MSRB Establishes Criteria for Participation in Mandatory Business Continuity Testing

In an annual notice, the MSRB established the criteria for designating participants for mandatory business continuity and disaster recovery ("BC/DR") testing consistent with Regulation Systems Compliance and Integrity (Regulation SCI).

The MSRB said that the criteria was designed to "ensure participation by those MSRB Registrants that the MSRB reasonably determines are, taken as a whole, the minimum necessary for the maintenance of fair and orderly markets in the event of the activation of its BC/DR Plans." Firms designated as participants will be provided at least 45 days' notice of BC/DR plan testing.

The criteria for Participant designation includes:

• "For the Real-Time Transaction Reporting System (RTRS), the MSRB will designate the top five MSRB Registrants in terms of number of municipal security trades as reported to RTRS during a calendar month prior to the testing, provided that such MSRB Registrants' cumulative activity accounts for at least 30% of the number of municipal security trades reported to RTRS during that month";
• "For the Short-term Obligation Rate Transparency system (SHORT), the MSRB will designate the top five MSRB Registrants acting as program dealers for auction rate securities or marketing agents for variable rate demand obligations (or providing services on behalf of such dealers) that participated in interest rate resets as reported to SHORT during a calendar month prior to the testing, provided that such MSRB Registrants’ cumulative activity accounts for at least 30% of the interest rate resets reported to SHORT during that month"; and
• "For primary market data and document submissions to the MSRB's Electronic Municipal Market Access (EMMA®) system, the MSRB will designate the top five MSRB Registrants that engaged in underwriting activity in terms of par amount underwritten as reported on Forms G-32 during a calendar month prior to the testing, provided that such MSRB Registrants' cumulative activity accounts for at least 30% of the par amount underwritten during that month."