Municipal Securities Rulemaking Board

“No officer, director, trustee, or key employee has a family relationship or business relationship (as such terms are defined for purposes of Form 990) with any other officer, director, trustee, or key employee. As contemplated by the Congressionally mandated structure of the MSRB's Board of Directors (which serves as the organization's governing body), and with the MSRB being a self-regulatory organization under the federal securities laws, the employers of some members of the Board of Directors, and such members in their capacities as employees of their employers, from time to time transact business with one another in the ordinary course of their business as participants in the municipal market on the same terms as are generally offered to others in the same line of business. FORM 990, PART VI, SEC. A, LINE 4 - CHANGES OF GOVERNANCE DOCUMENT Changes were made to Articles 3, 4 and 5 of the Bylaws to reflect corresponding rule changes made to Rules A-3, A-4 and A-5 to continue to help ensure that they reflect MSRB practices and improve consistency among the rules (and the Articles). Certain provisions in Rules A-4, A-5 and A-17 were amended to refer to the MSRB's most senior executive as "Chief Executive Officer" instead of "Executive Director."”

“All proposed rule changes adopted by the Board of Directors of the MSRB are subject to the filing and approval or review requirements by the Securities and Exchange Commission under Section 19(b) of the Securities Exchange Act of 1934. FORM 990, PART VI, SEC. B, LINE 11B - FORM 990 REVIEW PROCESS The Board of Directors of the MSRB has an Audit and Risk Committee that is charged with reviewing with management the organization's completed form annually prior to the filing of such form and reporting any findings or conclusions to the Board of Directors in connection with the Board's review of such form. The Audit and Risk Committee conducted its review on 01/30/2019 and the Board of Directors conducted its review on 01/30/2019.”

“The MSRB maintains for its Board of Directors and its staff: a code of ethics and business conduct policy; a conflicts of interest policy; and a whistleblower policy with complaint handling procedures, which are available on msrb.org. All Board members and staff are trained annually on these policies and must sign various acknowledgments. The MSRB has a policy requiring that officers, directors and key employees disclose annually interests that could give rise to conflicts, and subsequently disclose updates. In connection with the election of new members of the Board of Directors, each candidate provides information to the MSRB concerning potential conflicts of interest. In addition, certain organizational conflicts are effectively prohibited under Section 15B(b) of the Securities Exchange Act of 1934 due to the statutory requirements regarding qualification for membership on the Board of Directors. In particular, public representatives must be independent of any municipal securities broker, municipal securities dealer or municipal advisor. MSRB Rule A-3 defines "independent" as having no material business relationship with any municipal securities broker, municipal securities dealer or municipal advisor, including at a minimum not currently or at any time within the last two years being associated with a municipal securities broker, municipal securities dealer or municipal advisor and not having a relationship with any municipal securities broker, municipal securities dealer or municipal advisor, whether compensatory or otherwise, that reasonably could affect the independent judgment or decision making of the individual. The MSRB's General Counsel reviews the conflicts of interest acknowledgement and disclosure forms and determines what actions, if any, need to be taken, including asking a Board member to recuse him or herself from deliberations or voting on an action.”

“Under the MSRB written compensation strategy and program, the Finance Committee (comprised of members of the Board of Directors) is responsible for making recommendations and the Board of Directors is responsible for approving the organization-wide compensation strategy. The annual salary budget is approved by the Board of Directors. At least once every four years, the compensation strategy and structure are reviewed and approved by the Finance Committee based on information received from an external salary consultant. Such review was completed in July 2016. The external salary consultant compares the MSRB with comparable peer organizations in the local geographic market and within the industry as appropriate. The full Board approves the compensation of the Chief Executive Officer, and the Chief Executive Officer establishes the compensation of the key employees within the parameters and philosophy of the approved compensation strategy. Additionally, the Chief Executive Officer annually provides to the Board the salary, benefits, and total compensation of the senior management.”

“The organization's website (www.msrb.org) contains the following: Securities Exchange Act of 1934 Section 15B (statute creating the MSRB), Restated Articles of Incorporation, By-Laws, Governance-Related Administrative Rules, Board Committee Charters, Code of Ethics and Business Conduct, Conflicts of Interest Policy, Risk Management Program, Whistleblower Policy, audited financial statements, annual budget summary, most recent IRS Form 990 and certain financial policies.”

“The MSRB did not have any direct or indirect unrelated taxable business activities during FY 2018. However, as a result of tax reform, tax-exempt organizations are subject to unrelated business taxable income ("UBTI") tax for qualified transportation fringe benefits ("QTF") paid to employees under IRC Section 512(a)(7), effective January 1, 2018. As such, the MSRB reported QTF provided to its employees from January 1, 2018 through September 30, 2018 on 2017 Form 990, Part I Line 7b and 2017 Form 990-T accordingly. FORM 990, PART III, LINE 1, DESCRIPTION OF ORGANIZATION'S MISSION The mission of the MSRB is to protect investors, state and local government issuers, other municipal entities, and the public interest by promoting a fair and efficient municipal market through: 1. The establishment of rules for dealers and municipal advisors, 2. The collection and dissemination of market information, and 3. Market leadership, outreach and education. FORM 990, PART III, LINE 4A, PROGRAM SERVICE ACCOMPLISHMENTS Establishing regulations and supporting guidance for municipal advisors and dealers: The MSRB was created by Congress to regulate securities firms, banks and municipal advisors that engage in municipal securities and municipal advisory activities (collectively "regulated entities") with the goal of protecting investors, municipal entities, obligated persons and the public interest. MSRB rules seek to prevent manipulation and fraud in the municipal market, promote fair and efficient transactions, and support a free and open market in municipal securities and municipal financial products. MSRB rules generally are developed with extensive input from the public and the municipal securities industry, with an economic analysis to enhance the effectiveness and efficiency of the MSRB's rulemaking, and to meet the approval standards of the U.S. Securities and Exchange Commission (SEC). Once developed, all MSRB rules must be approved by the SEC prior to effectiveness, unless otherwise allowed by law. The MSRB also provides ongoing education, training and compliance support to ensure understanding of compliance with MSRB rules by regulated entities and operates programs that support the qualification of professionals employed by regulated entities. The MSRB does not enforce its rules but follows established procedures for coordinating with enforcement agencies charged with enforcing MSRB rules. Information regarding the MSRB's rules-including rule interpretations, requests for comment, notices to regulated entities, rule filings submitted to the SEC and compliance resources developed in conjunction with new rules or to clarify the application of existing rules-is displayed on the MSRB's website, at www.msrb.org. Regulatory, compliance and professional qualification activities during FY 2018 include: Dealer-Related Regulatory Activity 2018 Rules Approved - Amendments to MSRB Rule G-34, on CUSIP numbers, new issue, and market information requirements, to codify the MSRB's longstanding interpretive view that brokers, dealers and municipal securities dealers are "underwriters" when acting as placement agent in private placements of municipal securities, including direct purchases; - Amendments to Rule G-21, on advertising, to provide more specific content standards for advertisements by dealers, revise the rule's general standards for advertisements, reconcile analogous provisions relating to the definition of "form letter" in Rule G-21 with the definition of "correspondence" in FINRA Rule 2210, on communications, and a technical amendment to streamline the rule; - Amendments to the MSRB's facility for the Real-Time Transaction Reporting System (RTRS) to make it consistent with the re-engineering of RTRS; - Amendment to MSRB Rule A-13, on underwriting and transaction assessments for brokers, dealers and municipal securities dealers, to temporarily reduce the rate of assessment for the MSRB's underwriting, transaction and technology fees associa”

“Collecting and disseminating market information: The MSRB collects municipal market documents and data from regulated entities, municipal entities, obligated persons and/or their agents and makes the information publicly available. The collection and dissemination of this information serves a critical role in promoting fairness and efficiency of the municipal market. The MSRB ensures that the market operates transparently and efficiently by re-disseminating this information to municipal market participants and others, to regulators charged with examining for compliance with and enforcing MSRB rules, and to other regulatory and policymaking bodies. Under its rulemaking authority, the MSRB maintains "information facilities" that provide the legal foundation for the collection and dissemination of municipal market information. These facilities support the MSRB's authority to collect municipal transaction prices (with respect to customer and inter-dealer transactions in municipal securities); official statements, preliminary official statements and advance refunding documents (in connection with new issues of municipal securities); continuing disclosure documents (in connection with outstanding issues of municipal securities); interest rate information and related documentation for certain short-term obligations (in connection with outstanding variable rate demand obligations and auction rate securities); information regarding 529 savings plans and ABLE programs (in connection with dealer underwriting of municipal fund securities); and information regarding business undertaken by, and certain political contributions made by, dealers and municipal advisors or their professionals and certain related political action committees (in connection with the MSRB's pay-to-play rule). The MSRB provides most of this information to the public, free of charge, on its Electronic Municipal Market Access (EMMA) website at emma.msrb.org. In addition, access to most information collected by the MSRB is available in bulk or by automatic feed to subscribers through paid subscription services. As of the end of FY 2018, the MSRB offered five principal data products with approximately 152 active subscription agreements. During FY 2018, the MSRB made enhancements to the EMMA website to better serve the information needs of today's - and tomorrow's - municipal securities investors and other market participants. Enhancements included: - improved homepage navigation with direct access to an interactive map to search for information about a municipal bond and its issuer by state; - quick links to information for new EMMA users about interactive tools for evaluating municipal market trends and MyEMMA, which allows investors to create custom alerts to track trading activity and the posting of new disclosure documents for specific bonds; - enhanced display of information about a specific security, including interactive graphs of trade prices and yields and a searchable listing of important disclosure documents. In 2018 the MSRB also deployed a major re-engineering of the underlying technology of its Real-Time Transaction Reporting System (RTRS) to improve data quality and enhance the MSRB's ability to prevent and respond to significant service disruptions in municipal market transparency. Additionally, during FY 2018, the MSRB conducted organizational and industry-wide business continuity testing in compliance with the SEC's Regulation Systems Compliance and Integrity. The MSRB also published the following market data and analysis reports: - MSRB Fact Book 2017, a comprehensive reference for historical trade statistics; - Municipal Bond ETFs: Liquidity Impact on the Municipal Bond Market; - Dealer Participation and Concentration in Municipal Securities; - Transaction Costs for Customer Trades in the Municipal Bond Market: What is Driving the Decline? FORM 990, PART III, LINE 4C, PROGRAM SERVICE ACCOMPLISHMENTS Engaging in education, outreach and market leadershi”