MSRB defends spending on technology after criticism

Municipal Securities Rulemaking Board CEO Mark Kim Thursday highlighted the importance of the regulator's technology to the municipal bond market following public criticism of how much the agency's spends on tech at a House hearing two weeks ago.

Speaking at the Bond Dealers of America conference Thursday in Chicago, Kim said an updated and revamped Electronic Municipal Market Access website, the heavily used public site for muni data, will be launched before year end.

During a Subcommittee on Capital Markets House hearing two weeks ago, Bond Dealers of America CEO Mike Nicholas told lawmakers that nearly 60% of the MSRB's spending "goes not to market regulation but to technology and infrastructure." The agency's revamp of the EMMA website "appears to be overbudget and behind schedule," and its platforms "include unnecessary complexity and cost," Nicholas said in prepared remarks. "We ask the subcommittee to direct the SEC to examine whether MSRB expenditures are proportionate and prudently managed."

Nicholas also noted that broker-dealers "fund the overwhelming majority of the MSRB's budget – almost 80% in 2025 - through underwriting, transaction, and technology fees."

"I have lots of thoughts about your testimony Mike," Kim joked at the BDA conference. "You raised concerns about who uses our technology and what value it brings to the market," he added. "The fact that you needed to ask that question tells me that we're probably not doing a good enough job communicating that."

In 2025, EMMA received more than 49 million page views with daily traffic approaching 10,000 visitors, Kim said. "Everyone that is in this industry relies on our technology and relies on our data," he said, adding that if its trade reporting systems were to go down, the market would halt.

"EMMA gets a lot of headlines ... but it's just the tip of the iceberg," he said. The agency also has non-public websites that are used by enforcement regulators to access muni market data and dealers to access trade information, he said.

"Our technology is a critical piece" of the agency's congressional mandate, Kim said. "It's a pretty significant expense for the MSRB," he said. "And it's something that we're happy to continue conversations around — we take very seriously the responsibility to be good stewards of the resources you all provide for us."

The MSRB in October released a fiscal 2026 budget that reflects a 5.2% decrease from its FY 2025 budget. At nearly $14.9 million, information technology services ranked as the biggest FY 2026 budget expense by activity, followed by market transparency products and services at $12.2 million. Personnel was the largest expense by category, and the spending plan reduced budgeted headcount by 15%.

The layoffs included IT staff and contractors, Kim told market participants.

"We were able to right size in that area because we are at the tail end of completing a major large-scale investment in upgrading our technology," he said. "How much we spend on technology is something we're concerned about, and we appreciate the industry's scrutiny on that and want to be as transparent as possible."