MSRB NOTICE ()

NOTICE OF AMENDMENT

 

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The MSRB has filed with the SEC an amendment to its previously filed rule change providing a temporary alternative method for qualification of municipal securities principals in connection with municipal fund securities.

 

On July 5, 2001, the Municipal Securities Rulemaking Board (the “MSRB”) filed with the Securities and Exchange Commission (the “SEC”) a rule change relating to rule G-3, on professional qualifications. [1] The rule change provides a temporary alternative method for qualification of municipal securities principals in connection with municipal fund securities. Under the rule change, until July 31, 2002, a broker, dealer or municipal securities dealer (“dealer”) may designate an investment company/variable contracts limited principal to act as a municipal fund securities limited principal. A designated municipal fund securities limited principal will have all of the powers and responsibilities of a municipal securities principal under MSRB rules with respect to transactions in municipal fund securities and, under certain circumstances, may be counted toward the dealer’s numerical requirement with regard to municipal securities principals.

 

The MSRB adopted the temporary alternative qualification provision to provide relief and a period of transition for small dealers seeking to enter the market for so-called Section 529 college savings plans. [2] The MSRB understood that many of these small firms have previously limited their securities activities to sales of investment company securities and therefore have associated persons qualified solely as investment company/variable contracts limited representatives and investment company/variable contracts limited principals. Since filing the rule change, however, the MSRB has learned that some firms in fact use general securities principals to supervise their investment company and annuity product activities. The MSRB has determined, therefore, that it would be appropriate to permit general securities principals also to be designated as municipal fund securities limited principals and has filed this amendment with the SEC accordingly.

 

July 11, 2001

 

Text of Amendment[3]

 

Rule G-3 – Classification of Principals and Representatives; Numerical Requirements; Testing; Continuing Education Requirements

 (a)  No change .

(b)  Municipal Securities Principal .

             (i)-(iii)  No change .

             (iv)  No additional changes .

(A)  notwithstanding the provisions of paragraph (b)(ii), the broker, dealer or municipal securities dealer may designate any person who has taken and passed the General Securities Principal Qualification Examination or Investment Company and Annuity Principal Qualification Examination as a municipal fund securities limited principal.

(B)-(C)  No additional changes.

 (c)-(h)  No change.



[1]            File No. SR-MSRB-2001-05. See “Municipal Fund Securities – Qualification of Municipal Securities Principals and Application of MSRB Rules to Fees, Disclosure and Other Market Practices” dated July 5, 2001 posted on the MSRB’s web site at http://www.msrb.org/msrb1/whatsnew/MFS-NoticeforComment-6-01.htm.

[2]        Section 529 college savings plans are higher education savings plan trusts established by states under section 529(b) of the Internal Revenue Code as "qualified state tuition programs" through which individuals make investments for the purpose of accumulating savings for qualifying higher education costs of beneficiaries .

[3]         Underlining indicates addition to original rule change.

 

 

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