The Municipal Securities Rulemaking Board (MSRB) has adopted a policy for the formal use of economic analysis in MSRB rulemaking to ensure regulations that support a fair and efficient municipal market appropriately balance the benefits of protections for investors and municipal issuers with the burdens placed on regulated entities.
The policy incorporates the core principles of the Securities and Exchange Commission’s guidance on economic analysis in rulemakings, including identifying the need for a proposed rule, articulating a baseline against which to measure a rule’s likely economic impact, evaluating alternative regulatory approaches and assessing the benefits and costs, both quantitative and qualitative, of the proposed rule, among other principles.
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MSRB board chair, Jay Goldstone, said: "The MSRB recognizes industry concerns about the costs of regulation and designed the policy to provide additional rigor to its existing practice of evaluating possible alternatives and assessing potential burdens and benefits of rule proposals. The policy will inform the MSRB rulemaking process and better establish the basis for future rule proposals."
The policy was developed over the last year by a working group of the MSRB Board of Directors focused on further integrating economic analysis into the MSRB rulemaking process.
The formal policy comes at a time when the MSRB will begin to advance municipal advisor rulemaking in a series of key areas, including fiduciary duty, fair dealing and supervision. The MSRB is also continuing to streamline its existing rules for municipal securities dealers to promote regulatory efficiency.
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