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Municipal advisors
will soon be required to take and pass a baseline competency exam under new
MSRB professional qualification standards approved on February 26, 2015 by the Securities
and Exchange Commission (SEC). Revised MSRB Rule G-3 establishes two
classifications of municipal advisor professionals—representative and principal—with
firms required to designate at least one principal to oversee the municipal
advisory activities of the firm. All municipal advisor representatives and
principals will be required to take the MSRB’s forthcoming exam to demonstrate
knowledge of their regulatory requirements and business activities.
The MSRB has finalized
the content outline for the Municipal Advisor Representative Qualification Examination,
which will be filed soon with the SEC and made publicly available as a study
aid. After administering a pilot exam planned for later this year, the MSRB
intends to begin administering the permanent municipal advisor exam in 2016 and
will provide a one-year grace period during which individuals will be able to
take the test while still engaging in municipal advisory activities.
To inform the
passing score for the permanent exam and help determine the final bank of test
questions, the MSRB plans to offer municipal advisors the opportunity to take a
pilot exam later this year. Taking and passing the pilot exam is equivalent to
taking and passing the permanent exam – pilot test-takers who achieve a passing
score would not have to retake the exam when it is finalized. Municipal
advisors interested in volunteering to
take the pilot exam may sign up here to receive details about the process as they become
available.
The MSRB will host a
webinar to provide more information on the exam and related requirements on
April 2, 2015 at 3:00 p.m. ET. Register for the webinar.
As the MSRB’s other regulatory
initiatives for municipal advisors move from draft to final form, the MSRB will
continue to provide information on their status. The information below is
current as of March 5, 2015.
The MSRB has become aware that municipal advisors may be identifying more business activities on Form A-12 than the advisor actually engages in. In particular, the two items identifying solicitation as a business activity should be selected only if the solicitation activity is on behalf of an unaffiliated person or firm. Municipal advisors who solicit only on their own behalf, or on behalf of an affiliate, should not indicate solicitation as a business activity on Form A-12 and if they have done so, should amend Form A-12 as soon as possible. |
