The Bond Market Association (BMA) deploys a variety of advocacy and grassroots tools to influence the policy-making process and promote a more efficient fixed-income market. Regulatory authorities in Washington, D.C. recognize the BMA as an authority on technical issues and market trends. Through a variety of events and forums, our members have the opportunity to meet regulators and legislators to discuss market and business challenges. Our federal Political Action Committee (PAC) supports legislators who work to advance policies that improve the fixed income markets.
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The Beltway Bond Brief
The Bond Market Association’s monthly members-only briefing on how Washington policy is shaping the US bond markets—clear analysis, direct sourcing, across the regulators, Capitol Hill, and the White House.
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Federal Legislative and Regulatory Priorities & Accomplishments
Last updated: September 2, 2026
Funding Fights Continue to Dominate DC
What’s New:
Yet again, the 119th Congress is facing down a shut-down threat, with just weeks until pivotal midterm elections are poised to change the balance of power in Washington, DC.
Background:
FY2027 starts October 1, 2026, and Congress is well behind schedule. The House has completed committee action on all 12 regular appropriations bills, with two passed by the full House, while the Senate has yet to begin formal floor consideration as bipartisan negotiators still haggle over overall spending levels.
The Senate appropriations process remains stalled because appropriators haven’t reached a topline spending agreement for their FY2027 bills.
Both chambers passed their own stopgap bills before leaving for August recess: the House version (passed July 21) funds the government until December 4 but lacks certain technical “anomaly” provisions, while the Senate version (passed August 8) funds it through December 11 and includes those anomalies plus a temporary block on OMB’s grant-guidance revisions.
The House returns August 31 and is expected to take up the Senate’s version now that it has White House support — “nothing is ever guaranteed with Congress, but all signs point to a CR through December.”
The near-term expectation is a continuing resolution keeping the government funded at FY2026 levels into December 2026, rather than a shutdown, while the real FY2027 appropriations fight over spending levels continues past the election.
GSE Reform Stalls
What’s New:
BMA staff met with the U.S. Department of Treasury’s Office of Capital Markets leadership to discuss the status of the Administration’s GSE reform efforts following President Trump’s public statements on the potential for an IPO of Fannie Mae and Freddie Mac.
Background:
The meeting focused on the status of any potential changes to the GSE’s, how the changes could impact the market, and what, if anything, Treasury is doing following the President’s pronouncements.
Key Takeaways Include:
- In May 2025, Trump posted on Truth Social that he was giving “very serious consideration” to bringing them public and would be working with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Federal Housing Finance Agency (FHFA) Director William Pulte on a decision.
- Treasury began work on conceptualizing what this would look like, and noted they worked to “boil the ocean” in an effort to ensure all angles were considered.
- At this point, the Office of Capital Markets is not focused on GSE reform, and noted they are taking a wait-and-see approach to see if the President directs any further action.
Treasury staff remain interested in the MBS market and how any potential changes to the conservatorship status would impact the market.
Their questions focused on:
- Market reaction to UMBS.
- The concern about losing the federal backstop, and the need to ensure it remains.
- Preserving the TBA market, and how privatization would impact it.
PABs Get Their Time in the Sun
What’s New:
This summer, the DOT submitted a request to Congress as deliberation continues on the surface transportation reauthorization, to raise the PAB cap that has already been exhausted.
Background:
This summer, DOT made a formal push on the issue: in a July letter to the Senate laying out priorities for that bill, Transportation Secretary Sean Duffy urged lawmakers to raise the private activity bonds (PABs) cap, arguing that unlocking more private capital could fund transportation projects of regional and national significance. Alongside the PAB increase, DOT’s request included expanding project eligibility for two other federal financing tools, TIFIA and RRIF, and it also floated a more structural change, proposing that Congress remove the mass transit account from the Highway Trust Fund and consolidate all federal fuel tax revenue into the highway account instead.
The urgency behind the request is practical. The current PAB cap sits at $30 billion, having been doubled from $15 billion under the 2021 infrastructure law, and it’s essentially maxed out, leaving almost no room for new public-private partnership deals. Deputy Secretary Steven Bradbury made the same case in person back in May at a P3 forum in Washington, asking Congress to “replenish the reservoirs” for this financing tool as the new bill comes together. DOT isn’t alone in pushing for this change, either.
In response to the request, legislation known as the “TURBO Act” was introduced in the Senate with bipartisan support. It’s also worth noting that some transportation and infrastructure groups have begun advocating for getting rid of the cap all together. The BMA will continue to monitor developments.
Remote supervision
What’s New:
The MSRB recently sent to the SEC for final approval amendments to MSRB Rule G-27 related to supervision.
BMA in response urged the SEC to approve proposed changes to MSRB Rule G-27 intended to provide greater flexibility for remote work for traders and bankers. BMA told the Commission “BMA fully supports the Proposal. We commend the MSRB for its leadership and innovation in addressing limited issues around Rule G-27.”
The MSRB has proposed to amend Rule G-27 in two ways. First, the proposal would extend from 30 to 90 days the time a supervised employee may work during the year from a remote location other than a primary residence. Second, the proposal would define “structuring” in the context of G-27 to include only “final approval of a public offering or private placement transaction (i.e., structuring) conducted by the dealer.” Activities such as “debt modeling, financial analysis, number running, and the solicitation of issuers or obligated persons for the dealer’s investment banking services in connection with municipal securities (e.g., public finance banking services)” would be excluded from the definition.
Both the MSRB and FINRA have indicated that they are contemplating more comprehensive reforms to their supervision regimes designed to provide even more flexibility for remote work. This summer FINRA held at least two industry roundtables on the topic. The MSRB has suggested that they are waiting for FINRA to solidify its proposal before moving forward with a more comprehensive plan. We expect the SEC to approve the MSRB’s proposal
Background:
FINRA last year issued a request for comment around a regulatory review related to the “modern workplace,” including a review of remote supervision rules. BMA’s letter in response focused on outlining the manner in which fixed income traders and others are supervised and made a case for greater flexibility around remote work and supervision.
FINRA this summer conducted two fact-finding industry roundtables focused on supervision regulation. We expect to see a proposal soon.
FINRA in 2024 finalized changes to FINRA Rule 3110 related to remote supervision. The release announced that FINRA was terminating the temporary, COVID-related remote work relief that had been in place since 2020 and establishing a new, permanent regime for remote work involving the new concept of “Residential Supervisory Location.” It also announced the creation of a new voluntary “Remote Inspections Pilot Program.”
FINRA finalizes amendments to gift rule, MSRB following
What’s New:
The SEC recently approved changes to MSRB Rule G-20, the gift rule. The amendments bring the MSRB gift rule into line with changes FINRA made to its gift rule earlier this year.
During consideration of the MSRB’s proposal, an issue arose around effective dates. The MSRB originally proposed effective date for the amendments for BDs that was different from bank dealers and MAs. BMA informally petitioned the MSRB to allow bank dealers and MAs to come into compliance with the amendments at the same time as BDs. In response, the MSRB issued Notice 2026-04 providing the clarification we requested.
MSRB Release on SMMP Definition
What’s New:
The MSRB recently issued draft amendments on reforming and updating MSRB Rule D-15, which defines the term Sophisticated Municipal Market Participant (SMMP). The proposal would remove the requirement that dealers obtain an affirmation from Registered Investment Adviser customers before considering them as SMMPs. The proposal would maintain the requirement of a minimum of $50 million of total assets for most SMMPs but would raise the threshold for municipal entities (issuers) to $100 million. BMA filed a letter in support of the proposal but opposing the $100 million threshold for state and local governments.
At its recent meeting, the MSRB Board failed to approve any changes to Rule D-15.
Background:
In 2023 the MSRB issued a concept release which proposed to eliminate the requirement for SMMPs to provide affirmations. In our comment letter in response, BMA supported the elimination of the affirmation requirement.
SEC Rule 15c2-11
What’s New:
The SEC has announced that they will amend SEC Rule 15c2-11 to specify that the Rule applies only to equity securities, not to fixed income. They proposed an effective date 60 days after publication in the Federal Register, or May 18, 2026. However, the Commission must act on final approval before the amendments are finally adopted. BMA supported the amendments in a comment letter to the Commission.
Background:
In 2021 the SEC announced for the first time that Rule 15c2-11, a long-established rule in the OTC equity markets, also applies to quotations in fixed income securities. SEC staff then issued a temporary staff-no-action letter effectively exempting many bonds from the Rule if they meet certain criteria. The Rule requires traders, before publishing a quotation to a quotation medium, to review certain issuer financial information and ensure that information is available publicly.
In 2024 the SEC issued a new staff no-action letter with respect to the application of SEC Rule 15c2-11 to quotations for fixed income securities excluding municipals. The no-action letter effectively exempts many fixed income quotations from the Rule as long as the securities being quoted meet certain criteria. The newly issued letter does not have an expiration date.
Principal trading prohibition
BMA is preparing a request to the SEC to provide interpretive relief related to the principal trading prohibition of the Investment Advisors Act (IAA). The IAA generally prohibits registered Investment Advisors (IAs) from engaging in principal transactions with their customers without first obtaining authorization. For decades, the SEC has interpreted that provision as requiring customer authorization for each principal transaction. BMA intends to ask the Commission to revise their interpretation so that one-time or annual authorizations that apply to all principal trades would satisfy the requirements of the statute.
Financial Data Transparency Act
What’s New:
A joint agency rulemaking, the first formal regulatory action in implementing the Financial Data Transparency Act (FDTA), was finalized recently by the OCC, Fed, FDIC, NCUA, CFPB, FHFA, CFTC, SEC, and Treasury. The rulemaking sets the stage for each individual agency to conduct implementing rulemaking for parties under their authority. The SEC will write the rule for bond dealers and issuers.
Background:
In 2022 Congress enacted the FDTA as part of the National Defense Authorization Act. The Act is designed to promote the interoperability of data provided to financial regulators. The regulatory proposal would establish certain cross-agency data standards. One element, a standard for financial instrument identification, would use the Financial Instrument Global Identifier scheme instead of CUSIP.
The FDTA will, among other provisions, require municipal issuers to publish financial disclosure statements in a machine-readable format which will allow software to identify common data elements within the statements. There is a four-year implementation period from the date of enactment. The statute requires the SEC to develop a “taxonomy,” a collection of data items associated with tags that will make the documents machine-readable. Issuers generally remain opposed to the FDTA. BMA’s comments on the proposed rule highlighted concerns about the scope of the proposal.
NEW!
The Beltway Bond Brief
The Bond Market Association’s monthly members-only briefing on how Washington policy is shaping the US bond markets—clear analysis, direct sourcing, across the regulators, Capitol Hill, and the White House.
