Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”) ^[1] and Rule 19b-4 thereunder,^[2] notice is hereby given that on April 30, 2026, the Municipal Securities Rulemaking Board (“MSRB” or “Board”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the MSRB. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The MSRB filed with the Commission a proposed rule change relating to MSRB Rule G-12, on uniform practice (the “proposed rule change”). The proposed rule change would revise section (c) of Rule G-12 (“Rule G-12”) to codify into rule language and to retire or revise existing interpretive guidance on confirmation requirements for those inter-dealer municipal securities transactions between two brokers, dealers or municipal securities dealers (collectively, “dealers”) that are ineligible for automated comparison at a registered clearing agency, as well as to retire or revise other related interpretive guidance and to make technical amendments to simplify and clarify current rule requirements.

If the Commission approves the proposed rule change, the MSRB would announce the effective date of the proposed rule change in a regulatory notice to be published on the MSRB website no later than 90 days following Commission approval. The effective date would be no later than one year following Commission approval.

The text of the proposed rule change is available on the MSRB's website at https://msrb.org/​2026-SEC-Filings and at the MSRB's principal office.

II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the MSRB included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The MSRB has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

1. Purpose

Section (c) of Rule G-12 sets forth the confirmation requirements for inter-dealer municipal securities transactions that are ineligible for automated comparison in a system operated by a registered clearing agency,^[3] also referred to herein as “inter-dealer ( printed page 24920) confirmations.” ^[4] Since the original adoption of Rule G-12(c) in 1977, the rule has requirements for the exchange and comparison of trade confirmations by dealers in inter-dealer transactions.^[5] Rule G-12(c) outlines a list of content requirements related to inter-dealer confirmations, analogous in scope to the content requirements for customer confirmations listed in pre-1990s iterations of section (a) of MSRB Rule G-15 (“Rule G-15”), on customer confirmations.

In 1983, the MSRB approved an amendment to Rule G-12 that required that dealers use automated comparison through a registered clearing agency for eligible inter-dealer trades, foregoing the need for the sending of separate confirmations previously used for that purpose for such eligible trades.^[6] By 1985, a majority of inter-dealer trades were compared through such automated means ^[7] and, after when-issued securities became eligible for automated comparison, the MSRB assessed in 1995 that nearly all new issue municipal securities were eligible for automated comparison with the exception of those that do not meet the eligibility requirements to be assigned a Committee on Uniform Securities Identification Procedures (CUSIP) number.^[8] Thus, only a very small number of inter-dealer trades remained subject to the confirmation requirement of Rule G-12(c), predominantly due to their ineligibility for CUSIP number assignment.

Notwithstanding the low number of municipal securities that currently remain ineligible for automated comparison and therefore could be subject to Rule G-12(c), the MSRB observes that a population of municipal securities that do not have CUSIP numbers—and are therefore ineligible for automated comparison—persists. For example, over five years, from 2020 to 2025, an annual average of 2,447 new municipal securities were issued without assigned CUSIP numbers,^[9] so that any inter-dealer trades in such securities would be ineligible for automated comparison and would therefore be subject to Rule G-12(c).^[10]

Because of the historically low number of transactions subject to Rule G-12(c), the MSRB had not, to date, consolidated Rule G-12(c) and its associated interpretive guidance, as the MSRB has already completed for other MSRB rules whose provisions are more frequently used ( e.g., Rule G-15).^[11] The proposed rule change is mainly intended to significantly streamline the requirements of Rule G-12(c) and related interpretations to the core elements needed to fulfill the purpose of this confirmation requirement to facilitate comparison of inter-dealer transactions where such transactions cannot use the standard automated comparison system. The proposed rule change would, among other things, incorporate those key comparison-related principles established in interpretive guidance into the relevant rule text and eliminate certain requirements, from the current rule text or certain interpretive guidance, unrelated to the comparison process.^[12] The text of proposed amended Rule G-12(c) would set out, in full and in a better organized manner, the streamlined set of informational elements for inter-dealer confirmations for which automated comparison is not available.

The MSRB believes that, given recent technological innovations in the market, it is timely to update and streamline Rule G-12(c). The MSRB understands that issuers and other market participants are contemplating and, in some cases, may already be implementing new technological approaches in the municipal securities market with the rise of distributed ledger technologies (including blockchain technology), digital assets and other decentralized finance approaches. Some are beginning to explore the potential of issuing digital or tokenized securities.^[13] The issuance and subsequent trading of such securities could involve many unique features that did not exist at the time that the current centralized processes for comparison, clearance and settlement became the default manner for effecting municipal securities transactions. Such features may include, among others, digitizing and electronic record keeping of security ownership without the need for a traditional bond certificate and other aspects that would make such securities ineligible for the existing automated comparison and/or book-entry settlement process envisioned under MSRB rules. Thus, the MSRB believes that modernization of Rule G-12(c) is even more significant in light of alternative models for securities transactions that are emerging in the marketplace.^[14] The MSRB believes that the proposed rule change would effectuate this modernization of Rule G-12(c), ensuring that the rule continues to achieve its goals consistent with current market practices while simultaneously easing compliance burdens on regulated entities by removing outdated informational elements, and thereby removing potential impediments to market innovation and further perfecting the mechanism of a free and open market in municipal securities.

Therefore, in summary, the proposed rule change would: ( printed page 24921)

• Codify principles from interpretive guidance into the rule text and reorganize the content of Rule G-12(c);
• Remove certain existing requirements from current Rule G-12(c) that no longer serve a beneficial purpose for dealers or the market;
• Make technical modifications to the rule requirements that would simplify and clarify the existing requirements under Rule G-12(c), including amending current Rule G-12(c)(vi) to replace it with a new definition section;
• Retire certain guidance that is being codified or is already codified in current Rule G-12(c) or noted under other MSRB rules; ^[15] and

• Amend and retain certain interpretive guidance relevant to Rule G-12 and Rule G-15 and retire certain other guidance that may be obsolete or no longer serve a beneficial purpose to the market.^[16]

Codification of Certain Principles From Existing Interpretive Guidance and Reorganization of Rule G-12(c)

The proposed rule change would codify central principles of the interpretive guidance using more succinct and precise language and reorganize the content of Rule G-12(c)(v)-(vi) to clarify the existing requirements of Rule G-12(c). The proposed rule change would not impose any new requirements and would eliminate obsolete or superfluous requirements. A portion of the proposed rule change discussed herein is comprised of key informational elements drawn from pieces of certain interpretive guidance which would be codified in the proposed rule text.^[17]

The proposed rule change would organize informational elements required to be disclosed in a transaction subject to Rule G-12(c) into three categories, with the first covering securities transaction information, set forth in proposed Rule G-12(c)(v)(A), and the second covering securities identification information, set forth in proposed Rule G-12(c)(v)(B). The proposed rule change would also add, in proposed Rule G-12(c)(v)(C), a third category of securities additional information beyond the information noted under the securities transaction and securities identification category that, in limited circumstances, may be necessary to ensure that the counterparties are in agreement as to the fundamental terms of an inter-dealer transaction and to the identity of the specific security being transacted. The items of information that would be required to be included on an inter-dealer confirmation in these three categories pursuant to proposed amended Rule G-12(c) are described below.

Securities Transaction Information

The proposed rule change would codify certain elements consisting of securities transaction information into Rule G-12(c)(v)(A).^[18] The following securities transaction information would be required to be disclosed under the proposed rule change.

• The confirming party's name (that is, the name of the dealer producing the confirmation) and its contact information; ^[19]

• The contra party's identification (that is, the name of the dealer with whom the confirming dealer is engaging in a transaction ineligible for automated comparison); ^[20]

• Designation of whether the transaction is a purchase from or sale to the contra party; ^[21]

• Par value of the securities; ^[22]

• Trade date; ^[23]

• Settlement date; ^[24]

• Yield and dollar price, to be computed and shown as follows: ^[25]

○ For transactions effected on the basis of yield to maturity, yield to call date, or yield to put date, proposed Rule G-12(c)(v)(A)(7)(a) would require that the yield at which the transaction was effected be shown and, if that yield is to a call or put date, this must be noted, along with the date and dollar price of the call or put date; ^[26]

○ For transactions effected on the basis of dollar price, proposed Rule G-12(c)(v)(A)(7)(b) would require that a dollar price at which the transaction was effected be shown and, unless the transaction was effected at par, a yield be computed and shown;

○ Proposed Rule G-12(c)(v)(A)(7)(c)(i) would specify that yield shown on confirmations must be computed to the lower of call date or maturity date (instead of lowest of price to call, price to par option, or price to maturity, as stated in current Rule G-12(c)(v)(I)). For purposes of computing yield to call or dollar price to call, proposed Rule G-12(c)(v)(A)(7)(c)(ii) would limit call ( printed page 24922) features that may be used to only those call features that represent “in whole calls” of the type that may be used by the issuer without restriction in a refunding.^[27] Proposed Rule G-12(c)(v)(A)(7)(c)(iii) would clarify the computation and content requirements applicable to securities subject to a series of pricing calls at declining premiums,^[28] securities that, at the time of trade, are subject to a notice of a pricing call at any time,^[29] and additional requirements for zero coupon securities.^[30] Proposed Rule G-12(c)(v)(A)(7)(c)(iv) would require all yield and dollar price computations to be made in accordance with MSRB Rule G-33, on calculations (“Rule G-33”); ^[31]

○ Proposed Rule G-12(c)(v)(A)(7)(d) would not require yield to be shown for securities traded on a discounted basis and would not require dollar price to be shown for when-issued trades.^[32]

• Amount of concession; ^[33]

• Final monies; ^[34] and

• Delivery of securities.^[35]

Securities Identification Information

The proposed rule change would codify certain informational elements consisting of securities identification information into proposed Rule G-12(c)(v)(B).^[36] The proposed rule change would require inter-dealer confirmations to include the following elements of securities identification information.

• The name of the issuer; ^[37]

• A securities identifier, if any, such as a CUSIP number or an alternative securities identifier that is mutually agreed upon between two parties; ^[38]

• Maturity date; ^[39]

• Interest rate; ^[40] and,

• Dated date.^[41]

Securities Additional Information

The proposed rule change would move and modify language from existing Rule G-12(c)(vi)(I) to proposed new Rule G-12(c)(v)(C), which would retain the requirement that the confirmation include any additional information necessary to ensure that the parties agree to the details of the transaction, beyond the information that would be required under proposed Rule G-12(c)(v)(A), and would add reference to ensuring that the parties have uniquely identified the specific securities being transacted, beyond the information that would be required under proposed Rule G-12(c)(v)(B). While the MSRB expects that such additional information would only rarely be needed, additional information ( printed page 24923) about the securities at certain times may be necessary particularly where no CUSIP number or other alternative identifier has been assigned to the securities and/or where some event or change to the securities gives rise to the need to distinguish the subject securities from other securities that previously were fully fungible but which have become no longer fungible.

The MSRB believes it is imperative for dealers to consider the circumstances under which additional identifying information may be required since it may be essential for both parties to agree upon which security is being transacted. For example, where a portion of securities might be secured by funds held in escrow, or may be backed by a personal guarantee, or might have some other feature not known or otherwise accessible to the market that could call into question the fungibility of different portions of such securities, while another portion may not have such backing or such other feature, there may be a need to provide greater specificity to the counterparty to ensure that both dealers engaged in an inter-dealer transaction are not mistaken as to the specific securities being transacted. In such circumstances, the dealers may need to include additional information on the confirmation under proposed Rule G-12(c)(v)(C) to precisely identify which unique securities are being transacted.

Amendments To Remove Certain Existing Requirements

The proposed rule change would remove current rule text pertaining to confirmation requirements that are primarily of a descriptive nature, which are unnecessary to provide a materially complete description for purposes of the modern comparison process, and are neither securities transaction information nor securities identification information.^[42] Because trade confirmations are delivered after the time of trade—documenting previously-agreed-upon terms of the trade rather than providing disclosures necessary to inform counterparties at or prior to the time of trade—the need for securities descriptive information in a post-trade inter-dealer confirmation is significantly less than in a customer confirmation involving retail investors, who may value having documented in the customer confirmation some of these material substantive disclosures. In addition, for the vast majority of inter-dealer trades that are eligible for automated comparison, the current processes that substitute for trade confirmations under Rule G-12(c) do not entail the dissemination of this type of securities descriptive information. The proposed rule change would also retire certain pieces of interpretive guidance currently memorializing such requirements.^[43]

The proposed rule change would remove the following confirmation requirements, which pertain to securities descriptive information.

• Credit backing (from current Rule G-12(c)(v)(E));
• Features of securities (from current Rule G-12(c)(vi)(B), (E) and (G));
• Status of securities (from current Rule G-12(c)(vi)(H)); and
• Tax information (from current Rule G-12(c)(vi)(C) and (D)).

The MSRB notes that removing such requirements from inter-dealer confirmations would have no impact on whether dealers selling municipal securities in an inter-dealer transaction with features that would have been subject to confirmation disclosures under the current language of Rule G-12(c) must still comply with their obligations under other MSRB rules. For example, dealers would still be obligated to provide any required disclosures at or prior to the time of trade to their dealer counterparties under certain circumstances as provided in the Rule G-17 Inter-Dealer Time of Trade Disclosure Guidance.^[44] Of course, given that a confirmation is not received by the counterparty until after a transaction is effected, confirmation disclosure, even if it were to include any such information, would not normally be timely for purposes of a time of trade disclosure obligation.

Addition of a New Definition Section and Other Technical Amendments To Simplify and Clarify Existing Requirements Under the Rule

Rule G-12(c) currently utilizes certain terms, the definitions of which can be found in the text of other MSRB rules and interpretive guidance. Drawing from these sources, the proposed rule change would add a definition section to Rule G-12(c) to add clarity and facilitate compliance by reorganizing and compiling relevant definitions within the proposed rule text. The new definitions section would include the terms “stepped coupon securities,” “zero coupon securities,” “stripped coupon securities” and “pricing call,” codified as Rule G-12(c)(vi)(A)-(D).

Additionally, the proposed rule change would implement certain technical amendments to simplify, clarify and modernize existing content requirements under Rule G-12 as noted below:

• The proposed rule change would update certain internal cross references relating to the delivery of securities in Rule G-12(e)(ii),^[45] on securities delivered, and Rule G-12(e)(iii),^[46] on delivery ticket. The proposed rule change would also update Rule G-12(e)(v), on units of delivery under delivery of securities, to remove a separate reference to information regarding denomination of certificates to be delivered in case of bearer bonds since bearer bonds are no longer issued in the primary municipal securities market and any outstanding bearer bonds could be delivered in the same denominations applicable generally to municipal securities.

• The proposed rule change would also update internal cross-references under Rule G-12(g)(i) and (ii), on the reclamation requirements, from subparagraph (c)(v)(E) to paragraph (v)(B)(1)-(3) of section (c) of this rule. ( printed page 24924)

Retirement of Interpretive Guidance Codified in the Proposed Rule Text and Amendment of Certain Interpretive Guidance

As discussed above, the proposed rule change would amend Rule G-12(c) not only through reorganization of existing rule text but also through the codification of certain pieces of related interpretive guidance. This codification of guidance would promote ease of compliance with Rule G-12(c) both by improving the clarity of the proposed rule text and by reducing the number of documents dealers and compliance professionals must consult to understand Rule G-12(c). With the codification of requirements previously included in interpretive guidance, such source guidance would be retired in whole or have the relevant portions modified or removed in light of the incorporation of such requirements into the rule language.^[47]

Thus, the proposed rule change would fully retire MSRB Interpretive Guidance, Confirmation Disclosure Requirements for Callable Municipal Securities (Feb. 20, 1986), pertaining to confirmation of disclosure requirements for callable municipal securities, since the requirements of Rule G-12(c), as amended by the proposed rule change, would codify the confirmation requirements set forth therein, making such guidance superfluous.^[48]

In addition, the proposed rule change would amend five other pieces of interpretive guidance to modify certain rule references to reflect current rule language, including the new language of Rule G-12(c) under the proposed rule change, or to remove portions of such guidance that would be codified by the proposed rule change, that have previously been codified into MSRB rules, or that address outdated practices that are no longer relevant in the market, with the remaining portions of such guidance continuing to be in effect:

• MSRB Interpretive Guidance, Yield Disclosures: Yields to Call on Zero Coupon Bonds (Jan. 4, 1984),^[49] which would be amended to conform a reference to Rule G-12 to the appropriate portion of the rule (as it would be modified by the proposed rule change) and a parallel reference to Rule G-15 to the appropriate current provision of that rule, as well as to make a minor language change to reflect current rule language; ^[50]

• MSRB Interpretive Guidance, Confirmation Requirements for Partially Refunded Securities (Aug. 15, 1989),^[51] which would be amended to remove references to Rule G-12, to conform references to Rule G-15 to the appropriate current provisions of that rule, and to remove references to retired guidance; ^[52]

• MSRB Interpretive Guidance, Notice of Interpretation on Escrowed-to-Maturity Securities: Rules G-17, G-12 and G-15 (Sep. 21, 1987),^[53] which would be amended to delete the first and last sections of the guidance so that the guidance would only apply to issues under MSRB Rule G-17 (“Rule G-17”), on conduct of municipal securities and municipal advisory activities; ^[54]

• MSRB Interpretive Guidance, Notice Concerning Stripped Coupon Municipal Securities (Mar. 13, 1989),^[55] which would be amended by removing language in the guidance pertaining to the confirmation requirements under Rules G-12 and G-15 for transactions in stripped coupon municipal securities which either were previously incorporated into Rule G-15 and/or would be codified into Rule G-12(c) pursuant to the proposed rule change; ^[56]

• MSRB Interpretive Guidance, Calculation of Price and Yield on Continuously Callable Securities (Aug. 15, 1989),^[57] which would be amended to conform a reference to Rule G-12 to the appropriate portion of the rule (as it would be modified by the proposed rule change) and a parallel reference to Rule G-15 to the appropriate current provision of that rule.^[58]

2. Statutory Basis

The MSRB believes that the proposed rule change is consistent with Section 15B(b)(2) of the Exchange Act,^[59] which provides that the MSRB shall propose and adopt rules to effect the purposes of the Exchange Act with respect to, among other matters, transactions in municipal securities effected by dealers. Section 15B(b)(2)(C) of the Exchange Act ^[60] provides that the MSRB's rules shall be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of ( printed page 24925) trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in municipal securities and municipal financial products, to remove impediments to and perfect the mechanism of a free and open market in municipal securities and municipal financial products, and, in general, to protect investors, municipal entities, obligated persons, and the public interest.

The MSRB believes the proposed rule change is consistent with Section 15B(b)(2)(C) of the Exchange Act ^[61] because it would foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in municipal securities. The proposed rule change streamlines the current rule on confirmation requirements for inter-dealer transactions by removing informational elements that are outdated and allows for key information to flow in a more efficient manner to contra parties for these unique transactions that are not eligible for automated comparison. Given that Rule G-12(c) allows for exchange and comparison of key information for such unique transactions, the MSRB believes that the proposed rule change, by reorganizing the rule in categories similar to Rule G-15, would foster cooperation and coordination with parties engaged in processing information with respect to such transactions in municipal securities. The MSRB also believes that consolidating its rulebook by removing interpretive guidance that is outdated or has already been incorporated into the rulebook would promote regulatory clarity by reducing the need for industry participants to cross reference multiple sources and provide for more efficiency in the marketplace. Specifically, the MSRB believes that consolidating existing interpretive guidance into the text of Rule G-12, where appropriate, and clarifying existing rule language would facilitate compliance by dealers with existing requirements under Rule G-12 and would thereby remove impediments to and perfect the mechanism of a free and open market in municipal securities.

B. Self-Regulatory Organization's Statement on Burden on Competition

Section 15B(b)(2)(C) of the Exchange Act ^[62] requires that MSRB rules not be designed to impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The MSRB has considered the economic impact of the proposed rule change and believes that it would not impose any burden on competition, as the proposed rule change to Rule G-12(c) on uniform practice for dealer confirmations would codify certain existing interpretive guidance for inter-dealer confirmation disclosure requirements that are ineligible for automated comparison into Rule G-12(c), retire certain other interpretive guidance, add a new definitions section and make certain technical amendments to simplify and clarify current rule requirements under Rule G-12(c). In addition, the proposed rule change applies equally to all dealers who engage in these transactions. Therefore, the MSRB believes the proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act.^[63]

In determining whether the proposed rule change is necessary and appropriate, the MSRB was guided by the MSRB's Policy on the Use of Economic Analysis in MSRB Rulemaking.^[64] In accordance with this policy, the MSRB evaluated the potential impacts of the proposed rule change relative to the current baseline. The proposed rule change to Rule G-12(c) is intended to modernize, streamline and clarify dealer obligations under Rule G-12(c) as they relate to inter-dealer confirmations.

Specifically, the proposed rule change would: codify central principles of the interpretive requirements in a more succinct and precise manner, and reorganize the content of Rule G-12(c); remove certain existing requirements from current Rule G-12(c) that no longer serve a beneficial purpose for dealers or the market; amend current Rule G-12(c)(vi) to replace it with a new definitions section; make technical modifications to the rule requirements that would simplify and clarify the existing requirements under Rule G-12(c); retire certain guidance that is being codified or is already codified in current Rule G-12(c) and amend certain guidance and where applicable, retire guidance that is no longer beneficial to the market. The proposed rule change would modernize the rule for inter-dealer confirmations for securities ineligible for automated comparison by clarifying the rule text and would reduce the burden for dealers.

Benefits, Costs and Effect on Competition

The proposed rule change to Rule G-12(c) is intended to benefit dealers by providing clarification to dealers by streamlining and centralizing the needed information for producing an inter-dealer confirmation for securities transactions that are ineligible for automated comparison, which is a small percentage of all inter-dealer trades. The proposed rule change would ensure that Rule G-12(c) is consistent with current market practices while simultaneously reducing compliance costs on dealers, therefore promoting more efficiency in the marketplace.

Benefits

The MSRB believes that retiring interpretive guidance that is obsolete, superfluous or has been or is in the process of being codified ensures that the intent of Rule G-12(c) is consistent with current market practices while also reducing compliance burdens for dealers. The benefits of the proposed rule change would be achieved by eliminating outdated guidance and incorporating the remaining relevant guidance into the body of the rule which would streamline and consolidate duplicative guidance. Dealers would have additional clarity for their regulatory obligations without having to refer to different pieces of guidance, some of which are obsolete. The proposed rule change would potentially promote ease of compliance with the same requirements. The MSRB believes that dealers would also benefit from increased efficiency and reduced compliance costs with streamlined rule text and reorganized interpretive guidance. The MSRB also amends, where applicable, and preserves certain pieces of interpretive guidance, which may still be essential to a dealer's understanding of the regulatory framework.

Costs

The MSRB notes that no incremental ongoing compliance burdens in the form of new requirements or greater disclosures are being added by the proposed rule change. MSRB acknowledges that dealers would likely incur minor incremental costs as a ( printed page 24926) result of the proposed rule change, relative to the baseline state (current state). These costs may include the potential one-time upfront costs related to revising related policies and procedures to reflect new rule citations and to decrease the items of information identified as required in such inter-dealer confirmations,^[65] if existing policies and procedures provide such detail or the dealer chooses to include a greater degree of detail. In addition, to the extent that dealers currently or plan in the future to produce these rare inter-dealer confirmations on a systemic basis rather than on a one-by-one basis as they execute inter-dealer trades that are ineligible for automated comparison, dealers may incur costs in connection with such system modification or development. However, the proposed rule change likely would not add incremental ongoing costs since dealers are presumably already in compliance with the existing interpretive guidance and relevant MSRB rules, including the recordkeeping requirements. Similarly, the revisions to a dealer's policies and procedures may not be extensive if the dealer presumably already incorporates the review of existing interpretive guidance into their current policies and procedures. Nonetheless, the MSRB conducted an analysis of the upfront costs a dealer may incur in implementing the changes outlined in the proposed rule change.

The MSRB identified certain upfront costs, mostly related to updating existing policies and procedures which would entail identifying compliance staff at a dealer firm to conduct an analysis of the proposed new rule language and any remaining interpretive guidance within their policies and procedures. Based on the MSRB's assumptions, the total upfront costs per dealer would be estimated at $7,080 as shown in Table 1. The upfront costs include 6 hours for a compliance attorney ($461 × 6 = $2,766) to identify and change all references to Rule G-12(c) in their policies and procedures. In addition to identifying and changing the policies and procedures, the MSRB also expects two hours for a Compliance Director ($607 × 2 = $1,214) to review the changes and 0.5 hours for the Chief Compliance Officer to sign off on the changes.

Additionally, changes may need to be made to the actual inter-dealer confirmation process if a dealer chooses. The MSRB expects that while the confirmation updates are not required as part of the proposed rule change (that is, a dealer that currently conforms to Rule G-12(c) and the related interpretations would not need to make any changes to come into compliance with the proposed rule change, including not being required to reduce the items of information it currently may provide as it would not be a violation to provide more information than the baseline requirement in the proposed rule change), many dealers may elect to remove the additional information to minimize any potential risk, and some dealers may elect to programmatically remove these items through a technological project. To be conservative, the MSRB included this cost in the estimate and anticipates that if a dealer chooses to update their confirmations, they would spend a total of $2,755 to remove information that would no longer be required as part of the proposed rule change. This cost takes into account approximately two hours for a Senior Business Analyst ($348 × 2 = $696) to develop the requirements needed for IT staff to update the confirmations. In addition, the MSRB also expects a Senior Programmer to take four hours of work ($363 × 4 = $1,452) to change the coding that produces each inter-dealer confirmation. Lastly, the changes made by the Senior Business Analyst and the Senior Programmer would be reviewed for approval by the Director of Compliance. The MSRB estimates one hour of time ($607 × 1 = $607) for the approval to be completed. However, as previously articulated, other dealers may not currently use and may continue not to use a technological process for producing these inter-dealer confirmations and those that do may elect not to amend their inter-dealer confirmation process and would thus not incur any costs associated with a technological change.

The MSRB believes that the benefits of the proposed rule change from the cumulative compliance cost savings as a result of the streamlining of the rule language and guidance would outweigh the upfront costs associated with policies and procedures revision and programmatic changes. The proposed changes are intended to provide enhanced clarity to dealers when conducting an inter-dealer trade for ( printed page 24927) securities ineligible for automated comparison.

Effect on Competition, Efficiency, and Capital Formation

The MSRB believes that the proposed rule change to Rule G-12(c) would neither impose a burden on competition nor hinder capital formation. The proposed rule change would improve the municipal securities market's operational efficiency and promote regulatory certainty by providing dealers with a clearer understanding of regulatory obligations that are incorporated into the rule text. At present, the MSRB is unable to quantitatively evaluate the magnitude of the efficiency gains or losses, but believes the overall incremental benefits accumulated over time for all market participants would outweigh the minor upfront costs of revising policies and procedures, with no expected incremental change in the ongoing compliance and recordkeeping costs by dealers. The MSRB does not expect that the proposed rule change to Rule G-12(c) would impose a burden on competition for dealers, as the proposed amendments are applicable to all dealers and the upfront costs are expected to be relatively minor for all dealers.

Reasonable Regulatory Alternatives

The MSRB's Policy on the Use of Economic Analysis in MSRB Rulemaking requires the MSRB's economic analysis to identify and discuss reasonable alternatives to the proposed rule.^[67] The MSRB has identified two reasonable alternatives for the proposed rule change.

One alternative the MSRB considered was to fully harmonize the Rule G-12(c) requirements for inter-dealer confirmations for securities ineligible for automated comparison with the provisions of Rule G-15(a) on customer confirmations, rather than providing for a more streamlined set of requirements under Rule G-12(c). While Rule G-12(c) addresses solely those inter-dealer transactions that are ineligible for automated comparison, Rule G-15(a) addresses the requirements for dealers to provide customers with written confirmations in all customer transactions. Under this alternative, dealers would be required to provide confirmations to other dealers for inter-dealer municipal securities transactions that are ineligible for automated comparison with the same level of disclosure as on a customer confirmation. While the MSRB generally seeks to harmonize existing rules, in this instance it would not be appropriate or necessary. Dealers are generally more sophisticated than customers, especially retail customers, and even without any further disclosure requirement, dealers on both sides of an inter-dealer trade already possess, or have the means for obtaining, sufficient disclosure information to complete a trade, so that the items of information that are of value to a dealer in an inter-dealer trade ineligible for automated comparison are only those items necessary to ensure that they are able to accurately and efficiently compare and settle the transaction. Of note, there is no obligation to provide the types of disclosure information that would be removed from Rule G-12(c) for those inter-dealer trades that do use the automated comparison system. It is for this reason that the MSRB has deemed this alternative as inferior to the proposed rule change.

Another alternative the MSRB considered was to embed all remaining pieces of guidance (after retiring certain superfluous guidance) into Rule G-12(c) and Rule G-15(a). In this alternative, all guidance would be directly added to both rules. As part of the rulebook modernization, this would allow compliance personnel to only have to look to one place (Rule G-12(c)) for inter-dealer confirmation requirements and one place (Rule G-15(a)) for customer confirmation requirements. However, there are benefits to not having every standalone interpretive guidance embedded into rule text, as the purpose of interpretive guidance for certain more complex or nuanced situations is to provide additional clarity and context to existing rules while remaining flexible and to allow for changes as industry practices and technology evolves. By providing this information directly in the rule text, the MSRB would limit its ability to adapt to potential changes in the future and might design a rule that would be either overly broad and cumbersome or overly restrictive. It is for this reason that the MSRB deemed this alternative as inferior to the proposed rule change.

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

In response to the Request for Comment,^[68] the MSRB received one letter (the “SIFMA Letter”) from Leslie M. Norwood, Managing Director and Associate General Counsel, Securities Industry and Financial Markets Association (SIFMA).^[69] The SIFMA Letter,^[70] and additional engagement with the organization,^[71] raised two main themes: first, that G-12(c) is obsolete/unnecessary because dealers' informational needs relative to inter-dealer trades extend only to that information that is necessary for trade settlement; ^[72] and second, should Rule G-12(c) be retained, its requirements should be drastically pared back to only that information which is necessary to achieve settlement.^[73] The main themes of the SIFMA Letter are summarized below in more detail with MSRB responses provided.

G-12(c) Is Obsolete and Unnecessary

The SIFMA Letter argued that paper interdealer confirmations are obsolete ^[74] and stated that dealers rely on their information service vendors for all data points related to trade execution, confirmations, clearance, and settlement, and industry practice is that inter-dealer trades are evidenced (to Financial Industry Regulatory Authority (FINRA) examiners) by screen captures, VCONs, or electronic blotters. SIFMA further asserted that, as an ordinary part of the cost of doing business, all dealers have access to a security master database or reliable security master information.^[75] The MSRB believes that, while dealers generally have securities masters with varying degrees of information and completeness as to the full universe of municipal securities, such securities masters are unlikely to address the purposes of the proposed rule change. This is because almost all securities that are ineligible for automated comparison lack CUSIP numbers (and likely lack other alternative securities identifiers), and dealer securities masters are almost universally based, at least in large measure, on such securities identifiers. Thus, it is highly unlikely that dealers on the two sides of an inter-dealer transaction ineligible for automated comparison would, regardless of the breadth and depth of their respective securities masters, have information on the security in question included in such securities master that would fully match with the counterparty's ( printed page 24928) information, much less have any information on the security included therein at all. The more limited items of information that the MSRB would retain under the proposed rule change in the streamlined version of Rule G-12(c) would address the need to be able to properly compare, clear and settle trades in such securities while reducing the burden of having to compile and disclose other information that is extraneous to this process.

While the proposed rule change would narrow the scope of information required in such confirmations, further narrowing the scope of information would risk a deterioration in the ability to transact in such securities in an efficient and secure manner, which is a risk that the MSRB is concerned could rise if decentralized finance processes and products are introduced into the marketplace that might not allow for the current automated comparison process. The MSRB believes the proposed rule change would allow for modernization of information needed for inter-dealer confirmations without sacrificing the regulatory mandate by preserving the exchange of information sufficient to prevent fraudulent obfuscation and promote efficient and accurate trade settlement. Finally, the proposed rule change would not require that inter-dealer confirmations be on paper so that, for example, if tokenized municipal securities were to be traded on a blockchain, dealers would be able to meet their inter-dealer confirmation requirement through the transmission of the required information, such as by means of a unique contract address, on or as part of the mechanics of the blockchain itself.^[76]

G-12(c) Should Be Pared Down and Materially Simplified

SIFMA noted that for inter-dealer trades, the only information that should be required to be transmitted is that which is required to settle the trade and did not see the need for harmonizing disclosure requirements under Rule G-12(c) to Rule G-15.^[77] SIFMA further noted Rule G-15, as well as MSRB Rule G-47 describes information disclosures due at the time of confirmation, or trade, to customers and such disclosures are unnecessary to dealers and may create a “web of potential regulatory foot-faults” without any corresponding benefit.^[78]

The MSRB is aware that the informational requirements of customers and dealers are fundamentally different, and that dealers may not utilize information received through inter-dealer trade confirmations for settlement and processing transactions. The MSRB agrees that the scope of inter-dealer confirmation disclosure requirements should be narrowed to focus on the purposes of inter-dealer confirmations in this context and not be required to include information that is extraneous to that purpose.

As detailed above, the MSRB has identified certain informational elements required under the current rule text that may be conceptualized as “securities descriptive information” that do not assist in processing or clearing of transactions. The types of information subsumed within the “securities descriptive information” category—consisting of credit backing, features of securities, information on status of securities, and tax information—are primarily of a substantive disclosure nature rather than of a securities identification nature. Importantly, because trade confirmations are delivered after the time of trade and therefore primarily serve to document the terms of a trade already agreed to rather than as a mechanism for providing disclosures that can inform counterparties at or prior to the time of trade, the need for securities descriptive information in a post-trade document is significantly less relevant for dealers than for investors, who may value having documented in the customer confirmation some of these material substantive disclosure information. In addition, for the vast majority of inter-dealer trades that are eligible for automated comparison, the current processes that substitute for trade confirmations under Rule G-12(c) do not entail the dissemination of this type of securities descriptive information.

Because this type of information is not essential in the context of comparing, clearing and settling an inter-dealer trade, the MSRB believes that it is appropriate that the proposed rule change would eliminate these informational elements from the disclosure requirements for inter-dealer confirmations.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

Within 45 days of the date of publication of this notice in the Federal Register or within such longer period of up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will:

(A) by order approve or disapprove such proposed rule change, or

(B) institute proceedings to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:

Electronic Comments

• Use the Commission's internet comment form (http://www.sec.gov/​rules/​sro.shtml); or

Send an email to rule-comments@sec.gov. Please include File Number SR-MSRB-2026-01 on the subject line.

Paper Comments

• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-MSRB-2026-01. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website ( http://www.sec.gov/​rules/​sro.shtml). Copies of the filing will be available for inspection and copying at the principal office of the MSRB. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to File Number SR-MSRB-2026-01 and should be submitted on or before May 28, 2026.