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Technology and Market Structure
BY bond dealers of america

Technology Special Report: The MSRB and Muni Market Transparency

John Bagley, Chief Market Structure Officer
Adam Cusson, Chief Technology Officer

Q&A between BDA and the Municipal Securities Rulemaking Board
Talk a little about the history of EMMA and the current focus on technology at the MSRB.

JB: Over a decade ago in July 2009, the Securities and Exchange Commission designated the MSRB’s EMMA website as the municipal market’s official source for municipal securities data and disclosure documents. It’s been a remarkable 13 years, as EMMA has become synonymous with municipal market transparency, ensuring equal access to decision-useful information for all market participants.
We see tremendous opportunity for EMMA to continue to grow and mature in the coming years. As we detailed in our new long-range strategic plan, we are working collaboratively with a diverse group of market participants to understand stakeholder pain points and develop a wish list for tailoring the EMMA user experience to their needs. While it will take years to fully build out a future-state EMMA, we are incrementally making enhancements based on this user feedback. These enhancements sometimes change the user experience of a particular EMMA tool, like our recent update of the free new issue calendar on EMMA, or tackle some user frustrations with the underlying data on EMMA, such as an ongoing clean-up of unused CUSIPs in the system. To help stakeholders keep up with the EMMA project in flight, we publish a forward roadmap of transparency and technology initiatives on the MSRB website.
AC: Our move to the cloud is what is making so much of what John described possible. In 2020, we completed an 18-month effort to migrate EMMA and all our market transparency systems to the cloud, giving us access to cloud-based technologies that open up a whole new set of opportunities to more quickly and nimbly evolve EMMA to keep up with market information needs. Now that we are in the cloud, our focus is on modernizing the MSRB’s technology systems to deliver reliable, efficient and cost-effective transparency solutions to the market and general public.

Describe the relative priority of technology at the MSRB in terms of staffing and overall resources.

AC: The MSRB’s market transparency systems are what power our market. They receive, process and disseminate market-critical data and documents relied on by the municipal securities market 24 hours a day, seven days a week. Technology is the organization’s largest expense and a fundamental focus. In fact, we are making the largest investment in technology in our 45-year history, with the Board designating a total of $17.5 million toward modernizing our entire suite of market transparency systems. You see this focus in our staffing as well. As our CEO Mark Kim likes to say, we have more developers writing code than we have lawyers writing rules, with just over half of our staff residing in the technology area. The annual budget that we publish each fall gives a great snapshot of how the MSRB allocates resources to advance our mission in the critical areas of regulation, technology and data.

In what manner does the MSRB focus on the US muni market turning to tech, with ATS platforms MarketAxess, Tradeweb and ICE Bonds ramping up their muni focus?

JB: As the sole repository of real-time municipal securities trade data, as well as primary market and secondary market disclosures, the MSRB constantly monitors trading activity—including the use of ATSs and broker’s brokers—to deliver insights to the market.
In a recent study on the use of internal and external liquidity, our internal research team found that for trades of $100K or less, the use of external liquidity to fill customer orders increased from 30% in 2011 to 42% in 2020. ATSs are often used to access external liquidity for smaller-size trades. Our research team also found significant changes in dealers providing liquidity. Of the top 10 dealers providing liquidity in 2011, only three were among the top 10 in 2020.
In another recent research report on municipal bond trading on ATS platforms published earlier last year, we found that ATS platforms provide the value of visible liquidity and price discovery in the marketplace for both pre- and post-trade activity.
As technology and the use of ATS platforms continues to evolve and proliferate, the MSRB will use the information available to better understand the impact and the use of ATS platforms and share that information with the market.

Could you talk a little about new technologies and the muni market?

AC: The MSRB collects and publicly disseminates millions of data points on municipal securities, issuers and the broader market. Market participants depend on this data to issue, trade and invest in municipal securities, and to understand market trends. By migrating the data to the cloud, we are now poised to leverage cloud-based technologies like AI and machine learning to deliver deeper insights from our data and give market participants the confidence to make data-driven decisions. We see EMMA Labs as the place to test out potential applications of these technologies and welcome participation from market participants and technologists to co-create the future of market transparency.


EMMA Labs was launched in January 2022. Talk about the objectives behind EMMA Labs, the industry response and the related benefits.

AC: The MSRB created EMMA Labs to serve as our innovation sandbox, a place where we can work collaboratively with market participants to test-drive potential data tools and concepts and fuel innovation.
EMMA Labs debuted earlier this year with two Active Labs. One is a keyword search engine leveraging natural language processing, machine learning and artificial intelligence to unlock the information contained within the hundreds of thousands of disclosure documents submitted to EMMA as unstructured PDFs. The second is a dynamic dashboard for market data analysis that empowers users to discover and visualize market trends. An additional Idea Labs section provides a forum for users to submit and provide feedback on ideas for potential future Active Labs.
JB: What’s so exciting is that EMMA Labs is already enabling deeper market insights – even before we officially launched the platform. We actually leveraged the advanced search prototype to provide a window into how states and municipalities were grappling with the impact of the COVID-19 pandemic. We’re also excited to be partnering with academics who are starting to see the potential of these prototypes for their research into market structure trends, including the increasing adoption of ESG-designated bonds.