The MSRB analyzed municipal bond market trading activities since the May 2018 effective date of the mark-up disclosure rule.

Under the new amendments, broker-dealers and municipal securities dealers must disclose the mark-up or mark-down for certain non-institutional customer transactions.

To measure the impact, the MSRB examined (i) dealers' trading patterns relating to retail customer trades and (ii) transaction costs for dealer-to-customer trades by determining the effective spread. The MSRB found that:

  • the percentage of retail-sized customer trades with an offsetting trade for the same executing dealer declined by less than one percentage point, which the MSRB stated was "consistent with historic variation;" and
  • transaction costs continued to decline, which was consistent with the downward trend shown prior to the implementation of the mark-up disclosure rule.

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