Securities Law

MSRB Asks to Meet With Developers of Muni Indices, Benchmarks

WASHINGTON — The Municipal Securities Rulemaking Board has invited nine developers of municipal market indexes and benchmarks, including The Bond Buyer, to a meeting at its office in Alexandria, Va., on Aug. 16.

In a two-page letter sent to the nine firms, Alan Polsky, the board's chair, said the MSRB is holding the meeting "in response to growing market concerns about the integrity of financial market indices and market transparency."

"This meeting is intended to provide an opportunity to discuss ways to increase market participants' understanding of indices' methodologies and mechanics; to identify issues of mutual interest; and to explore enhancing market transparency through MSRB's Electronic Municipal Market Access (EMMA) website," said Polsky, senior vice president at Dougherty & Co. in Minneapolis.

The letter said the MSRB "recognizes that it does not have regulatory jurisdiction over commercial enterprises and third-party vendors." However, it continued, "the information provided to the marketplace by these entities such as the municipal market index and benchmark providers is essential to the operation of a transparency, efficient and fair municipal market."

The letter follows Polsky's announcement to reporters on Monday that the board plans to review all of the muni indexes and benchmarks with the aim of providing transparency on how they are developed and used. He stressed that the reviews are not investigations or probes and said the board is unaware of any manipulation of muni indexes at this time.

Polsky said the board wants to develop educational materials that can be used by investors and other market participants.

"We plan to preview our educational materials at this meeting and will be interested in your feedback," Polsky wrote in the letter.

The organizations invited to the meeting, besides The Bond Buyer, include: Bloomberg; Interactive Data Corp.; Markit; Municipal Market Data; Municipal Market Advisors, Standard & Poor's indices, the Securities Industry and Financial Markets Association and Thomson Reuters.

U.S. and European regulators and lawmakers have been probing allegations that the London Interbank Offered Rate has been manipulated by several big banks.



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