MSRB Creates Professional Qualification Standards for Municipal Advisors

Date: March 2, 2015

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

MSRB CREATES PROFESSIONAL QUALIFICATION STANDARDS FOR MUNICIPAL ADVISORS 

Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) has received approval from the Securities and Exchange Commission (SEC) to create baseline standards of professional qualification for municipal advisors. The new standards will be incorporated through amendments to the MSRB’s existing Rules G-2 and G-3 on professional qualifications and take effect April 27, 2015. 

“The MSRB’s professional qualification program aims to ensure that regulated municipal market professionals meet certain threshold requirements in order to engage in business activities that have a direct impact on financial decisions made by investors, states and municipalities,” said MSRB Executive Director Lynnette Kelly. “Municipal securities dealers have had to meet competency requirements for many years. The approval of these rule amendments takes us a step closer to putting municipal advisors under a similar regime.” 

The Dodd-Frank Wall Street Reform and Consumer Protection Act charged the MSRB with developing professional standards as part of a comprehensive regulatory framework for municipal advisors. Revised MSRB Rule G-3 establishes two classifications of municipal advisor professionals, representative and principal, with firms required to designate at least one principal to oversee the municipal advisory activities of the firm. 

The MSRB last month approved the content outline for the Municipal Advisor Representative Qualification examination, which will be filed with the SEC and made publicly available as a study aid. The MSRB plans to administer a pilot exam later this year that will precede the final exam, which is expected to be available in 2016. To facilitate the transition to the new exam requirement, the MSRB’s rule provides for a one-year grace period during which individuals will be able to take the municipal advisor representative exam while still engaging in municipal advisory activities.  

Amended Rule G-3 also eliminates the requirement of apprenticeship. Previously, municipal securities representatives were required to apprentice for 90 days before conducting business with the public. Omitting the apprenticeship requirement for dealers — and not establishing it for municipal advisors – allows both types of firms to identify appropriate training and supervision for new employees. 

The MSRB has scheduled a webinar to provide more information on the municipal advisor representative professional qualifications test and related requirements on April 2, 2015 at 3:00 p.m. ET. Register for the webinar

For up-to-date information on the MSRB’s professional qualifications program and other rulemaking for municipal advisors, visit the Resources for Municipal Advisors section of the MSRB’s website. Individuals interested in participating in the pilot exam may sign up here to receive details about the process as they become available.


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.