MSRB to Consolidate Fair-Pricing Rules for Municipal Securities Dealers

Date: May 12, 2014

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


Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) has received approval from the Securities and Exchange Commission (SEC) to consolidate municipal securities dealers’ existing fair-pricing obligations into a single rule, facilitating dealer compliance with a fundamental investor protection regulation. This action is part of a larger, multi-year initiative that the MSRB has underway to review and streamline its Rule Book.

“The MSRB continues to focus on opportunities to further improve our Rule Book to better highlight key principles and support regulatory efficiency and compliance,” said MSRB Executive Director Lynnette Kelly. “Consolidating all fair-pricing rules and interpretations into a single rule is an important step forward in this effort.”

Fair-pricing requirements for dealers with respect to customer transactions currently are contained in three separate MSRB rules, Rule G-30 on prices and commissions, Rule G-18 on execution of transactions, and Rule G-17 on fair dealing, and in various interpretive guidance under Rules G-30 and G-17. 

The new, single fair-pricing rule, which requires dealers that transact municipal securities with or on behalf of customers to use a “fair and reasonable” standard for the pricing of the security and for any related commission or service charge, does not make any substantive change to existing dealer pricing obligations. Effective July 7, 2014, all pricing-related obligations will be contained in revised MSRB Rule G-30.

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.