Securities Regulation Daily Wrap Up, MUNICIPAL SECURITIES NEWS—MSRB Review finds 2025 marked structural turning point for municipal securities market, (Jan 13, 2026)
The report highlights how surging electronic trading, record ETF inflows, and elevated issuance reshaped market activity and investor behavior in 2025.
The MSRB’s 2025 Municipal Market Year in Review describes an extraordinary year defined by record trading activity, strong issuance, heightened volatility, and a fundamental shift toward a more electronic, investor-driven market. Trade counts reached a fourth consecutive record, par amounts traded hit their highest level since 2008 for fixed-rate securities, new issuance rose to a second straight annual record, and ETF inflows surged, underscoring how dramatically the municipal market has changed since the low-volume environment of 2021.
Trading activity and investor shifts. Trading activity expanded sharply as rising interest rates and the growth of separately managed accounts fueled demand, particularly from individual investors. Total trade count more than doubled from 2021 to 2025, average trade size declined, and customer trading increasingly migrated to electronic venues, with more than one in five customer trades executed on alternative trading systems. At the same time, investor preferences shifted decisively toward ETFs, which posted record inflows, while traditional tax-exempt mutual funds experienced sustained outflows and banks and insurers continued to reduce their municipal holdings.
Issuance, yields, and market outlook. Issuance and yields also reflected a transformed market. New issue volume climbed to $580 billion, driven primarily by tax-exempt and new-money issuance, while taxable issuance and refundings fell sharply from pandemic-era levels. Yields rose significantly from their 2021 lows, including a brief but severe bout of volatility in April 2025, before stabilizing later in the year. The report concludes that while issuance is likely to remain strong in 2026, trade volumes may moderate depending on interest rate movements, after five years of unprecedented growth and structural change.
RegulatoryActivity: ExchangesMarketRegulation GCNNews InvestorEducation MunicipalSecuritiesNews