Alexander Chilton, the Municipal Securities Rulemaking Board's new chair, said the muni market is changing, and his goal as chair is to ensure the MSRB keeps evolving along with it.
Chilton, head of municipal securities at Morgan Stanley, was elected by the board during its quarterly meeting in July to serve as the board's FY2027 chair. His one-year term began Oct 1.
"I want us to be forward-thinking about how we regulate, how we use technology and data, and how we engage with the market, all while staying focused on where [the] MSRB can make the greatest difference in protecting investors, issuers and the public interest," he said.
Chilton, who previously chaired the board's finance committee, said he looks forward to working with Pamela Frederick, chief financial officer and treasurer of the Battery Park City Authority, who was elected to serve as the board's FY2027 vice chair, as well as with other fellow board members and MSRB staff "as we collectively advance MSRB's mission."
Beyond identifying issues, "I also want to ensure we are advancing practical solutions and following through on the priorities we established in our Strategic Plan with input from stakeholders across the market," he said.
Chairing the board's finance committee gave Chilton a "deeper understanding of the organization and reinforced the importance of connecting our priorities to the resources needed to achieve them," he said.
As a self-regulatory organization funded by the entities it regulates, the MSRB has "a responsibility to be thoughtful stewards of the resources entrusted to us, while continuing to invest in the capabilities MSRB needs to fulfill our statutory obligations," Chilton said.
"[MSRB's] approach to the FY2027 budget was not to cut simply for the sake of cutting," he said, adding, MSRB instead looked at expenses across the organization and "made disciplined choices" regarding where it could save and where investment was needed. "The savings identified in other operating areas helped offset some of the increased cost associated with technology."
Chilton's experience leading Morgan Stanley's municipal securities business also prepared him for the MSRB chair role by giving him "a robust understanding of how the market operates," he said.
"My experience across sales and trading, banking, and lending has taught me to consider issues from multiple perspectives, assess potential effects across the market and make decisions with both immediate needs and long-term consequences in mind," Chilton said. "It has also reinforced the value of bringing together people with different areas of expertise and remaining open to learning."
Asked about concern raised by dealer trade groups that dealers shoulder too much of the cost associated with supporting the MSRB, Chilton said, the MSRB has heard those concerns and they "helped inform the new multi-year rate card."
The MSRB's new rate card "provides greater predictability and stability for regulated entities, keeps market activity fee rates unchanged through 2029 and includes a 45% credit on those fees in 2026 and 2027," he said.
"We will continue to assess our funding approach with an emphasis on fairness, transparency and responsible stewardship," Chilton said.
The new MSRB chair also commented regarding amendments to MSRB Rule G-27 on dealer supervision, which the Securities and Exchange Commission
"The SEC's approval of the G-27 amendments is an important step in our ongoing retrospective rule reviews," Chilton said. "We will continue listening to stakeholders and evaluating whether our rules appropriately reflect the way the market operates today."
In assuming his role as MSRB chair, Chilton is following in the footsteps of Patrick Brett, the MSRB's FY2022 chair, which is something he's done before and what led him into the muni business. The two met when Chilton was a freshman and Brett was a senior at the University of Pennsylvania where they were both members of a debate team.
When Chilton was looking for a job, Brett was already working in Citigroup's municipal bond department.
"I fell into the municipal market because Patrick chose to work in the municipal market, and I really wanted to have the opportunity to work for him," Chilton said.
While Chilton's decision to join Citigroup's muni bond department was based more on the people he would be working for and with rather than any particular affinity for the muni industry itself, his thinking regarding the industry "really changed over time" as he got to know the muni market, he said.
"I feel very fortunate to be able to work in a market where what we do is tangible," he said, adding that in the U.S., "we have a really interesting and special ecosystem here, where our localities can make decisions themselves as to whether they want infrastructure."
According to the MSRB's website, state and local governments account for
The U.S. is a place where Chilton, who grew up in Kansas, said he can walk around and say, "Oh, you know we issue bonds for that hospital," or that his team is working with the transit system responsible for the train he rides to work.
It's nice to be in a field of finance "where we're doing … a tangible good, I think, for people and for the country," he said, adding, retail investors, who account for the biggest slice of muni bond holdings, "are also predominantly the people who use the infrastructure."
After beginning his career in Citigroup's municipal finance department, Chilton went on to become a partner at Whitehaven Asset Management, working on an investment fund focused on the municipal market. He joined Morgan Stanley in 2015.
Chilton, who is also a member of the Penn Institute for Urban Research advisory board, holds bachelor's degrees in both economics and engineering as well a master's degree in engineering from the University of Pennsylvania.
So, outside of work, does Chilton have any hobbies?
"Yes, annoying my children as I drive them around from activity to activity pointing out all the municipal projects that I had the opportunity to work on," he quipped, adding, while his kids are starting to learn about the kind of work he's involved in, at this stage their reaction is more "Dad, why are you telling me about this? … I'm just trying to get to my soccer game."
