MSRB NOTICE 2011-45 (AUGUST 15, 2011)

MSRB TO PROVIDE WRITTEN VERIFICATION OF MUNICIPAL ADVISOR AND DEALER REGISTRATION STATUS

On July 5, 2011, the Municipal Securities Rulemaking Board (“MSRB”) issued a Notice (the “Registration Notice”) expressing concern that some municipal advisor firms engaging in municipal advisory activities may not be registered both with the MSRB and the Securities and Exchange Commission (“SEC”) and that unregistered municipal advisor firms providing municipal advisory services may be in violation of federal securities laws and MSRB rules if not registered properly.[1]  Firms engaged in municipal advisory activities were required to be registered with the MSRB as of December 31, 2010, consistent with the MSRB’s expanded regulatory authority over municipal advisors established by the Dodd-Frank Wall Street Reform and Consumer Protection Act.[2]  Prior to registering with the MSRB, municipal advisors are required to register with the SEC.  In addition, brokers, dealers and municipal securities dealers (“dealers”) that also act as municipal advisors are required to register with both regulators as municipal advisors even if they previously registered with the MSRB and SEC as dealers.

In the Registration Notice, the MSRB encouraged municipal entities and obligated persons that retain municipal advisor firms to verify the registration status of such firms with the MSRB and the SEC.  The MSRB makes available to the general public a list of current municipal advisor registrants on its website at www.msrb.org.  The list is available under the “Municipal Bond Market” tab on the home page.

Separately, dealers are required to register with the SEC and MSRB prior to engaging in any transaction in, or inducing or attempting to induce the purchase or sale of, any municipal security.  The MSRB maintains a list of registered dealers under the same “Municipal Bond Market” tab on its website.

Since the publication of the Registration Notice, the MSRB has learned that certain municipal advisors have been asked for written verification of their registration status by municipal entity clients.  While such entities may verify the status of a municipal advisor or dealer by checking the MSRB website, the MSRB has created a Certificate of Current MSRB Registration (the “Certificate”) that can be obtained by municipal advisors or dealers to satisfy requests by municipal market participants for written verification of their registration status.  The Certificate will list the name of the firm, date of original MSRB registration, registration type (municipal advisor or dealer), MSRB ID number, and MSRB contact information.  Firms that are currently registered as dealers and municipal advisors may obtain certifications of their current registration status for each category of registration.[3]

Municipal entities and other market participants are cautioned that the Certificate is accurate only as of the date of issuance and that any question regarding the subsequent registration status of a firm may be confirmed by checking the MSRB website, which provides the most current registration status of municipal advisors and dealers.

Municipal advisors and dealers who wish to obtain a Certificate may contact the MSRB Market Information Department at (703) 797-6668 or by email at MarketInformation@msrb.org.  The MSRB will only provide the Certificate to a current registrant and will not provide the Certificate to other market participants.

Questions about this Notice may be directed to Lawrence P. Sandor, Senior Associate General Counsel, at (703) 797-6600.

Click here to view a sample of the Certificate.

August 15, 2011


[2] Public Law No. 111-203.  The provisions of Section 975, on Regulation of Municipal Securities and Changes to the Board of the MSRB, are codified in principal part in Section 15B of the Securities Exchange Act, as amended.

[3] Municipal advisors and dealers that are not properly registered with the SEC or have not paid timely their initial or annual fees under MSRB Rules A-12 and A-14, respectively, will not be issued a Certificate.