MSRB Issues Statement on Financial Reform Legislation

Date: July 15, 2010

Contact:             Jennifer A. Galloway, Chief Communications Officer
                         (703) 797-6600



Alexandria, VA – The Dodd-Frank Wall Street Reform and Consumer Protection legislation passed by Congress today and sent to the President is the most significant financial reform legislation in a generation and will create sweeping changes in the municipal securities market. The legislation broadens the mission of the Municipal Securities Rulemaking Board (MSRB) to protect state and local governments and other municipal entities, in addition to investors and the public interest. The legislation also establishes, as of October 1, 2010, a majority public governing board that has the necessary expertise to carry out the MSRB’s mission effectively and includes representation of firms that provide advice to municipal entities. Such municipal advisors will become subject to MSRB rules for the first time and will play an important role in crafting the protections provided by the MSRB. 

The MSRB staff and current governing Board have been working to ensure a smooth and effective transition to a majority public board. The MSRB expects to file soon with the Securities and Exchange Commission administrative rule changes needed for this transition. The transition will be coordinated with a rulemaking program designed to ensure careful but prompt development of rules fulfilling the MSRB’s expanded mission. The MSRB will develop rules in the areas of fair practice and fiduciary duties, pay-to-play and other conflicts of interest, gifts, disclosure, professional qualifications, continuing education and other areas identified by the new governing board.

An important element of this rulemaking program will be an outreach effort to key market participants, including investors and municipal entities that the MSRB’s rules are designed to protect, as well as municipal advisors, broker-dealers and banks subject to MSRB rules. The outreach effort will allow all participants to provide significant input to the MSRB during this transition period.

The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a self-regulatory organization governed by a board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.