MSRB Receives SEC Approval to Establish Majority Public Governing Board

Date: September 30, 2010

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


Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) today received approval from the Securities and Exchange Commission (SEC) to change the composition of its governing board to a majority of public members with municipal advisor representation to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The Dodd-Frank Act requires the MSRB board of directors to consist of a majority of public members and to include representation of municipal advisors, broker-dealers and banks. The MSRB plans to seat on October 1, 2010, a governing board that includes 11 public members and 10 industry members. To comply with the Dodd-Frank Act, at least one public member of the board must represent investors, at least one public member must represent state and local government entities, and at least one public member must have municipal industry knowledge or experience.

The SEC’s approval incorporates two clarifying amendments in the transitional composition rule for the MSRB board of directors. One amendment requires that MSRB municipal advisor representatives not be affiliated with any broker, dealer or municipal securities dealer. The second amendment requires that the MSRB’s Nominating Committee be established after October 1, 2010, that it be composed of a majority of public representatives and that fair representation of banks, broker-dealers and municipal advisors is assured.

Beginning October 1, 2010, the Dodd-Frank Act broadens the MSRB’s mission to protect not only investors and the public interest but also state and local government entities and others whose credit stands behind municipal bonds. It requires the MSRB to write rules for municipal advisors that provide advice to these entities on municipal securities or investment-related matters or that solicit certain business from those entities on behalf of others. This expanded authority is in addition to the MSRB’s existing regulation of banks and securities firms that engage in municipal securities business.

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 21-member 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.