Compliance Outreach Program for Municipal Advisors
Monday, Nov. 3, 2014
8:30 a.m. to 4:00 p.m. CDT

The SEC, FINRA and the MSRB are hosting a compliance outreach program for municipal advisor professionals to promote strong compliance practices among this newly regulated group of financial professionals. 

A live webcast will be available on the SEC's website at www.sec.gov. Webcast registration not required.

The MSRB is still seeking comment from municipal market participants and the general public about its strategic priorities. The deadline for submitting comments is October 23, 2014. 

The MSRB and Regulatory Efficiency

For the past several years, the MSRB has been engaged in an effort to promote regulatory efficiency by ensuring that new and existing municipal securities regulations function as efficiently as possible and are consistent with those of other regulators, when possible.

In early 2013, the MSRB began a comprehensive review of its Rule Book, with the goal of revising, reorganizing or retiring MSRB rules based on an assessment of current market practices and input from regulated entities, other market stakeholders and regulators. Rule changes resulting from the review seek to promote more effective and efficient compliance for regulated entities, and to align MSRB rules with those of other self-regulatory organizations or government agencies where appropriate.

To date, the MSRB has amended, consolidated and streamlined several rules in response to recommendations received from stakeholders. These are listed below. More information about each of the changes can be found by clicking on the title.

• Amendments to Dealer Professional Qualification Requirements  (August 2014)
  To align regulatory requirements with current business practices, the MSRB amended its professional qualification rules for municipal securities dealers. The changes included the elimination of the Financial and Operations Principal (FINOP) classification and the restriction of the permitted activities of a “limited representative – investment company and variable contracts products” to sales to and purchases from customers of municipal fund securities. 
  
  
• Consolidation of Fair-Pricing Obligations of Municipal Securities Dealers (July 2014)
  The MSRB consolidated numerous fair-pricing obligations of dealers into a single fair pricing rule, Rule G-30, on prices and commissions for principal and agency transactions. 
  
  
• Consolidation of Fair-Dealing Obligations for Municipal Securities Dealers (July 2014)
  The MSRB codified several fair-dealing obligations of municipal securities dealers into a new rule on time-of-trade disclosure obligations and a rule governing activities with sophisticated municipal market professionals. 
  
  
• Alignment with FINRA of Suitability of Dealers’ Recommendations (July 2014)
  The MSRB revised its rule on the suitability of dealers’ recommendations of municipal securities transactions to incorporate existing interpretive guidance and to more closely align the rule with the Financial Industry Regulatory Authority’s (FINRA) suitability rule.
  
  
• Consolidation of Registration Requirements (May 2014)
  To make the MSRB registration process more efficient for dealers and municipal advisors, the MSRB consolidated its multiple registration requirements and forms into a single rule and form, MSRB Rule A-12 and Form A-12.
  
  
• Streamlining of New Issue Submission Requirements (December 2012)
  The MSRB amended its rules to streamline certain new issue reporting requirements and to integrate into the Electronic Municipal Market Access (EMMA) system certain data submitted by underwriters to the New Issue Information Dissemination Service operated by the Depository Trust and Clearing Corporation. 

Another change aimed at enhancing regulatory efficiency is the MSRB’s implementation in 2013 of a revised format for new rules that is consistent with that of other financial regulators. All new and amended MSRB rules now contain a “Supplementary Material” section in addition to rule language.

Cooperation and Coordination with Other Regulators

As part of the MSRB’s focus on regulatory efficiency, it has enhanced its interaction with other regulators. The MSRB collaborates extensively with the Securities and Exchange Commission in its oversight of the municipal market, and provides enforcement support to regulatory authorities that examine for compliance with and enforce MSRB rules, including FINRA and federal bank regulators. The MSRB frequently provides rule interpretations and training for examiners, and facilitates access to municipal market information in support of their examinations and enforcement activities. Frequent communications also occur between the MSRB and other federal regulators, such as the Internal Revenue Service, where the MSRB assists with the agency’ enforcement of tax laws related to municipal securities.

Recent MSRB Publications

MSRB Updated Quarterly Rule Book Now Available Each quarter, the MSRB publishes an updated PDF of its entire Rule Book. The October 1, 2014 version is now available on msrb.org.