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WASHINGTON – The American Securities Association (ASA) filed a brief in the U.S. Court of Appeals for the Eleventh Circuit challenging the constitutionality of the Municipal Securities Rulemaking Board (MSRB) as well as its amendments to a post-trade reporting rule.
“Despite numerous warnings from the industry not to do so, the MSRB fully adopted the anti-market agenda of the previous administration,” said ASA President and CEO Chris Iacovella. “The MSRB’s blatant contempt for the views of stakeholders in the public finance market and its technocratic means of operation have left us with no choice but to challenge not only its reporting rule but also its constitutionality. The MSRB is a duplicative outgrowth of the administrative state that has been acting as an instrument of the government for far too long, and we believe the law supports that view.”
ASA’s challenge notes, “the Municipal Securities Rulemaking Board is a one-of-a-kind regulatory entity that flouts our entire constitutional structure. Like other federal agencies, it is charged with regulating an entire industry of activities. The MSRB writes the rules; it issues interpretations of its rules; it helps enforce violations of the rules; it collects fines when those rules are broken; and it charges mandatory fees to every entity and individual whom it regulates. Yet the MSRB lacks the constitutional safeguards the Founders put in place for entities exercising this type of regulatory power.”
“This unicorn regulatory body—one that has no comparison anywhere in our federal system—runs afoul of the Constitution in several ways. The MSRB violates the private nondelegation doctrine because it is exercising delegated legislative and executive power without being subordinate to the SEC or subject to the SEC’s authority or surveillance. The MSRB violates Article II because it is exercising significant executive power, and the President does not have adequate control over MSRB Directors. And the MSRB violates the Appointments Clause because its Directors are “Officers of the United States” who were not properly appointed. The SEC’s order approving the rules of this unconstitutional entity must be set aside.”
To read ASA’s challenge, click here.
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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.