Tuesday, June 26, 2012

A Few Statistics from the GAO Report on Municipal Bond Market

The U.S. Government Accountability Office issued a congressional report on the municipal bond market a while back. A few notes:

  • One percent of muni's trade once a day or more
  • There are 46,000 issuers and between 1-1.5m securities in play
  • FINRA oversees 98% of 1,800 MSRB-registered broker-dealers
  • FINRA investigated 5,764 times resulting in 51 occasions where G-30 violations were pursued, of these 37 resulted in cautionary action, 11 resulted in a compliance conference. (The Office of Compliance, Inspections and Examinations - part of the SEC - oversees FINRA's oversight of MSRB rules, albeit infrequently)
  • Average markup for $10,000-$20,000 trade is 1.8 points
  • Average markup for $50,000-$100,000 trade is 0.9 points
  • Average markup for $250,000+ trades is on the order of 10-30 bps
  • Markdowns are smaller

The GAO report also mentions ongoing studies by the SEC and MSRB, also due this year and distinct from the regular statistical summaries from the MSRB (such as this one, for example).

1 comment:

  1. SIFMA Proposes Muni Trade Standard; Wants MSRB to Seek Public Input


    #Know of any good transparency tools out there?

    The term “market” would be defined to encompass other broker-dealers known to trade the muni security.

    Dealers also would be required to conduct post-trade reviews that, among other things, would compare their muni prices with the prices they could have obtained from other dealers.