Incoming MSRB chair will preside over a shift in focus

Register now

PHOENIX -- Trailblazer Lucy Hooper is set to preside over a significant shift at the Municipal Securities Rulemaking Board, as the board finishes mandated rulemaking for municipal advisors and focuses more on reviewing some existing rules to determine if they need updating as well as helping market participants comply with its rules.

Hooper, who assumes the chairmanship of the board with the start of the MSRB’s new fiscal year Oct. 1, is an executive vice president and director of fixed income sales and trading with Davenport & Company.

A member of the MSRB since 2014, she becomes chair as the board undertakes a review of its rules on primary offering practices to determine if developments in recent years warrant their updating. The board is also trying to do more outreach to market participants so that they understand its rules and can better comply with them.

The board’s new agenda represents what Hooper considers a “shift in focus” following its conclusion of municipal advisor rulemaking mandated by the Dodd-Frank Act, which subjected municipal advisors to federal oversight and regulation.

Hooper hails from Front Royal, Va., a town of about 15,000 situated just off Interstate 66 some 70 miles west of Washington, D.C. She graduated from Randolph-Macon Woman’s College, now called Randolph College, in Lynchburg, Va., and moved to Richmond, Va. with friends.

She went to work for First and Merchant National Bank, which became Sovran Bank. Hooper said she became administrative assistant to the chief economist, and then worked as a trader of government securities for a year before launching what would be her main career in institutional bond sales.

Hooper was among the first wave of muni professionals to take and pass the MSRB’s Series 52 exam for municipal securities representatives, which debuted in late 1978. She passed the test in March 1979 and in 1981 was again breaking new ground when she was recruited to become the first female professional at Richmond-based Davenport, which was then a fairly small firm. She has been there ever since.

Hooper said she is taking a holistic view of the MSRB’s strategic goals, a multiyear list of priorities that the board released earlier this year. It includes education to market participants to help them comply with the rules, continued evolution of the board’s EMMA website, optimizing the use of market data to improve transparency, leveraging the MSRB’s expertise to advance the integrity and efficiency of the market, and promoting financial sustainability of the MSRB.

“When you look at our strategic goals, not one is more important to me than the other,” Hooper said. “We will try to make EMMA the best it can be for all of our users." She said the board has lots of data that it will be studying to glean more information about the municipal securities market.

There has been a bit of controversy regarding the MSRB’s finances over the years, with some market participants questioning why the self-regulator needs such large financial reserves: its annual report for the 2016 fiscal year lists more than $69.5 million in net assets, the majority of which is investments. Hooper said the MSRB is constantly reviewing its financial position and the way it uses its funds, most of which come from fees assessed on regulated parties. Dodd-Frank also gave the MSRB a share of fines that the Securities and Exchange Commission and Financial Industry Regulatory Authority collect for MSRB rule violations.

The board will be publishing a budget summary sometime in October in the interest of transparency, Hooper said.

In early September, the board published a notice aimed at discouraging issuers from making “selective disclosure,” a practice in which issuers make certain information known to a select group of investors, often unintentionally. The guidance generated some criticism from attorneys in the market, who believed it was outside the MSRB’s core mission because the board does not regulate issuers. Disclosure proponents worried it might cause issuers to disclose less information out of an abundance of caution to avoid making selective disclosure. Hooper said the board has a lot of expertise and will likely continue to share it on important muni market topics.

“Those are the kinds of issues where we think that we, as a board and a staff, can share our expertise, Hooper said. “It would be our intent to do more of that.”

The board will continue to be focused on educating regulated entities, she stressed.

“What we want to do is help people comply with our rules,” said Hooper. “We want to educate, we want to give them the tools and resources. Firms are asking for that.”

Hooper will chair the board until Sept. 30, 2018, when her term at the MSRB will expire.

For reprint and licensing requests for this article, click here.
Securities law Financial regulations MSRB Washington DC