Real-Time Price Transparency in the Municipal Markets Implemented

Securities and Exchange Commission (SEC) Chairman William H. Donaldson last week commended the Municipal Securities Rulemaking Board (MSRB) for its implementation of real-time price transparency in the municipal market. Chairman Donaldson said, "Today is an historic moment for all municipal bond investors. For the first time, investors will have ready access to real-time price data for municipal securities."

Beginning on Monday, brokers, dealers and municipal securities dealers must report transactions in municipal securities to the Municipal Securities Rulemaking Board's Real-Time Transaction Reporting System, or "RTRS," within 15 minutes of the time of trade execution instead of by midnight on trade date, as is currently required. Upon receipt of this transaction data, RTRS will immediately perform automated error checking and will electronically disseminate prices, providing the municipal securities market with near real-time transaction price transparency for the first time. The Bond Market Association has agreed to make this municipal bond trade information freely available to all investors on its Web site at www.investinginbonds.com.

The availability of real-time price transparency is expected to benefit municipal bond investors through more efficient pricing and enhanced investor confidence. Information relevant to the value of municipal securities should be incorporated more quickly and reliably into transaction prices. Real-time price transparency should also increase confidence that the best market price for specific securities has been located. For both institutional and retail investors, the open availability of market prices should instill greater confidence that pricing mechanisms in the market are fair, open and efficient. In addition, the new RTRS facility will enhance the surveillance database and audit trail of transaction data used by enforcement agencies.

The Commission and the MSRB have had a long-standing goal of increasing price transparency in the municipal securities market through the dissemination of comprehensive and contemporaneous pricing data. Today marks the culmination of that multi-year effort.

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