MSRB Holds Quarterly Meeting

Date: April 26, 2013

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

MSRB HOLDS QUARTERLY MEETING

Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) Board of Directors held its quarterly meeting April 24–26, 2013 in Alexandria, Virginia, where it focused on efforts to consolidate numerous interpretations of a rule that forms the basis of a dealer’s obligation of fair dealing, among other business.

Over the last several months, the MSRB has been working to restate certain interpretive guidance associated with MSRB Rule G-17 on fair dealing into new or revised rules that highlight core principles, and where possible, make them consistent with the rules of other regulators. The outcome of these efforts will be a comprehensive package of rules that clarifies Rule G-17 obligations and that is expected to be filed with the Securities and Exchange Commission (SEC) later this year.

At its meeting the Board incorporated comments received and approved its prior proposal to consolidate into a stand-alone rule existing requirements for dealers to disclose material information to customers in connection with the purchase or sale of a municipal security. These obligations are currently set forth in interpretations to Rule G-17.  

“Disclosure of material information to investors is a cornerstone of the MSRB’s regulatory framework,” said MSRB Chair Jay Goldstone. “These changes will provide greater clarity for dealers, and emphasize the importance of their obligations to investors.”

Additionally, the Board agreed to seek comment on a proposal to establish a new definitional rule for “sophisticated municipal market professionals” (SMMPs) and a related rule setting forth the obligations of dealers toward SMMPs. These obligations are also contained in G-17 interpretations.

In a separate effort, the Board discussed comments received on an earlier proposal seeking comment on its entire rule book, and agreed to begin to prioritize recommendations that would further streamline MSRB rules and ensure that they reflect current market practices and conditions. The MSRB plans to communicate the next steps of this plan when the prioritization process is complete.

In other business, the Board discussed comments received on two concept proposals the MSRB issued previously. One proposal related to developing a central transparency platform as a successor to the MSRB’s Real-time Transaction Reporting System. The Board will continue to seek and evaluate comment, including holding focus groups, on additional elements of the transparency platform as the initiative evolves.

The other concept proposal related to requiring underwriters to submit preliminary official statements to the MSRB’s Electronic Municipal Market Access (EMMA®) website. The Board decided that it would continue to study the merits of posting preliminary official statements on EMMA and the potential burdens on regulated entities.

Finally, the Board continued to consider a regulatory framework for municipal advisors, which will be further developed following the SEC’s finalization of a definition of municipal advisor. “We have spent the last few months focusing on the activities of municipal advisors and are prepared to review our draft rules, make changes if necessary and move forward with the rulemaking process," Goldstone said. 


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.