Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving a Proposed Rule Change To Amend Rule G-14 RTRS Procedures Under MSRB Rule G-14 Regarding the Timing of Reporting Transactions in Municipal Securities to the MSRB and To Make a Related Amendment to Rule G-12

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-103987; File No. SR-MSRB-2025-01]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving a Proposed Rule Change To Amend Rule G-14 RTRS Procedures Under MSRB Rule G-14 Regarding the Timing of Reporting Transactions in Municipal Securities to the MSRB and To Make a Related Amendment to Rule G-12</SUBJECT> <DATE>September 16, 2025.</DATE> <HD SOURCE="HD1">I. Introduction</HD> On June 10, 2025, the Municipal Securities Rulemaking Board (“MSRB” or “Board”) filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)  <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> a proposed rule change to (i) amend Rule G-14 RTRS Procedures under MSRB Rule G-14, on reports of sales or purchases, to rescind a previously approved but not yet effective shortening of the amount of time within which brokers, dealers and municipal securities dealers (“dealers”) must report most transactions to the MSRB, reverting such timeframe to the currently operative 15-minute reporting timeframe, (ii) amend the Rule G-14 RTRS Procedures to eliminate two previously approved but not yet effective reporting exceptions and a manual trade indicator relating to the rescinded shortened timeframes, and (iii) make a related conforming amendment to MSRB Rule G-12, on uniform practice (“Rule G-12”), as described herein (the “proposed rule change”). <SU>3</SU> <FTREF/> The proposed rule change was published for comment in the <E T="04">Federal Register</E> on June 20, 2025. <SU>4</SU> <FTREF/> On July 22, 2025, the Commission extended until September 18, 2025, the time period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change. <SU>5</SU> <FTREF/> The Commission received comment letters on the proposed rule change. <SU>6</SU> <FTREF/> The MSRB filed a response to comments on File No. SR-MSRB-2025-01. <SU>7</SU> <FTREF/> <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <FTNT> <SU>3</SU>   <E T="03">See</E> Exchange Act Release No. 103262 (June 16, 2025), 90 FR 26390 (June 20, 2025) (“Notice”). Comments on the proposed rule change are available at <E T="03">https://www.sec.gov/comments/sr-msrb-2025-01/srmsrb202501.htm.</E> </FTNT> <FTNT> <SU>4</SU>   <E T="03">See</E> Notice, 90 FR at 26390. </FTNT> <FTNT> <SU>5</SU>   <E T="03">See</E> Exchange Act Release No. 103516 (July 22, 2025), 90 FR 35325 (July 25, 2025). </FTNT> <FTNT> <SU>6</SU>   <E T="03">See</E> Letters to Secretary, from Christopher A. Iacovella, President & Chief Executive Office, American Securities Association (July 10, 2025) (“ASA Letter”); Gerar O'Reilly, Co-CEO and Co-Chief Investment Officer, and David A. Plecha, Global Head of Fixed Income, Dimensional Fund Advisors LP (July 10, 2025) (“Dimensional Fund Advisors Letter”); Kenneth E. Bentsen Jr., President and CEO, SIFMA and SIFMA Asset Management Group (July 11, 2025) (“SIFMA Letter”); Howard Meyerson, Managing Director, Financial Information Forum (“FIF Letter”); Michael Decker, Senior Vice President, Research and Public Policy, Bond Dealers of America (July 11, 2025) (“BDA Letter”); Tyler Gellasch, President and CEO, Healthy Markets Association (Aug. 8, 2025) (“HMA Letter”). One of these commenters also commented on the governance practices and rulemaking processes of the MSRB. <E T="03">See</E> ASA Letter at 2-5. Those comments are outside of the scope of the proposed rule change. </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> Letter to Secretary, Commission, from Ernesto A. Lanza, Chief Regulatory and Policy Officer, MSRB, dated September 5, 2025, <E T="03">available at https://www.sec.gov/comments/sr-msrb-2025-01/srmsrb202501-648967-1945034.pdf</E> (“MSRB Letter”). </FTNT> <HD SOURCE="HD1">II. Description of the Proposed Rule Change</HD> On September 20, 2024, the Commission issued an order approving proposed rule change SR-MSRB-2024-01, as modified by Amendment No. 1, which modified, among other things, the baseline 15-minute reporting requirement for reporting trades to MSRB's Real-time Transaction Reporting System (“RTRS”) in two ways: (i) reducing the deadline for reporting such trades to no later than one minute after the Time of Trade (the “one-minute reporting requirement”) and (ii) requiring that trades be reported as soon as practicable, regardless of the amended deadline (the “as soon as practicable requirement”). <SU>8</SU> <FTREF/> Under file No. SR-MSRB-2024-01, the MSRB also added two new exceptions to the new one-minute reporting requirement for trades with a manual component  <SU>9</SU> <FTREF/> and for trades by dealers with limited trading activity  <SU>10</SU> <FTREF/> and included a requirement that dealers append a new manual trade indicator to identify all manual trades. <SU>11</SU> <FTREF/> The 2024 Amendments were intended to make publicly available more timely information about the market and the prices at which municipal securities transactions are executed. <SU>12</SU> <FTREF/> The MSRB has not implemented the changes approved in File No. SR-MSRB-2024-01. <FTNT> <SU>8</SU>   <E T="03">See</E> Exchange Act Release No. 101118 (Sept. 20, 2024), 89 FR 78955 (Sept. 26, 2024), File No. SR-MSRB-2024-01 (the “2024 Amendments”). The 2024 Amendments were developed in close coordination with the Financial Industry Regulatory Authority (“FINRA,” and together with the MSRB, the “SROs”). </FTNT> <FTNT> <SU>9</SU>   <E T="03">See</E> 2024 Amendments, 89 FR at 78957-59. </FTNT> <FTNT> <SU>10</SU>   <E T="03">See id.</E> at 78957. </FTNT> <FTNT> <SU>11</SU>   <E T="03">See id.</E> at 78959. </FTNT> <FTNT> <SU>12</SU>   <E T="03">See id.</E> at 78956. </FTNT> Following the approval of the amendments, the MSRB stated that it “continued to engage with market participants and received further feedback expressing various concerns regarding aspects of the one-minute reporting requirement.”  <SU>13</SU> <FTREF/> According to the MSRB, these concerns emerged as dealers began to consider the “specific steps they would need to undertake” to comply with the 2024 Amendments. <SU>14</SU> <FTREF/> According to the MSRB, these concerns related to additional scenarios involving potential trades with a manual component beyond those discussed in the 2024 Amendments, and to issues that could arise in the case of certain fully automated trades. <SU>15</SU> <FTREF/> Specifically, the MSRB noted that the scenarios identified by the dealers raised the prospect that a potentially broader array of circumstances than previously anticipated during the course of the rulemaking for the 2024 Amendments may exist where, at this time, the adjustment of dealer systems and workflows, including those dependent on third party vendors or market utilities associated with achieving and complying with the shortened reporting timeframes under the 2024 Amendments might not be feasible in the near-term. <SU>16</SU> <FTREF/> <FTNT> <SU>13</SU>   <E T="03">See</E> Notice, 90 FR at 26391. </FTNT> <FTNT> <SU>14</SU>   <E T="03">See id.</E> </FTNT> <FTNT> <SU>15</SU>   <E T="03">See id.</E> </FTNT> <FTNT> <SU>16</SU>   <E T="03">See id.</E> </FTNT> The MSRB also explained that in reviewing trade reporting data through the end of 2024 that reflected market practices since the 2022 trade reporting data used in connection with the 2024 Amendments, it had observed that trades that were likely reported electronically were being reported more rapidly in 2024 as compared to 2022. <SU>17</SU> <FTREF/> In addition, the MSRB noted that, to the extent dealers are not already reporting trades as soon as practicable, the inclusion of the requirement for reporting as soon as practicable would have the effect of increasing the proportion of trades being reported within shorter timeframes than they currently are, without regard to a one-minute, five-minute or 15-minute deadline, potentially translating into significant improvement in market-wide average reporting times and in turn reducing market-wide lags in pricing information being made more widely available and reduce information arbitrage. <SU>18</SU> <FTREF/> The MSRB explained that it believed that the inclusion of the as soon as practicable requirement may, by itself, result in improvements in the timing of trade reporting, with greatest improvements likely to occur for those trades currently being reported nearer to the 15-minute deadline. <SU>19</SU> <FTREF/> <FTNT> <SU>17</SU>   <E T="03">See id.</E> at 26396, Table 2—Trade Report Time Comparison: 2022 and 2024 and accompanying text. </FTNT> <FTNT> <SU>18</SU>   <E T="03">See id.</E> at 26392. </FTNT> <FTNT> <SU>19</SU>   <E T="03">See id.</E> </FTNT> Consistent with the MSRB's goal to enhance market transparency without the potential compliance burdens and costs associated with the one-minute reporting requirement and the use of a special condition indicator for trades with a manual component, the MSRB determined that it would be appropriate to rescind the one-minute reporting requirement and related provisions of the 2024 Amendments, and revert the rule language to maintain the currently-operative 15-minute RTRS reporting standard. <SU>20</SU> <FTREF/> In addition, the MSRB has also determined to retain the as soon as practicable requirement and related provisions, as well as certain other clarifying amendments, of the 2024 Amendments. Therefore, and as described more fully in the Notice, the M ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 39k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━