March 8, 2022

VIA ELECTRONIC SUBMISSION
Ronald W. Smith
Corporate Secretary
Municipal Securities Rulemaking Board
1300 I Street NW, Suite 1000
Washington, DC 20005

Re: MSRB Notice 2021-17 – Request for Information on Environmental, Social and Governance (ESG) Practices in the Municipal Securities Market

Dear Mr. Smith,

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates this opportunity to comment on Municipal Securities Rulemaking Board (“MSRB”) Notice 2021-17 (the “Notice”)2 requesting public input on environmental, social and governance (“ESG”) practices in the municipal securities market. We understand that the request does not correspond with any rule making and only seeks to further the MSRB’s mandate of enhancing issuer and investor protection and furthering the overall fairness and efficiency of the municipal securities market. SIFMA appreciates this type of request by the MSRB, which allows for preliminary discussion of items of interest to the MSRB before any rulemaking has commenced and initial viewpoints are potentially set. We acknowledge the attention these issues have been receiving from other regulators and market participants, as well as society at large.

In light of the preliminary nature of the request, SIFMA’s comments are high-level and represent SIFMA’s initial thinking on the delineated topics. SIFMA urges that if the MSRB desires to take action on ESG disclosures, a formal rulemaking process should be followed, allowing for appropriate public notice and comment periods for any proposals. SIFMA remains available to assist the MSRB and will provide additional comments in response to any specific regulatory proposals. SIFMA does, however, have some initial concerns about the issues in the Notice, as set forth below.

I. MSRB Is Not the Appropriate Regulatory Authority

First and foremost, SIFMA believes that the Securities and Exchange Commission (“SEC”), not the MSRB, is the appropriate regulatory authority to promulgate rulemaking regarding the content of issuer or obligor disclosures. To the extent the SEC has authority over issuer and obligor disclosures, any substantive regulation of issuer disclosure content should be left to the SEC in its pursuit of investor protection.3 Similarly, the MSRB is not the appropriate regulatory authority to determine materiality; that authority lies squarely with the SEC. With that being said, we acknowledge it may be helpful for the MSRB to examine ESG issues in the municipal securities market and determine if there are any unique factors in this market that should be kept in mind for future discussions with the SEC and other regulators.

1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). SIFMA’s members underwrite over 90% of new issues of municipal securities by volume.

2 MSRB Notice 2021-17 (Dec. 8, 2021)