MSRB Comments on Senator Dodd's Financial Reform Bill

Date: November 10, 2009

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

Alexandria, VA - The Municipal Securities Rulemaking Board (MSRB) said today that provisions in the Senate Banking Committee financial reform bill introduced by Chairman Christopher Dodd relating to municipal securities recognize the importance of the MSRB's investor protection mandate and would enhance its ability to oversee this vital part of the capital markets.  
"The MSRB appreciates Chairman Dodd's interest in promoting an effective regulatory structure for the municipal securities market," said MSRB Executive Director Lynnette Kelly Hotchkiss.  "We also appreciate the Senator's confidence in the MSRB's ability to improve oversight in this market." 
Hotchkiss said the MSRB continues to support regulation of municipal advisors, which the MSRB has called for since January. Sen. Dodd's legislation proposes requiring advisors to municipal issuers - such as financial advisors, investment brokers, swap advisors and other municipal market intermediaries - to register with the Securities and Exchange Commission and be subject to rules established by the MSRB.
The bill also proposes changing the MSRB's Board composition to a majority public board.  "We recognize the need to align our Board structure with those of other self-regulatory organizations and appreciate the recognition that municipal market expertise is essential," Hotchkiss said. Sen. Dodd's legislation also would enhance the coordination and effectiveness of enforcement activities by expanding MSRB's support role in enforcement and examination actions.  "We are eager to work even more closely with the existing enforcement agencies to bring all of our expertise to bear on this important aspect of market regulation," Hotchkiss said. 
The bill would also allow the MSRB to establish new information systems, in conjunction with other regulators and self-regulatory organizations to further improve transparency.  The MSRB recently implemented the Electronic Municipal Market Access (EMMA) website (, which provides free public access to disclosure documents and data.  "We look forward to working with Congress to ensure that any changes to MSRB's authority and structure are implemented in a way that provides the resources required for any increase in our mission," Hotchkiss 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 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.