MSRB Files With SEC to Require Dealers To Disclose Bond Ballot Contributions

Date: December 4, 2009

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


Alexandria, VA - The Municipal Securities Rulemaking Board (MSRB) today filed with the Securities and Exchange Commission (SEC) an amendment to its political contributions rule to require municipal securities broker-dealers and banks, their municipal professionals and political action committees to publicly disclose contributions made in support of bond ballot initiatives.  The change will provide for free public access to centralized disclosure of such contributions through the MSRB's website at

"Public disclosure of bond ballot contributions by municipal securities firms is the best way to understand their possible effects on the integrity of the municipal securities market," said MSRB Executive Director Lynnette Kelly Hotchkiss. "Including disclosure of bond ballot contributions in the MSRB's existing pay-to-play disclosure system will expand the breadth of dealers political contribution activities subject to the sunshine of our rule." The change will become effective after approval by the SEC.

Bond ballot measure campaigns typically occur as a result of a state or local government placing a ballot measure before voters to approve specified municipal borrowing. Many state and local jurisdictions are required to authorize the issuance of municipal bonds through voter approval to fund municipal finance projects.

The MSRB's existing pay-to-play rule, known as Rule G-37, has been the primary means of seeking the elimination of the use of political contributions by dealers to influence the awarding of business in the new-issue municipal securities market.  The rule has served as a model for other federal and state regulators, public bodies and government officials seeking to eliminate the influence of political contributions on the awarding of public-sector contracts.

For additional information on today's filing, please see MSRB Notice 2009-62.

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 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.