MSRB Requests Comment on Municipal Advisor Rules on Written Communications and Disclosures

Date: August 10, 2011

Contact: Jennifer Galloway 
             (703) 797-6600 


Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) today requested comment on extending the MSRB’s rule on advertisements to cover municipal advisors and on a draft interpretive notice covering other forms of marketing communications.  It also requested comment on a new rule requiring municipal advisors to evidence their engagements in writing, as well as to make certain required disclosures. Comments should be submitted by to the MSRB by September 14, 2011.

The MSRB’s existing rule on advertising, Rule G-21, applies to advertisements by municipal securities dealers. The MSRB is requesting comment on extending this rule to cover advertising by municipal advisors. The rule would prohibit municipal advisors from publishing or disseminating advertisements related to municipal securities, municipal financial products or third-party services the municipal advisors knows or has reason to know are materially false or misleading. This would include any written or electronic promotional materials, such as a circular, report or press release.   The MSRB recognizes that many of the communications municipal advisors have with municipal entities and obligated persons are not advertisements.  The MSRB, therefore, is also requesting comment on an interpretive notice under Rule G-17, which would provide that all written and oral sales or marketing communications and correspondence (e.g., pitch books and responses to request for proposals) must not be materially false or misleading.  

The MSRB is also requesting comment on a new rule for municipal advisors—draft MSRB Rule G-46—which would require municipal advisors to evidence in writing a municipal advisory relationship with a municipal entity client or obligated person client at the time the municipal advisor provides advice or agrees to provide advice. The rule would require the writing to include the basis of compensation; the disclosures required by the MSRB’s fair dealing and fiduciary duty rules; the affiliates that will provide advice, services or products related to the municipal advisor engagement; and whether the municipal advisor is registered with the MSRB and the SEC.  In certain cases, municipal advisors would also be required to disclose those affiliations to investors.

“These rules would help ensure that municipal advisors are not misleading in their public communications and that a municipal advisor’s clients receive the disclosures they are entitled to receive from the outset of the relationship,” said MSRB Executive Director Lynnette Kelly Hotchkiss.

Comments may be submitted electronically to Please indicate the notice number in the subject line of the email and, if possible, send comments in PDF format. Comments may be submitted in paper form to Ronald W. Smith, Corporate Secretary, Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314.

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.