The Municipal Securities Rulemaking Board’s self-regulatory organisation (SRO) model

The concept of self-regulation in the United States securities markets, codified by Congress in the Securities Exchange Act of 1934, combines government and industry responsibility with the goal of promoting effective and efficient regulation that uses the oversight capabilities of the federal government, but reduces the burden on its limited resources. The Municipal Securities Rulemaking Board (MSRB) is the self-regulatory organisation (SRO) for the municipal securities market. Established in 1975, the MSRB’s statutory mission is to protect investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills its mission in part by involving and benefiting from market participants with a deep understanding of the complexities and nuances of securities trading, disclosure practices and other critical market functions. The MSRB’s SRO model has enabled the municipal securities market to grow into a US$3.8 trillion capital market that provides reliable, long-term income for investors, and supports infrastructure financing, economic development and job creation. The appropriate combination of government and industry oversight also has earned the municipal securities market the confidence of investors, bond issuers and market professionals.