“During the time I was on the MSRB Board, we switched from being a regulatory oversight Board and a little bit of IT, to being a regulatory oversight Board running an IT company.”
The municipal market is the oldest financial market, but has seen much innovation. Despite new transparency, old abuses rooted in influence peddling persist. The market’s regulator has improved its oversight and has welcomed an expanded mandate, yet still works largely within confines established in the 1930s. In all these respects, the municipal securities industry entered the 21st century as the newest old market.
Emblematic of both old and new is the story of the Electronic Municipal Market Access website, pleasantly named EMMA. A fresh digital solution, it emerged in conservative, incremental fashion out of the NRMSIR experiments, a process “letting the players try to solve the disclosure dissemination issue, and let the private sector work.” 30 Only by the late 2000s, after the failure of that process, with the Muni Council having allayed old suspicions, and the SEC having approved electronic disclosure, did the decades-long pursuit of an effective central municipal securities disclosure system come close to realization. The new start owed much to Frank Chin and Lynnette Kelly.
Chin was an industry veteran in Citibank’s municipal securities department when he became a leader of the Muni Council in the early 2000s. Kelly had followed bond law through a stint with the New York Municipal Assistance Corporation to industry leadership as general counsel of The Bond Market Association. Together, they had led the Muni Council’s efforts to create the Central Post Office. By fall 2007, Kelly was MSRB’s Executive Director and Chin its Chair. They convinced the Board to take up the challenge of designing and hosting a centralized electronic disclosure system.
The MSRB created an entirely new website to differentiate the MSRB’s existing rulemaking function from this additional information repository function. EMMA was launched on a pilot basis in March 2008. 31 By December, it was providing daily market statistics. 32 The SEC approved the MSRB becoming the sole repository of municipal documents and EMMA transitioned to a permanent system on June 1, 2009. The role of information technology in advancing the MSRB’s regulatory mission cannot be underestimated; EMMA “has absolutely worked to level the playing field among the people who are on different sides of the trade.” 33
(30) W. Bartley Hildreth, June 4, 2015 The Remaking of the Municipal Market.
(31) March 28, 2008 MSRB to Launch EMMA on March 31, 2008.
(32) July 30, 2008 Statement of SEC Chairman Christopher Cox at Open Meeting on Municipal Securities Disclosure; December 8, 2008 SEC, MSRB: New Measures to Provide More Transparency Than Ever Before for Municipal Bond Investors.
(33) Marcy Edwards, June 4, 2015 The Remaking of the Municipal Market.
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