November 15, 2017

Ronald W. Smith
Corporate Secretary
Municipal Securities Rulemaking Board
1300 I Street NW
Suite 1000
Washington, DC 20005

Re: MSRB Notice 2017-19: Request for Comment on a Concept Proposal Regarding Amendments to Primary Offering Practices of Brokers, Dealers and Municipal Securities Dealers

Dear Mr. Smith:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates this opportunity to respond to Notice 2017-19 (the “Notice”)2 issued by the Municipal Securities Rulemaking Board (the “MSRB”) in which the MSRB is requesting comment on a concept proposal regarding possible amendments to existing rules related to primary offerings of municipal securities by brokers, dealers and municipal securities dealers (collectively, “dealers”). SIFMA is pleased to provide its input on the issues raised as the beginning of a conversation about whether rulemaking or additional guidance is called for in connection with primary offering practices.

SIFMA and its members support the MSRB’s commitment to engaging in retrospective review of its rules to assure that they are responsive to changes in the municipal securities market and in the policymaking, economic, stakeholder and technological environment.3 SIFMA agrees that the publication of this Notice as a concept release is an appropriate step in undertaking such retrospective review, with the understanding that, as the MSRB has described in connection with its standard rulemaking process,4 the publication of a concept release is designed to assist the MSRB in assessing whether to undertake rulemaking and does not represent a formal rulemaking proposal. Rather, any rule proposals would be subject to an MSRB exposure draft seeking comment on specific rule language prior to the formal submission of such proposal with the Securities and Exchange Commission (the “SEC”).

The MSRB’s Retrospective Review Process recognizes that there are many means to retrospective review, and the MSRB specifically notes that its Investor Advisory Group has provided input on potential changes to MSRB rules on primary offering practices. While discussion of potential rule changes in such a venue is perfectly appropriate since investors (as well as issuers) do indeed have a significant interest in a fair, efficient and effective primary offering process, SIFMA requests that the MSRB undertake similar face-to-face discussions with SIFMA members and other participants in the new issue distribution process before proceeding with any rulemaking proposals in this area.

As a general matter, SIFMA and its members believe that current primary offering practices have been effective and that existing rules work well in the vast majority of circumstances. The successful pricing, sale and distribution of a primary offering of municipal securities can be a complicated process entailing the balancing of many interests, and seemingly minor changes in such process may have significant ramifications if not considered in a detailed manner by parties representing those interests. Further, different new issues may call for differing primary offering approaches in particular cases depending on any number of factors, and so changes in process that may be appropriate or non-problematic in many situations can have negative implications in others. SIFMA believes that any decision to seek changes in the primary offering process through regulation must be limited to situations where existing practices result in documented problems of a material nature and those changes must be crafted to avoid impeding the marketing process or creating undue compliance burdens that are not justified by the benefits derived from the changes.

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1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

2 MSRB Notice 2017-19 (Sept. 14, 2017).

3 The MSRB’s process for undertaking retrospective reviews is set out at http://www.msrb.org/AboutMSRB/Programs/Market-Regulation/Retrospective-Rule-Review (the “Retrospective Review Process”).

4 The MSRB’s rulemaking process is described at http://www.msrb.org/About-MSRB/Programs/MarketRegulation.