The MSRB reported a continuing decrease in the number of MSRB-registered municipal securities dealers ("dealers") and, conversely, less concentration of customer trades in the big dealers. The May 2019 Report, titled Dealer Participation and Concentration in Municipal Securities Trading, measured changes and identified trends in the trading activity of municipal securities dealers based on transaction data and related descriptive data from calendar years 2006, 2011, 2017 and 2018.
The MSRB found that the concentration in the number of customer trades in the top five and top 10 dealers declined significantly from 2017 to 2018. Further, the number of dealers that executed a "substantial amount of business" (i.e., more than 25,000 trades a year) increased from 4.5 percent of all dealers in 2017 to 5 percent in 2018.
Additionally, while the total number of dealers has continued to decline, newly registered dealers generated significant trading activity. According to the MSRB, 57 of the newly registered dealers in 2017 and 2018 executed approximately 680,000 trades and $44.3 billion in trading activity in those two years.
The MSRB stated that it is "hard to identify" what caused these changes in concentration and participation from 2006 to 2018, but noted that algorithmic trading may have been a contributing factor.
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