New Pay-to-Play Rules Adopted for Municipal Advisors

In an important development for the integrity of the municipal securities market, municipal advisors will soon be subject to a long-standing pay-to-play rule that has applied to municipal securities dealers for more than 20 years. Bringing municipal advisors under the same regulations as dealers supports the MSRB’s effort to safeguard the $3.7 trillion municipal securities market against pay-to-play practices—and the appearance of them—when state and local governments hire outside financial professionals. 

Pay-to-play practices typically involve a person or entity making cash or in-kind political contributions (or soliciting others to do so) to help finance the election campaigns of state or local officials or bond ballot initiatives as a quid pro quo for the receipt of government contracts. The MSRB’s new regulations will curb, at a minimum, the appearance of quid pro quo corruption in the awarding of municipal advisory business and provide greater transparency regarding municipal advisors’ political contributions. Read more about the new pay-to-play regulations for municipal advisors.

Proposed Guidance on Pricing of Municipal Bonds Could Support Increased Transparency for Investors

The MSRB is continuing its effort to help investors understand the true cost of their municipal securities transactions. In another step towards this goal, the MSRB last week sought public comment on draft regulatory guidance on how dealers price bonds and calculate their mark-ups or mark-downs. The MSRB believes the draft guidance could support development of a draft rule under consideration that would require municipal securities dealers to disclose on customer confirmations the amount of the mark-up or mark-down on a certain class of transactions with retail investors. The MSRB is coordinating with the Financial Industry Regulatory Authority (FINRA) on a parallel mark-up disclosure initiative for transactions in other debt securities. The MSRB's draft guidance also seeks to promote consistent compliance by municipal securities dealers with existing fair pricing obligations to investors and better align standards on these subjects with those that apply to other fixed income securities.

MSRB Educational Offerings and CPE Credit

In its latest effort to provide high-quality educational content that supports market knowledge and compliance with municipal market regulations, the MSRB now offers continuing professional education (CPE) credit to participants in educational webinars hosted by the MSRB. Visit the MSRB's new on-demand webinar portal to access all MSRB's webinars currently available for CPE credit.

Upcoming Events

MSRB Webinar: Click, Call and Comply: Understanding Continuing Disclosures March 18, 2016 12:00 p.m.- 1:00 p.m. ET MSRB staff will demonstrate resources available in the MSRB's Education Center and on the Electronic Municipal Market Access (EMMA®) website and other MSRB educational materials to support issuers' understanding and fulfillment of their continuing disclosure obligations. Register for the webinar.

MSRB Webinar: Application of MSRB Rule G-20 and Related Amendments to MSRB Rule G-8
March 24, 2016
3:00 p.m. - 4:00 p.m. ET

MSRB staff will review the key provisions of changes to MSRB Rule G-20 to extend restrictions regarding gift giving and the related recordkeeping requirements currently applicable to brokers, dealers, and municipal securities dealers to municipal advisors. The changes to MSRB Rule G-20 are effective May 6, 2016. Register for the webinar.

New Investor Education Resource: Ways to Buy Municipal Bonds

Investors have several options to consider when they decide to buy or sell municipal bonds. Hire a full service broker? Work with a registered investment adviser? Do it yourself through a self-managed account? Buy shares in a mutual fund?  Read more about considerations for each approach in Ways to Buy Municipal Bonds, a new educational resource from the Municipal Securities Rulemaking Board (MSRB). Access other objective information about investing in municipal bonds in the MSRB Education Center.

EMMA® Tip: Using MyEMMA Alerts

Get the most out of the Electronic Municipal Market Access (EMMA®) website by setting up free MyEMMA alerts. With MyEMMA alerts, users will receive personalized alerts when new information becomes available for selected securities. MyEMMA users can track a security's trading activity and learn when new disclosure filings are posted for that security's issuer.  Learn how to get started with MyEMMA alerts.

Recent Press Releases

February 24, 2016: MSRB Publishes Compliance Advisory for Brokers, Dealers and Municipal Securities Dealers February 23, 2016: MSRB Launches Outreach Effort for Issuers on the Municipal Securities Market February 19, 2016: MSRB Educates Retail Investors on Ways to Buy Municipal Bonds February 18, 2016: MSRB Publishes Draft Guidance to Support Fair Pricing of Municipal Securities and Dealer Compensation Calculations February 17, 2016: Municipal Advisors to be Subject to New Pay-to-Play Regulations February 1, 2016: MSRB Holds Quarterly Board Meeting February 1, 2016: Marcy Edwards Rejoins MSRB Board of Directors January 26, 2016: MSRB to Offer Continuing Professional Education Credit for Webinars and Events January 20, 2016: Confirmation Disclosure and Bank Loans Among Topics at Upcoming MSRB Board Meeting

Regulatory Roundup

February 23, 2016: MSRB Amends its Rule Regarding Calculations for Bonds that Do Not Pay Interest Semi-Annually

• SEC Filing (February 23, 2016)

February 18, 2016: Request for Comment on Draft Amendments to MSRB Rule G-30 to Provide Guidance on Prevailing Market Price

February 17, 2016: Amendments to MSRB Rule G-37 on Political Contributions and Prohibitions on Municipal Securities Business and Related Amendments are Deemed Approved Under the Securities Exchange Act of 1934

January 28, 2016: MSRB Revises Content Outline for the General Securities Sales Supervisor Qualification Examination

January 22, 2016: Proposed Rule Change Relating to the Content Outline for the Series 9/10 Examination Program

• SEC Approval Order (February 4, 2016)
• Federal Register Notice of Immediately Effective Rule Change (February 10, 2016)

January 19, 2016: Designation Information Regarding Mandatory Participation in Business Continuity and Disaster Recovery Testing

January 15, 2016: Proposed Rule Change Consisting of Proposed Amendments to Rule A-3, on Membership on the Board

• Federal Register Notice of Filing (February 4, 2016)