Chart 3—Historical Actual Revenue for the Rate 

Card Fees as a Percentage of the Total Rate Card Fee 

Revenue’’ and ‘‘Chart 14—Distribution of 

Registrants by Range of Total Fees Assessed Under 

Current Fee Structure Compared to Projected 

Distribution Under the Rate Card Model (Exclusive 

of Late Fees and Examination Fees)’’ (reflecting that 

the distribution of registrants by range of total fees 

assessed under the current fee structure are 

currently anticipated to be relatively stable if the 

proposed Rate Card Amendments are 

implemented). 

63A positive variance may occur, for example, 

when the actual revenue from Rate Card Fees 

collected for a fiscal year exceeds budgeted 

amounts (a ‘‘Positive Rate Card Fee Variance’’). See, 

e.g., Exhibit 3, ‘‘Chart 2—Historical Budget vs. 

Actual Revenue for the Rate Card Fees,’’ at Fiscal 

Year 2020 (reflecting the actual revenue generated 

from the Underwriting Fee and Transaction Fee 

exceeding budget). A negative variance may occur, 

for example, when the actual revenue from Rate 

Card Fees collected for a fiscal year is below 

budgeted amounts (a ‘‘Negative Rate Card Fee 

Variance’’). See, e.g., Exhibit 3, ‘‘Chart 2—Historical 

Budget vs. Actual Revenue for the Rate Card Fees,’’ 

at Fiscal Year 2020 (reflecting the actual revenue 

generated from the Technology Fee below budget). 

64A positive variance above the reserves target 

may occur, for example, due to actual expense 

savings, actual revenue above budget from sources 

other than Rate Card Fees, or the Board’s 

determination to decrease the reserves target in 

light of revised organizational needs (a ‘‘Positive 

Reserves Variance’’). See, e.g., Exhibit 3, ‘‘Chart 

12—Total Reserves vs. Target: Historical and 

Projected without Rate Card Model,’’ at Fiscal Year 

2021 (reflecting actual reserves exceeding target). A 

negative variance below the reserves target may 

occur, for example, due to an increase in actual 

expenses, shortfall in revenue from sources other 

than Rate Card Fees, or the Board’s determination 

to increase the reserves target in light of revised 

organizational needs (a ‘‘Negative Reserves 

Variance’’). See, e.g., Exhibit 3, ‘‘Chart 12—Total 

Reserves vs. Target: Historical and Projected 

without Rate Card Model,’’ at Fiscal Year 2011 

(reflecting actual reserves below target). 

65The amended Annual Rate Cards resulting from 

the Annual Rate Card Process will be filed with the 

Commission as proposed rule changes consistent 

with the Act. 

66Stated differently, the Board may decide that 

some or all of such a Negative Reserves Variance 

amount will be added to that fiscal year’s 

Operational Funding Level when determining the 

cumulative Budgeted Revenue Target for that fiscal 

year. Notably, the Board would have the flexibility 

to close the Negative Reserves Variance (i.e., 

increase reserves funding to reach the target) over 

a period of multiple fiscal years, rather than all in 

one fiscal year, and so could determine to only 

address some of the Negative Reserves Variance in 

a given fiscal year. For example, if the Operational 

Funding Level was determined to be $45 million 

and there was a Negative Reserves Variance of $1 

million (i.e., actual reserves were under target by $1 

million), then the Board could seek to resolve that 

difference by increasing the target amount of 

revenue to be generated from the applicable Annual 

Rate Card by $1 million and set a final Budgeted 

Revenue Target of $46 million. Alternatively, the 

Board may determine to seek to resolve the $1 

million difference over the course of two Annual 

Rate Cards and set the final Budgeted Revenue 

Target for the first of those two Annual Rate Cards 

at, for example, $45.5 million. 

67Stated differently, the Board may decide that 

some or all of such a Positive Reserves Variance 

amount will be subtracted from that fiscal year’s 

Operational Funding Level to determine the 

Budgeted Revenue Target for that fiscal year. As 

discussed in the immediately prior footnote, the 

Board would have the flexibility to close the 

Positive Reserves Variance (i.e., decrease reserves 

funding to target) over a period of multiple fiscal 

years, rather than all in one fiscal year, and so could 

determine to only address some of the Positive 

Reserves Variance in a given fiscal year. For 

example, if the Operational Funding Level was 

determined to be $45 million and there was a 

Positive Reserves Variance of $1 million (i.e., actual 

reserves were over target by $1 million), then the 

Board could seek to resolve that variance by 

decreasing the target amount of revenue to be 

generated from the applicable Annual Rate Card by 

$1 million and set a final Budgeted Revenue Target 

of $44 million. Alternatively, the Board may 

determine to seek to resolve the $1 million variance 

the Board’s adjustments to the Annual 

Rate Card will remain incremental, the 

Board is proposing certain maximum 

caps on the amount of such year-to-year 

increases, as discussed below under the 

section entitled ‘‘Limitations on Rate 

Changes to Promote Predictability and 

Stability.’’ 60

Objectives of the Annual Rate Card. 

Adjustments to the Annual Rate Card 

will be used to revise the Rate Card Fees 

to annual levels that the MSRB 

anticipates will be sufficient to: (i) cover 

anticipated expenses for the related 

fiscal year; 61 (ii) maintain target 

contribution balances between fees on 

regulated entities in line with recent 

historical precedents; 62 (iii) address any 

prior-year variance between the 

amounts of each of the Rate Card Fees 

actually collected versus budget (i.e., 

‘‘Rate Card Fee Variances’’); 63 and (iv) 

address any variance between the 

amount of the Board’s organizational 

reserves versus the Board’s target (i.e., 

‘‘Reserves Variances’’).64 Fee rates may 

increase year-to-year, subject to certain 

limitations discussed in additional 

detail below, or decrease from year-toyear, as needed to meet these objectives. 

Process for Setting the Annual Rate 

Card. The Board will develop an 

Annual Rate Card for future fiscal years 

through a uniform process consistent 

with the objectives discussed above (the 

‘‘Annual Rate Card Process’’).65 The 

Annual Rate Card Process is intended to 

establish a fee framework that is more 

transparent and predictable for the 

MSRB’s stakeholders while also 

retaining the Board’s ability to flexibly 

react to changing circumstances when 

establishing reasonable fees on 

regulated entities. The Annual Rate 

Card Process will consist of the 

activities below. 

Development of the Fiscal Year 

Operational Funding Level. Consistent 

with its existing budgeting process, the 

Board will approve the annual expense 

budget and, thereby, establish the 

baseline revenue that the organization 

will need to operate for that fiscal year 

(i.e., the ‘‘Operational Funding Level’’). 

As previously discussed, the MSRB 

anticipates the Operational Funding 

Level in the near-term fiscal years to 

align with the discharge of the Board’s 

statutory mandate and corresponding 

initiatives outlined in the MSRB’s 

current Strategic Plan. Once the Board 

sets the Operational Funding Level, any 

Reserves Variances may further adjust 

the amount of the Operational Funding 

Level, as discussed below. 

Reconciliation of Any Material 

Reserves Variances. While the Board 

currently projects that the MSRB’s 

reserves will be at their target level at 

the end of Fiscal Year 2022, based on 

current circumstances, if there are 

material Reserves Variances in future 

fiscal years, the amount of such 

Reserves Variances will be added to or 

subtracted from the Operational 

Funding Level to develop a final 

‘‘Budgeted Revenue Target’’ for a given 

fiscal year. For example, if there is a 

Negative Reserves Variance, the Board 

may determine, in accordance with the 

MSRB Funding Policy, that some or all 

of the reserves shortfall will be 

incorporated into the total revenue that 

needs to be collected for that fiscal 

year.66 Conversely, if there is a material 

Positive Reserves Variance, the Board 

may determine, in accordance with the 

MSRB Funding Policy, that some or all 

of the excess will offset an amount of 

the total revenue that needs to be 

collected for that fiscal year.67


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over the course of two Annual Rate Cards and set 

the final Budgeted Revenue Target for the first of 

those two Annual Rate Cards at, for example $44.5 

million. 

68The Board will consider whether contribution 

targets should be revisited when setting rates each 

year. However, to maintain fairness and equity in 

fees, the Board intends contribution targets to be 

relatively stable over time, unless there is a durable, 

material shift in market structure or circumstances 

that would indicate that the expectations for the 

relative contributions from one or more fees are no 

longer reasonable or appropriate. See Exhibit 3, 

‘‘Chart 3—Historical Actual Revenue for the Rate 

Card Fees as a Percentage of the Total Rate Card Fee 

Revenue’’ and also ‘‘Chart 14—Distribution of 

Registrants by Range of Total Fees Assessed Under 

Current Fee Structure Compared to Projected 

Distribution Under the Rate Card Model.’’ 

69More specifically, a Negative Rate Card Fee 

Variance will increase the rate of assessment for a 

Rate Card Fee by increasing its Final Contribution 

Amount. A Positive Rate Card Fee Variance will 

reduce the rate of assessment for a Rate Card Fee 

by reducing its Final Contribution Amount. See 

note 63 supra and related discussion regarding Rate 

Card Fee Variances. 

70 If the full amount of a Negative Rate Card Fee 

Variance cannot be recaptured in a single year due 

to these limitations, the remaining amount of such 

variance will carry over into the calculation of the 

Rate Card Funding Amount for the following fiscal 

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

of assessment for such Rate Card Fee as described 

above. Conversely, there are no limits on potential 

decreases to the rates of assessment for the Rate 

Card Fees that may result from Positive Rate Card 

Fee Variances and, if warranted, Positive Reserves 

Variances. 

71Note that the 10% revenue cap is based on 

targeted revenue dollars. The underlying market 

activity volume will likely vary based on projected 

market conditions for the respective fiscal year. For 

illustrative purposes only, if the target revenue for 

one of the Rate Card Fees in Year 1 is $13,000,000, 

the maximum target revenue in Year 2 would be 

$14,300,000. In addition, if target revenue 

decreased in Year 2—such as to return excess 

revenue collected in Year 1—then the cap for Year 

3 would be calculated based on the higher revenue 

target in the year prior to the decrease (i.e., the 

higher prior revenue level in Year 1, which is 

$13,000,000 in this example). 

72For illustrative purposes only, if the Trade 

Count Fee is set at $1.10 in Year 1, the maximum 

rate in Year 2 would be $1.38 under the 25% 

maximum cap on assessment rate increases. In 

addition, if the assessment rate decreased in Year 

2—such as to return excess revenue collected in 

Year 1—then the cap for Year 3 would be calculated 

based on the higher assessment rate in the year 

prior to the decrease. 

73See MSRB Funding Policy (link at note 26 

supra). 

74See Section 15B(b)(2)(J) of the Act. 15 U.S.C. 

78o–4(b)(2)(J). 

75The Board did not engage in the reconciliation 

of any material reserves variances because the 

Board anticipates that organizational reserves 

would be at or near target on the proposed effective 

date of October 1, 2022. Nor did the Board engage 

Continued 

Incorporation of Other Anticipated 

Revenue. Revenue from sources other 

than the Rate Card Fees will be 

forecasted, and that estimate will be 

credited against the Budgeted Revenue 

Target. The amount remaining after 

these revenue estimates are 

incorporated will be the remaining 

revenue amount that will determine the 

total amount of funding needed to be 

generated from the Rate Card Fees (the 

‘‘Rate Card Funding Amount’’). 

Reconciliation of Any Rate Card Fee 

Variances from the Prior Fiscal Year. 

Each of the four Rate Card Fees will be 

responsible for a proportionate amount 

of the overall Rate Card Funding 

Amount (each a ‘‘Proportional 

Contribution Amount’’). The MSRB will 

maintain a fair and equitable balance of 

the Proportional Contribution Amounts 

in line with recent historical 

precedents.68 Beginning with the 

Annual Rate Card for Fiscal Year 2024, 

any Rate Card Fee Variances between 

the budget and actual results of the Rate 

Card Fees for the prior fiscal year will 

be added to (or subtracted from) the 

Proportional Contribution Amount 

(‘‘Final Contribution Amount’’).69 For 

example, if new issuance underwriting 

volume were to exceed the budgeted 

amount in Fiscal Year 2023, resulting in 

a Positive Rate Card Fee Variance for 

that fee, the Proportional Contribution 

Amount for the Underwriting Fee would 

be adjusted downward sufficient to 

offset the excess Underwriting Fee 

revenue collected (and vice versa). In 

this way, Rate Card Fee Variances 

related to a specific Rate Card Fee will 

only impact the Proportional 

Contribution Amount for that specific 

fee. 

Forecast of Expected Activity and 

Setting the Annual Rate Card. The 

MSRB will use the best available 

information to set expected volume of 

activity for the coming fiscal year. Based 

on the anticipated volume of activity, 

the MSRB will calculate rates of 

assessment for each of the Rate Card 

Fees to generate their respective Final 

Contribution Amounts. 

Limitations on Rate Changes to 

Promote Predictability and Stability. To 

alleviate the potential for greater 

uncertainty among regulated entities 

regarding the variability of the Rate Card 

Fees under this revised approach, the 

Board has also established certain 

limitations on fee increases from yearto-year to promote greater predictability 

and stability.70

10% Maximum Cap on Targeted 

Revenue. The first limitation is a 10% 

cap on the maximum year-over-year 

increase in the targeted revenue for a 

Rate Card Fee.71 This maximum cap is 

intended to limit large increases in the 

rate of assessment for the Rate Card Fees 

to ensure that fee increases remain 

incremental and, accordingly, regulated 

entities have the time to operationalize 

such increases into their business 

models. 

25% Maximum Cap on Assessment 

Rate Increases. The second limitation is 

a 25% cap on the maximum year-overyear increase in the assessment rate for 

a Rate Card Fee.72 The secondary cap is 

intended to limit large increases in rates 

of assessment for the Rate Card Fees in 

instances where expected volume 

decreases significantly from the prior 

year. 

If the proposed rule change becomes 

operative, the MSRB Funding Policy 

will be updated as of such operative 

date to reflect the Annual Rate Card 

Process, including the Maximum Cap on 

Targeted Revenue and the Maximum 

Cap on Assessment Rate Increases. It 

should be noted that, pursuant to its 

terms, the principles described in the 

MSRB Funding Policy do not bind 

individual Board decisions but instead 

generally are intended as a guide to 

provide continuity in funding decisions 

and to help align strategic, operational, 

and financial planning.73 If the Annual 

Rate Card Process becomes operative 

and a future proposed amendment to 

the rates of assessment for the Rate Card 

Fees would exceed the Maximum Cap 

on Targeted Revenue or the Maximum 

Cap on Assessment Rate Increases, as 

applicable, then such future amendment 

would address any such deviation in the 

corresponding proposed rule change. 

Proposed Rate Card Amendments 

The proposed Rate Card Amendments 

are designed to promote the collection 

of reasonable fees and charges from 

MSRB regulated entities as are 

necessary or appropriate to defray the 

costs and expenses of operating and 

administering the Board.74 The Board 

believes that the Annual Rate Card 

Process enables it to consider the 

necessary factors and to sufficiently 

deliberate on those factors in order to 

arrive at reasonable fees and charges as 

may be necessary or appropriate to 

defray the costs and expenses of 

operating and administering the Board. 

Accordingly, among the other reasons 

discussed herein, the Board believes 

that the proposed rule change achieves 

reasonable fees and charges consistent 

with the Act because the Rate Card 

Amendments adhered to the Annual 

Rate Card Process. Specifically, the 

Board (i) developed the Operational 

Funding Level for Fiscal Year 2023 

based on existing pro forma estimates; 

(ii) incorporated other anticipated 

revenue into its funding analysis; and 

(iii) forecasted expected volume activity 

to appropriately set the rates of 

assessment for each of the Rate Card 

Fees, all as further described above.75


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in the reconciliation of any Rate Card Fee Variances 

because, as noted, this is the first use of the Annual 

Rate Card approach, so no such Rate Card Fee 

Variances yet exist. 

76The Rate Card Fees listed do not indicate the 

current temporary fee reductions for the Market 

Activity Fees that expire on September 30, 2022. 

See Rule A–13(h) and the 2021 Temporary Fee 

Reduction (citation and description at note 12 

supra). 77The Rate Card Amendments are intended to 

revise the rates of assessment for the Market 

Activity Fees prior to the expiration of the 2021 

Temporary Fee Reduction on October 1, 2022. As 

a result, the Board notes that its fifteen-month 

budgetary and rate assumptions are subject to a 

greater degree of uncertainty than would be 

expected in future years, which would only have 

twelve-month budgetary and rate assumptions. 

Consequently, there is an increased risk that the 

Board may need to exercise its flexibility to revise 

this rate card prior to its implementation on 

October 1, 2022 in accordance with the totality of 

the circumstances and as prudence necessitates. 

However, that is not the current expectation. 

Proposed Annual Rate Card. The Rate 

Card Amendments would establish the 

Municipal Advisor Professional Fee 

specified in Rule A–11 and the Market 

Activity Fees specified in Rule A–13 in 

accordance with the chart below. 

Basis Current rate 76 Proposed rate 

Underwriting Fee ........................................................ Per $1,000 Par Underwritten .................................... $0.0275 $0.0297 

Transaction Fee ......................................................... Per $1,000 Par Transacted ...................................... 0.0100 0.0107 

Trade Count Fee ........................................................ Per Trade .................................................................. 1.00 1.10 

Municipal Advisor Professional Fee ........................... Per Covered Professional ......................................... 1,000 1,060 

These revised rates would become 

effective on October 1, 2022 and are 

expected to apply to activities occurring 

through December 31, 2023. The Board 

anticipates amending the rates of 

assessment specified in this proposed 

Annual Rate Card with a subsequent 

rule filing with the Commission that 

would become effective as of January 1, 

2024.77

Purpose and Description of the 

Technical Amendments 

Consistent with the Board’s Fee 

Review, the MSRB identified instances 

across Rule A–11, Rule A–12, and Rule 

A–13 where amendments would 

improve the clarity of application of 

these MSRB rules. Specifically, the 

MSRB determined that Rule A–11, Rule 

A–12, and Rule A–13 could benefit 

from: (i) the creation of defined terms 

for existing concepts that would help 

streamline the rule text and improve 

readability; (ii) the clarification of 

existing terms and concepts through the 

consolidation of previously published 

regulatory guidance into the proposed 

rule change and the direct incorporation 

of cross-referenced definitions from 

other MSRB rules into the proposed rule 

change; and (iii) the deletion of obsolete 

rule language to streamline the rule text 

and avoid the potential for regulatory 

confusion as to why such obsolete 

language continues to be incorporated 

into MSRB rules. Accordingly, the 

proposed rule change would also amend 

Rule A–11, Rule A–12, and Rule A–13 

with certain technical, non-substantive 

amendments. 

Technical Amendments to Rule A–11 

The proposed Technical Amendments 

would amend Rule A–11 to (i) create a 

separately defined term for the concept 

of a ‘‘covered professional;’’ (ii) reformat 

the applicable subsections of Rule A–11 

with the appropriate subsection 

designations and update the applicable 

cross-references in the rule text; and (iii) 

directly incorporate the definition for 

‘‘Prime Rate’’ into the text of the rule. 

Importantly, the proposed definition for 

the new term ‘‘covered professional’’ is 

intended to be non-substantive and to 

match the existing rule text and 

understanding of the descriptive phrase 

in Rule A–11 regarding a ‘‘person 

associated with the municipal advisor 

who is qualified as a municipal advisor 

representative in accordance with Rule 

G–3 and for whom the municipal 

advisor has on file with the Commission 

a Form MA–I as of January 31 of each 

year.’’ The proposed amendment would 

also incorporate the concept of an 

‘‘active’’ Form MA–I to make expressly 

clear the existing application of Rule A– 

11 that, if a firm has filed an 

amendment to indicate that an 

individual is no longer an associated 

person of the municipal advisory firm or 

no longer engages in municipal advisory 

activities on its behalf, then that 

individual’s Form MA–I would not be 

deemed as active for purposes of the 

Municipal Advisor Professional Fee and 

would not be counted in the January 

31st calculation regarding the 

assessment of the Municipal Advisor 

Professional Fee. In this way, the 

proposed amendments are intended to 

define the same category of associated 

persons as the existing text of the rule 

and, all else being equal, would not 

capture any greater or fewer individuals 

in its scope. Consequently, the proposed 

defined term for a covered professional 

would not change the MSRB’s current 

method for calculating and applying the 

amount of the Municipal Advisor 

Professional Fee under Rule A–11. The 

proposed amendment is merely 

intended to provide greater regulatory 

clarity for the application of Rule A–11. 

Therefore, the MSRB believes it is a 

technical, clarifying amendment to the 

rule text that would improve its 

readability and would not modify any 

existing regulatory burdens or 

obligations, nor create any new 

regulatory burdens or obligations. 

Consistent with separately defining 

the term ‘‘covered professional,’’ the 

proposed rule change would also 

reformat the applicable subsections of 

Rule A–11 with the appropriate 

subsection designations and update the 

applicable cross-references in the rule 

text. These related amendments are 

merely intended to provide internal 

consistency to Rule A–11 in light of the 

other amendments and, therefore, the 

MSRB believes they are technical, nonsubstantive amendments. 

Lastly, the proposed Technical 

Amendments to Rule A–11 would strike 

the current reference to the MSRB 

Registration Manual from current 

subsection (b) and directly incorporate 

the definition for ‘‘Prime Rate’’ in 

Supplementary Material .02. The new 

definition provided in Supplementary 

Material .02 would match the existing 

definition provided in the MSRB 

Registration Manual, stating that ‘‘. . . 

the Prime Rate is the annual rate of the 

commercial prime rate of interest as last 

published in The Wall Street Journal 

prior to the date such charge is 

computed.’’ Given that this proposed 

definition is the same as the one 

currently provided in the MSRB 

Registration Manual, the MSRB believes 

this amendment is a technical, 

clarifying amendment to the rule text 

that would improve regulatory 

understanding of Rule A–11 and would 

not modify any existing regulatory 

burdens or obligations, nor create any 

new regulatory burdens or obligations. 

Moreover, the MSRB believes that 

moving this language directly into Rule 

A–11 consolidates the operative 

regulatory text and, thereby, is likely to 

lead to less regulatory confusion for 

regulated entities, who would no longer 


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78This language is currently found in subsection 

(d)(iii)(c) of Rule A–13 and the proposed rule 

change would not amend its location. 

79Since the inception of the Underwriting Fee, 

the application of Rule A–13 has encompassed 

those primary offerings where a municipal 

securities dealer acts agent for the issuer arranging 

the direct placement of new issue municipal 

securities with institutional customers or 

individuals. See ‘‘Underwriting assessment: 

application to private placements’’ (Feb. 22, 1982), 

available at https://msrb.org/Rules-andInterpretations/MSRB-Rules/Administrative/RuleA-13?tab=2. Given this amendment to Rule A–13, 

the February 22, 1982 guidance will be removed 

from the MSRB rule book as of the operative date 

of the Technical Amendments and will be archived 

by relocating it to a dedicated MSRB Archived 

Interpretive Guidance page at: www.msrb.org/RulesandInterpretations/Archived-Guidance-Rule-BookReview.aspx. The guidance will be clearly labeled 

with its date of archival and can be accessed for its 

historical value. 

80 17 CFR 240.15c2–12(f)(7) (stating that the term 

‘‘primary offering’’ means ‘‘an offering of municipal 

securities directly or indirectly by or on behalf of 

an issuer of such securities’’). 

81See Rule G–34(e)(viii) (‘‘The term ‘variable rate 

demand obligation’ shall mean securities in which 

the interest rate resets on a periodic basis with a 

frequency of up to and including every nine 

months, where an investor has the option to put the 

issue back to the trustee, tender agent or other agent 

of the issuer or obligated person at any time, 

typically within a notification period, and a broker, 

dealer or municipal securities dealer acts as a 

remarketing agent responsible for reselling to new 

investors securities that have been tendered for 

purchase by a holder.’’) 

have to separately reference Rule A–11 

and the MSRB Registration Manual. 

Technical Amendments to Rule A–12 

The proposed Technical Amendments 

would amend Rule A–12 to (i) eliminate 

its existing reference to Rule A–13 

regarding the imposition of late fees 

under Rule A–13; (ii) delete the now 

obsolete language in Supplementary 

Material .01 regarding the temporary 

suspension of late fees from March 1, 

2020 to July 1, 2020; and (iii) directly 

incorporate the definition for ‘‘Prime 

Rate’’ into the text of the rule. In terms 

of deleting the reference to the 

imposition of late fees owed pursuant to 

Rule A–13, the MSRB believes that 

regulatory clarity would be improved if 

this fee concept was deleted from Rule 

A–12 and incorporated directly into 

Rule A–13. The proposed amendment to 

Rule A–13 that would incorporate this 

concept in an amendment to that rule 

text and, thereby, retain this fee concept 

in the MSRB’s fee structure is discussed 

in the following section. Notably, the 

deletion of this fee concept in Rule 

A–12 and its incorporation in Rule 

A–13 would not change the MSRB’s 

current method for calculating and 

applying the amount of such late fees; 

and, therefore, the MSRB believes it is 

a technical, clarifying amendment to the 

rule text that improves its readability 

and does not modify any existing 

regulatory burdens or obligations, nor 

create any new regulatory burdens or 

obligations. 

In terms of deleting the language in 

Supplementary Material .01 of Rule A– 

12, the language is no longer operative 

at this time and, therefore, the MSRB 

believes that deleting it from the rule 

text would improve the clarity of the 

application of Rule A–12. Specifically, 

the deletion of the text of 

Supplementary Material .01 from Rule 

A–12 would help streamline the rule 

text and reduce the potential for 

regulatory confusion as to why it 

continues to be included in the text of 

the rule. 

In addition, the proposed Technical 

Amendments to Rule A–12 would strike 

the reference to the MSRB Registration 

Manual from subsection (d) and directly 

incorporate the definition for ‘‘Prime 

Rate’’ in Supplementary Material .01. 

The new definition provided in 

Supplementary Material .01 would 

match the existing definition provided 

for in the MSRB Registration Manual, 

stating that ‘‘. . . the Prime Rate is the 

annual rate of the commercial prime 

rate of interest as last published in The 

Wall Street Journal prior to the date 

such charge is computed.’’ Given that 

this proposed definition is the same as 

the one currently provided in the MSRB 

Registration Manual, the MSRB believes 

this amendment is a technical, 

clarifying amendment to the rule text 

that would improve regulatory 

understanding of Rule A–12 and would 

not modify any existing regulatory 

burdens or obligations, nor create any 

new regulatory burdens or obligations. 

Moreover, the MSRB believes that 

moving this language directly into Rule 

A–12 consolidates the operative 

regulatory text and, thereby, is likely to 

lead to less regulatory confusion for 

regulated entities, who would no longer 

have to separately reference Rule A–12 

and the MSRB Registration Manual. 

Technical Amendments to Rule A–13 

The proposed Technical Amendments 

would amend Rule A–13 to: (i) reformat 

and clarify the definition of ‘‘primary 

offering’’ consistent with the historical 

understanding and current application 

of Rule A–13; (ii) further clarify that 

certain transactions in municipal 

securities must meet the definition of a 

‘‘variable rate demand obligation’’ or 

‘‘VRDO’’ under Rule G–34, on CUSIP 

numbers, new issue, and market 

information requirements, in order to be 

exempt from Transaction Fees pursuant 

to Rule A–13(d)(iii)(c)’s subsection 

identifying ‘‘Transactions Not Subject to 

Transaction Fee;’’ 78 (iii) uniformly 

revise Rule A–13’s references to the 

term ‘‘technology fee’’ to ‘‘trade count 

fee;’’ (iv) incorporate the existing 

concept regarding the imposition of late 

fees into the rule text (which concept 

currently exists in Rule A–12, but is 

being deleted from Rule A–12 as part of 

the proposed amendments, as discussed 

above); (v) delete the language that 

would become obsolete on September 

30, 2022 regarding the temporary fee 

reduction of the Market Activity Fees 

for activities occurring between April 1, 

2021 through September 30, 2022; (vi) 

delete the now obsolete language in 

Supplementary .01 regarding the 

waiving of certain assessments for 

transactions with the Municipal 

Liquidity Facility established by the 

Federal Reserve Board of Governors; 

and (vii) directly incorporate the 

definition for ‘‘Prime Rate’’ into the text 

of the rule. 

The proposed Technical Amendments 

regarding the definition of primary 

offering for purposes of Rule A–13 

would reformat the existing definition 

to the first subsection of the rule, as well 

as incorporate clarifying revisions 

expressly codifying the existing 

application of Rule A–13 to private 

placements.79 Specifically, the proposed 

amendment would incorporate text 

expressly stating that, consistent with 

the definition for the same term found 

in Rule 15c2–12(f)(7) under the Act,80

certain circumstances where a dealer 

acts as an agent for an issuer to arrange 

the placement of a new issue of 

municipal securities would be included 

in the definitional scope of a ‘‘primary 

offering’’ under Rule A–13. 

Accordingly, the MSRB believes that 

these amendments are technical, 

clarifying modifications to the rule text 

that (i) would improve the readability of 

Rule A–13 and facilitate greater 

regulatory clarity regarding the current 

application of the Underwriting Fee and 

(ii) would not modify any existing 

regulatory burdens or obligations, nor 

create any new regulatory burdens or 

obligations. 

In addition, the proposed Technical 

Amendments to Rule A–13 would 

clarify that only transactions in 

municipal securities that meet the 

definition of a ‘‘variable rate demand 

obligation’’ under Rule G–34 are exempt 

from Transaction Fees pursuant to Rule 

A–13’s language regarding 

‘‘Transactions Not Subject to 

Transaction Fee.’’ Specifically, the 

current definitional language in that 

subsection of Rule A–13 does not 

precisely match the corresponding 

definition in Rule G–34.81 Yet, the 

MSRB’s internal billing process 

currently relies on reports made 


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82See Exchange Act Release No. 75751 (Aug. 24, 

2015), 80 FR 52352 (Aug. 28, 2015) File No. SR– 

MSRB–2015–08, at 52355 (discussing the fact that 

the revenue from the technology fee will no longer 

be designated exclusively for capitalized hardware 

and software expense). 

83 15 U.S.C. 78o–4(b)(2)(J). 

84 Id. 

85 Id. 

86 Id. 

pursuant to Rule G–34’s Short-term 

Obligation Rate Transparency System 

and, thereby, Rule G–34’s variable rate 

demand obligation definition, to 

identify such transactions that should 

not be billed under Rule A–13. To avoid 

the possibility of any potential 

unintended consequences resulting 

from the differences between the 

definition currently stated in Rule A–13 

versus the variable rate demand 

obligation definition in Rule G–34 that 

is currently utilized for purposes of the 

MSRB’s internal billing logic, the 

proposed rule change would amend 

Rule A–13 to expressly cross-reference 

Rule G–34(e)(viii) and expressly restate 

the variable rate demand obligation 

definition directly in the text of Rule 

A–13. The MSRB believes that the 

proposed amendments to expressly 

incorporate Rule G–34’s variable rate 

demand obligation definition into Rule 

A–13 will improve regulatory clarity for 

regulated entities regarding the MSRB’s 

billing process and which transactions 

are exempt from certain fees. In this 

way, the proposed definition is 

intended to define the same category of 

activity and instruments as the existing 

text of the rule and, all else being equal, 

would not capture any greater or fewer 

transactions than the current 

application of the Rule A–13. 

As previously mentioned above, the 

proposed Technical Amendments 

would uniformly revise Rule A–13’s 

references to the term ‘‘technology fee’’ 

to the term ‘‘trade count fee.’’ The 

MSRB believes that this non-substantive 

change is warranted because the use of 

the phrase ‘‘technology fee’’ is outdated. 

The MSRB believes ‘‘trade count’’ fee is 

a better descriptor because the revenue 

generated from this fee is not strictly 

used for technology expenses but is 

aggregated with the other fee revenue 

the MSRB collects and utilized for the 

most appropriate organizational uses.82

Accordingly, the MSRB believes that the 

term ‘‘trade count fee’’ is a more 

accurate descriptor and, thereby, less 

likely to lead to regulatory confusion 

about this fee. 

Consistent with Technical 

Amendments to Rule A–11 and Rule 

A–12, the proposed Technical 

Amendments to Rule A–13 would also 

copy language into new Rule A–13(g) 

incorporating the existing concept 

currently articulated in current Rule A– 

12(d) regarding the imposition of late 

fees on the fees assessed pursuant to 

Rule A–13. As noted above, currently, 

the operative rule text for this late fee 

concept is provided for in Rule A–12(d), 

and the proposed rule change would 

delete this language from Rule A–12(d) 

specific to Rule A–13’s fees. 

Importantly, the incorporation of this 

language directly into new Rule A–13(g) 

would not change the MSRB’s current 

method for calculating and applying the 

amount of such late fees; and, therefore, 

the MSRB believes it is a technical, 

clarifying amendment to the rule text 

that improves the readability of both 

Rule A–12 and also Rule A–13 and 

would not modify any existing 

regulatory burdens or obligations, nor 

create any new regulatory burdens or 

obligations. The MSRB believes that 

moving this language into Rule A–13 

consolidates the operative regulatory 

text and, thereby, is likely to lead to less 

regulatory confusion for regulated 

entities, who would no longer have to 

separately reference Rule A–12 to 

identify that such late fees were 

applicable to the fees assessed pursuant 

to Rule A–13. 

Relatedly, and similar to the proposed 

amendments to Rule A–11 and Rule 

A–12 on the same topic of late fees, the 

proposed Technical Amendments to 

Rule A–13 would also directly 

incorporate the definition for ‘‘Prime 

Rate’’ in new Supplementary Material 

.02. This definition provided in 

Supplementary Material .02 would 

match the current definition provided in 

the MSRB Registration Manual, stating 

that ‘‘. . . the Prime Rate is the annual 

rate of the commercial prime rate of 

interest as last published in The Wall 

Street Journal prior to the date such 

charge is computed.’’ Given that this 

proposed definition is the same as the 

one currently provided for in the MSRB 

Registration Manual, the MSRB believes 

this amendment is a technical, 

clarifying amendment to the rule text 

that would improve regulatory 

understanding of Rule A–13 and would 

not modify any existing regulatory 

burdens or obligations, nor create any 

new regulatory burdens or obligations. 

In addition, the proposed Technical 

Amendments to Rule A–13 would 

delete the language that would become 

obsolete on September 30, 2022, 

regarding the temporary fee reduction of 

the Market Activity Fees for those 

activities occurring between April 1, 

2021 through September 30, 2022. 

Given the MSRB’s proposed effective 

date for this proposed rule change, the 

MSRB believes that this deletion would 

improve regulatory clarity for regulated 

entities because this language would no 

longer be operative as of October 1, 

2022, and, therefore, its continued 

inclusion in the rule text may cause 

regulatory confusion. Similarly, the 

proposed Technical Amendments 

would delete the now obsolete language 

in Supplementary .01 of Rule A–13 

regarding the waiving of certain 

assessments for transactions with the 

Municipal Liquidity Facility (the 

‘‘MLF’’) established by the Federal 

Reserve Board of Governors. Given that 

the MLF and the language used to 

reference it here is no longer operative, 

the MSRB believes that this deletion 

would improve regulatory clarity for 

regulated entities. 

Lastly, consistent with all the other 

proposed Technical Amendments to 

Rule A–13, the proposed rule change 

would also reformat the applicable 

subsections of Rule A–13 with the 

appropriate subsection designation and 

update the applicable cross-references 

in the rule text. These related 

amendments are merely intended to 

provide internal consistency to Rule A– 

13 in light of the other amendments 

and, therefore, the MSRB believes they 

are technical, non-substantive 

amendments. 

2. Statutory Basis 

Statutory Basis for the Rate Card 

Amendments 

The MSRB believes that the proposed 

Rate Card Amendments are consistent 

with Section 15B(b)(2)(J) of the Act,83

which states that the MSRB’s rules shall 

provide that each municipal securities 

broker, municipal securities dealer, and 

municipal advisor shall pay to the 

Board such reasonable fees and charges 

as may be necessary or appropriate to 

defray the costs and expenses of 

operating and administering the 

Board.84 Such rules must specify the 

amount of such fees and charges, which 

may include charges for failure to 

submit to the Board, or to any 

information system operated by the 

Board, within the prescribed 

timeframes, any items of information or 

documents required to be submitted 

under any rule issued by the Board.85

The MSRB believes that the Rate Card 

Amendments provide for reasonable 

fees and charges to be paid by regulated 

entities. Moreover, the MSRB believes 

that the Rate Card Amendments are 

necessary and appropriate to fund the 

operation and administration of the 

Board and, thereby, satisfy the 

requirements of Section 15B(b)(2)(J) 86

through the achievement of a reasonable 


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87See, e.g., Exhibit 3, ‘‘Chart 14—Distribution of 

Registrants by Range of Total Fees Assessed Under 

Current Fee Structure Compared to Projected 

Distribution Under the Rate Card Model (Exclusive 

of Late Fees and Examination Fees).’’ 

88 In addition to the following citations within 

this sentence in support of the reasonability of the 

Rate Card Amendments, see also related discussion 

supra under ‘‘Board Review of the Current Fee 

Structure—Maintaining a Fair and Equitable 

Balance of Fees,—Mitigating the Impact of Market 

Volatility, and—Funding the MSRB’s Anticipated 

Near-Term Operating Expenses’’ and ‘‘Proposed 

Rate Card Amendments.’’ See also related 

discussion infra under ‘‘Self-Regulatory 

Organization’s Statement on Burden on 

Competition.’’ 

89See Exhibit 3, ‘‘Chart 10—Historical and 

Projected Revenue without Rate Card Model 

Compared to Historical and Pro Forma Expenses’’ 

and ‘‘Chart 11—Historical and Projected Revenue 

with Rate Card Model Compared to Historical and 

Pro Forma Expenses.’’ 

90See related discussion supra under section 

entitled ‘‘Board Review of the Current Fee 

Structure—Mitigating the Impact of Market 

Volatility.’’ See also Exhibit 3, ‘‘Chart 14— 

Distribution of Registrants by Range of Total Fees 

Assessed Under Current Fee Structure Compared to 

Projected Distribution Under the Rate Card Model 

(Exclusive of Late Fees and Examination Fees)’’ 

(reflecting that the distribution of registrants by 

range of total fees assessed under the current fee 

structure are currently anticipated to be relatively 

stable if the proposed Rate Card Amendments are 

implemented). 

91See related discussion supra under section 

entitled ‘‘Board Review of the Current Fee 

Structure—Mitigating the Impact of Market 

Volatility.’’ See also Exhibit 3, ‘‘Chart 2—Historical 

Budget vs. Actual Revenue for the Rate Card Fees’’ 

and ‘‘Chart 4—Rate Card Fees: Historical Activity 

Volume Variance Budget to Actual.’’ 

92 15 U.S.C. 78o–4(b)(2)(J). 

93See also related discussion supra under ‘‘Board 

Review of the Current Fee Structure—Maintaining 

a Fair and Equitable Balance of Fees,—Mitigating 

the Impact of Market Volatility, and—Funding the 

MSRB’s Anticipated Near-Term Operating 

Expenses’’ and ‘‘Proposed Rate Card Amendments.’’ 

See also related discussion infra under ‘‘SelfRegulatory Organization’s Statement on Burden on 

Competition.’’ 

94 15 U.S.C. 78o–4(b)(2)(C). 

95 Id. 

96 Id. 

97 Id. 

98See related discussion supra under ‘‘Board 

Review of the Current Fee Structure—Mitigating the 

Impact of Market Volatility’’ and ‘‘Proposed Annual 

Rate Card Approach—Limitations on Rate Changes 

to Promote Predictability and Stability’’ (discussing 

various limitations on future increases of the Rate 

Card Fees). See also Exhibit 3, ‘‘Chart 5—Historical 

Effective Fee Rate Changes.’’ 

fee structure that ensures (i) an 

equitable balance of necessary and 

appropriate fees among regulated 

entities and (ii) a fair allocation of the 

burden of defraying the costs and 

expenses of the MSRB.87 Specifically, 

the Board believes that the Rate Card 

Amendments will achieve reasonable 

fees on regulated entities 88 that (i) are 

necessary and appropriate to sustain the 

operation and administration of the 

Board by defraying the MSRB’s 

anticipated Fiscal Year 2023 operating 

and administrative expenses; 89 (ii) 

reasonably and appropriately allocate 

fees among firms by equitably 

distributing fees in accordance with 

each individual firm’s overall market 

activities; 90 and (iii) reasonably and 

appropriately adjust for the annual 

fluctuations in the volume of market 

activity as compared to budget 

expectation by incorporating the actual 

amounts of Market Activity Fees 

collected as compared to budget into 

this and future rate-setting processes.91

As a result, the MSRB believes that the 

proposed rule change satisfies the 

applicable requirements of Section 

15B(b)(2)(J) of the Act,92 and the Board 

has developed a reasonable and 

appropriate fee mechanism that will 

sufficiently fund future expenses and 

better manage reserves at appropriate 

levels.93

Statutory Basis for the Technical 

Amendments 

The MSRB believes that the proposed 

Technical Amendments are consistent 

with Section 15B(b)(2)(C) of the Act,94

which states that the MSRB’s rules shall 

be designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in municipal 

securities and municipal financial 

products, to remove impediments to and 

perfect the mechanism of a free and 

open market in municipal securities and 

municipal financial products, and, in 

general, to protect investors, municipal 

entities, obligated persons, and the 

public interest.95

The MSRB believes that the Technical 

Amendments would promote just and 

equitable principles of trade by ensuring 

that existing rule provisions are accurate 

and understandable by: (i) creating 

newly defined terms for existing 

concepts that will help streamline the 

rule text and improve its readability; (ii) 

clarifying the application of existing 

terms and concepts through the 

consolidation of previously published 

regulatory guidance into the proposed 

rule change and the direct incorporation 

of cross-referenced definitions from 

other MSRB rules into the proposed rule 

change; and (iii) deleting obsolete rule 

language to streamline the rule text and 

avoid the potential for regulatory 

confusion as to why such language 

continues to be incorporated into MSRB 

rules. While the Technical Amendments 

would affect rules applicable to MSRB 

regulated entities, the amendments are 

meant to clarify Rule A–11, Rule A–12, 

and Rule A–13, respectively, and would 

not (i) modify any existing regulatory 

burdens or obligations, (ii) create any 

new regulatory burdens or obligations, 

or (iii) affect the registration status of 

any persons under MSRB rules. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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

Act 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.96 The 

MSRB has considered the economic 

impact of the proposed rule change, 

including a comparison to reasonable 

alternative regulatory approaches.97

The Annual Rate Card Process 

proposed by the Rate Card Amendments 

is intended to introduce a new fee 

structure that would (i) better mitigate 

the impact of market volatility on the 

MSRB’s revenue structure (and, 

consequently, also better mitigate the 

impact of market volatility on the 

MSRB’s organizational reserves), and (ii) 

maintain rates within a reasonably 

predictable range that, while subject to 

more incremental changes each year, 

would be comparably more stable over 

the long term than the MSRB’s current 

fee structure.98 Furthermore, the Annual 

Rate Card process applies equally to all 

those MSRB regulated entities who may 

pay dealer Market Activity Fees and/or 

the Municipal Advisor Professional 

Fees. Accordingly, the MSRB believes 

that the proposed Annual Rate Card 

Process would not have an impact on 

competition and, consequently, would 

not impose any burden on competition, 

relieve a burden on competition, nor 

promote competition. The MSRB 

therefore believes the Annual Rate Card 

Process would not impose any burden 

on competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Exchange Act. 

The increase in the rates of 

assessment for the Rate Card Fees 

proposed by the Rate Card Amendments 

(i.e., the Underwriting Fee, Transaction 

Fee, Trade Count Fee, and Municipal 

Advisor Professional Fee) are necessary 

and appropriate to cover the currently 

anticipated operating deficit for Fiscal 

Year 2023, which would have occurred 

even with the current fee structure, to 

ensure prudent funding for the 

operation and administration of the 

Board. Moreover, the Board’s Rate Card 

Amendments apply equally to each 

MSRB regulated entity who may pay the 

Rate Card Fees and, thereby, equitably 


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99The SEC and FINRA use this approach for some 

fees. See SEC Section 31 rate fees: https://

www.sec.gov/divisions/marketreg/sec31feesbasic

info.htm; see also FINRA Trading Activity Fee 

(TAF) https://www.finra.org/rules-guidance/ 

guidance/trading-activity-fee. 

100See Exhibit 3, ‘‘Chart 3—Historical Actual 

Revenue for the Rate Card Fees as a Percentage of 

the Total Rate Card Fee Revenue,’’ ‘‘Chart 4—Rate 

Card Fees: Historical Activity Volume Variance 

Budget to Actual,’’ ‘‘Chart 5—Historical Effective 

Fee Rate Changes,’’ and ‘‘Chart 14—Distribution of 

Registrants by Range of Total Fees Assessed Under 

Current Fee Structure Compared to Projected 

Distribution Under the Rate Card Model (Exclusive 

of Late Fees and Examination Fees)’’ (reflecting that 

the distribution of registrants by range of total fees 

assessed under the current fee structure are 

currently anticipated to be relatively stable if the 

proposed Rate Card Amendments are 

implemented). As to how the proportion was 

devised, in addition to the costs of regulatory 

activities, the cost of servicing each category of fees 

is also a consideration, as it costs the MSRB 

significantly more to collect and disseminate 

trading data for transparency purposes than 

municipal advisory firm professional data. It should 

be noted that all regulated entities benefit from this 

publicly available transparency information. 

101See Exhibit 3, ‘‘Chart 10—Historical and 

Projected Revenue without Rate Card Model 

Compared to Historical and Pro Forma Expenses.’’ 

102The Municipal advisory firm professional fee 

was raised three times since inception in Fiscal 

Year 2014 (Fiscal Year 2018, Fiscal Year 2020, and 

Fiscal Year 2021). 103See discussion supra under ‘‘Statutory Basis 

for the Rate Card Amendments’’ near notes 87 and 

88. 104See related discussions supra under sections 

entitled ‘‘Board Review of the Current Fee 

Structure—Mitigating the Impact of Market 

Volatility’’ and ‘‘Proposed Annual Rate Card 

Approach—Limitations on Rate Changes to Promote 

Predictability and Stability.’’ See also Exhibit 3, 

‘‘Chart 2—Historical Budget vs. Actual Revenue for 

the Rate Card Fees,’’ ‘‘Chart 4—Rate Card Fees: 

Historical Activity Volume Variance Budget to 

Actual,’’ and ‘‘Chart 5—Historical Effective Fee Rate 

Changes.’’ 

105 Id. 106See, Exhibit 3, ‘‘Chart 8—Historical Actual 

Expenses’’ (showing a ten-year historical compound 

annual growth rate of 4.2%),’’Chart 10—Historical 

and Projected Revenue without Rate Card Model 

Compared to Historical and Pro Forma Expenses,’’ 

‘‘Chart 11—Historical and Projected Revenue with 

Rate Card Model Compared to Historical and Pro 

Forma Expenses,’’ ‘‘Chart 12—Total Reserves vs. 

Target: Historical and Projected without Rate Card 

Model,’’ and ‘‘Chart 13—Total Reserves vs. Target: 

Historical and Projected with Rate Card Model.’’ 

and non-discriminatorily distribute the 

fee burden across all MSRB regulated 

entities who participate in the 

municipal securities market. In this 

way, no firm would be unduly burdened 

as compared to another firm. In 

particular, smaller municipal advisory 

firms would continue to pay less 

Municipal Advisor Professional Fees 

than larger municipal advisory firms, 

and, therefore, the Rate Card Fees 

proposed by the Rate Card Amendments 

are not unduly burdensome, 

comparatively, between small 

municipal advisory firms and large 

municipal advisory firms. Because the 

Rate Card Fees proposed by the Rate 

Card Amendments would equitably and 

non-discriminately distribute the fee 

burden across all MSRB regulated 

entities, the MSRB believes that the Rate 

Card Fees proposed by the Rate Card 

Amendments would not have an impact 

on competition and, consequently, 

would not impose any burden on 

competition, relieve a burden on 

competition, nor promote competition. 

Accordingly, the MSRB believes the 

Rate Card Fees proposed by the Rate 

Card Amendments would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act. 

The Board determined it was 

necessary and appropriate to conduct a 

comprehensive review of the MSRB’s 

overall fee structure to devise a 

methodology that reasonably and 

appropriately defrays the costs and 

expenses associated with operating and 

administering the Board, with a goal of 

arriving at a longer-term solution for 

MSRB’s revenue generation process that 

continues to ensure a sustainable 

financial position. The current fee 

structure has a semipermanent fixed 

rate of assessment for each of the above 

categories. Under the proposed Annual 

Rate Card Process, categories of fees 

assessed for regulated entities would 

remain the same. However, the Board 

proposes using an annual rate-setting 

method to recalculate fee rates every 

year for each category based on factors 

described herein.99

With the proposed Annual Rate Card 

Process, the Board is adopting a 

programmatic methodology for 

assessing the fees in each category. 

While the current categories of fees 

divided amongst regulated entities 

would not change (i.e., the 

Underwriting Fee, Transaction Fee, 

Trade Count Fee, and Municipal 

Advisor Professional Fee) in the 

proposed Annual Rate Card Process, the 

proportional share of each category 

would vary less over the long term than 

under the current fee structure and 

would be consistent with the average 

shares paid by each category of fees in 

recent fiscal years.100 The proposed 

Annual Rate Card Process allows the 

Board to review a change in budgeted 

expenses compared to the prior year and 

compare it to the projected market 

activities for each category of fees in the 

upcoming year. Any over/under 

assessment in the prior year within each 

class of fee payer would be factored into 

any change in the fee rate for the 

subsequent year. Fee rates would be 

established prior to or in the fourth 

quarter of each calendar year to be 

effective on the following January 1 and 

would last until December 31. However, 

for Fiscal Year 2023, the first year of 

adoption, the effective date would start 

from October 1, 2022 and end on 

December 31, 2023 for a fifteen-month 

period. Following the inaugural fifteenmonth Annual Rate Card proposed by 

the Rate Card Amendments, in 

subsequent years, the fee rates for each 

category would be adjusted on a 

calendar year basis starting in January to 

compensate for any over/under 

assessment in the prior fiscal year, in 

addition to accommodating any change 

in other considerations (e.g., change in 

annual expenses, change in projected 

market volume, prior year revenue 

variances as compared to budget, 

change in reserve target and certain 

limitations on fee increases). 

For Fiscal Year 2023, the Board is also 

projecting a revenue/expense imbalance 

(i.e., an operating deficit) without a 

change in the current fee structure.101 In 

the past, excess organizational reserves 

buffered budget deficits (though the 

budgeted deficits were typically not 

realized due to excess revenue collected 

versus budget or expense savings, 

unless intended deficits due to rebates 

or temporary fee reductions); however, 

now that the excess reserves are being 

eliminated because of the Fiscal Year 

2021 Temporary Fee Reduction, any 

deficit would require a fee increase in 

Fiscal Year 2023 to cover the gap and 

maintain a balance between revenues 

and expenses, regardless of the fee 

structure used. Therefore, the proposed 

rule change also includes a rate increase 

for the Underwriting Fee, Transaction 

Fee, Trade Count Fee, and Municipal 

Advisor Professional Fee for the Annual 

Rate Card proposed by the Rate Card 

Amendments. It should be noted that 

the Board last raised the rate for the 

Transaction Fee and technology fee in 

Fiscal Year 2011 when the technology 

fee was first imposed, and last raised the 

rate for the Underwriting Fee more than 

20 years ago.102

Necessity of the Rate Card Amendments 

The Board believes Rate Card 

Amendments are necessary and 

appropriate to: 

(i) maintain a fair and equitable 

balance of reasonable fees and charges 

among regulated entities; 103

(ii) better mitigate fee assessment 

volatility based on Market Activity 

Fees,104 which has contributed to the 

growth of the MSRB’s excess 

reserves; 105 and 

(iii) ensure a prudent long-term 

approach to organizational funding that 

addresses projected structural operating 

deficits under the current fee structure 

in near-term fiscal years.106


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107See related discussion supra under section 

entitled ‘‘Board Review of the Current Fee 

Structure—Mitigating the Impact of Market 

Volatility.’’ See also Exhibit 3, ‘‘Chart 1—Historical 

Revenue Variances: Budget vs. Actual,’’ ‘‘Chart 2— 

Historical Budget vs. Actual Revenue for the Rate 

Card Fees,’’ and ‘‘Chart 4—Rate Card Fees: 

Historical Activity Volume Variance Budget to 

Actual.’’ 

108The 2021 Temporary Fee Reduction is the 

MSRB’s largest temporary fee reduction, which was 

initiated during Fiscal Year 2021 and is expected 

to last until September 30, 2022. Link to the 2021 

Temporary Fee Reduction and related citations 

supra at note 12. The MSRB also filed for a separate 

temporary fee reduction during Fiscal Year 2019. 

See Exchange Act Release No. 85400 (Mar. 22, 

2019), 84 FR 11841 (Mar., 28 2019) File No. SR– 

MSRB–2019–06. 

109See Stakeholder Comments to the MSRB’s 

Strategic Priorities (link at note 34 supra). 

Specifically, one commenter asked the MSRB to 

better address the volatility in revenues and the 

corresponding excess in MSRB organizational 

reserves. See, e.g., BDA Comment Letter, at p. 3– 

4 (link and citation at note 51). 

110See related discussion supra under section 

entitled ‘‘Board Review of the Current Fee 

Structure—Mitigating the Impact of Market 

Volatility.’’ See also Exhibit 3, ‘‘Chart 1—Historical 

Revenue Variances: Budget vs. Actual,’’ ‘‘Chart 2— 

Historical Budget vs. Actual Revenue for the Rate 

Card Fees,’’ and ‘‘Chart 4—Rate Card Fees: 

Historical Activity Volume Variance Budget to 

Actual.’’ 

111See related discussion supra under ‘‘Proposed 

Annual Rate Card Approach—Limitations on Rate 

Changes to Promote Predictability and Stability’’ 

(discussing various limitations on future increases 

of the Rate Card Fees). See also Exhibit 3, ‘‘Chart 

5—Historical Effective Fee Rate Changes.’’ 

112See related discussion supra under ‘‘Proposed 

Annual Rate Card Approach.’’ 

113See notes 14, 15, 18, and 22 supra and related 

discussion for explanations of why the Board to 

determined not to include certain fees in the Rate 

Card Fees and the Annual Rate Card Process. 

Because market events, when 

combined with the current fee structure, 

partially contributed to the excess 

reserves in recent years, the Board 

believes it is reasonable and appropriate 

to adopt a new approach to reduce the 

variability over time in fee assessments 

and mitigate the impact of market 

volatility over time by adjusting for 

budget surpluses or shortfalls annually, 

therefore providing a better mechanism 

for effectively managing fee rates and 

reserve levels.107 In the recent past, 

higher-than-expected new issue and 

secondary market volumes caused fees 

assessed from dealers to exceed budgets 

and, combined with lower-thanexpected expenses, led to increases in 

reserves that necessitated rebates or 

temporary fee reductions to manage 

reserve levels. To reduce excess 

reserves, the Board instituted ad hoc 

rebates in Fiscal Year 2014 and Fiscal 

Year 2016 and temporary fee reductions 

via filings with the Commission for 

Fiscal Year 2019 and for Fiscal Year 

2021 and Fiscal Year 2022 to reduce the 

excess reserves.108 As a result, there has 

been volatility in fee collections (since 

these are market-based fees) and 

MSRB’s reserve levels in recent years.109

The same dynamics could also exist if 

actual new issue and secondary market 

activities fail to meet projected volumes, 

resulting in a revenue shortfall, which 

would prompt new filings to increase 

rate assessments to close the gap. 

Without devising a new fee approach, 

it is likely the MSRB would again be 

forced to deal with large reserve 

excesses or shortfalls on an ad hoc basis 

in the future, which would not be a 

sustainable path going forward.110

Specifically, the proposed Annual Rate 

Card Process would (i) better mitigate 

the impact of market volatility on the 

MSRB’s revenue structure (and, 

consequently, also better mitigate the 

impact of market volatility on the 

MSRB’s organizational reserves), and (ii) 

maintain rates within a reasonably 

predictable range that, while subject to 

more incremental changes each year, 

would be comparably more stable over 

the long term than the MSRB’s current 

fee structure.111 In this way, the Annual 

Rate Process is intended to establish a 

fee framework that is more transparent 

and predictable for the MSRB’s 

stakeholders that would mitigate market 

volatility over time, while also retaining 

the Board’s ability to flexibly react to 

changing circumstances year-to-year 

when establishing reasonable fees on 

regulated entities.112

Baseline and Reasonable Alternative 

Approaches 

The current fee assessment structure 

is used as a baseline to evaluate the 

benefits, the costs, and the burden on 

competition of the proposed Annual 

Rate Card Process. Furthermore, the 

proposed rate increase for Market 

Activity Fees and Municipal Advisor 

Professional Fee for the Fiscal Year 2023 

Annual Rate Card would have occurred 

regardless of which fee structure is 

adopted since excess reserves are being 

eliminated through the 2021 Temporary 

Fee Reduction and the need to cure the 

Fiscal Year 2023 structural budget 

deficit; therefore, the Board’s 

assessment in this section focuses on 

the comparison of the two fee structures 

setting aside the increases to the rates of 

assessment for the Rate Card Fees 

proposed by the Rate Card Amendments 

for Fiscal Year 2023 extending to 

December 2023. 

In addition to the proposed new fee 

rate setting approach, the MSRB also 

considered a few other fee assessment 

options but ultimately decided that the 

proposed Rate Card Fee structure is the 

best approach to ensure a stable revenue 

stream for the MSRB while reducing the 

volatility from Market Activity Fees 

assessed and the need for ad hoc fee 

filings with the Commission, without 

instituting a fundamental change in how 

the MSRB assesses fees that may disrupt 

regulated entities’ financial expectations 

and operations. 

For example, one alternative the 

MSRB reviewed was to include other 

sources of revenue in the Annual Rate 

Card Process. The MSRB evaluated 

whether to include in the variable rate 

card pool approach the municipal funds 

underwriting fees, annual fees, and 

initial fees. However, the MSRB 

ultimately decided not to include those 

fees for a variety of reasons, including 

the fact that each of those fees 

constitutes a much smaller proportion 

than the four categories in the proposed 

Annual Rate Card Process.113

Additionally, the Board also 

considered a different way to apportion 

fees within each class of fee payer but 

decided that the proposed Annual Rate 

Card Process is the best way to achieve 

proportionate revenue based on the 

MSRB’s available information, i.e., 

underwriters pay based on their volume 

underwritten, trading firms pay based 

on their trading activities (in par value 

and trade count), and municipal 

advisory firms pay based on the 

headcount of a firm. 

A fee assessment method based on a 

percentage of each municipal advisory 

firm’s revenue, for example, would not 

be feasible at this time as the MSRB 

does not currently require municipal 

advisory firms to report such 

information under existing rules; and, 

more importantly, many municipal 

advisory firms would likely have 

business activities not solely related to 

municipal advisory services. In 

addition, it would increase the burden 

on municipal advisory firms as 

municipal advisory firms would have 

the responsibility to collect the relevant 

information to be used for MSRB’s fee 

assessment and also would then be 

required to report it. The MSRB believes 

at this time that the costs and burdens 

associated with collecting and reporting 

such information are not justified, and 

the Municipal Advisor Annual 

Professional Fee for each person 

associated with the firm who is 

qualified is a reasonable proxy for the 

size of relevant business activities 

conducted by each municipal advisory 

firm. 

Benefits, Costs, and Burden on 

Competition 

The proposed amendments to MSRB 

rules would result in a new fee 


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114See, e.g., related discussion supra under 

‘‘Proposed Annual Rate Card Approach—Objectives 

of the Annual Rate Card’’ and ‘‘Proposed Annual 

Rate Card Approach—Process for Setting the 

Annual Rate Card.’’ 

115These increases would be the first rate 

increases to any of the three Market Activity Fees 

since Fiscal Year 2011. As mentioned above, the 

Transaction Fee was last raised in Fiscal Year 2011 

and the Trade Count Fee was initiated in Fiscal 

Year 2011 as the technology fee. The Underwriting 

Fee was not changed in Fiscal Year 2011 but was 

last changed in Fiscal Year 2016, when it was 

reduced. In addition, the annual and initial fees 

paid by both dealers and municipal advisory firms 

were last raised in Fiscal Year 2016. 

116 15 U.S.C. 78s(b)(3)(A). 

117 17 CFR 240.19b–4(f). 

118 15 U.S.C. 78s(b)(3)(A). 

119 17 CFR 240.19b–4(f)(6). 

approach intended to align revenues 

and expenses more closely and to 

reduce the year-to-year volatility in the 

amount of fees assessed (and, as a result, 

reduce the likelihood of accumulating 

excess reserves) by targeting each fee 

category to a pre-determined proportion 

of the total revenue based on respective 

projected volumes.114 The proposed 

Annual Rate Card Process would result 

in more frequent (annual), but smaller 

downward and upward, adjustments to 

keep revenues more closely aligned 

with budgeted expenses. 

The proposed Annual Rate Card 

Process addresses the following goals 

and issues the Board identified before 

initiating the Fee Review and would 

therefore achieve the intended benefits: 

• Continue to maintain a fair and 

equitable balance of fees among all 

regulated entities, as the MSRB’s new 

fee approach proposal does not change 

the division of fees amongst regulated 

entities; 

• Design a durable fee structure for 

MSRB’s long-term needs; 

• Ensure that excess reserves would 

not likely be built up at a high level 

again by reviewing the actual reserves 

compared to the targeted reserves 

annually and incorporating any needed 

adjustments directly into the Annual 

Rate Card Process; 

• Mitigate the need for an ad hoc 

‘‘rebate’’ process, as any excess revenue 

would be used to reduce future years’ 

fees; and 

• Lower year-to-year variability in fee 

assessments, which would smooth out 

regulated entities’ budget outlays. 

For the Annual Rate Card proposed by 

the Rate Card Amendments, the 

proposed rate increases for Market 

Activity Fees,115 which would be 

applicable to all dealers who conduct 

municipal market business, and for 

Municipal Advisor Professional Fee, 

which would be applicable to all 

municipal advisory firms, are intended 

to pay for the expenses of operating and 

administering the Board, including 

execution of the MSRB’s Strategic Plan 

for ongoing technology and data 

investments, and would occur 

regardless of which fee structure the 

MSRB would adopt. Aside from the 

proposed rate increases for this Annual 

Rate Card, the Board does not believe 

the proposed Annual Rate Card Process 

would create any additional costs for 

regulated entities when compared to the 

current fee structure, as the aggregate 

fees assessed using the proposed 

Annual Rate Card Process over the 

course of multiple years would be 

equivalent to the aggregate fees assessed 

using the current fee structure, except 

with less year-to-year fluctuation since 

over or under revenue assessments 

related to market volatility would be 

operationalized through the Rate Card 

Process. 

The proposed Annual Rate Card 

Process would introduce a new fee 

structure to reduce year-to-year 

fluctuation in the amount of marketbased fees paid by each regulated entity 

over time. The MSRB believes that the 

proposed Annual Rate Card Process 

would not have an impact on 

competition and, consequently, would 

not impose any burden on competition, 

relieve a burden on competition, nor 

promote competition. The MSRB 

believes the proposed rate increase for 

the Fiscal Year 2023 Annual Rate Card 

(extending to December 2023) is 

necessary and appropriate to ensure 

prudent funding for the Board and that 

such fee increases are reasonably and 

fairly designed to be proportionately 

distributed across regulated entities in 

such a way that would not harm 

competition among regulated entities, 

nor otherwise harm the functioning of 

the municipal securities market. As a 

result, the Board does not believe that 

the proposed rate increase would result 

in any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as it would 

be applicable to all regulated entities. 

The Board also believes that no firm 

would be unduly burdened as compared 

to another firm in terms of the proposed 

rate increase. Dealers with different 

levels of underwriting and trading 

activities as well as municipal advisory 

firms with a range of headcounts would 

all be impacted proportionately by the 

proposed Annual Rate Card Process, 

including the proposed increases for the 

rates of assessment for the Fiscal Year 

2023 Annual Rate Card. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Board did not solicit comment on 

the proposed rule change. Therefore, 

there are no comments on the proposed 

rule change received from members, 

participants, or others. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change related to 

the Rate Card Amendments has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 116 and paragraph (f) of Rule 

19b–4 117 thereunder. Because the 

foregoing proposed rule change related 

to the Technical Amendments does not: 

(i) significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

for 30 days from the date on which it 

was filed, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 118 and Rule 19b– 

4(f)(6) 119 thereunder. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MSRB–2022–03 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–MSRB–2022–03. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 115 / Wednesday, June 15, 2022 / Notices 36179 

120 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Participant’’ means a firm, or 

organization that is registered with the Exchange 

pursuant to the Rule 2000 Series for purposes of 

participating in trading on a facility of the 

Exchange. See BOX Rule 100(a)(41). 

4The Exchange recently established these Reports 

as described under BOX Rule 7350(b) and (c). See 

Securities Exchange Act Release 34–94563 (March 

31, 2022), 87 FR 19985 (April 6, 2022) (Notice of 

Filing of Immediate Effectiveness of SR–BOX– 

2022–10). See Securities Exchange Act Release 34– 

94920 (May 16, 2022), 87 FR 31013 (May 20, 2022) 

(Notice of Filing of Immediate Effectiveness of SR– 

BOX–2022–18). 

5The term ‘‘BOX Book’’ means the electronic 

book of orders on each single option series 

maintained by the BOX Trading Host. See BOX 

Rule 100(a)(10). The term ‘‘Complex Order Book’’ 

means the electronic book of Complex Orders 

maintained by the BOX Trading Host. See BOX 

Rule 7240(a)(8). 

6Only displayed orders will be included in the 

Simple Order Report. The Exchange notes that it 

does not currently offer any non-displayed order 

types on its options trading platform. 7The Exchange notes that no changes are being 

made to the Open-Close Data Report fees. The 

Exchange is simply rearranging the Fee Schedule to 

account for more market data products being 

offered by BOX. 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the MSRB. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–MSRB–2022–03 and should 

be submitted on or before July 6, 2022. 

For the Commission, pursuant to delegated 

authority.120

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12839 Filed 6–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95081; File No. SR–BOX– 

2022–20] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fee 

Schedule on the BOX Options Market 

LLC Facility 

June 9, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on May 31, 

2022, BOX Exchange LLC (‘‘BOX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule on the BOX 

Options Market LLC (‘‘BOX’’) options 

facility. While changes to the fee 

schedule pursuant to this proposal will 

be effective upon filing, the changes will 

become operative on June 1, 2022. The 

text of the proposed rule change is 

available from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s internet website at http:// 

boxexchange.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange recently adopted new 

data products known as the Liquidity 

Taker Event Report—Simple Orders (the 

‘‘Simple Order Report’’) and the 

Liquidity Taker Event Report—Complex 

Orders (the ‘‘Complex Order Report’’), 

(collectively, the ‘‘Reports’’) which will 

be available for purchase by Exchange 

Participants 3 on a voluntary basis. The 

Exchange now proposes to adopt fees 

for the Reports.4

By way of background, the Reports are 

daily reports that provide a Participant 

(‘‘Recipient Participant’’) with its 

liquidity response time details for 

executions of an order resting on the 

BOX Book or Complex Order Book,5

where that Recipient Participant 

attempted to execute against such 

resting order 6 within a certain 

timeframe. The purpose of the Reports 

is to provide Participants the necessary 

data in a standardized format on a T+1 

basis to those that subscribe to the 

Simple Order Report and/or the 

Complex Order Report on an equal 

basis. These products are offered to 

Participants on a completely voluntary 

basis in that the Exchange is not 

required by any rule of regulation to 

make this data available and potential 

subscribers may purchase the Simple 

Order Report and/or the Complex Order 

Report only if they voluntarily choose to 

do so. It is a business decision of each 

Participant whether to subscribe to the 

Simple Order Report and/or the 

Complex Order Report or not. 

First, the Exchange proposes to 

rename current Section III.C of the BOX 

Fee Schedule from ‘‘Open-Close Data 

Report’’ to ‘‘Reports.’’ Further, the 

Exchange proposes to move current 

Section III.C (Open-Close Data Report) 

to new Section III.C.1.7 The Exchange 

believes that moving current Section 

III.C. to new Section III.C.1 and 

renaming Section III.C ‘‘Reports’’ will 

improve the overall readability of the 

BOX Fee Schedule and help prevent 

investor confusion because the fees for 

all market data reports will reside in one 

place in the BOX Fee Schedule. 

Next, the Exchange proposes to adopt 

new Section III.C.2 (Liquidity Taker 

Event Reports) in the BOX Fee 

Schedule. Section III.C.2 will provide 

that Participants may purchase the 

Simple Order Report and/or the 

Complex Order Report on a monthly or 

annual (12 month) basis. The Exchange 

proposes to assess a fee of $4,000 per 

month and a fee of $24,000 per year for 

a 12 month subscription for the Simple 

Order Report. The Exchange also 

proposes to assess a fee of $4,000 per 


jspears on DSK121TN23PROD with NOTICES1