MSRB NOTICE 2001-19 (JUNE 4, 2001)

MSRB REVIEW OF RULE G-37

Comments due by September 30, 2001

The MSRB is requesting comments on all aspects of rule G-37, on political contributions and prohibitions on municipal securities business

Rule G-37, on political contributions and prohibitions on municipal securities business, became effective on April 25, 1994. During the past seven years, the MSRB believes that the rule has been very successful in halting pay-to-play practices in the municipal securities market. As part of the MSRB’s Long Range Plan, the MSRB has determined to conduct a review of the rule’s requirements and seek comments on whether there are compliance concerns that need to be addressed. Although the MSRB is sensitive to the burden imposed on brokers, dealers and municipal securities dealers (“dealers”) by the requirements of rule G-37 and is committed to reducing this burden whenever possible, the MSRB believes that the rule has provided substantial benefits to the industry and the investing public by greatly reducing the direct connection between political contributions to issuer officials and the awarding of municipal securities business. Thus, before considering any additional rulemaking intended to reduce dealers’ compliance burdens under rule G-37, the MSRB is soliciting comments from the industry and other interested parties to determine whether any existing difficulties arising under the rule merit regulatory relief and to assess whether any such relief would materially impair the effectiveness of the rule. The MSRB does not anticipate that significant changes to the rule will be necessary.

While the MSRB has determined to seek comment from the municipal securities industry and others on all aspects of rule G-37, there are certain areas of the rule that the MSRB has decided to highlight in its solicitation of comments. The areas in which the MSRB seeks specific comments are: the definition of municipal finance professional, the amount and timing of de minimis contributions, the exemption provision, political contributions by the political action committees (“PACs”) of banks, and the role of syndicate and selling group members. Comments should be submitted to the MSRB by September 30, 2001.

BACKGROUND

Rule G-37, on political contributions and prohibitions on municipal securities business, prohibits a dealer from engaging in municipal securities business[1] with an issuer within two years after certain contributions to an official of such issuer made by the dealer, any municipal finance professional (“MFP”) associated with such dealer (other than certain de minimis contributions[2]) or any political action committee controlled by the dealer or any MFP. In addition, the rule requires dealers to disclose on Form G-37/G-38 certain contributions to issuer officials and payments to political parties of states and political subdivisions made by MFPs and certain other categories of contributors. Rule G-8, on recordkeeping, requires dealers to create records of such contributions and payments. Finally, rule G-37(i) provides a procedure whereby dealers may request that the National Association of Securities Dealers (“NASD”) or the appropriate regulatory agency (i.e., federal bank regulatory authorities) grant an exemption from rule G-37’s two-year ban on municipal securities business with an issuer that resulted from political contributions made to officials of that issuer.

DEFINITION OF MUNICIPAL FINANCE PROFESSIONAL

Many dealers have raised concerns regarding the manner in which rule G-37 applies to the activities of certain of their associated persons who qualify as MFPs under the rule. The MSRB is seeking comment on various components within the definition of MFP and the effect of the two-year look-back period for contributions.

New MFPs and the Two-Year Look-Back Period

The contributions of MFPs to issuer officials that may cause a dealer to be banned from municipal securities business with an issuer are not limited to those contributions made by MFPs while they are associated with such dealer. The MSRB has previously stated, for example, that a non-de minimis contribution to an issuer official made by an individual while he or she is not an MFP associated with any dealer would nonetheless cause a dealer to be banned from municipal securities business with the issuer if that individual becomes associated with the dealer as an MFP during the two-year period following the contribution.[3] Similarly, a non-de minimis contribution to an issuer official made by a person already associated with a dealer but not then qualifying as an MFP would nonetheless cause the dealer to be banned from municipal securities business with the issuer if that associated person becomes an MFP of the dealer during the two-year period following the contribution.[4]

Some dealers have noted that this two-year look-back requirement has resulted in dealers refraining from hiring individuals who are otherwise qualified to serve as MFPs but who may have made contributions to certain issuer officials, even if those contributions were relatively small, prior to their possible hiring as MFPs. Such contributions were made at a time when such individual had no reason to be familiar with the provisions of rule G-37. In addition, some dealers have expressed concern in the context of mergers and acquisitions in the industry, where individuals who previously were not MFPs may become new MFPs in the surviving organization as a result of restructured supervisory chains and reconstituted executive and management committees.[5] Since most mergers in the securities and banking industries are currently driven by interests and needs unrelated to dealers’ municipal securities business, any such merger raises the potential that the supervisory chains and the executive and management committees will be formed without adequate attention being given to implications arising under rule G-37.

The MSRB is seeking comment regarding dealers’ experiences with the hiring of new MFPs and with MFP issues arising from mergers.

  • Are qualified individuals being foreclosed from the municipal securities industry solely as a result of the application of rule G-37 to contributions made prior to seeking entry into the industry?
  • Should the look-back provision continue to apply to periods prior to an individual becoming an MFP?
  • If not, would this exemption leave an opening for dealers to selectively hire large contributors from outside the industry who could leverage such contributions into municipal securities business?
  • Would a separate de minimis test for new MFPs provide significant relief without adding excessive complexity to dealers’ compliance efforts or creating new avenues for circumventing the rule? [6]
  • Would applying these types of relief be helpful in the context of mergers, or would they provide opportunities for abuse?
  • Is there any other manner in which to address the concerns raised by new MFPs without significantly diluting the effectiveness of the rule?

MFPs Primarily Engaged in Municipal Securities Representative Activities

Under rule G-37, associated persons of a dealer are MFPs if they are primarily engaged in municipal securities representative activities. An associated person who for the first time becomes primarily engaged in municipal securities representative activities will have his or her non-de minimis contributions to issuer officials made during the two-year period preceding such conversion to MFP status become subject to the rule's ban on business even though such contributions were made at a time when he or she was not considered to be primarily engaged in municipal securities representative activities and therefore not an MFP. The rule currently does not define the level of municipal securities representative activities that would constitute being “primarily engaged in” such activities and does not set forth a time frame or weighting method to be used in making such a determination.

The MSRB seeks comment regarding any significant issues that have arisen as a result of dealers attempting to determine whether their associated persons qualify as MFPs through the “primarily engaged in” provision of the definition. The MSRB is interested in receiving descriptions of how various dealers currently make this determination.

  • What level of municipal securities representative activities are dealers currently using as the threshold for making an associated person an MFP?
  • Would a specified safe harbor figure be helpful to the industry? If so, what should that safe harbor be and how should it be measured (i.e., should it be based on revenue generated, principal amount of sales, percentage of time expended, etc., and should it be measured over a period of a month, a quarter, six months, etc.)?
  • “Municipal securities representative activities” currently include activities in both the primary and secondary markets. Would limiting application of such term to primary market activities be appropriate for purposes of determining who is an MFP? Can dealers reliably track which municipal securities representative activities of individual representatives are in the primary market as opposed to the secondary market?
  • Would establishing a safe harbor level of municipal securities representative activities and/or limiting such activities to the primary market provide significant opportunities for circumventing the rule or otherwise weaken the effectiveness of the rule?

Solicitor MFPs

An associated person of a dealer who solicits municipal securities business on behalf of the dealer is considered an MFP under the rule even if such person undertakes only a single such solicitation and takes no other action in connection with the dealer’s municipal securities activities. Upon making a solicitation, any non-de minimis contribution made by the new MFP to officials of any issuer (not just issuers from which business is being solicited) during the two-year period preceding such solicitation would subject the dealer to a ban on business with the issuer to whom the contribution was made.[7]

The MSRB is seeking comment on whether this is the appropriate treatment of persons who become MFPs solely as a result of their solicitations.

  • Does the inclusion of these individuals in the definition of MFP limit the ability of dealers to staff multi-disciplinary teams of securities professionals that include associated persons who operate primarily in other segments of the securities industry?
  • How frequently do dealers encounter situations where one of their non-municipal securities specialists who would be helpful for undertaking certain municipal securities business must nonetheless be excluded from taking part in the transaction as a result of rule G-37?
  • Some dealers have suggested that the two-year look-back provision should be limited solely to contributions made to officials of the issuer from which an MFP is soliciting municipal securities business. For example, if an associated person becomes an MFP by virtue of soliciting municipal securities business from one issuer, such MFP’s prior contribution to an official of another issuer would not subject the dealer to the ban on business with such other issuer under rule G-37 unless the MFP solicits business from such issuer within two years of having made that contribution. Would limiting the look-back provision to the specific issuer from which business is being solicited provide significant opportunities for circumvention or weakening of the rule?

Supervisor MFPs

An associated person of a dealer may become an MFP solely by virtue of being a municipal securities principal or municipal securities sales principal that supervises another MFP. In addition, an associated person of a dealer who has no direct involvement in the dealer's municipal securities activities may become an MFP solely by virtue of supervising another supervisor of MFPs. Once such a supervisor becomes an MFP, he or she remains an MFP for a period of at least two years, even if such person ceases supervising any other MFPs or any other supervisors of MFPs.

The MSRB is soliciting comments regarding the experience of dealers with supervisors who qualify as MFPs solely as a result of their supervisory activities.

  • What actions have dealers taken to ensure that they are not banned from municipal securities business with an issuer as a result of a contribution made by a non-MFP supervisor who thereafter becomes an MFP because an associated person that he or she supervises becomes an MFP or such supervisor is reassigned to an office in which municipal securities activities are undertaken?
  • In particular, do dealers require that their supervisory personnel adhere to their procedures for ensuring compliance with rule G-37, regardless of whether such personnel currently qualify as MFPs?
  • Should supervisors qualify as MFPs only for the period of time that they actually supervise other MFPs (i.e., once a supervisor who does not otherwise qualify as an MFP no longer supervises other MFPs, he or she would no longer be considered an MFP)?
  • For associated persons who qualify as MFPs solely by virtue of their supervisory position, would eliminating or shortening the two-year look-back period (e.g., limiting the contributions that might subject the dealer to the ban on business only to those contributions made while such supervisor is in fact an MFP) provide relief without significantly weakening the effectiveness of the rule?

Management-Level MFPs

An associated person of a dealer who is a member of the dealer's executive or management committee (or, in the case of a bank dealer, the separately identifiable department or division's executive or management committee) or a similarly situated official is automatically an MFP of the dealer even if such person has no direct involvement in the dealer's municipal securities activities so long as at least one other associated person of the dealer is an MFP.

  • Have dealers experienced any difficulties with such management-level personnel being included in the definition of MFP?
  • If so, how would dealers ameliorate such difficulties without undermining the purposes of the rule?

AMOUNT AND TIMING OF DE MINIMIS CONTRIBUTIONS

The MSRB is interested in receiving comments about the amount and timing of de minimis contributions.

Amount

As noted above, contributions made by an MFP to officials of an issuer for whom the MFP is entitled to vote will not cause the MFP’s dealer to be prohibited from engaging in municipal securities business with the issuer if the contributions, in total, are not in excess of $250 by such MFP to each official of such issuer, per election.

The MSRB is seeking comment on whether $250 is a reasonable dollar amount given the purposes of rule G-37.

  • Would the purposes of rule G-37 continue to be served if the dollar amount of the de minimis exemption were larger (e.g., $500) or smaller (e.g., $100)?
  • Should the de minimis dollar amount be applicable to contributions given to any official of an issuer, regardless of whether the MFP is entitled to vote for such official?
  • Should different de minimis dollar amounts be used depending on whether or not an MFP is entitled to vote for an official of an issuer?

Timing

Certain issues involving the timing of contributions have arisen. One timing issue arises when MFPs are asked to make contributions to both the primary and the general election prior to the primary election being held.

  • Should rule G-37 specifically allow contributions to be given to a general election prior to a primary election when it is not known whether a candidate will succeed in the primary election?

In addition, the NASD has raised a particular concern about the timing of contributions. The NASD is concerned about contributions made during the period after the primary election but prior to the general election in the amount of $500 where $250 is designated for the already-completed primary election and $250 is designated for the up-coming general election. The NASD believes that the timing of such contributions is at odds with the spirit and intent of the $250 de minimis exemption for contributions.

EXEMPTION PROVISION

Section (i) of rule G-37 provides a procedure whereby a dealer that has triggered the rule’s two-year prohibition on municipal securities business may seek an exemption from that prohibition from the appropriate regulatory agency. As originally filed with, and approved by, the SEC in 1994, rule G-37 did not contain this exemption provision. However, the SEC asked that the MSRB consider providing for an exception to the prohibition on business under certain limited instances. The MSRB later adopted the rule G-37(i) exemption provision.

Pursuant to the exemption provision, the appropriate regulatory agency may grant a dealer’s request for an exemption from the two-year ban on business either “conditionally or unconditionally.” The MSRB specifically intended that the regulatory agencies have flexibility in dealing with the various factual situations that may arise pursuant to exemption requests. In determining whether to grant an exemption request, the appropriate regulatory agency is required to consider, among other factors, whether an exemption would be consistent with the public interest, the protection of investors and the purposes of rule G-37. In addition, the regulatory agency is required to examine whether the dealer had appropriate procedures in place to ensure compliance with the rule, had no actual knowledge that the contribution was being made, has taken all steps to obtain a return of the contribution, and has taken any other appropriate remedial or preventive measures.

The MSRB was concerned that dealers not use this provision to circumvent the rule, and thus stated that exemptions should be granted sparingly.[8] The MSRB cited two examples of when an exemption may be appropriate. These involved (i) a disgruntled MFP who makes a contribution purposely to injure the dealer, its management or employees; and (ii) an MFP who is eligible to vote for a particular issuer official and who made a number of small contributions during an election cycle which, when consolidated, amounted to slightly over the $250 de minimis exemption (e.g., $255).[9]

To facilitate understanding of, and compliance with, the exemption process, the MSRB published guidance in the form of Question-and-Answer Notices.[10] In its June 1995 notice, the MSRB provided three examples it believed were not sufficient to justify the granting of an exemption. These involved: (i) an MFP making a contribution that triggered the ban on business but the MFP was not aware of rule G-37 or any of its particular provisions; (ii) the dealer or an MFP did not know that the recipient of a particular contribution was an official of an issuer; and (iii) at the time the contribution was made, an associated person did not know that he was an MFP by virtue of his supervisory capacity, by being primarily engaged in municipal securities representative activities, or by virtue of any of the other activities listed in the rule’s definition of MFP.

In 1998, in response to concerns regarding the exemption provision, the MSRB published an additional Q&A notice to clarify that its two previous examples of when an exemption may be appropriate (the disgruntled employee and the contribution slightly over the de minimis amount) “were not meant to be the only instances in which exemptions might appropriately be given.”[11] In this notice, the MSRB also clarified that, with respect to its prior three examples of when an exemption is not appropriate, the MSRB’s intent was that:

none of these situations was sufficient, in and of itself, to justify the granting of an exemption….However, any such scenario in combination with other facts and circumstances deemed relevant by the NASD or the appropriate regulatory agency (including, but not limited to, the factors set forth in rule G-37(i)) could, in the judgment of the NASD or the appropriate regulatory agency, be sufficient to justify a conditional or unconditional exemption from the ban.[12]

Thus, the MSRB reiterated and attempted to clarify that the NASD and other regulatory agencies were authorized to exercise their judgment in reviewing the facts and circumstances surrounding exemption requests and determining whether to grant or deny such requests. The MSRB stated that:

[T]he NASD and the appropriate regulatory agencies should review such other factual situations presented by dealers in exemptive requests…and, based on the facts, either approve or reject the request. Rule G-37(i) allows the NASD and the appropriate regulatory agencies to grant exemptions from the ban on business “conditionally or unconditionally” and, if the NASD or the appropriate regulatory agency believes it would be appropriate to shorten the ban on business or limit its scope, it is authorized to do so as long as the requirements of rule G-37(i) are met.[13]

Last year, the NASD’s National Adjudicatory Council (“NAC”) affirmed a NASD Regulation (“NASDR”) staff denial of an exemption request.[14] The dealer in that case was seeking an exemption from a ban that was caused by hiring an individual as an MFP who was employed as bond counsel and who had contributed thousands of dollars to issuer officials with whom the dealer engaged in municipal securities business. In support of its decision, the NAC cited a May 1994 Q&A which provided that the ban on business will be triggered if a dealer hires an individual as an MFP and that person, prior to becoming associated with any dealer, made a contribution to an official of an issuer with whom the dealer is engaging or seeking to engage in municipal securities business.[15] The fact that a dealer is subject to a ban is not a reason to deny an exemption request; rule G-37(i) empowers the regulatory agencies to grant exemptions from the ban on business if the regulatory agency believes such action is justified. Notwithstanding this ability, the NAC stated that “the MSRB’s interpretive position…is inappropriately inflexible and should be re-examined.” NASDR informed the MSRB that its philosophy regarding all exemption requests (not just those involving rule G-37) is that it will not grant an exemption unless the circumstances involved are unique or limited, and are not circumstances that could be applied to many different cases. NASDR expressed the view that the MSRB should revise rule G-37 to make it more flexible.

The MSRB is firmly of the view that there must be a viable exemption process in place to provide relief from the two-year ban on business in appropriate circumstances. Accordingly, the MSRB is soliciting industry comment on the rule G-37 exemption provision. The MSRB welcomes all comments on this provision and specifically asks for comment on the following:

  • Should the list of relevant factors set forth in rule G-37(i) be revised?
  • Should some of these factors be more important than others in determining whether to grant an exemption (e.g., obtaining a prompt return of the contribution)?
  • Should the rule provide for an automatic exemption in certain limited circumstances (for example, if the dealer obtains a refund of the offending contribution within a reasonable time period)?

CONTRIBUTIONS BY BANK PACs

Under rule G-37, the prohibition on municipal securities business is triggered by contributions to issuer officials made by dealers, dealer-controlled PACs, MFPs, and MFP-controlled PACs. The ban on business is not triggered by contributions by bank PACs or bank holding company PACs so long as neither the dealer nor any of its MFPs control such PACs.

When the MSRB first published draft rule G-37 for industry comment in 1994, several commentators expressed concern that the rule did not apply to contributions by those bank PACs and bank holding company PACs with a municipal dealer department or subsidiary. These commentators argued that it is customary for banks to make contributions to issuer officials on behalf of, or with the goal of securing business for, its dealer affiliate, and that it is unreasonable to think that issuer officials who receive such contributions distinguish between the bank and its dealer department. The commentators argued that such dealer departments or subsidiaries gain a competitive advantage over securities dealers.

The MSRB seeks comment on this area, and specifically requests comment on the following:

  • Are contributions by bank PACs and bank holding company PACs made, even in part, to secure business for the bank’s dealer affiliate?
  • Should contributions by bank PACs and bank holding company PACs continue to be excluded as a triggering event for the ban on business?
  • Alternatively, should the MSRB require the disclosure of contributions by bank PACs and bank holding company PACs, similar to the disclosure required for contributions made by non-MFP executive officers (i.e., such contributions would be subject to disclosure but would not trigger the two-year ban on business)?

ROLE OF SYNDICATE AND SELLING GROUP MEMBERS

The MSRB has stated that rule G-37 does not define “municipal securities business” to include selling group member activities.[16] The MSRB also has stated that syndicate members must report the municipal securities business in which they engage.[17] However, the MSRB has not previously provided guidance as to the factors that would distinguish a syndicate member from a selling group member. The MSRB is seeking comment on what factors are relevant in distinguishing these two roles and on whether the MSRB should adopt a specific definition for either role.

Syndicates typically are formed by contract through an agreement among underwriters or similar agreement that sets forth the rights and obligations of the syndicate members. These syndicate members typically are identified to the issuer as parties to the purchase contract executed in a negotiated offering or as members of a syndicate submitting a bid in a competitive offering. Selling groups also are often formed by contract through a selling group agreement or similar agreement. Selling group members typically are neither parties to the purchase contract nor members of the syndicate under whose name a bid is submitted. Should these contractual arrangements be determinative with respect to the role of the dealer as a syndicate member or selling group member for purposes of rule G-37? Do other types of arrangements among dealers that may depart from these standard formulations exist and, if so, how should they be viewed for purposes of making the distinction between syndicate members and selling group members?

Exchange Act Rule 15c2-12(f)(8) defines “underwriter” as any person who has purchased from an issuer of municipal securities with a view to, or offers or sells for an issuer of municipal securities in connection with, the offering of any municipal security, or participates or has a direct or indirect participation in any such undertaking, or participates or has a participation in the direct or indirect underwriting of any such undertaking. However, any person whose interest is limited to a commission, concession, or allowance from an underwriter or dealer not in excess of the usual and customary distributors’ or sellers’ commission, concession or allowance is excluded. The MSRB believes, in general, that a dealer that meets this definition of underwriter for a primary offering purchased on other than a competitive bid basis would be engaging in municipal securities business for purposes of rule G-37. The MSRB further believes, in general, that dealers serving in a traditional selling group member capacity would qualify for the exclusion to the definition of underwriter under Rule 15c2-12. The MSRB seeks comment on whether this distinction established under the Rule 15c2-12 definition is consistent with the municipal securities industry’s view of what constitutes a syndicate member or a selling group member.

* * * * *

Comments from all interested parties are welcome. Comments should be submitted no later than September 30, 2001 and may be directed to Jill C. Finder, Assistant General Counsel, or Ronald W. Smith, Senior Legal Associate. Written comments will be available for public inspection.

June 4, 2001


[1] Municipal securities business is defined in rule G-37 to consist of negotiated underwritings or private placements of an issue of municipal securities, or financial advisory, consultant or remarketing agent services with respect to an issue of municipal securities retained on a negotiated basis.

[2] Contributions made by an MFP to officials of an issuer for whom the MFP is entitled to vote will not cause the MFP’s dealer to be prohibited from engaging in municipal securities business with the issuer if the contributions, in total, are not in excess of $250 by such MFP to each official of such issuer, per election.

[3]  See Questions and Answers Concerning Political Contributions and Prohibitions on Municipal Securities Business: Rule G-37 (May 24, 1994), Q&A No. 15, MSRB Rule Book (January 1, 2001) at 211; Additional Rule G-37 Q&As (December 7, 1994), Q&A No. 6, MSRB Rule Book (January 1, 2001) at 213. In addition, an MFP of one dealer that makes a non-de minimis contribution to an issuer official will cause any other dealer with which he or she becomes associated as an MFP during the two-year period following the contribution to be banned from business with the issuer. See Questions and Answers Concerning Political Contributions and Prohibitions on Municipal Securities Business: Rule G-37 (May 24, 1994), Q&A No. 14, MSRB Rule Book (January 1, 2001) at 211.

[4]  See Questions and Answers Concerning Political Contributions and Prohibitions on Municipal Securities Business: Rule G-37 (May 24, 1994), Q&A No. 16, MSRB Rule Book (January 1, 2001) at 211.

[5]  See Questions and Answers Regarding Rule G-37(i) (June 29, 1998), Q&As Nos. 1 and 3, MSRB Rule Book (January 1, 2001) at 217-218.

[6] For example, extending the de minimis test to contributions made to all issuer officials prior to becoming an MFP, not just those for whom the individual is entitled to vote; increasing the dollar amount of the de minimis test for contributions made prior to becoming an MFP from $250 to another figure; or providing a global de minimis figure, so that all contributions made by the individual prior to becoming an MFP would be ignored so long as the total of all contributions made to all issuer officials does not exceed a set dollar amount.

[7] The MSRB has stated that solicitation activities include, among other things, responding to issuers’ requests for proposals, making presentations of public finance and/or municipal securities marketing capabilities to issuer officials, and engaging in other activities calculated to appeal to issuer officials for municipal securities business, or which effectively do so. See Additional Rule G-37 Q&As (December 7, 1994), Q&As Nos. 2 and 3, MSRB Rule Book (January 1, 2001) at 213. See also Additional Rule G-37 Q&As (March 22, 1995), Q&A No. 1, MSRB Rule Book (January 1, 2001) at 214.

[8]  See Political Contributions and Prohibitions on Municipal Securities Business: Rule G-37, MSRB Reports, Vol. 14, No. 3 (June 1994) at 17.

[9]  Id.

[10]  See Additional Rule G-37 Q&As (August 18, 1994), Q&A No. 2, and Additional Rule G-37 Q&As (June 15, 1995), Q&A No. 4, MSRB Rule Book (January 1, 2001) at 213 and 214, respectively. See also Political Contributions and Prohibitions on Municipal Securities Business: Rule G-37, MSRB Reports, Vol. 14, No. 3 (June 1994) at 17.

[11]  See Questions and Answers Regarding Rule G-37 (June 29, 1998), Q&A No. 2, MSRB Rule Book (January 1, 2001) at 218.

[12]  Id.

[13]  Id.

[14]  See NASD Notice to Member 00-37 (June 2000).

[15]  See Questions and Answers Concerning Political Contributions and Prohibitions on Municipal Securities Business: Rule G-37 (May 24, 1994), Q&A No. 15, MSRB Rule Book (January 1, 2001) at 211.

[16]  See Questions and Answers Concerning Political Contributions and Prohibitions on Municipal Securities Business: Rule G-37 (May 24, 1994), Q&A No. 35, MSRB Rule Book (January 1, 2001) at 212.

[17]  See Additional Questions and Answers: Rule G-37 (September 9, 1997), Q&A No. 4, MSRB Rule Book (January 1, 2001) at 217.