Milestones in Municipal Securities Regulation

1975 – Creation of the Municipal Securities Rulemaking Board
The MSRB was established by Congress as a self-regulatory organization to protect investors and the public interest by promoting a fair and efficient municipal securities market. The MSRB’s role includes developing rules to regulate the securities firms and banks involved in underwriting, trading, and selling municipal securities dealers. The MSRB Board, composed of members from the municipal securities dealer community and the public, sets standards for all municipal securities dealers. All MSRB rules are subject to oversight by the Securities and Exchange Commission.

1976 – MSRB Established Uniform Practice Rules
The MSRB created standardized industry practices for trade confirmation, clearance and settlement, making it easier for dealers to complete transactions with one another.

1978 − MSRB Created Rules on Underwriting Practices
New rules, including MSRB Rule G-11 on underwriting practices, were created to address major concerns among market participants regarding the operation of underwriting syndicates purchasing new issue bonds from issuers.  

1978 – Fair Practice Rules Created
The MSRB established high ethical standards for dealers in the municipal securities industry, including rules on suitability, pricing and fair dealing.

1978 – MSRB Created Standard for Yield Comparisons
The MSRB established a standard for a fixed-income securities market that allows investors in fixed-income instruments to more easily compare yields to analyze alternative investment opportunities in municipal securities.

1979 – MSRB Required Use of CUSIP Numbers
Alphanumeric codes, or CUSIPs, were assigned by the CUSIP Service Bureau to reflect the differences in securities that are relevant to trading and investment decisions. MSRB rules required that CUSIP numbers appear on confirmations of transactions and that the securities delivered on those transactions match the CUSIP numbers appearing on the confirmations. The rule set the stage for the computerization of the municipal securities market. 

1980 – MSRB Released Report on Pricing
The landmark report marked the MSRB’s first public attempt to address pricing practices in the municipal securities market. The report grew out of dialog with the industry aimed at establishing broad parameters for acceptable spreads in transaction prices taking into account bond maturity and market risks and other factors.

1982 – Tax Equity and Fiscal Responsibility Act Enacted
One provision the Tax Equity and Fiscal Responsibility Act called for the elimination of all bearer securities. This provision encouraged the municipal bond market to move to electronic book-entry-only issuance, which has eliminated the use of paper certificates.    

1984 – Automated Clearance and Settlement Systems
Through the MSRB’s adoption of new uniform practice rules, the municipal securities industry took progressive steps toward an all-electronic standard for processing transactions in inter-dealer and institutional customer trades. This eventually eliminated the need for paper confirmations and physical settlements of these transactions.   

1989 – SEC Adopted SEC Rule 15c2-12
The SEC mandated that underwriters for most bond issues obtain the issuer’s agreement to deliver an official statement to the underwriter within seven business days after the date of sale. The SEC also required underwriters to review the official statement to determine whether all key factors had been disclosed. The landmark rule promoted increased disclosure and transparency in the municipal securities market.

1990 – MSRB Required Filings of Disclosure Documents
The MSRB adopted a rule requiring dealers to send the MSRB two copies of the official statement. The MSRB began serving as the central repository for official statements.

1993/94 – Groundbreaking Pay-to-Play Rule G-37 Adopted
The MSRB adopted its pay-to-play Rule G-37, which prohibits a dealer from negotiating business with an issuer within two years after the dealer or one of its municipal finance professionals makes a political contribution to an issuer official.   

1995 – MSRB Created Transaction Reporting System
The MSRB developed a daily summary report of bonds traded between dealers, a first step in providing comprehensive price transparency in the municipal securities market.

1996 – MSRB Adopted Rule on Use of Outside Consultants
A new MSRB rule shed light on dealer use of consultants to solicit municipal securities business. The new rule required that issuers contracted by consultants be informed that the consultants are working on behalf of a dealer.

1998 – MSRB Published Daily Trade Reports
The MSRB implemented another major step in providing market transparency, expanding its daily reports on dealer trading to include transactions with customers.

2000/2001 – MSRB Adopted Rules on 529 Plans and Other Municipal Fund Securities
The MSRB adopted an initial set of fair practices and other rules relating to dealer transactions in 529 college savings plans and local government investment pools, known as municipal fund securities.

2001 – The MSRB Launched the Muni Council
The MSRB assembled leading municipal securities industry groups and initiated a long range planning process that resulted in the creation of the Muni Council and a multi-year process to improve the efficiency and effectiveness of disclosure practices in the municipal securities market.

2002 – Electronic Official Statement Submission System is Launched
The MSRB's online system for the submission of official statements by underwriters to the MSRB was launched.

2005 – MSRB Revised Rule G-38 to Ban Use of Consultants
The MSRB revised its Rule G-38 after industry trends indicate increased dealer compensation to consultants and an increase in political contributions by consultants. The revised rule prohibited hiring persons, other than employees, for the purpose of soliciting municipal securities business.     

2005 – MSRB Made Comprehensive Real-Time Trade Reports Available
Dealers were required to submit transaction information to the MSRB within 15 minutes of execution of all trades, providing real-time public access to their fund information.

2005/2006 - MSRB Established 529 Plan Disclosure and Advertising Standards
In a series of regulatory actions, the MSRB adopted rules for disclosure and advertising of 529 plans that ensure fair and complete disclosure in the 529 plan market, consistent with mutual fund standards.

2006 - MSRB Launched Regulatory Effort to Establish All-Electronic Disclosure System for Municipal Securities
The MSRB published a concept release setting forth its vision of a centralized electronic disclosure system for the municipal securities market. 

2008 – MSRB Launched the Electronic Municipal Market Access (EMMA) Website
The launch of the pilot program for the Electronic Municipal Market Access (EMMA) website was the first time that historical data and statistics on the municipal securities market were available from a single source, free of charge. EMMA is an electronic, Internet-based system that provides public access to disclosure documents, real-time trade price data and educational resources for the municipal securities market.

2009 – MSRB Launched Market Statistics on EMMA
The MSRB introduced market-wide municipal bond statistics on EMMA that allowed investors to view municipal market trading trends. The addition of daily statistics on EMMA was the first in a series of initiatives by the MSRB to provide investors with more extensive data on municipal bonds to help them better understand the market.

2009 – MSRB Provided Auction Rate Security and Variable Rate Demand Obligation Transparency
The MSRB launched a program to collect information about for auction rate securities and variable rate demand obligations from broker-dealers and disseminate it to the public for free through EMMA. Dealers were required to provide the MSRB with interest rates set for auction rate securities and variable rate demand obligations. The program provided all market participants with additional critical information necessary to trade these financial products.

2009 – MSRB Implemented All-Electronic Official Statement Dissemination Standard
The MSRB revised its Rule G-32 to require municipal securities underwriters to submit electronic copies of official statements and advance refunding documents (rather than paper copies) to EMMA. Electronic documents made the submission process less costly and speeds dissemination to investors.

2009 – MSRB Began Collecting and Posting Continuing Disclosures
Under amendments to SEC Rule 15c2-12 adopted by the SEC in 2008, municipal bond issuers began to provide electronic copies of continuing disclosure documents to the MSRB through EMMA, which made them immediately available to the public.  The MSRB officially began to collect all disclosure documents associated with municipal bonds under a combination of MSRB and SEC rules. 

2010 – MSRB Revised Rule G-37 to Require Additional Political Contributions Disclosure
The MSRB revised its Rule G-37 to require disclosure of dealer contributions to municipal bond ballot campaigns.  

2010 – Congress Expands MSRB's Mission and Jurisdiction 
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed by President Barack Obama on July 21, 2010, expanded the MSRB's mission to include the protection of municipal entities and obligated persons. It also granted the MSRB rulemaking authority over municipal advisors. The MSRB's expanded mandate and mission became effective October 1, 2010.

2012 – MSRB Expands Obligations of Underwriters to their State and Local Government Clients
The MSRB issued an interpretive notice to its Rule G-17 on fair dealing to outline explicit and expanded requirements for underwriters aimed at protecting state and local governments that issue municipal bonds.

Related Information
See a timeline of significant developments in financial securities regulation published by the Securities and Exchange Commission Historical Society.