ASA Outlines Governance and Decision-Making Failures During MSRB and FINRA Trade Reporting Rulemaking

WASHINGTON – The American Securities Association (ASA) today sent a letter to the Securities and Exchange Commission (SEC) outlining persistent structural, decision-making, and process failures at the Municipal Securities Rulemaking Board (MSRB) and the Financial Industry Regulatory Authority (FINRA) throughout the one-minute trade reporting rulemaking and subsequent rule reversal back to 15 minutes. 

“While ASA supports this specific proposal, the totality of failures related to this multi-year rulemaking process can’t be ignored as it perfectly crystallizes the dangers of allowing quasi-public, quasi-private market regulators to operate without meaningful accountability,” said ASA President and CEO Chris Iacovella. “The SEC should take the MSRB and FINRA’s poor performance in this rulemaking as an invitation to scrutinize their governance structures and decision-making processes.”

“How much money was spent on this entire rulemaking process—including the review of comment letters, the finalization of the rule, and the subsequent legal defense—only to return to the status quo rule of 15-minute trade reporting? Moving forward, the SEC needs to reform the MSRB and FINRA by holding them to a much higher standard of governance, decision-making, transparency, and accountability so that this kind of failure can never happen again,” Iacovella wrote in the letter.

ASA's key concerns include:

• No Market Problem Was Ever Identified: From the beginning, neither MSRB nor FINRA demonstrated a substantive problem in trade reporting that required shortening the reporting window from 15 minutes to one minute. 
  

• The SROs Disregarded Stakeholder Input: Throughout the rulemaking, industry participants—including regulated broker-dealers—provided detailed comment letters outlining operational, technological, and cost concerns. 
  

• Wasteful and Avoidable Process: The MSRB and FINRA refused to heed industry warnings led to a substantial waste of resources across the market. 
  

• SROs Exercised Government Power: Instead of questioning the previous administration’s demands and asserting their independence, the MSRB and FINRA exercised their power to impose a flawed policy on the fixed income markets without regard to its impact.
  

• ASA Demands SRO Accountability: ASA requests the SEC require the MSRB and FINRA to provide a public and comprehensive accounting of all costs, legal fees, and staff hours associated with this entire rulemaking process.

Read ASA's full submission here. 

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.