WASHINGTON — The Regional Bond Dealers Association is in the midst of a makeover as it expands from a scrappy startup of just 14 firms into a more established industry group that continues to focus exclusively on domestic fixed-income markets.
Well into its third year, RBDA is becoming Bond Dealers of America, shedding “regional” from its name to reflect the fact that most of its current 35 members firms are headquartered throughout the country and do business from coast to coast rather than in one region.
“In a very short period, the association has become the established, go-to organization for the industry, as well as legislators and regulators seeking expert perspectives on U.S. fixed-income markets,” said Ken Williams, president and chief executive officer of Stone & Youngberg LLC and chair of the BDA. Its other members include Raymond James & Associates Inc., George K. Baum & Co., Wells Fargo Securities, Stephens Inc., BB&T Capital Markets, Fifth Third Securities Inc., and most recently, Piper Jaffray & Co.
Though it has more than doubled in size, the group has sought to remain nimble and to distinguish itself from larger industry groups, namely the Securities Industry and Financial Markets Association, Wall Street’s main trade group that includes the world’s largest financial services firms.
In contrast, the main limitation on BDA members is that they not be very large: The group excludes bulge-bracket firms and those designated by the Federal Reserve as primary dealers.
“We’re here to ensure that our members’ interests are understood and appreciated in Washington, D.C., above the competing din of larger global banks and to help convene the fixed-income industry’s best minds to make all of our members stronger,” said Mike Nicholas, the BDA’s chief executive officer.
Last year, the BDA’s board unanimously turned down a proposal to dissolve and merge into SIFMA as part of an effort by the larger trade association to bring Nicholas and then co-CEO Michael Decker back to SIFMA.
The pair had left SIFMA in early 2008 to help create RBDA, which was formed that March of that year after regional dealers felt their issues were not adequately addressed by SIFMA. That larger trade group was struggling to merge two predecessor organizations, The Bond Market Association and the Securities Industry Association.
Decker ultimately moved back to SIFMA as co-head of its municipal securities division in October, part of multiple moves by the larger trade group to amplify its focus on the muni market. But Nicholas said he stayed with RBDA because “my interest has always been doing what I can to help build this organization.”
“RBDA was formed because dealers wanted focused fixed-income advocacy,” he added. “It’s hard to see how our dealers would have the same focus in a trade association as diverse as SIFMA.”
Nicholas said that while Decker left for his own personal reasons, his departure “did not hurt this organization in any way.”
The BDA’s operating revenue of just $2 million is dwarfed by SIFMA’s nearly $100 million. But Nicholas said it is enough to focus on the issues that matter most to member firms and that have been addressed in some fashion in the new financial regulatory reform law: regulations that discourage firms from becoming “too big to fail,” credit rating fairness for municipal issuers, and a level regulatory playing field for muni market advisers.
Going forward, the group’s top issue is an extension small-issuer exemptions for bank-qualified bonds as well as the Build America Bond program, Nicholas said.
Not all of the changes to the BDA are aesthetic. The group plans to soon hire a policy director who will principally focus on building out the restructuring of the group into two main divisions, one focused on taxable fixed-income issues and the other on municipal fixed-income issues. The policy director will join Nicholas and William Daly, the BDA’s senior vice president of government relations, who was hired early this year. The group also continues to have relationships with Nixon Peabody LLP on legal matters and with lobbyist Ellen Marshall tax issues.
