BDA adds more small firms to its ranks

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A new membership category is allowing the Bond Dealers of America to broaden its advocacy to dozens of small regional firms, and the group says it has plans to add many more firms to its ranks in the future.

BDA's new Affiliate Member Division, formed through a partnership with one of its largest members — Hilltop Securities Inc. — expands the lobbying group's voice to smaller firms.

“With the addition of our first 50 affiliate members, the BDA’s membership expands to 125 members and we look forward to additional growth as more firms take advantage of this opportunity," said BDA CEO Mike Nicholas.


The affiliate memberships are available to broker-dealers with a total annual revenue of $10 million or less that clear through a current BDA member firm. HilltopSecurities is covering the membership of the first 50 affiliate members.

First Financial Equity Corporation has just under 200 brokers and its President and CEO Jeff Graves said they don’t currently have any lobbying capabilities or meaningful voice when it comes to fixed income advocacy on Capitol Hill.

“It gives us a voice where we probably didn’t have the time, the energy or the money to realistically put that forward by ourselves,” Graves said. “There’s power in numbers.”

Graves was eager to attend BDA’s conferences throughout the year and to partake of BDA’s political insight and gain a deeper understanding of how rules are made.

Members will get regular emails from BDA on legislative activity related to tax-writing and U.S. securities-focused congressional committees, updates from regulators, access to surveys and networking.

Trade groups tend to focus on their biggest clients, Nicholas said.

“They (smaller firms) get lost in the weeds,” Nicholas said. “They don’t have the money to pay the dues that larger firms do. So like every trade group, or law firm, it doesn’t matter who it is, you pay the most attention to your biggest clients.

Nicholas added that BDA has been trying to manage representation of all of its member firms.

The vast majority of BDA’s firms are traditional regional middle market firms, with several large firms.

Advocacy in the muni market has evolved recently, especially impacted by the elimination of tax-exempt advance refundings and near-demise of private activity bonds in the 2017 Tax Cuts and Jobs Act.

That led to a larger, more focused and more collaborative municipal market lobby in Washington and the growth of BDA and more collaboration among market groups.

Since BDA’s 2008 founding, it has grown from 14 full members to more than 70. Also in 2008, BDA had two staff and zero outside counsel or lobbying, and today has several staffers and law firm Nixon Peabody on retainer.

This summer it also added Loop Capital Markets and Mesirow Financial to its ranks.

This also comes at a time when bond dealers’ regulatory costs have been steep. In a BDA survey conducted from December 2018 to February 2019, primarily middle-market and regional broker-dealers, reported spending about 20% more money and time on regulatory compliance than they did before 2010.

Dealers, like other municipal market participants have had to adjust to many new regulations over the past decade. The 2010 Dodd-Frank Act led to a new municipal advisor regulatory regime, including new muni securities rules governing firms and individuals who provide bond advice to state and local governments.

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