MSRB Expands Enforcement Support with Agreement to Assist IRS

Date: October 24, 2011

Contact: Jennifer A. Galloway
             (703) 797-6675


Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) announced today that it has expanded the support it provides to federal regulatory organizations with an agreement to provide municipal market data to the Internal Revenue Service (IRS) in connection with its enforcement of tax laws related to municipal securities.

The MSRB regulates the $3.7 trillion municipal market and currently provides information and data to regulatory authorities that enforce MSRB rules governing municipal market financial professionals. The new agreement extends the MSRB’s enforcement support to the IRS for its enforcement of federal internal revenue laws related to the municipal securities market. The MSRB will provide the IRS with municipal market data and documents collected through MSRB information systems.

“Industry compliance with federal tax laws is fundamental to a fair and efficient municipal market,” said MSRB Executive Director Lynnette Kelly Hotchkiss. “Investments in technology have enabled the MSRB to make municipal market data more readily available to regulators and our agreement with the IRS will ensure that MSRB data and other support are readily available to the IRS for its enforcement activities.”

“We appreciate the assistance from the MSRB. This agreement helps the IRS foster the best market conditions for both municipal bond issuers and investors,” said Joseph H. Grant, Acting Commissioner of the IRS Tax Exempt and Government Entities Division.

Under federal securities law, the MSRB has a statutory mandate to provide enforcement support to regulatory authorities. The MSRB assists authorities that enforce MSRB rules, including the Securities Exchange Commission, the Financial Industry Regulatory Authority and appropriate bank regulators, with real-time access to market transactions, training on MSRB rules and data analysis. The MSRB also meets regularly with enforcement authorities to discuss municipal market issues and coordinates on education and outreach activities related to compliance with MSRB rules.

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 Congressionally-chartered, 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 subject to oversight by the Securities and Exchange Commission.