MSRB Responds to SEC's Approval of Final Registration Rule for Municipal Advisors

Date: September 18, 2013

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

MSRB RESPONDS TO SEC’S APPROVAL OF FINAL REGISTRATION RULE
FOR MUNICIPAL ADVISORS
 

Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) welcomes today’s approval by the Securities and Exchange Commission (SEC) of its final guidance on the types of municipal advisory activities that are subject to federal regulatory oversight, including MSRB rules. The MSRB will carefully study the guidance and continue its outreach to municipal advisors as it assumes oversight responsibilities.

“The MSRB is very pleased that we now have clarity on the kinds of financial professionals that are considered municipal advisors,’ said MSRB Board of Director Chair Jay Goldstone. “We plan to reach out to municipal advisors to help them understand what it means to be regulated and the next steps we will be taking.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expanded the MSRB’s jurisdiction to include registration and other aspects of regulation of municipal advisors. Regulatory oversight of municipal advisors will help protect municipal entities that hire municipal advisors and investors that participate in the municipal market.

The SEC’s final guidance on the definition of municipal advisor addresses a number of interpretative issues relevant in determining whether a firm or individual is engaging in municipal advisory activities requiring registration and regulatory compliance. In 2011, the MSRB proposed draft rules for advisors but suspended that process as the SEC finalized its guidance.

The MSRB will advance a regulatory framework for municipal advisors that includes rules for professional conduct, professional qualification examination requirements as well as education and outreach to municipal advisors. Goldstone said the MSRB will reexamine the draft rules, revise them if necessary in light of the SEC’s final guidance and seek public comment. It will also continue to work with the municipal advisory industry to develop a professional qualification exam to establish standards of competency for municipal advisors.

Any municipal advisor that has engaged in municipal advisory activities after December 31, 2010 is required to be registered first with the SEC and then with the MSRB. Learn more about the MSRB’s online registration process. Financial professionals and others who want to learn whether they are engaged in such activities should review the SEC’s guidance.

In addition to registration requirements, municipal advisors owe a federal fiduciary duty to their state and local government clients and are subject to certain MSRB rules, including a fundamental obligation to deal fairly with municipal clients. Municipal advisors should review the MSRB rulebook for all applicable rules. Resources for municipal advisors are available on the MSRB’s website, and additional resources and educational materials will be added to the website as the municipal advisor regulatory framework develops.


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.