Voglio sapere a riguardo di…

13596

Federal Register / Vol. 86, No. 44 / Tuesday, March 9, 2021 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES

2021.23 Market 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
historically has exceeded the amount budgeted.24 Therefore, the Board has determined that market activity fees paid by dealers have uniquely and directly contributed to the MSRBs excess reserves position while other fees collected from regulated entities have not. Specifically, the other fees collected by the MSRB have provided a relatively smaller portion of the MSRBs actual revenue, in comparison to market activity fees, and, at the same time, the other fees have not exceeded their respective budgeted amounts as consistently and to the same degree as market activity fees, if at all.25 Thus, unlike market activity fees, the Board has determined that these other fees on regulated entities have not contributed to the MSRBs excess reserves position.26
As the Board has considered and revisited the reasonable fees and charges necessary or appropriate to defray the costs and expenses of operating and administering the MSRB, the Board has continually strived to have a fair and equitable balance of fees among regulated entities.27 Accordingly, the Board has determined that the market activity fees that directly contributed to the excess reserves position should be the fees that are targeted for a temporary reduction, and so market activity fees paid by dealers are the subject of the proposed rule change.
The Board continually seeks to strike the right balance in fee assessments to maintain sufficient reserves to ensure fiscal sustainability, while providing relief to regulated entities that have contributed to the excess reserves position. The temporary eighteen-month fee reduction for certain market activity 23 See MSRB Fiscal Year 2021 Budget link at note 15 supra. Notably, this amount is generally consistent with recent prior fiscal years.
24 Although the organizations revenue sources have become modestly more diversified since the initial enactment of the Dodd-Frank Actwhen market activity fees accounted for 90 percent or more of the Boards annual revenue in certain fiscal yearsmarket activity fees paid by dealers still accounted for approximately 80 percent of actual revenue in Fiscal Year 2018 $33.5 million, 72
percent in Fiscal Year 2019 $24.4 million, and 77
percent in Fiscal Year 2020 $36.6 million. The MSRBs Financial Statements for these years are available at http msrb.org/About-MSRB/Financialand-Other-Information/Annual-Reports.aspx.
25 Id.
26 Id.
27 See, e.g., MSRB Regulatory Notice 201720
Sept. 29, 2017 The MSRB will continue to review and evaluate its fees over time to ensure that fees are allocated fairly and equitably across all regulated entities.

VerDate Sep<11>2014

17:03 Mar 08, 2021

Jkt 253001

fees assessed on dealers would continue these ongoing efforts, allowing the Board to take timely action to provide relief and reduce reserves to target levels while undertaking a longer-term effort to assess and potentially develop a revised fee structure to be implemented at the conclusion of the temporary fee reduction period.28
Proposed Rule Change The proposed rule change would enact a temporary fee reduction on market activity fees by amending section MSRB Rule A13h to reduce by 40 percent the fees for assessable activity that occurs on April 1, 2021
through September 30, 2022.29
Amended MSRB Rule A13hi would provide that the underwriting assessment for certain primary offerings during this period would be .00165% of the par value $0.0165 per $1,000, a reduction of 40 percent from .00275% of the par value $.0275 per $1,000
assessed under MSRB Rule A13ci.
Amended MSRB Rule A13hii would provide that the transaction assessment during this period would be .0006% of the par value $0.006 per $1,000, a reduction of 40 percent from .001% $.01 per $1,000 assessed under MSRB Rule A13di and MSRB Rule A13dii.
Amended MSRB Rule A13hiii would provide that the technology assessment during this period would be $0.60 per transaction, a reduction of 40
percent from $1.00 per transaction assessed under MSRB Rule A13div.
The temporarily reduced rates would be for assessable activity that occurs during this eighteen-month period, inclusive of activity occurring on the beginning date of April 1, 2021 and the end date of September 30, 2022.30 Effective October 1, 2022, the rates of assessment for these market activity fees would revert to current levels on assessable activity occurring on and after that date.
2. Statutory Basis The MSRB believes that the proposed rule change is consistent with Section 28 As noted, and for the reasons otherwise discussed herein, underwriting assessments charged pursuant to Rule A13cii to dealers acting as underwriters of municipal fund securities are not included in the temporary fee reduction.
29 The 40 percent is relative to the existing market activity fees respectively specified in MSRB Rule A13ci and MSRB Rule A13d. Note, however, that the proposed rule change would amend the temporary fee reduction language of MSRB Rule A
13h and would not change the text of MSRB Rule A13ci or MSRB Rule A13d.
30 Dealers are typically billed for these fees after the relevant month end. Specifically, the underwriting fee is billed immediately after the respective month end, while the transaction and technology fees are billed thirty days in arrears.

PO 00000

Frm 00078

Fmt 4703

Sfmt 4703

15Bb2J of the Act,31 which states that the MSRBs 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. Such rules shall 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.

The MSRB believes that its rules provide for reasonable dues, fees, and other charges among regulated entities.
The MSRB believes that the proposed rule change is necessary and appropriate to fund the operation and administration of the Board and satisfies the requirements of Section 15Bb2J,32 achieving a more reasonable fee structure, a more equitable balance of fees among regulated entities, and a fairer allocation of the expenses of the MSRB.
As described above, the MSRBs reserves position currently exceeds its target. This surplus has continued despite prior efforts undertaken by the Board to address the MSRBs financial position, such as budgeting operating deficits, providing for prior fee reductions,33 and making strategically significant investments in market transparency systems.34 Accordingly, the Board has determined to seek this additional temporary fee reduction for market activity fees after considerable analysis and deliberation, particularly regarding the advantages, disadvantages, and outcomes of its prior activities. Both in light of the impact of the COVID19
pandemic on the MSRBs Fiscal Year 2020 financial results and also when considered in conjunction with its planned broader examination of the MSRBs fee structure, the Board believes that the proposed rule change resulting in the temporary fee reductions is preferable at this time to address the excess reserves position instead of, for example, funding anticipated future operating deficits over a number of years until excess reserves are depleted.
In this way, the Boards determination to seek the proposed rule changes 31 15

U.S.C. 78o4b2J.

32 Id.
33 See note 22 supra and related discussion regarding prior temporary fee reductions in Fiscal Year 2019. See also Release No. 3475751 Aug. 24, 2015, 80 FR 52352 Aug. 28, 2015 File No. SR
MSRB201508 amending the underwriting fee, among other amendments.
34 See note 17 supra and related discussion identifying examples of such investments.

E:FRFM09MRN1.SGM

09MRN1