MSRB NOTICE 2001-14 (APRIL 9, 2001)

MSRB REVIEW OF RULE G-37, ON POLITICAL CONTRIBUTIONS

The Municipal Securities Rulemaking Board has begun a review of its political contributions rule, rule G-37. The rule, which has been in effect for seven years, has been very successful in halting pay-to-play practices in the municipal securities market. The MSRB believes that dealer compliance with the rule’s requirements has been exceptional and does not believe any major overhaul is necessary. However, over the years, issues have been raised in a number of areas, including the scope of coverage of the term “municipal finance professional” and the effectiveness of the waiver provision. These and other areas of the rule will be reviewed during the year.

MSRB Chairman Dan Keating, Senior Managing Director, Bear, Stearns & Co., Inc., states: “As part of the MSRB’s Long Range Plan, we periodically review major rules to determine if any changes are warranted to ensure that the rules continue to work well. Our review of rule G-37 will focus on areas of concern and help us to provide additional guidance to the industry where needed.”

April 9, 2001