(A discontinued weekly newsletter providing compliance tips for regulated entities):
December 19, 2022: Get Ready for the New Year - The MSRB's Form A-12 Annual Affirmation Has A New Extended Deadline!
Beginning January 1, 2023, MSRB registered firms must review their information on Form A-12 and either affirm that the information on the form remains accurate or make any necessary updates by the new extended deadline of January 31, 2023. In addition to extending the deadline for annual affirmation, the MSRB has also amended Form A-12 to improve the usability of the registration form.
Be sure to review Form A-12 to familiarize yourself with the additional data fields added to sections of the form.
Programming Note: The Compliance Tip of the Week is going on holiday - stay tuned!
December 12, 2022: Municipal Advisors – Review SEC Form MA
Municipal advisors must renew Form MA each year by filing an annual update within 90 days after the end of its fiscal year, and end of the calendar year for sole proprietors. When you're updating Item 4: Information About Applicant’s Business, as applicable, it's an ideal time to review the MSRB-Registered Municipal Advisor Firms and Qualified Representatives and Principals List for its accuracy.
December 5, 2022: The Gift of Education this Holiday Season
It’s not just the season for holiday gifts; it may also be the season in which parents and grandparents are gifting (contributing) to 529 savings plans.
Dealers selling interests in 529 savings plans should be mindful that the annual federal gift-tax exclusion that is currently set at $16,000 (or $32,000 for a married couple) for 2022 is scheduled to increase to $17,000 (or $34,000 for a married couple) in 2023. As a result, dealers should review and update their relevant advertisements to ensure such advertisements do not contain any untrue statements of material facts.
November 28, 2022: Time Is Running Out - Professional Qualifications Regulatory Relief
As a reminder, the compliance date by which all individuals acting in a municipal securities principal capacity without having qualified by passing the Municipal Securities Principal Qualification Examination (Series 53) is quickly approaching. The deadline to take and pass the Series 53 examination will be here before you know it - December 27, 2022.
A few more days left before Autumn ends - pack your flashcards to carry on a long, leafy walk.
November 21, 2022: What We Are Thankful For
Giving thanks is a wonderful thing and this time of year often leads to reflection. It's also that time when it may be a good opportunity to review your books and records for anything that might need to be updated or revised. As a reminder, not all books and records requirements reside within MSRB Rule G-8, so regulated entities should be mindful of other books and records that should be made and maintained to evidence compliance with MSRB rules.
The MSRB is thankful for all that you do to stay on top of compliance requirements all year round.
November 14, 2022: Don’t Get Yourself into a Continuing Education Pickle!
November 14 is National Pickle Day! While those crunchy snacks are a big “dill” for many, missing your annual Continuing Education (CE) requirements is less than tasty. MSRB Rule G-3 requires regulated entities to deliver firm-specific CE training to their associated persons on at least an annual basis. Your firm’s CE training should be tailored to the needs of your firm, so whether your firm is a tiny but mighty cornichon or a kosher spear fit for your favorite sandwich, remember one size does not fit all. Pursuant to Rule G-3, CE training should take into consideration a firm’s size, organizational structure, and scope of business activities, as well as regulatory developments.
As a reminder, if your firm has not conducted its firm-specific CE training, it should do so by December 31, 2022.
November 7, 2022: Don’t Miss the Boat and Forget to Vote – or to Disclose Your Political Contributions Under MSRB Rule G-37!
Tomorrow is election day in America, so make your vote count! The end of an election cycle is a good time to begin gathering and reviewing political contributions made by your firm’s municipal finance professionals (MFPs) or municipal advisor professionals (MAPs) to an official of a municipal entity in preparation for disclosure on Form G-37. Unless an exception applies, Form G-37 for this quarter (ending December 31, 2022) must be submitted to the MSRB by January 31, 2023. Contributions from an MFP or MAP to a municipal entity official must be disclosed on Form G-37 unless the MFP or MAP who made the contribution is entitled to vote for such official and any contributions to such official made by the MFP or MAP do not exceed, in total, $250 per election.
October 31, 2022: Treat or Trick!
Giving out candy on Halloween may be a real treat but remember that gifts given in relation to municipal securities and municipal advisory activities must meet certain conditions. If your firm or its associated persons directly or indirectly give(s) a gift, gratuity or service of value in excess of $100 per year to a person in relation to the municipal securities or municipal advisory activities of the employer of the recipient of the payment or service, you should consult MSRB Rule G-20.
Read Understanding MSRB Rules Regarding Gifts, Gratuities and Non-Cash Compensation for more helpful guidance.
October 24, 2022: Not A Bunch of Boloney
Today is National Bologna Day. With no disrespect to the sandwich meat, boloney has no place in the advertising materials of dealers or municipal advisors. Regulated entities must not make any false, exaggerated, unwarranted, promissory or misleading statement or claim in any advertisement. Advertisements must be fair and balanced and provide a sound basis for evaluating the facts in regard to any particular municipal security or type of municipal security, industry or service.
Read MSRB Rule G-40, on Advertising by Municipal Advisors or Rule G-21, on Advertising by Brokers, Dealers or Municipal Securities Dealers. Also read Application of the Content Standards to Advertisements by Municipal Advisors and FAQs on Use of Social Media Under MSRB Advertising Rules for more helpful guidance.
October 17, 2022: Timing is Everything - No Sitting on the Fence
Ambiguity can be intriguing because it keeps one guessing, but often times making your intentions known is required. Pursuant to MSRB Rule G-17, at or before the time of an engagement, an underwriter must make full disclosures in writing to its issuer client about the role of the underwriter, the underwriter’s compensation, and actual and potential material conflicts of interest. As a takeaway, providing such full disclosures, evidenced by a writing, such as an engagement letter, would also be helpful if an underwriter wishes to avail itself of the underwriter exclusion from municipal advisor registration.
October 10, 2022: Navigating Supervision is a Voyage
It's Indigenous Peoples' Day and Columbus Day. While Christopher Columbus' voyage led to the discovery of the New World, don't discover after the fact that your associated persons are communicating information related to your firm's business through the use of their personal devices or other electronic means that are not captured by the firm. MSRB Rule G-27 requires firms to review electronic correspondence of its municipal securities representatives related to the municipal securities activities of the firm; and to train their associated persons on the firm's policies and procedures related to sending and receiving of correspondence. Be sure the voyage is well planned by having robust compliance policies and procedures, and adequate surveillance and monitoring to ensure they are adhered to!
October 3, 2022: Jump Ball or Whose Responsibility Is It?...
Today is National Techies Day! While supervision and compliance professionals, like the rest of us, heavily rely on technology, ultimate responsibility for supervision resides with the regulated entity and appropriate principal. MSRB Rule G-27 is primarily a principles-based rule, which requires a supervisory system that is reasonably designed to achieve compliance with applicable securities laws and regulations, including applicable MSRB rules. The MSRB acknowledges that supervisory principals play a vital role within the regulatory framework, so be sure you've identified the correct person(s) to carry out the responsibility such person(s) has been vested with!
Review the MSRB Supervisory Responsibilities of Qualified Principals chart for a list of principal-level activities and requisite qualifications.
September 19, 2022: Content Always Counts
MSRB Rule G-21 and Rule G-40 require that a principal review and approve each advertisement prior to first use. In assessing your compliance program, your firm should ensure that the appropriate principal responsible for reviewing advertisements is evaluating each advertisement consistent with the content standards of the applicable rule. This includes, at a minimum, ensuring that the advertisements are fair and balanced and do not contain false, exaggerated, unwarranted, promissory or misleading statements or claims.
Review Application of the Content Standards to Advertisements for a helpful review of the content standards.
September 12, 2022: Signing up for Extracurricular Activities
Under MSRB Rule G-44, on supervisory and compliance obligations of municipal advisors, a municipal advisor’s written supervisory procedures should take into consideration of, among other things, the likelihood that associated persons may be engaged in extracurricular activities, bearing in mind that SEC Form MA-I requires outside business activities to be disclosed.
August 29, 2022: History Notes, a Day of Hard Work
As you prepare for your Labor Day weekend and we mark the end of summer, don’t forget to review the MSRB’s Systems Holiday Schedule. The MSRB publishes a schedule to assist dealers with determining deadlines for submission of municipal market data and disclosures. Keep up with those federal holidays that affect the operations of MSRB market transparency systems by viewing the MSRB's Systems Holiday Schedule.
August 22, 2022: Keeping Everything Straight
ho knew that today is National Take Your Cat to the Vet Day? It is important to remember that routine checkups are important! Dealers should also consider establishing a routine for checking up on reported trading activity. The Dealer Data Quality Detail Report identifies specific trades reported to RTRS. In addition, dealers have access to the Dealer Data Quality Summary (DDQS) Report which has a section on trades – more specifically, the report shows how many trades were reported timely and late relative to required reporting deadline.
These reports facilitate the monitoring and reporting of trading activities in compliance with MSRB Rule G-14, which requires dealers to report trade information to the MSRB promptly and accurately.
Sometimes a little help goes a long way in keeping things straight. Dealers can make a request for these reports on the “Reports” section of RTRS Web.
August 15, 2022: The Flexibility is in the Drafting, Not in the Maintaining
While Rule G-44 affords a municipal advisor discretion in tailoring written supervisory procedures (WSPs) to its business, the obligation to establish and maintain WSPs is not discretionary. The WSPs must be reasonably designed to achieve compliance with MSRB rules and other applicable securities laws. WSPs are not stagnate documents and should be reviewed and modified to reflect changes in applicable rules and as changes occur in the municipal advisor’s business model. Check out tools to help with this Rule G-44 obligation – a sample template and checklist. The template illustrates one possible format for developing WSPs, and the checklist can be used as an aid in assessing a firm’s WSPs.
August 8, 2022: To Infinity and Beyond...
Today, August 8, is International Infinity Day, celebrating life without limits. While we hope that your lives are without limit, your firm’s Form G-37 reporting obligations under Rule G-37 are limited in scope, but the required information must be complete and accurate. Review the Instructions for Forms G-37, G-37x and G-38t for guidance as to the municipal securities and municipal advisory business that must be reported on Form G-37 as well as the format and time frame for reporting such information to the MSRB. Don't forget, a regulated entity that is both a dealer and a municipal advisor (dealer-municipal advisor) may submit a single Form for each reporting period; affiliates may not combine their required reporting submissions.
As a refresher, listen to the MSRB's Compliance Workshop on Completing Form G-37 and review the Rule G-37 Interpretive Questions and Answers.
August 1, 2022: School’s Still Out but Time to Pick Up the Books for Some!
School is still out but for some it’s time to pick up the books in preparation for the Tuesday, December 27, 2022, compliance date by which all individuals acting in a municipal securities principal capacity without having qualified by taking and passing the Municipal Securities Principal Qualification Examination (Series 53) must become duly qualified.
Last week, the MSRB published MSRB Notice 2022-05 announcing August 29, 2022, as the expiration of certain professional qualifications pandemic-related regulatory relief. As a result, individuals associated with a dealer will have 120-calendar days from such date, until December 27, 2022, to satisfy their professional qualification requirements under MSRB Rule G-3(b)(ii), (b)(iv)(B) and Rule G-3(c)(ii).
Pack your books with your beach gear.
July 25, 2022: Save for Qualified Disability Expenses with ABLE
July is Disability Pride Month. Many states provide opportunities for federally tax-advantaged savings through Achieving a Better Life Experience (ABLE) programs to help individuals with disabilities save for qualified disability expenses. No matter where you live, you can open an ABLE account in any state that accepts outside residents into their program.
Read the MSRB's Investor's Guide for ABLE Programs and Frequently Asked Questions about ABLE Programs.
July 18, 2022: Find Key Municipal Securities Stats in the 2022 Mid-Year Update
The MSRB collects data from the municipal securities market and is publishing a mid-year market update showing significant changes in the municipal bond market in the first half of 2022. Check out the MSRB's 2022 Mid-Year Market Update, published today!
July 11, 2022: Understanding the Source of Funds
Many have pondered if “money doesn’t grow on trees, then why do banks have branches,” which still remains an unanswered question. Dealers must do their part in determining where money (funds) deposited into municipal clients’ accounts comes from. Specifically, whether the funds are derived from municipal bond proceeds or municipal escrow investments.
With respect to municipal client accounts, keep in mind that if a representative provides advice pertaining to bond proceeds, such advice may trigger municipal advisor registration requirements and the obligation to comply with applicable MSRB rules.
Firms may want to consider whether there is a process in place to ensure that your representatives are identifying new and existing municipal client accounts and determining the source of funds deposited into such clients’ accounts. For example, dealers may consider obtaining expressed representation from municipal clients as to whether bond proceeds are contained in any accounts held by the firm.
Read the SEC’s Registration of Municipal Advisors Frequent Asked Questions (Section 11) on “Investment Strategies and Proceeds of Municipal Securities.”
June 27, 2022: Submission Deadline Reminder for Form G-45
As a reminder, underwriters of 529 savings plans or ABLE programs, or their agents, must make certain submissions to the MSRB under MSRB Rule G-45. Submissions must be made no later than 60 days (i.e., Monday, August 29, 2022) by way of MSRB Form G-45, for the reporting period ending June 30, 2022 (semi-annual reporting period).
Read MSRB Notice 2014-03 and MSRB Notice 2016-20 for more information.
June 13, 2022: Giving Where You Care
It is a good reminder on this National Random Acts of Light Day, which encourages acts of kindness in support of cancer awareness, that donations to charitable organizations are not considered “political contributions” under Rule G‑37. Regulated entities are encouraged to establish, and review their written supervisory procedures concerning charitable giving as such donations may prompt other compliance obligations under other MSRB rules, such as Rule G-20, on gifts and gratuities; and Rule G-42, on duties of non-solicitor municipal advisors.
See Question IV.5. of FAQs on MSRB Rule G-37 (1994) and the MSRB’s Quarterly Compliance Corner (Summer 2018) for additional information.
June 6, 2022: Have You Heard About the MSRB's Guide to 529 Savings Plans?
The MSRB has released a new and enhanced edition of its Investor's Guide to 529 Savings Plans. The new guide provides an overview of how individuals and families can invest in a 529 savings plan, a tax-advantaged vehicle to save for college and other education expenses.
The new edition includes:
- Updated information on investment options and fees and expenses;
- Changes from the past few tax reform bills that impact 529 savings plans, such as the expansion of qualified education expenses;
- Impending changes to the FASFA form that would eliminate grandparents' contributions from being treated as assets and thereby counted against financial aid eligibility of a student;
- A Glossary of Terms to better inform and educate investors in making educated and informed decisions on investing in 529 savings plans.
May 23, 2022: Now Is a Great Time for Spring Cleaning
Whether it’s spring or fall, it’s never a bad time to ensure that you’re reviewing for compliance with MSRB rules. For example, MSRB Rule G-7 requires every associated person of a dealer to provide, and every dealer to obtain, a completed FINRA Form U4. Additionally, when the form becomes materially inaccurate (or incomplete), associated persons must provide a corrected form to the dealer within the time period prescribed by FINRA. For dealers that are also municipal advisors, be sure to review SEC Forms MA-I to determine if any updates are also required to such form, as applicable.
May 16, 2022: Understanding the MSRB’s New Issue Calendar
Looking for information about competitive and negotiated offerings coming to the primary market? Did you know that you can find timely information about each upcoming bond offering in the MSRB’s New Issue Calendar available on the MSRB’s Electronic Municipal Market Access (EMMA®) website under the “Tools and Resources” tab?
View these resources to learn more about the new issue calendar:
Dealers are reminded that paying municipal transaction-based compensation (e.g., commissions or service charges) to an unregistered entity or person could be in violation of Rule G-17, on fair dealing. Conversely, an unregistered entity or person that receives such compensation may be required to register as a dealer pursuant to Rule A-12, on registration and would be subject to all applicable MSRB rules.
May 2, 2022: Looking for Muni Stats? Find Key Stats in the 2021 MSRB Fact Book
The MSRB serves as the steward of transaction reports in municipal securities given the established transaction reporting regime for municipal securities. The MSRB publishes an annual Fact Book providing statistics on trading patterns and other valuable information including interest rate resets for variable rate securities, continuing disclosures, and primary market information. Check out the 2021 Fact Book, published in March 2022.
April 25, 2022: Be Mindful of Triggering Municipal Advisor Professional Qualification Requirements
Firms dually registered as a broker-dealer and a municipal advisor (BDMA) should be mindful of triggering professional qualification requirements under Rule G-3. For example, the municipal advisor side of the business that has been engaged by a municipal entity client should be careful in consulting with the firm’s underwriting desk regarding aspects of a particular deal because advice from a member(s) of the underwriting team may trigger the requirement for that individual to become duly qualified as municipal advisor representative by passing the Municipal Advisor Representative (Series 50) Examination Qualification.
April 18, 2022: Remember Your Disclosure Obligations When Selling Discounted Bonds
Firms dually registered as a broker-dealer and a municipal advisor (BDMA) should be mindful of triggering professional qualification requirements under Rule G-3. For example, the municipal advisor side of the business that has been engaged by a municipal entity client should be careful in consulting with the firm’s underwriting desk regarding aspects of a particular deal because advice from a member(s) of the underwriting team may trigger the requirement for that individual to become duly qualified as municipal advisor representative by passing the Municipal Advisor Representative (Series 50) Examination Qualification.
April 11, 2022: Prepare for Good Friday
U.S. stock markets are closed on Good Friday and while trading activity in municipal bonds may occur on April 15, 2022, Good Friday is considered an MSRB system holiday. Check out the MSRB’s trade reporting requirements by viewing the Good Friday Submission Instructions on msrb.org.
You may also want to know what federal holidays affect the operations of MSRB market transparency systems by viewing the Systems Holiday Schedule.
April 4, 2022: Being Mindful of the Bumps Along the Way
Under MSRB Rule G-18, on best execution, dealers must use reasonable diligence to find the best market for a security and buy and sell in that market so that the resulting price to the customer is as favorable as possible under prevailing market conditions. While a dealer’s obligation to exercise reasonable diligence does not change under volatile market conditions, the reasonable diligence required for best execution is assessed taking into account the characteristics of the security and market condition (e.g., price, volatility, relative liquidity and the accessibility of quotations).
Dealers should consider establishing and implementing order-handing procedures that are designed to preserve the continued execution of customer orders in a manner that is consistent with their best execution obligation during extreme market conditions. To the extent a dealer’s order-handling procedures are different during extreme market conditions than they are during normal market conditions, a dealer should consider disclosing these differences.
Read Rule G-18 and MSRB’s Implementation Guidance on MSRB Rule G-18, on Best Execution (Question 1.4) to learn more.
March 28, 2022: Don’t Let Cybercriminals Win
Cybersecurity threats continue to rise in both number and sophistication. During a new issue of municipal securities, members of the deal team exchange confidential information related to the transaction. For example, good faith and settlement wires include banking transfer of funds instructions and account information. Be wary of phishing attacks where fake emails provide last minute changes to wire instructions.
These fake emails appear to be from an authentic source and are designed to trick you into making that fateful click that could divert your firm’s funds into a fraudulent account. Stay vigilant and do your part to reduce your firm’s risk and protect against a damaging cyber intrusion.
For additional information on navigating current cybersecurity risks, be sure to read The Cybersecurity & Infrastructure Security Agency's Shields Up Gui dance.
March 21, 2022: Who is Your Master Account Administrator?
Each firm must designate a Master Account Administrator (MAA) on Form A-12 to maintain the firm’s MSRB Gateway account. The MSRB’s Gateway is a web portal that serves as a secure access point for MSRB systems, such as the G-37 submission portal, Form A-12 and the Real-time Transaction Reporting System (RTRS) Web. The MAA ensures only appropriate personnel have access to MSRB systems and serves as the MSRB’s primary contact for issues that may arise regarding the MSRB Gateway account.
While firms can grant appointed agents access to Gateway to submit documents or information to the MSRB on their behalf, if a firm opts to outsource the MAA function, the firm still remains ultimately responsible for timely completion of filings (e.g., the annual A-12 affirmation).
March 14, 2022: Time of Trade Disclosures Are Not Always Discretionary
MSRB Rule G-47 requires dealers to provide to their customers, at or prior to the time of trade, material information about a transaction and the security that is reasonably accessible to the market. Whether the customer is purchasing or selling the municipal securities may be a consideration in determining whether information is material.
The only customers exempt from the time of trade disclosures are Sophisticated Municipal Market Professionals under MSRB Rule G-48. Consequently, unless an exemption applies, dealers must provide time of trade disclosures to all customers, including those where the dealer has discretion. Read Rule G-47, Rule G-48 and Interpretive Notice on the Application of MSRB Rules to Transactions in Managed Accounts (December 1, 2016).
March 7, 2022: Conflicts before Engagement? Ensure Timeliness of Disclosure
Because the disclosure of conflicts of interest is delivered prior to or upon engaging in municipal advisory activities, the delivery of such disclosures will likely occur before the municipal advisory relationship is memorialized in writing(s). Therefore, municipal advisors should carefully review that specified information required under Rule G-42(b) and (c) to ensure the timeliness of the applicable disclosures.
For example, municipal advisors need to have written documentation of the municipal advisory relationship, which includes the form and basis of compensation, at the latest, promptly after establishing the relationship under Rule G-42(c). However, if the municipal advisor’s compensation is contingent on the size or closing the transaction, any conflicts of interest arising from that compensation arrangement must be disclosed prior to or upon engaging in municipal advisory activities under MSRB Rule G-42(b)(i)(E).
February 28, 2022: Self-Promotion with a Source
- Be fair and balanced
- Do not omit any material fact or qualification if the omission would cause the ad to be misleading, and
- Provide a sound basis for evaluating the facts regarding any particular municipal security, type of municipal security, municipal financial product, or service.
Before using an advertisement, a municipal advisor or dealer should determine whether any statement in the advertisement needs additional support, such as the source of such statement. You can ask yourself, does this advertisement provide our audience a sound basis to evaluate the facts of the statements we plan on making?
February 14, 2022: Who's Your Client?
Under Supplementary Material .10 of MSRB Rule G-42, municipal advisors are obligated to know their clients in order to, among other things, effectively service their municipal advisory relationships with their clients and comply with applicable laws, regulations and rules. With that in mind, municipal advisors must exercise reasonable diligence in determining whether the client is a municipal entity or obligated person client in order to satisfy the applicable standard of conduct and duties. Read the definitions of "municipal entity" and "obligated person" found in Exchange Act Sections 15(B)(e)(8) and (10), and Exchange Act Rules 15Ba1-1(g) and (k); and the SEC's Final Rule on the Registration of Municipal Advisors.
February 7, 2022: Are Your Numbers Adding Up?
Dealers must designate an appropriate principal (i.e., a municipal securities principal, municipal fund securities limited principal, municipal securities sales principal, or a general securities principal, as appropriate) responsible for the supervision of the municipal securities activities of the dealer and its associated persons, as outlined under Rule G-27. Dealers are reminded of the availability of the MSRB's compliance resource, "Supervisory Responsibilities of Qualified Principals," which contains a listing of the functional roles that may be performed by designated principals. Every dealer should have at least two municipal securities principals, unless the firm satisfies the exception under Rule G-3.
January 31, 2022: If the Shoe Fits, Wear It: Municipal Advisor Principals
The MSRB recently concluded its outreach to ensure that every municipal advisor firm has at least one person appropriately qualified with the Series 54, Municipal Advisor Principal Qualification Examination, in order to comply with the obligation, under MSRB Rule G-44, to have a supervisory principal in place, vested with the authority to carry out and effectively discharge the responsibility to supervise the municipal advisory activities of the municipal advisor and its associated persons. As a reminder all individuals who meet the definition of a municipal advisor principal - that is, a person who engages in the management, direction or supervision of the municipal advisory activities of the municipal advisor and its associated persons, must be qualified as a municipal advisor principal by taking and passing the Series 54 Examination.
January 24, 2022: Political Contribution Reporting Deadline Is January 31
The deadline to submit your quarterly filing with respect to disclosures about your municipal securities or municipal advisory business and any related political contributions under MSRB Rule G-37 is January 31, 2022, unless you meet one of the exemptions under MSRB Rule G-37(e)(ii) from submitting a filing for the calendar quarter. Municipal advisors are reminded that Rule G-37’s definition of “municipal advisory business” is more broadly defined than the related “municipal securities business” definition. Therefore, municipal advisors are reminded to review and understand the “municipal advisory business” definition under MSRB Rule G-37(g)(ix).
January 10, 2022: Welcome the New Year by Completing the Annual MSRB Form A-12 Affirmation and SEC Form MA Amendments
During the MSRB’s annual affirmation period, which commenced on January 1, firms must review their information on Form A-12 and either affirm that the information on the form remains accurate or make any necessary updates by January 25, 2022. Additionally, MA firms must file an annual amendment to Form MA with the SEC based on the MA firm’s fiscal year end. For example, sole proprietors have 90 days from the end of the calendar year to file the required annual amendment to SEC Form MA, while other MA firms must file the annual amendment to Form MA within 90 days of the end of their fiscal year.
January 3, 2022: Make Sure Reporting of Trading Activities Is in Order
To facilitate the monitoring and reporting of trading activities in compliance with MSRB Rule G-14, which requires dealers to report trade information to the MSRB promptly and accurately, the MSRB makes trade information reported to RTRS accessible in a variety of formats to the dealers that reported the trades. The Dealer Data Quality Summary Report provides a total count of transactions submitted by the dealer and the Dealer Data Quality Detail Report identifies specific trades reported to RTRS that are counted in each category of the Summary Report.
Do you need to know how to access these reports to aid your compliance obligations? Dealers can make a request for these reports on the “Reports” section of RTRS Web.
December 20, 2021: Stocking Up Holiday Treats to Share, but Keep Track of Your Giving
Have you finished your holiday gift shopping? All year long, keep track of gifts or gratuities given by the firm and each associated person to a particular recipient to ensure such gifts or gratuities do not exceed the $100 limit under Rule G-20(c), for gifts or gratuities given in relation to the municipal securities or municipal advisory activities of the employer of the recipient. Remember that the value of all gifts that are not covered under an exclusion must be aggregated over the course of the year, so that the total of all gifts or gratuities for the year does not exceed $100 for a particular recipient. Keeping a separate record of each gift is also required under Rule G-8, on books and records.
December 13, 2021: One for the Records
As the end of year draws near, this may be a good time to review your books and records being made and maintained under MSRB Rules G-8 and G-9 and look for anything that might need to be updated or revised. For example, it's a great time for a municipal advisor to check that it has obtained and retained written consent to service of process for all of its associated persons. As a reminder, for a sole proprietorship, by signing the Form MA-I you are agreeing to consent to service of process and do not need to create a separate form.
December 6, 2021: Get in the Holiday Spirit—Review the MSRB's Systems Holiday Schedule
As the days grow shorter and air outside gets nippy, we are reminded that the holiday season is fast approaching. The MSRB publishes a Systems Holiday Schedule to assist dealers with determining submission deadlines associated with Rule G-14, on transaction reporting, Rule G-32, on disclosures in connection with primary offerings, and Rule G-34 (c), on variable rate security market information. Review the MSRB's System Status webpage for real-time information on the operational status of the MSRB's market transparency systems.
November 29, 2021: Peanut Butter and Jelly Received Their Pardons, Now on With the Holiday Season
Can you feel the "chemistree" between supervision and compliance? They complement each other but are different. For example, while the role of a chief compliance officer may be outsourced by the firm, the role of a supervisory principal must be fulfilled by an employee of the firm. MSRB Rule G-44 requires municipal advisors to establish and maintain a supervisory system that is reasonably designed to achieve compliance with MSRB rules. Municipal advisors should be mindful about the reasonableness of their supervisory system, including ensuring that designated supervisory principals are able to effectively fulfill their supervisory obligations, because final responsibility for proper supervision rest with the firm.
November 22, 2021: We are Thankful for the Role of Compliance
At this time of Thanksgiving, the MSRB is thankful for the role that compliance plays in fostering a fair and efficient market. Compliance is a shared responsibility; to aid your efforts, be sure to subscribe to MSRB newsletters for updates on regulatory matters, market data, and events.
November 15, 2021: Municipal Advisor End-of-Year To-Do List
Tis the season for year-end to-do lists. If you have not done so already, check off these regulatory obligations as you prepare for year-end closing:
☐ Continuing Education Requirements - Under MSRB Rule G-3, municipal advisors must, at least annually, conduct a needs analysis, develop a written training plan, and deliver CE training in accordance with the needs analysis.
☐ Chief Executive Officer(s) Certification - Under Rule G-44, municipal advisors must have their CEO certify annually, in writing, that the municipal advisor has in place processes to establish, review, test and modify its compliance policies and written supervisory procedures.
☐ Notification Requirements Related to Municipal Advisory Client Education - Under Rule G-10, municipal advisors must provide their municipal advisory clients with the required written notification once each calendar year during the course of the municipal advisory relationship.
November 8, 2021: Sophistication Takes Some Effort
Have your clients indicated that they are Sophisticated Municipal Market Professionals (SMMPs)? From time to time, consider reviewing your SMMP customers' affirmations related to exercising independent judgement and the ability to timely access material information that is publicly available. While an annual review is not required, this practice may provide a basis to continue to reasonably conclude that a customer is an SMMP. Additionally, this check could be timely, given the recent amendments to MSRB Rule G-10, on investor and municipal advisory client education and protection, and accompanying amendments to MSRB Rule G-48 to exempt SMMPs from the required notification requirements.
November 1, 2021: 30 Days Left to Take the Series 54 Exam
Today marks the beginning of the last 30 days in which to request an enrollment window that will afford the applicable associated persons of a municipal advisor firm time to take the Series 54 exam before the November 30, 2021 compliance date. The MSRB encourages individuals to start their preparation by reviewing the Series 54 Content Outline. This is the best approach to tailor your studies coming down the home stretch.
October 25, 2021: Keeping the Record Straight
MSRB Rule G-9 states the amount of time records maintained pursuant to MSRB Rule G-8 must be preserved and requires that records be accessible for inspection by the appropriate regulatory agency. Take time to revisit the record preservation timelines. Rule G-9 (a) and (b) outline records that dealers must preserve for a period of four years or six years; and MSRB Rule G-9 (h) outlines records that municipal advisors must preserve for a period of not less than five years and for at least six years, under certain conditions prescribed under the rule.
October 18, 2021: Be Mindful of the "Like" Button
Have you been wondering how to use the power of social networking to promote, among other things, news regarding the municipal advisor services or municipal securities business of your firm? Depending on the facts and circumstances, any material that relates to such services of your firm could constitute advertising and therefore be subject to the content standards and approval prior to first use.
Conversely, as a general matter, third parties, such as a customer or client, can post to your firm's social media webpage and even "like" content that has been posted, and these unsolicited posts or “likes,” would not constitute advertising by the regulated entity or its associated persons under MSRB rules.
Be mindful not to become entangled with or adopt third-party posts.
For additional information, please see the MSRB's FAQs regarding the Use of Social Media under MSRB Rule G-21, on Advertising by Brokers, Dealers or Municipal Securities Dealers, and MSRB Rule G-40, on Advertising by Municipal Advisors.
October 11, 2021: Don’t Be Spooked - Filing on Sunday October 31 Is on Time
Regulated entities must file Form G-37 quarterly, but what happens if that deadline falls on a weekend or holiday like today? You can be confident that if you submit your Form G-37 on a weekend or holiday, it will be accepted that day.
The next deadline for filing Form G-37 is Sunday October 31, 2021. You can submit your Form G-37 on that date, and the submission will be timely.
October 4, 2021: Opportunity on Thursday for Municipal Advisors to Engage with Regulators
This Thursday, October 7, 2021, is the 2021 Compliance Outreach Program for Municipal Advisors. Register now to hear from the SEC, FINRA, and MSRB on current compliance issues – submit your questions to municipal advisor regulators and industry practitioners today! We look forward to “seeing” you there!
September 27, 2021: Unlike Couples, Municipal Advisors Must Register BEFORE Getting Engaged
The SEC recently charged two individuals with improperly providing municipal advice to two charter school clients without their firm being registered with the SEC or the MSRB as a municipal advisor. In addition, the individuals were charged with violating MSRB Rule G-42 for failing to adequately disclose conflicts of interest and for engaging in a prohibited fee-splitting arrangement with an underwriter.
September 20, 2021: Compliance Outreach Program for Municipal Advisors – October 7, 2021
On October 7, 2021, the SEC, FINRA, and MSRB will host the 2021 Compliance Outreach Program for Municipal Advisors. This event will be held virtually from 10 a.m. to 5 p.m. Registration is now open. Plan on attending to hear from regulators and industry practitioners about compliance issues that are top of mind for municipal advisors in the coming year. We look forward to “seeing” you there!
September 13, 2021: Evergreen Agreements Still Need Care and Attention
In autumn we rake leaves and can ignore our evergreens – however evergreen agreements still need to tending to. Municipal advisors with evergreen agreements reflecting ongoing relationships with issuer clients need to ensure that the MSRB Rule G-42 disclosures made in those agreements stay current. Supplementary Material .06 of Rule G-42 requires municipal advisors to amend or supplement relationship documentation, including an evergreen agreement, to reflect any material change to conflicts of interest or other disclosures.
August 30, 2021: It’s Back to School Time
As our kids head back to school, it's time for individuals engaged in the management, direction or supervision of a firm’s municipal advisory activities to consider their own educational needs. The compliance deadline for these individuals to take and pass the Municipal Advisor Principal Qualification Examination (Series 54 Exam) is rapidly approaching, and now is the time to register and begin studying for the exam. To facilitate compliance with municipal advisors' obligations to have at least one person appropriately qualified with the Series 54 exam by the impending November compliance date, the MSRB recently announced that the Series 54 exam is now available online in addition to ongoing in-person testing at Prometric testing centers. Individuals who wish to test online should carefully review the set of frequently asked questions for detailed information on requesting the interim accommodation.
See our resources:
August 23, 2021: Attend a Virtual Regional Town Hall for Municipal Advisors
The MSRB is holding a series of virtual regional town halls for municipal advisor firms, where MSRB Board members and staff update participants on MSRB initiatives and participants can ask questions and raise topics for discussion. These town halls provide an opportunity for municipal advisors to share their challenges so the MSRB can develop tools and resources that facilitate compliance with MSRB rules.
The MSRB has already held two virtual regional town halls—one for municipal advisors in Midwest states and one for municipal advisors in Western states—and has three more to go. The next town hall, for Southwest firms, will be held on Tuesday, August 24, 12:00-1:30 p.m. MT (2:00-3:30 p.m. ET).
August 16, 2021: Are You Flying Solo?
Even if you're flying solo, MSRB Rule G-3(e) (iii) on numerical requirements applies to your sole proprietorship. Pursuant to Rule G-3, every municipal advisor must have at least one municipal advisor principal; and pursuant to MSRB Rule G-44 such designated principal is responsible for the supervision required under the rule. So, if you still need to take and pass the Municipal Advisor Principal Qualification Examination (Series 54) by the November 12, 2021, compliance date, be sure to visit the MSRB's Series 54 webpage for up-to-date information. Additionally, in case you haven't heard, on Monday, August 23, the Series 54 exam will be launched online, on a temporary basis, to provide flexibility to individuals in meeting their compliance obligation by the compliance deadline.
August 9, 2021: Back to School Planning
As part of back-to-school planning, parents may use this as an opportunity to review their 529 account balance and investment options. When advising customers regarding 529 plan investment options, including share-class recommendations, dealers are reminded of their suitability obligations under MSRB Rule G-19. Dealers must have written supervisory procedures, consistent with MRSB Rule G-27, that are reasonably designed to achieve compliance with the suitability obligations under Rule G-19.
August 2, 2021: Non-NIIDS-Eligible? Form G-32 has a place for you.
As part of back-to-school planning, parents may use this as an opportunity to review their 529 account balance and investment options. When advising customers regarding 529 plan investment options, including share-class recommendations, dealers are reminded of their suitability obligations under MSRB Rule G-19. Dealers must have written supervisory procedures, consistent with MRSB Rule G-27, that are reasonably designed to achieve compliance with the suitability obligations under Rule G-19.
July 26, 2021: Give Your All By Enrolling and Preparing for the Series 54 Exam
National All or Nothing Day encourages people to give their all to every task. Celebrate today by enrolling and preparing for the Series 54 exam.
Visit the dedicated Municipal Advisor Principal Qualification Examination (Series 54) webpage for helpful information on the exam enrollment process and tools for preparing. In accordance with Rule G-3, on professional qualification requirements, individuals acting in the capacity of a municipal advisor principal must take and pass the Series 54 exam on or before November 12, 2021.
July 19, 2021: Bank Dealers – Who Is a Municipal Finance Professional?
Bank dealers are reminded that any officer(s) designated by the bank's board of directors as responsible for the day-to-day conduct of the bank’s municipal securities activities (dealer supervisory chain persons) are considered municipal finance professionals under Rule G-37(g)(ii)(D). As a result, political and bond ballot campaign contributions or payments made by municipal finance professionals must be disclosed quarterly on Form G-37 and certain political contributions made by these individuals can trigger Rule G-37’s ban on municipal securities business.
To learn more, read the MSRB’s Summary of Ban on Business Provisions under MSRB Rule G-37 and Questions and Answers Concerning Political Contributions and Prohibitions on Municipal Securities Business.
July 12, 2021: UEFA--Victory in Understanding Engagement Facts for Advisors
A municipal advisory relationship must be evidenced with one or more writings. Rule G-42 requires that such writing(s) be dated and include, among other things, disclosure of all material facts regarding conflicts of interest. These disclosures must be in sufficient detail to inform the client of the nature, implications and potential consequences of each conflict and include an explanation of how the municipal advisor addresses or intends to manage or mitigate each conflict. These disclosures also need to be promptly amended during the engagement to reflect any material changes or additions.
June 28, 2021: Social Media Can Be an Advertisement
For over a year most of our communications have been online, and many of us have increased our social media presence as a way to stay connected with clients in this new normal. Social media has become an increasingly important part of our work lives, as well, and social media communications related to a firm’s business are likely subject to MSRB Rule G-40 or MSRB Rule G-21. Click here to determine how the MSRB’s advertising rules apply to your online presence.
June 21, 2021: On Par with the Tools for MAs' WSPs
Municipal advisors establish, implement, and maintain written supervisory procedures (WSPs) and routinely modify those procedures to reflect changes in applicable rules and as changes occur in the municipal advisor’s supervisory system. Check out a tool to help with this Rule G-44 obligation--a sample template and checklist. The template illustrates one possible format for developing WSPs, and the checklist can be used as an aid in assessing whether WSPs address the applicable rules.
June 14, 2021: Do You Know Who Your Municipal Finance Professionals Are?
One of the five types of MFPs is a "municipal finance representative," defined as any associated person primarily engaged in municipal securities representative activities other than sales activities with natural persons. The activities described in Rule G-3(a)(i) that describe municipal securities representative activities include underwriting and trading or sales of municipal securities. If a person associated with your firm is primarily engaged in such activities, they may need to be designated as an MFP if their activities do not constitute sales activities with natural persons.
June 7, 2021: Meet the MSRB's Market Regulation Team
The MSRB is committed to providing compliance resources to advance understanding of MSRB rules. In 2018, the MSRB launched the distribution of its Compliance Tip of the Week. To date, we have issued more than 160 compliance tips to over 2,000 subscribers. We strive to make this Monday ritual concise, sometimes funny and, most importantly, helpful. As we enter the summer of 2021, we will feature a compliance tip from each of the MSRB’s Market Regulation team members to introduce this great team to all of you. Please don’t hesitate to reach out to any one of us with questions at email@example.com.
May 24, 2021: Maintain and Preserve – Municipal Advisor Books and Records
Even as we all start experiencing a new normal, municipal advisors’ books and records must still be maintained and preserved. Read Considerations for Developing a Municipal Advisory Supervisory System and Compliance Program for a checklist of many of the required records to be made as part of a municipal advisor’s supervisory system and consider reviewing the firm’s written supervisory procedures and compliance policies to evaluate whether they are reasonably designed to comply with the applicable books and records requirements under SEC Rule 15Ba1-8 and MSRB Rules G-8 and G-9.
May 17, 2021: Your Input Will Help Reduce Compliance Burdens
On Friday, the MSRB issued a Request for Comment (RFC) proposing amendments to Rule G-10(a) on dealers' obligations to provide certain annual notifications to customers. Given the devil is always in the details, the MSRB is seeking your comments to better assess which customers would most directly benefit from such annual notifications and to understand the estimated cost savings to dealers under the proposed amendments. Comments should be submitted no later than June 28, 2021.
May 3, 2021: Down the stretch--Guidance to be Archived on May 10
Sometimes tradition is timeless and iconic, like the mint julep at the Kentucky Derby, but other things do not age as well. On Monday May 10, fifteen pieces of interpretive guidance will be removed from the MSRB Rule Book and retired. Archiving retired guidance that no longer achieves its intended purpose serves to reduce compliance burdens and advances the MSRB's initiative to streamline and modernize the MSRB Rule Book.
Click here to learn which pieces of guidance will no longer be in effect and how to engage with the MSRB if you have any questions.
April 26, 2021: Political Contribution Reporting Deadline Is April 30
With the quarterly Form G-37 filing due this Friday, April 30, 2021, it is important to remember that reportable political contributions include those that may not readily come to mind, such as contributions to a bond ballot campaign. Additionally, regulated entities must disclose any undertaking of municipal securities business or municipal advisory business during the relevant quarter of the submission period. For helpful information related to completing Forms G-37 and G-37x, review the MSRB’s Instructions for Forms G37 and G-37x and MSRB Rule G-37. Should you need technical assistance with a form filing, please don’t hesitate to contact MSRB Support at 202-838-1330 or MSRBsupport@msrb.org.
April 19, 2021: Find Key Municipal Securities Stats in the 2020 MSRB Fact Book
The MSRB collects data from the municipal securities market and publishes an annual Fact Book providing statistics on trading patterns and other valuable information including interest rate resets for variable rate securities, continuing disclosures, and primary market information. Check out the 2020 Fact Book, published in March 2021.
April 12, 2021: Free Webinar on Submitting it Faster to EMMA
Join the MSRB on April 15 for a free webinar on Submitting it Faster on EMMA, a virtual training on how to be more efficient and effective when submitting disclosure documents on EMMA.
April 15 is National High Five Day. Attend the webinar and give yourself a high five for learning about ways to save time in the submission process.
April 5, 2021: National Financial Capability Month
It’s National Financial Capability Month. Take this opportunity to empower investors with educational resources. Potential investors in municipal bonds may have questions when considering the purchase of a municipal security. The MSRB offers many educational resources for investors. Among these offerings is a free interactive course on MuniEdPro – Exploring Municipal Bonds: A Course for Investors.
March 29, 2021:
Like April showers bring May flowers, prudent rulemaking grows from the input of all market participants. Given that, have you noticed that the MSRB has recently issued two Requests for Comment? One Request for Comment is of particular interest to bank dealers and the other is of interest to municipal advisors. The MSRB is requesting comment on the application of Regulation Best Interest (Reg BI) to bank dealers, with a comment period ending June 2, 2021 and on fair dealing obligations of solicitor municipal advisors , with a comment period ending June 17, 2021. We look forward to hearing from you.
March 22, 2021: Start the Ball Rolling--Prepare for the Series 54 Exam
While the weather is getting warmer, before you know it, it will be Autumn and the deadline to take and pass the Municipal Advisor Principal Qualification Examination (Series 54) will be here. Individuals qualified with the Series 50 examination will need to become appropriately qualified as a municipal advisor principal to continue to engage in the management, direction or supervision of the municipal advisory activities of a municipal advisor firm. Don’t wait to start studying...no one enjoys cramming for an examination at the last minute. You can start by reviewing Series 54 exam information available on msrb.org. The grace period ends on November 12, 2021.
March 15, 2021: Annual MA CEO Certification
We are all busy and delegate where we can, whether it is Instacart or UberEats, but some things cannot be delegated. While municipal advisors may outsource certain compliance tasks, ultimate responsibility remains with the firm. For example, consistent with MSRB Rule G-44, the chief executive officer (or equivalent officer) of the municipal advisor must certify that the firm has in place processes to ensure that its policies and procedures are reviewed, updated and maintained to be reasonably designed to achieve compliance with applicable rules. This certification is due annually, but based on prior relief granted by the MSRB, municipal advisors have until March 31, 2021 to complete the 2020 certification.
March 8, 2022: Longer Days, More Time to Comply
Like our clocks will spring ahead this weekend to give us more time to enjoy the daylight, the MSRB is providing dealers additional time to operationalize and implement the new Form G-32 requirements. The compliance date for new Form G-32 has been extended from March 31, 2021 to August 2, 2021. Read more about it here.
March 1, 2021: Certain Relief Is Expiring Soon
It has been an unprecedented year, but don’t be like the White Rabbit in Alice's Adventures in Wonderland -- late, late for a very important date. March 31, 2021 is the deadline for implementing the revised underwriter disclosures as described in the revised interpretive notice under Rule G-17 and for certain professional qualification standards under Rule G-3. The original deadlines were extended last year due to the demands of the COVID-19 pandemic. It has been nearly a year since the MSRB provided regulatory relief and extended the deadline for these requirements, so don't miss the new deadline!
February 22, 2021: Free MSRB Webinar on Interpretive Guidance Review
Don't miss the MSRB's live webinar on its initiative to conduct a comprehensive review of the entire catalogue of interpretive guidance in the MSRB rule book. The goal is to streamline and modernize the rule book by clarifying, amending and/or retiring interpretive guidance that no longer achieves its intended purposes.
MSRB staff will discuss this multi-year initiative and address stakeholder questions on Wednesday, February 24, 2021 from 3:00 p.m. to 4:00 p.m. ET.
Do you have questions for the presenters? Send them in advance to Msrbevents@msrb.org
February 8, 2021: Review and Update Associated Person Information
On Monday February 15, we honor our great presidents by closing our banks for the day and taking a moment to remember Washington, Lincoln and others. Bank municipal securities dealers can also ask their associated persons to take a moment to ensure that information related to Form MSD-4 (Uniform Application for Municipal Securities Principal or Municipal Securities Representative Associated with a Bank Municipal Securities Dealer) is current and accurate. MSRB Rule G-7(c) requires each associated person of a bank municipal securities dealer to inform the firm if any information on Form MSD-4 becomes materially inaccurate or incomplete.
February 1, 2021: Is the pandemic making it feel like Groundhog Day?
Like Bill Murray's character lived the same day over and over again in the movie “Groundhog Day,” compliance officers continue to monitor the impact of the COVID-19 pandemic on their firms' operations long after they initially expected to. Similarly, the MSRB provided initial regulatory relief in light of the operational challenges due to the pandemic and has since extended such relief. Regulated entities should be sure to document their reliance on any of the temporary relief and continue to visit the MSRB’s COVID-19 information page for updates to FAQs about the regulatory relief – again and again.
January 25, 2021: Don't Labor Over LIBOR Transition Resources
The MSRB is highlighting the Securities and Exchange Commission’s Office of Municipal Securities recent statement regarding the potential impact of the discontinuation of LIBOR during 2021 on the municipal securities market. Additionally, the MSRB reminds dealers of its published LIBOR Transition Information, which addresses the duty of fair dealing, under Rule G-17, that could be impacted by the LIBOR transition, as well as municipal advisors' duties, under Rule G-42, when making a recommendation to a municipal entity or obligated person client of a municipal securities transaction (or a municipal financial product) involving LIBOR.
January 11, 2021: Start 2021 off on the right foot!
If you are a dealer or municipal advisor, the Annual Affirmation Period pursuant to Rule A-12 began on January 1. Rule A-12(k) requires every registered dealer and municipal advisor to review, update as necessary, and affirm the information provided on its Form A-12. A dealer or municipal advisor must complete the 2021 Annual Affirmation on or before January 27, 2021, even if the firm’s information has not changed.
January 4, 2021: Resolve to Identify, Disclose, and Manage or Mitigate Conflicts
MSRB Rule G-42 requires a municipal advisor to use reasonable diligence to identify its material conflicts of interest and make robust disclosures of those conflicts to its municipal entity and obligated person clients.
If there are no known conflicts of interest identified, the municipal advisor must provide a written statement to the client to that effect. If material conflicts are identified, a municipal advisor must disclose such conflicts in writing in sufficient detail so that the client is informed of the nature, implications and potential consequences of each conflict and an explanation of how the municipal advisor addresses or intends to manage or mitigate each conflict.
Importantly, Rule G-42 specifically prohibits a municipal advisor from engaging in municipal advisory activities for a municipal entity client if the municipal advisor cannot manage or mitigate the conflicts of interest in a manner that will permit it to act in the municipal entity’s best interests.
December 14, 2020: Timely Close-Outs
MSRB Rule G-12(h), related to close-outs, establishes a deadline for either cancelling or closing out an inter-dealer transaction. If the transaction cannot be completed, then it should be closed out or cancelled no later than 10 calendar days after settlement date. However, Rule G-12(h)(i)(E) does permit the purchaser to grant the seller a one-time extension for an additional 10 calendar days. Assuming an extension is granted, the maximum time a seller has to deliver the securities or close out an open inter-dealer fail is 20 calendar days.
December 7, 2020: Share Your Input on the MSRB’s Strategic Priorities
The Municipal Securities Rulemaking Board (MSRB) today published a request for input notice on its strategic goals and priorities. Every three to five years, the MSRB engages in a strategic planning exercise to reassess the long-term direction of the organization responsible for safeguarding the integrity of the nearly $4 trillion municipal securities market. The MSRB seeks input on opportunities for the organization to improve its effectiveness, address emerging and evolving market risks, and better serve the municipal market of today and tomorrow. Comments should be submitted no later than January 11, 2021.
November 30, 2020: Amending Form MA-I Information
Are you working on completing your customary year-end checklist? For dealers that are also municipal advisors, remember that if you receive Form U4 amendments from associated persons, those Form U4 amendments will not be automatically reflected on the Form MA-I. You may need add to your checklist the task of going into EDGAR to make corresponding amendments to the Form MA-I information.
November 23, 2020: Update Your Year-End To-Do List
'Tis the season for year-end to-do lists. If your customers and/or municipal advisory clients have yet to receive the requisite annual notification this calendar year, you may want to have Rule G-10 annual notifications on your list. Rule G-10 requires dealers and municipal advisors to provide customers or municipal advisory clients a written notification once every calendar year.
November 16, 2020: Check out Compliance Corner
Check it out the latest issue of Compliance Corner to learn more about volunteering for the MSRB's Compliance Advisory Group, get answers to frequently asked questions about compliance with MSRB Rules G-37 and G-42, or find a compliance tip on completing Form G-32 with respect to an offering that is a private placement. You also can get up to speed on a recent enforcement matter regarding a state-funded Arizona charter school.
November 9, 2020: Zoom Lunch—Gift or Entertainment Expense?
In the current environment of COVID-19 social distancing and remote work, we are all learning to adapt to virtual meetings and events. Under MSRB Rule G-20, on gifts and gratuities, certain types of gifts qualify as "normal business dealings" and are not subject to the $100 gift limit, as long as the conditions under the rule are met. Meals, such as a box lunch or snack, that are sent to an issuer representative and other members of the deal team attending a virtual business meeting hosted by the regulated entity would be excluded from the gift limitation, so long as the cost of the food and beverage, as well as the frequency of such virtual meeting(s), does not raise any question of propriety.
Even if we cannot be together in person, we can still share an occasional meal over Zoom under Rule G-20(d).
November 2, 2020: Respecting Different Perspectives
MSRB Rules G-27 and G-44 are primarily principles-based rules. In creating a compliance program, one size does not fit all. The MSRB recognizes the broad differences among dealers as well as among municipal advisors. No matter the perspective, the common goal is a supervisory system that is reasonably designed to achieve compliance with applicable securities laws and regulations, including applicable MSRB rules.
October 26, 2020: Get in the Spirit...Review the MSRB's Systems Holiday Schedule
As the leaves fall, days get shorter, and air outside gets nippy, we are reminded that the holiday season is fast approaching. The MSRB publishes a Systems Holiday Schedule to assist dealers with determining submission deadlines associated with Rule G-14, on transaction reporting, Rule G-32, on disclosures in connection with primary offerings, and Rule G-34 (c), on variable rate security market information.
Review the MSRB's System Status webpage for real-time information on the operational status of the MSRB's market transparency systems.
October 19, 2020: Gearing Up for the Discontinuation of LIBOR
There have been multiple reminders about the switch from LIBOR to the Secured Overnight Financing Rate (SOFR) as the standard U.S. reference rate in the debt and derivatives market. This past weekend the derivatives markets had the "big bang" switch to SOFR. While this "big bang" may not directly affect your firm's municipal securities activities, it is a good reminder that the transition from LIBOR to SOFR continues.
October 12, 2020: MSRB-Owned Exams Enrollment Windows Extended
In monitoring the COVID-19 pandemic and related risks of operational challenges and market disruption, the MSRB continues to evaluate information related to scheduled and completed MSRB-owned professional qualification examinations at Prometric test centers. That said, individuals who had an exam enrollment window expire after March 16 or have one that will expire before November 16, 2020, have been provided an extension of their exam enrollment window until November 16, 2020. The MSRB will continue to work with FINRA, as its exam administrator, to assess the situation and consider whether any additional extensions are necessary.
October 6, 2020: Be Educated on the Fees for 529 Plan Rollovers
A 529 rollover can protect funds contributed by an account owner from tax consequences and other penalties if such funds are rolled over from one 529 savings plan to another state’s 529 savings plan for the same beneficiary or to another 529 savings plan for a different beneficiary, if certain conditions are met. In effectuating a 529 rollover, dealers should be mindful of the associated fees and charges assessed to ensure such fees are appropriate.
September 28, 2020: Recognizing the Vital Role of Compliance Professionals
In recognition of Compliance Officer Day, which was celebrated on September 26, the MSRB acknowledges that compliance professionals play a vital role in the regulatory framework. The MSRB provides compliance resources and tools to assist compliance professionals and their firms in complying with MSRB rules that apply to their business and operations.
Compliance is a shared corporate responsibility.
September 21, 2020: Use ATS Indicator to Report Inter-Dealer Trades on an ATS
MSRB Rule G-14 requires dealers to report all executed transactions in municipal securities to the MSRB’s Real-Time Transaction Reporting System (RTRS) within 15 minutes of the time of trade, with limited exceptions. As a reminder, dealers executing inter-dealer transactions with or using the services of an alternative trading system (ATS) are to use the ATS special condition indicator when reporting these trades to the RTRS, even if such transactions executed with an ATS were done so as voice trades executed over the phone. In addition, a dealer that fails to accurately report the ATS special indicator will receive an error code (Q55A) when the seller's and buyer's trade reports differ with respect to the ATS special condition indicator.
September 14, 2020: Virtual Fundraising Events
Brokers, dealers and municipal securities dealers ("dealers"), municipal advisors and dealer-municipal advisors (collectively "regulated entities") are reminded that attendance at a virtual fundraising event (e.g., virtual dinner or rally) for an official of a municipal entity, as part of such official's congressional campaign or otherwise, may trigger a ban on engaging in municipal securities business and/or municipal advisory business with a municipal entity if certain conditions are not met. Specifically, contributions by a municipal finance professional (MFP) or municipal advisor professional (MAP) would not trigger a ban on business if the MFP or MAP who made the contribution is entitled to vote for such official and any contributions to such official made by the MFP or MAP do not exceed, in total, $250 per election. In addition, any MFP or MAP who attends the event for the purpose of soliciting contributions by others for the municipal entity official would violate Rule G-37's prohibition on soliciting contributions.
August 31, 2020: MSRB Resumes Price Variance Alerts for Dealers
As part of the MSRB's COVID-19 pandemic-related regulatory measures, in March, the MSRB temporarily suspended sending price variance alerts to dealers for trades reported to the MSRB's Real-Time Transaction Reporting System (RTRS). As of September 1, 2020, the MSRB will resume the transmission of price variance alerts to dealers when a transaction reported to RTRS by the dealer is at a price that is notably different (i.e., notably lower or higher) than the price reported to RTRS by other dealers in the same security within a specified time period.
As a reminder, price variance alerts are meant to be a tool to assist dealers in identifying transactions that may warrant review to ensure the information reported to RTRS reflects the trade price as intended. Under MSRB Rule G-14, on reports of sales or purchases, dealers have an obligation to submit transaction data that meets the specified format for the RTRS Portal and to promptly review and address any problem or potential problem with such transaction data.
August 24, 2020: Did You Miss the Municipal Advisor Compliance Webinar?
If you missed the virtual Compliance Outreach Program for Municipal Advisors hosted earlier this month by the SEC, FINRA and MSRB, don't worry. You can access all the great content you missed on demand and get CPE credit, as well.
August 17, 2020: Not Every Underwriting Requires a Public Distribution
MSRB Rule G-32 requires a dealer to complete Form G-32 in a timely and accurate manner when acting as an underwriter, as the term is defined in SEC Rule 15c2-12(f)(8), in a primary offering. Generally, with limited exception, SEC Rule 15c2-12(f)(8) defines an underwriter as a dealer that purchases from an issuer, or offers or sells for an issuer, an offering of municipal securities. This includes dealers having a direct or indirect participation in any such undertaking, or a participation in the direct or indirect underwriting of any such undertaking. Accordingly, an underwriter for purposes of Rule G-32 includes a dealer acting as an underwriter in a primary offering, whether that offering is a public distribution or a private placement (e.g., an exempt limited offering or direct purchase).
August 10, 2020: Inadvertent Political Contributions under MSRB Rule G-37
Were you online and did you inadvertently make a political contribution that would trigger a ban on business with a municipal entity for your firm under Rule G-37?
If the contribution is returned to you within 60 days of your firm's discovery of the contribution, your firm may be able to avail itself of an "automatic" exemption. Rule G-37(j) provides an automatic exemption that allows a firm to continue to do municipal securities business or municipal advisory business with the relevant municipal entity. However, your firm must have discovered the contribution (e.g., through your notification after realizing that a ban may have been triggered or through a quarterly compliance certification relating to political contributions) within four months of the date it was made and the contribution must not have exceeded $250. Additionally, a firm is only entitled to two automatic exemptions per 12-month period and no more than one automatic exemption can relate to contributions by the same person regardless of the time period.
August 3, 2020: MSRB’s Late-Fee Suspension Has Expired
As part of the MSRB's COVID-19 pandemic-related regulatory measures, the MSRB temporarily waived the charging of late fees assessed under Rules A-11 and A-12 (i.e., professional, technology and market-activity-based fees). As a reminder to regulated entities, this temporary relief expired on Friday, July 31, 2020.
July 27, 2020: Dealer Disclosure Obligations Under MSRB Rule G-15
Dealers are reminded that under MSRB Rule G-15 written confirmations to customers, which are required to be sent at or before the completion of a transaction, should include, among other things, information related to the transaction and both descriptive and identifying information about the security. For example, if a security has additional credit backing, such as bond insurance, the confirmation should identify that there are multiple obligors.
July 20, 2020: SEC, MRSB, FINRA Address Municipal Advisor Compliance Matters
Do you have questions for the regulators on municipal advisor compliance matters?
The Securities and Exchange Commission, Municipal Securities Rulemaking Board and Financial Industry Regulatory Authority are holding a virtual Compliance Outreach Program for Municipal Advisors.
The webcast program will be held Thursday, August 13, 2020, from 1 p.m. to 3 p.m. ET.
Participants are encouraged to submit questions in advance of the event by emailing MSRBEvents@msrb.org.
July 13, 2020: Dealer obligations for offerings with the CPFF or MLF
Dealers may be wondering if their transactions with the Commercial Paper Funding Facility (CPFF) or the Municipal Liquidity Facility (MLF) would trigger submission of new issue information to the MSRB. The answer is yes. Under Rule G-32, dealers should fulfill their applicable regulatory obligations, including the timely and accurate submission of information relating to the offering by completing Form G-32.
July 6, 2020: Learn more about the SEC’s Temporary Conditional Exemptive Order
Questions about the Securities and Exchange Commission’s (SEC’s) Temporary Conditional Exemptive Order for certain municipal advisor activities?
Tune in for a virtual discussion hosted by the SEC on Tuesday, July 7 from 2 p.m. to 3 p.m. ET at www.sec.gov.
Staff from the SEC’s Division of Trading and Markets and Office of Municipal Securities will discuss the requirements and conditions of the order. A representative of the Municipal Securities Rulemaking Board (MSRB) will join to discuss MSRB rules relevant to the order. The SEC and MSRB staff will answer questions from the public regarding the order submitted prior to the event to MAWebinar@sec.gov.
Please register for the virtual event here.
June 29, 2020: Application of Rule G-23 to SEC’s Emergency Temporary Conditional Exemptive Order
The MSRB updated its frequently asked questions (FAQs) on COVID-19 pandemic-related regulatory relief and guidance. A new FAQ has been added that addresses the application of MSRB Rule G-23 to the Securities and Exchange Commission’s Emergency Temporary Conditional Exemptive Order concerning direct placements of municipal securities by registered municipal advisors. This resource should be read in conjunction with the applicable MSRB rules and interpretations.
June 22, 2020: Documenting New or Modified Procedures
Regulated entities are reminded that any new or modified policies and procedures resulting from reliance on the temporary regulatory relief provided by the MSRB in Notices 2020-09 and 2020-11 from complying with existing obligations should be documented. In accordance with MSRB Rules G-8 and G-9, including, as applicable, Rules 17a-3, 17a-4 and 15Ba1-8 of the Securities Exchange Act of 1934, dealers and municipal advisors are required to make and preserve certain books and records.
June 15, 2020: Read our FAQs on COVID-19-Related Regulatory Relief
In light of the disruptions to normal business operations as a result of COVID-19, the MSRB provided temporary regulatory relief to market participants by extending certain MSRB compliance and testing deadlines.
To help regulated entities understand the full scope of this compliance relief, the MSRB has now provided answers to frequently asked questions (FAQs). This resource should be read in conjunction with the applicable MSRB rules and interpretations.
June 8, 2020: Share These Resources for Municipal Bond Investors
Investors who hold municipal securities may not be aware of the resources available to assist them in understanding how the current coronavirus disease (COVID-19) pandemic may affect their holdings. In order to highlight available MSRB resources and provide information on where to find COVID-19-related disclosures from issuers, the MSRB published an investor protection informational notice.
June 1, 2020: MLF Transaction Fee Waiver
In order to help assist the industry during the COVID-19 crisis, the MSRB is providing a temporary waiver of underwriting, transaction and technology assessments under its Rule A-13 for brokers, dealers and municipal securities dealers with respect to those transactions with the Federal Reserve’s Municipal Liquidity Facility (MLF). The waiver is temporary and only applicable during the duration of time the MLF is purchasing municipal securities, which is currently scheduled to cease on December 31, 2020.
May 18, 2020: Enhanced Usability of Weekly Disclosure Summary Report
Last week, the MSRB enhanced the format of its weekly report aggregating disclosures submitted to the Electronic Municipal Market Access (EMMA®) website that reference COVID-19. The new format allows for more seamless searchability, permitting users to sort by category, issuer name, state and posted date. Follow the below link tomorrow for an updated report covering disclosures through the week ending May 17, 2020.
May 11, 2020: Review Your Trades
Under MSRB Rule G-14, on reports of sales or purchases, dealers must submit transaction data that conforms to the formats specified for the RTRS Portal used for trade submissions and dealers have an obligation to report this information promptly, accurately and completely.
A dealer is obligated to promptly review and address any problem or potential problem with submitted trade data that is reported to the dealer through the Message Portal, through the RTRS Web Portal or via electronic mail.
May 4, 2020: Check out the Spring Compliance Corner
Did you miss the Spring edition of the MSRB's Compliance Corner? The most recent compliance-dedicated newsletter covers the MSRB's COVID-19 response, compliance FAQs, enforcement insight for a MSRB Rule G-23 violation and more. Read it here. Previous editions are available on MSRB.org.
Make sure you are signed up to receive the next edition of Compliance Corner. Sign up here.
April 27, 2020: Don’t Forget Your Time of Trade Disclosures!
Does your firm have a process for calculating market discount to see if the De Minimis Rule applies for a customer’s trade?
Bonds with a de minimis amount of market discount are subject to more favorable tax treatment than bonds with a non-de minimis amount of market discount. Under MSRB Rule G-47, which requires brokers, dealers and municipal securities dealers to disclose to their customers all material information known about the transaction, this discount may be considered to be material.
Read the IRS Investment Income and Expenses publication for additional information.
April 20, 2020: Working From Home? Try MuniEdPro®
Looking for ways to stay productive while staying home? MuniEdPro® offers easy-to-access, free remote education for muni bond professionals. Complete your compliance training with timely content, direct from the regulators themselves. You now have a turnkey solution for training that you can access from your new home office.
Visit MSRB.org for more information on MuniEdPro® or start exploring a class today.
April 13, 2020: Review the MSRB's Temporary Compliance Relief
In light of the disruptions to normal business operations as a result of COVID-19, the MSRB announced regulatory relief to provide for an extension of time to implement certain amended rules and interpretive guidance, and additional time to complete certain professional qualification and supervisory requirements. MSRB-regulated firms will now have additional time to:
- Prepare to operationalize the submission of additional data related to primary offerings of municipal securities under amendments to MSRB Rule G-32;
- Prepare to operationalize compliance with amended and restated guidance regarding the fair dealing obligations underwriters owe to issuers of municipal securities under MSRB Rule G-17;
- Take and pass certain qualification exams and continuing education modules required by MSRB Rule G-3;
- Conduct the annual needs analysis and the delivery of continuing education content pursuant to MSRB Rule G-3;
- Conduct the annual compliance meeting and branch inspections pursuant to MSRB Rule G-27;
- Provide the annual report related to the dealer’s review of the firm’s supervisory controls under MSRB Rule G-27 ; and
- Provide the annual certification related to the municipal advisor firm’s compliance policies and procedures under MSRB Rule G-44.
April 6, 2020: Tracking COVID-19 Disclosures
The MSRB is now publishing a weekly summary identifying disclosures submitted to the EMMA® website by issuers of municipal securities that reference COVID-19. To compile the summary, the MSRB searched the approximately 40,000 disclosures the EMMA system received from January 2020 to March 2020 and identified those that referenced COVID-19 or related keywords.
March 30, 2020: New Daily Trade Activity Analysis
In order to assist market participants, policymakers and the general public with understanding the impact of COVID-19 on the liquidity of the municipal securities market, the MSRB is now publishing a daily trade activity report.
The report compares daily purchases and sales of fixed, variable and zero coupon bonds to historical averages from 2019 and early 2020.
March 23, 2020: One Stop for MSRB Coronavirus Updates
The MSRB is closely monitoring the impact of the coronavirus disease (COVID-19) on municipal market participants, including municipal securities dealers and municipal advisors. Please reach out to us at firstname.lastname@example.org with any compliance questions or suggestions for how we can help regulated entities.
Stay up-to-date on MSRB information, including notices and market analysis, with a new dedicated COVID-19 information page on MSRB.org.
March 16, 2020: Supervisory Requirements in Light of Coronavirus
In light of the recent public health concerns due to the coronavirus (COVID-19) outbreak, the Municipal Securities Rulemaking Board (MSRB) recognizes that there may be operational challenges and business disruption for regulated entities. To address these concerns, the MSRB issued a reminder to regulated entities regarding the supervision of municipal securities and municipal advisory activities and that of their associated persons. Read the notice.
Broker-dealers should also read FINRA Regulatory Notice 20-08, which notes that FINRA is “temporarily suspending the requirement to maintain updated Form U4 information regarding office of employment address for registered persons who temporarily relocate due to COVID-19. In addition, member firms are not required to submit branch office applications on Form BR for any newly opened temporary office locations or space-sharing arrangements established as a result of recent events.”
March 9, 2020: Understanding How Continuing Disclosures Appear on EMMA®
Join MSRB staff on March 19, 2020, for a free webinar demonstrating upcoming enhancements to the Electronic Municipal Market Access (EMMA®) website, including:
- How submitters modify a published disclosure to replace files, correct categories and revise descriptive information that appears on the EMMA website;
- New features to display the history of modifications to a disclosure submission; and
- Upcoming enhancements to improve the transparency of the timing of issuers' annual and audited financial disclosures.
March 2, 2020: Think Before You Click!
Become cyber aware of suspicious emails. Phishing emails with malicious attachments are designed to look like legitimate emails. Clicking a link or opening an attachment from a phishing email is one of the leading root causes of data breaches. Recognizing that a cyber attack may have consequences that extend beyond the compromised firm, the Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations noted that information security will continue to be a priority in each of its examination programs.
February 24, 2020: LIBOR Transition
The Municipal Securities Rulemaking Board (MSRB) has published information regarding the transition from the LIBOR reference rate to encourage regulated entities to review their activities related to LIBOR transactions. The information is intended to highlight existing MSRB rules that promote the protection of municipal entities by ensuring they are apprised of the risks associated with the LIBOR reference rate when entering into new LIBOR-based transactions. Such information is of particular importance given that the financial authority responsible for the publication of LIBOR has stated that it cannot guarantee that the LIBOR reference rate will be published beyond 2021.
February 10, 2020: Mark Your Calendars
Simplify your tracking of key compliance dates with the Municipal Securities Rulemaking Board's (MSRB) online Compliance Calendar. This compliance resource for municipal securities dealers and municipal advisors highlights upcoming deadlines, rule effective dates and events.
Have a suggestion for the compliance calendar? Contact the MSRB at email@example.com.
February 3, 2020: Best Execution with Limited Pricing Information
The absence or limitation of accessible quotations or pricing information is not uncommon for many municipal securities, but it does not relieve a dealer of its best-execution obligations. Supplementary Material .06 to Rule G-18 specifically requires dealers to have written policies and procedures in place that address how the dealer will make its best-execution determinations with respect to securities with limited quotations or pricing information, and address when those policies and procedures are triggered by establishing what it means to have limited quotations or pricing information. See Rule G-18 Interpretive Guidance.
January 27, 2020: Municipal Advisors – Review SEC Form MA-I
Each municipal advisory firm must complete and file U.S. Securities and Exchange Commission (SEC) Form MA-I with respect to each natural person associated with the firm and engaged in municipal advisory activities on the firm’s behalf. Firms must promptly amend information contained in a Form MA-I whenever information regarding the associated person becomes inaccurate, including promptly amending such forms to indicate when the associated person is no longer associated with municipal advisors.
The MSRB recommends firms review the accuracy of their Forms MA-I on file with the SEC. Professional fees assessed by the MSRB pursuant to MSRB Rule A-11 are calculated based on the number of associated persons qualified as a municipal advisor representative and for whom the municipal advisor firm maintains an active Form MA-I with SEC as of January 31 each year. See MSRB Rule A-11, on assessments for municipal advisor professionals.
January 13, 2020: Primary Offering Amendments Effective Today
Amendments to primary offering rules, including MSRB Rule G-11, on primary offering practices, and MSRB Rule G-32, on disclosures in connection with primary offerings, are effective today, January 13, 2020. Read the notice.
Note that the compliance date for amendments to Form G-32 is November 30, 2020. Read the notice.
The MSRB also recently published a notice reminding dealers that electronic media may be used to satisfy their delivery obligations under MSRB Rule G-11 for communications among dealers and between dealers and issuers. Read the notice.
January 6, 2020: Remember to Affirm or Update MSRB Form A-12
MSRB-registered firms are required to update MSRB Form A-12 within 30 days if any information on this registration form becomes inaccurate. During the Annual Affirmation Period, which commenced on January 1, firms must review their information on Form A-12 and either affirm that the information on the form remains accurate or make any necessary updates by January 27, 2020. Read more about the affirmation process.
December 16, 2019: 'Tis the Season
It’s not just the season for holiday cards; it may also be the season for giving your customers and/or clients the annual information required under MSRB Rule G-10 on regulatory protections for customers and municipal advisory clients.
Programming Note: The Compliance Tip of the Week will be on holiday until January 6, 2020.
December 9, 2019: Confirming Your Registration
A Certificate of Current MSRB Registration is available to satisfy requests regulated entities may receive from municipal entities seeking written verification of MSRB registration. Regulated entities now can use a self-service option, available in the MSRB’s Gateway system, to print a certificate. Under MSRB Rule A-12, each broker, dealer and municipal securities dealer prior to engaging in municipal securities activities must register with the Board, and each municipal advisor prior to engaging in municipal advisory activities must register with the Board.
December 2, 2019: Leftovers Are Great for After Thanksgiving, Not Quotations
Under MSRB Rule G-13, on quotations relating to municipal securities, with limited exception, a dealer’s published quotations shall represent a "bona fide bid for, or offer of, municipal securities." This means that the dealer making the quotation is prepared to purchase or sell the security which is the subject of the quotation at the price stated in the quotation and under such conditions, if any, as are specified at the time the quotation is made.
November 25, 2019: Be Thankful and Be Informed
Maintaining and improving health, independence and quality of life is the key goal of Achieving a Better Life Experience (ABLE) programs. MSRB Rule G-45, on reporting of information on municipal fund securities, requires that underwriters to ABLE programs submit certain information to the MSRB about the ABLE programs they underwrite. Read more about the MSRB's role with ABLE Programs.
The MSRB has also developed an Investor's Guide for ABLE Programs, which is designed to help investors understand how these tax-advantaged savings programs work. Read the guide here.
November 18, 2019: Looking Out for Investors
Last week, the Municipal Securities Rulemaking Board (MSRB) sent a letter in response to the SEC Office of the Investor Advocate’s annual request for the MSRB to share its perspective on products and practices that may have adversely impacted municipal market retail investors over the past year.
This year's letter focused on a number of risks to retail investors under the broader topics of:
- The macroeconomic environment;
- Disclosure practices; and
- Market practices.
The MSRB will continue to monitor the impact of market conditions and regulatory changes. Read the letter to the SEC Investor Advocate.
November 11, 2019: Series 54 Launch
Tomorrow, the MSRB will launch the Municipal Advisor Principal Qualification Examination (Series 54). As provided for under MSRB Rule G-3, in addition to passing the Municipal Advisor Representative Qualification Examination, individuals acting as municipal advisor principals are required to pass the Series 54 examination. Municipal advisor principals will have until November 12, 2020, to pass the Series 54 examination in order to become appropriately qualified to engage in the management, direction or supervision of the municipal advisory activities of the municipal advisor and its associated persons. Stay tuned for a frequently asked questions (FAQ) compliance resource next week.
November 4, 2019: Subscribe to Compliance Corner
October 28, 2019: Ban on (Boo!)siness
Don't get spooked, but municipal securities business engagements with a municipal entity within two years after a contribution to an official of such municipal entity may result in a ban on business if the contribution doesn't meet certain conditions under
October 21, 2019: Avoid Striking Out During the World Series
No matter how common it may be for your favorite team to make it to the World Series, consider reviewing your policies and procedures surrounding business entertainment because the prohibition under MSRB Rule G-20 on gifts, gratuities and non-cash compensation applies to business entertainment that is so extensive to raise any question of impropriety. Read the MSRB’s FAQ on gift giving to learn more.
October 14, 2019: US Government Closed Today But MSRB Systems Open for Business
All MSRB market transparency systems are running today.
Keep up with the federal holidays that affect the operations of MSRB market transparency systems by viewing the Systems Holiday Schedule.
October 7, 2019: It Stands to Reason
The duty of care includes, among other things, the obligation to have a reasonable basis for any information provided to the client or other parties involved in the municipal securities transaction in connection with the preparation of an official statement for any issue of municipal securities as to which the municipal advisor is advising.
September 30, 2019: Confirming Best Ex
Under MSRB Rule G-18, on best execution, dealers are required to use reasonable diligence to ascertain the best market for a subject security and buy or sell in that market so that the resulting price to the customer is as favorable as possible under the prevailing market conditions.
What if the firm chooses to route its orders to another dealer that has agreed to execute the transactions? The initial dealer's sound policies and procedures under MSRB Rule G-18 should indicate the process for evaluating the other dealer’s best execution reviews and the frequency of such reviews.
September 23, 2019: Senior Syndicate Managers – Write Away
Under MSRB Rule G-11, on primary offering practices, the senior syndicate manager shall furnish in writing to the other members of the syndicate and to members of the selling group the following information prior to the first offer of any securities:
- a written statement of all terms and conditions required by the issuer;
- a written statement of all of the issuer’s retail order period requirements, if any;
- the priority provisions;
- the procedure, if any, by which such priority provisions may be changed;
- if the senior syndicate manager or managers are to be permitted on a case-by-case basis to allocate securities in a manner other than in accordance with the priority provisions, the fact that they are to be permitted to do so;
- if there is to be an order period, whether orders may be confirmed prior to the end of the order period; and
- all pricing information.
September 16, 2019: Taking Care of (Outside) Business
Under MSRB Rule G-44, on supervisory and compliance obligations of municipal advisors, a municipal advisor’s written supervisory procedures shall take into consideration, among other things, the likelihood that associated persons may be engaged in relevant outside business activities. Municipal advisors should also bear in mind that SEC Form MA-I requires outside business activities to be disclosed. Read more about written supervisory procedures.
September 9, 2019: Let the Record Show
Under MSRB Rule G-8, a municipal advisor is required to make and maintain General Business Records relating to its municipal advisory activities that are true, accurate and current. General Business Records include check books, bank statements, cancelled checks and cash reconciliations of the municipal advisor, as well as general ledgers that reflect assets, liabilities, reserves, capital and income and expense accounts. Read SEC Rule 15Ba1-8 for additional records that must be made and maintained as General Business Records under MSRB Rule G-8.
August 26, 2019: Resources for Understanding Advertising Rules
To assist municipal advisors and dealers as they review advertisements and social media for compliance with the new regulations, the MSRB has released the following resources:
- Assessing Supervision of Municipal Advisor Advertising Regulations
- FAQs on Use of Social Media under MSRB Advertising Rules
- FAQs on Use of Municipal Advisory Client Lists and Case Studies
- On-Demand Compliance Workshops (Parts I and II) on MSRB Rule G-40: Advertising by Municipal Advisors
- Application of the Content Standards to Advertisements by Municipal Advisors under MSRB Rule G-40.
August 19, 2019: Full Catalog of Compliance Podcasts
The MSRB Podcast, available on all major podcast platforms, periodically features episodes on compliance topics for dealers and municipal advisors. The episodes below are all available now. Stay tuned for Season Two.
- Now You Are a Municipal Advisor – Disclosure Fundamentals
- Municipal Advisor Considerations in Preparing for Examination
- MSRB Rule G-37: Promoting Integrity in the Municipal Securities Market
- Professional Qualifications - A Conversation about MSRB Rule G-3
August 12, 2019: Advertising Rules Effective August 23
MSRB advertising rules, including amended MSRB Rule G-21, on advertising by municipal securities dealers, and new MSRB Rule G-40, on advertising by municipal advisors, become effective on August 23, 2019. Read the notice.
Make sure to check out the Rule G-21 and Rule G-40 compliance resources available on the MSRB's online Compliance Center.
August 5, 2019: Share Your Input on Dealers Rendering Financial Advisory Services
Share your input on whether MSRB Rule G-23’s limitations on when dealers may render financial advisory or consultant services to or on behalf of an issuer are consistent with current practices in the municipal market and achieve the rule’s intended purpose. Read the request for comment and submit your response by Monday, August 19, 2019.
July 29, 2019: Simplifying the Submission Process
Join the MSRB on Thursday, August 8, 2019, from 3:00 p.m. to 4:00 p.m. ET for a discussion about enhancements to the Electronic Municipal Market Access (EMMA®) Dataport, the user interface for submitting continuing disclosures and other information to EMMA. These enhancements are the culmination of a three-phase initiative focusing on the EMMA user experience.
July 22, 2019: Keep "Tabs" on MSRB Rules
Based on feedback from website users, the Municipal Securities Rulemaking Board (MSRB) has added a brief helpful summary to the tab of each of its General, or “G,” rules on MSRB.org. New descriptions have also been added to clarify the additional information available for MSRB rules, such as interpretive guidance, related rules and guidance, amendment history and compliance resources.
July 15, 2019: Political Contributions Disclosure Reminder
The deadline to submit quarterly disclosures about your municipal securities or municipal advisory business and any related political contributions under MSRB Rule G-37 is Wednesday, July 31, 2019. Read the manual on how to submit disclosures to the MSRB using electronic Form G-37.
Reminder: Users now receive one notification when the Form G-37 submission is posted to the Electronic Municipal Market Access (EMMA®) website. Previously when making such submissions, users would receive a notification when the submission was pending and another notification once the submission was accepted.
July 8, 2019: Understand the Evolution of MSRB Rules
Municipal advisors and municipal securities dealers can easily access rule approval orders and see the amendment history for each MSRB rule. Visit the "Rules and Guidance" section of the homepage and select any MSRB rule. Then click on the “Amendment History” tab to follow the evolution of the rule. Each MSRB rule features links to approval orders for rule amendments for the past 14 years. Here you will also find the rule’s file number, which is helpful for anyone interested in searching the entire rule record.
July 1, 2019: Regulators Are No Exception
MSRB Rule G-17, on conduct of municipal securities and municipal advisory activities, requires each broker, dealer, municipal securities dealer, and municipal advisor to deal fairly with all persons and not engage in any deceptive, dishonest, or unfair practice. Regulators are no exception. Responding to a regulator’s request for information regarding the firm’s activities in conducting municipal securities or municipal advisory activities in a manner that is not accurate and truthful can be a violation of Rule G-17.
June 24, 2019: Less Than One Week Until Changes to Form G-45
On June 30, 2019, amendments to Form G-45 under MSRB Rule G-45, on reporting of information on municipal fund securities, become effective. The form amendments will enhance the MSRB’s and other regulators’ ability to effectively and efficiently analyze 529 savings plans and ABLE programs. Read the amendment approval notice.
June 17, 2019: MA Outreach Webcast On-Demand
June 10, 2019: Smarter Search on EMMA
Have you tried the improved Quick Search on the Electronic Municipal Market Access (EMMA®) website? With new predictive search, users can quickly navigate to issuer homepages or securities from a dropdown menu. Explore EMMA today. Join us for a free virtual webinar on June 13, 2019, to get an overview of all the ways to for search for information on EMMA. Register today.
June 3, 2019: Say Goodbye to G-29
Today, June 3, 2019, the MSRB eliminated MSRB Rule G-29 and removed it from the the MSRB Rule Book. As part of its retrospective rule review, the MSRB determined that, in light of the widespread availability of the MSRB Rulebook online, coupled with the obligation under MSRB Rule G-10 to annually provide clients the website address for the MSRB, Rule G-29 is no longer necessary to ensure customers and municipal securities professionals have access to MSRB rules. Read the notice.
May 20, 2019: Municipal Advisor Outreach Program Livestream
Unable to attend the May 21, 2019 Municipal Advisor Compliance Outreach program in San Francisco, hosted by the Municipal Securities Rulemaking Board, U.S. Securities and Exchange Commission, and Financial Industry Regulatory Authority? The event page will show a live video box at approximately 8:00 am ET, 30 minutes before the start of the program. Read the agenda.
May 13, 2019: New MSRB Podcast Addresses Regulatory Topics
Did you know that the MSRB Podcast will periodically feature episodes on compliance topics? Professional Qualifications - A Conversation about MSRB Rule G-3 is now available on all major podcast platforms. Stay tuned for our next episode, Regulations on Political Contributions – Are They Applicable to You?, scheduled for release on May 21, 2019.
May 6, 2019: CE For Free
Did you know that the entirety of the MSRB's MuniEdPro® library—a great CE resource—is available for free? That’s right; 20 courses, ranging from Continuing Disclosure Obligations to Best Execution of Transactions in Municipal Securities, are now available at no charge. Read the course catalog. Learn more about MuniEdPro®.
April 29, 2019: Easier-to-Find Compliance Resources
The MSRB has enhanced how compliance resources are organized on MSRB.org. Visit the Compliance Resources page on MSRB.org to find resources categorized for municipal advisors and dealers, and now also by topic for ease of reference.
April 22, 2019: Linking to EDGAR
The Municipal Securities Rulemaking Board (MSRB) has enhanced its Municipal Advisor Registrants webpage to include links to required municipal advisor firm disclosures made to the U.S. Securities and Exchange Commission (SEC).
Municipal advisors may wish to review their SEC filings to ensure that the information being made accessible on the MSRB website is complete and accurate.
April 15, 2019: 15c2-12 Webinar Transcript
Did you miss the February 2019 webinar hosted by the MSRB with the SEC about frequently asked questions related to amendments to SEC Rule 15c2-12?
You're in luck—the MSRB has posted a full transcript of the conversation. Read here.
For an overview of the amendments to SEC Rule 15c2-12 and information about submitting additional events to the EMMA website, reference 10 Things to Know: New SEC Rule 15c2-12 Requirements.
April 8, 2019: Municipal Advisor Annual Professional Fee
Reminder: the annual professional fee for registered municipal advisors is due on April 30, 2019.
MSRB Rule A-11 requires municipal advisors to pay an annual professional fee of $500 for each person associated with the municipal advisor who is qualified as a municipal advisor representative and for whom the municipal advisor has on file with the Securities and Exchange Commission (SEC) Form MA-I. Read more about MA fees.
March 25, 2019: Don’t Foul Out
March Madness is here! Before heading to the arena, consider reviewing your policies and procedures surrounding business entertainment. For example, taking a client to a basketball game is allowed under MSRB Rule G-20 on gifts, gratuities and non-cash compensation if such business entertainment is not so frequent or extensive that it raises questions of propriety. Read the MSRB’s FAQ on gift giving to learn more.
March 18, 2019: Spring Cleaning
Get ready for spring with an annual compliance review.
At least annually, each municipal advisor firm must review its compliance policies and supervisory procedures to ensure that they remain reasonably designed to achieve compliance with applicable rules. See MSRB Rule G-44(b).
Similarly, each dealer firm must annually test and verify its supervisory procedures to ensure they are reasonably designed to achieve compliance with applicable rules. See MSRB Rule G-27(f)(i).
March 11, 2019: The Trade Price is Right
The Municipal Securities Rulemaking Board (MSRB) is now providing municipal securities dealers with a new feature in RTRS Web that identifies certain price variances in municipal securities transactions. Read our FAQ resource for brokers, dealers and municipal securities dealers.
March 4, 2019: Get an Early Start on Municipal Advisor Principal Qualification
Municipal advisors principals - the Series 54 pilot enrollment window is now open! Individuals interested in taking the pilot can enroll from March 4, 2019 – March 15, 2019, and subsequently schedule a test date within a 120‑calendar day period. Register here. Learn more about the Series 54 Exam.
February 25, 2019: Subscribe to Compliance Corner
February 11, 2019: Getting Closer to Disclosure
Amendments to SEC Rule 15c2-12 have added two events for continuing disclosure agreements entered into on or after February 27, 2019, expanding the list from 14 to 16 events.
February 4, 2019: Compiled Guidance on 529 Savings Plans and ABLE Programs
To assist dealers involved in the offer and sale of interests in 529 savings plans and ABLE programs, the Municipal Securities Rulemaking Board (MSRB) has aggregated a list of relevant guidance on rules relating to the 529 plans and ABLE programs. The guidance can be found on our Compliance Resources page of MSRB.org under the drop-down titled Guidance Related to 529 Savings Plans and ABLE Programs.
January 28, 2019: Advertising Rules Extension
With the federal government now reopened, the MSRB has filed with the U.S. Securities and Exchange Commission (SEC) a proposal to extend the February 7, 2019 effective date for previously approved amendments to MSRB Rule G-21, on advertising by brokers, dealers or municipal securities dealers, and new MSRB Rule G-40, on advertising by municipal advisors.
January 21, 2019: Systems Holiday Schedule
Happy Martin Luther King Jr. Day! Keep up with federal holidays that affect the operations of MSRB market transparency systems by viewing the Systems Holiday Schedule.
January 14, 2019: Listen and Learn
The Municipal Securities Rulemaking Board (MSRB) is hosting three webinars over the next two weeks. Don't miss these important conversations.
Amended SEC Rule 15c2-12 and EMMA®
January 17, 2019
3:00 PM - 4:30 PM ET
New Price Variance Feature on RTRS Web
January 18, 2019
12:00 PM - 1:00 PM ET
Municipal Advisor Principal Qualification Examination (Series 54)
January 24, 2019
3:00 PM - 4:00 PM ET
January 7, 2019: Join the MSRB in San Francisco!
Join the Municipal Securities Rulemaking Board (MSRB), Financial Industry Regulatory Authority (FINRA) and U.S. Securities and Exchange Commission (SEC) in San Francisco on February 7 for a discussion on regulatory and compliance issues for municipal advisory industry professionals. View the agenda. Register here.
December 17, 2018: Share Your Input on MSRB Rule G-17
As the year comes to a close, you're not the only one reflecting on the past. As part of our retrospective rule review, we are currently seeking comments on draft amendments to 2012 interpretive guidance on the application of MSRB Rule G-17, on conduct of municipal securities and municipal advisory activities. Read the notice.
Comments are due by January 15, 2019.
December 10, 2018: 'Tis the Season
It’s not just the season for holiday cards, it may also be the season for giving your customers and/or clients the annual information required under MSRB Rule G-10 on regulatory protections for customers and municipal advisory clients.
December 3, 2018: Market Transparency is a Collaborative Effort!
The MSRB’s Electronic Municipal Market Access (EMMA®) website provides free public access to objective municipal market information and interactive tools for regulated entities, investors and others. To foster market transparency, entities that submit disclosure documents to EMMA® are required to submit documents in a word-searchable PDF format. Read more.
November 26, 2018: This Cyber Monday, Think Before You Click
Although the MSRB's MuniEdPro® Cyber Monday sale is the real deal, not every email offer is. Cybercriminals often use current topics, like Cyber Monday sales, to improve the likelihood that a recipient will click a link that may be a phishing scam or contain malicious software. Spammers and scammers often use URLs with typos and transposed letters in them that are easy to overlook, such as “MSRBoard.” Stay diligent this holiday season and think before you click.
November 19, 2018: How's Everyone Getting to the Thanksgiving Table?
Are your friends and family flying into town? Are they driving over?
Chances are high that they will see municipal bonds at work, so why not invite EMMA® over too!
Watch this short educational video, EMMA 101: An Overview for Municipal Bond Investors, to learn how to use the EMMA® website to find infrastructure and other projects in your community.
November 12, 2018: Preparing for Continuing Education (CE) Annual Training
Under MSRB Rule G-3 , municipal advisor firms must, at least annually, deliver CE training to their municipal advisor professionals based on the training needs identified by the particular municipal advisor firm.
As a reminder, if your municipal advisor firm has not conducted its CE training, it should be sure to do so by December 31, 2018.
November 5, 2018: Share Your Input on Market Benchmarks
Submit your comments to the MSRB regarding the accessibility, methodology and utility of indices, yield curves and other benchmarks currently available in the municipal market. The MSRB is obtaining information and insight from market participants to better inform its mission to promote market transparency. This request is not a precursor to future rulemaking. Read the request for information and share your input by November 27, 2018.
October 29, 2018: Webinar on New MSRB Rule G-40 and Amended Rule G-21
Join the MSRB on Thursday, November 8, 2018 from 3:00 p.m. to 4:00 p.m. ET for a discussion about key provisions of amended MSRB Rule G-21, on advertising by municipal securities dealers, and new MSRB Rule G-40, on advertising by municipal advisors. Register here.
October 22, 2018: G-37 Trick or Treat!
Don’t be startled, but the MSRB Rule G-37 quarterly disclosure submission deadline is sneaking up on you. The filing deadline is October 31, 2018.
Need a treat to help with the deadline? Read about the new submission process in the MSRB's most recent Compliance Corner newsletter.
October 15, 2018: Temporary Reduction on Fee Rates
Did you know that the MSRB temporarily reduced by about a third, fee rates assessed on underwriting, transaction and technology activity from October to December this year? The reduction under MSRB Rule A-13 is providing short-term, limited relief to dealers. Assessment rates will revert to regular levels effective January 1, 2019. Read the notice for more information.
October 8, 2018: Sophistication May Not Be Timeless
Have your clients indicated that they are Sophisticated Municipal Market Professionals (SMMPs)? From time to time, consider reviewing your SMMP customers’ affirmations related to exercising independent judgement and the ability to access material information. While an annual review is not required, this practice may provide a basis to continue to reasonably conclude that a customer is an SMMP. See MSRB Rule G-48.
October 1, 2018: Understanding the New Securities Industry Essentials (SIE) Exam
As of today, October 1, 2018, the Financial Industry Regulatory Authority’s (FINRA) Securities Industry Essentials (SIE) Examination is a prerequisite for the Municipal Securities Representative Qualification Examination (Series 52). The Series 52 has been revised into a specialized knowledge examination. Read about the amendments to MSRB Rule G-3.
September 24, 2018: PQ Pop Quiz
Question: If there is an active Form MA-I on file at the U.S. Securities and Exchange Commission (SEC) for an individual associated with a municipal advisory firm, what must also be true?
Answer: The individual has passed the MSRB Series 50 Examination .
As of September 13, 2017, an individual is required to pass the MSRB’s Municipal Advisor Professional Qualification Examination prior to engaging in municipal advisory activities on behalf of a municipal advisor. SEC FAQs indicate that firms must amend the Form MA-I of an associated person of a municipal advisor who has not taken and passed the Series 50 exam. Read MSRB Series 50 FAQs.
September 17, 2018: Hone Your Bond Pricing Skills with MuniEdPro®
Take advantage of MuniEdPro®’s limited-time sale! Enroll in “Pricing of Municipal Bonds through the Negotiated Sales Process” and “Pricing of Municipal Bonds through the Competitive Sales Process” and receive a third course, “The Decision to Borrow,” for free. Courses are eligible for CPE and CPLP credits. This offer expires September 30, 2018.
September 10, 2018: Join a Compliance Workshop on Completing Form G-37
It’s election season and a good time to get reacquainted with the Form G-37 submission process. Join MSRB staff this Friday, September 14, 2018 from 12:30 – 1:30 p.m. ET for a compliance workshop on key provisions of MSRB Rule G-37, on political contributions and prohibitions on municipal securities business and municipal advisory business, followed by a walk through of the new Form G-37 submission process. The workshop will follow a question-and-answer format based on questions and suggestions from regulated entities and other stakeholders. Register for the workshop.
September 4, 2018: Back to School and Time to Educate the MSRB
The MSRB recognizes the value of the varied perspectives of municipal market participants and is hoping to receive your insight this September to inform its analysis on the following:
- September 14, 2018: Draft Frequently Asked Questions Regarding Use of Social Media under MSRB Advertising Rules
- September 17, 2018: Draft Amendments to MSRB Rules on Primary Offering Practices
August 27, 2018: It’s Election Season: Remember Your Political Contribution Disclosure Obligations
This election season, don’t forget that MSRB Rule G-37, on political contributions, applies to non-de minimis contributions to “officials of a municipal entity.” This general principle applies even when the contribution is given to a sitting official of a municipal entity seeking election for federal office. For example, a municipal finance professional or municipal advisor professional residing in a state in which a municipal entity official is campaigning for a state-wide federal office may not contribute more than $250 per election to the official’s campaign (assuming that the official has selection influence over the type of business in which the firm engages) without causing a ban on municipal securities business or municipal advisory business with that municipal entity.
Not sure if a specific individual is an official of a municipal entity? Consult the “official of a municipal entity” definition in Rule G-37 or access additional compliance resources related to Rule G-37 under the Access Compliance Resources tab on the MSRB website. Be sure to consult the sub-parts of the “official of a municipal entity” definition as contributions to certain types of municipal entity officials may have consequences for your firm, while contributions to other types may not, depending on the type of business in which your firm engages.
August 20, 2018: Submission Deadline Reminder for 529 Plan and ABLE Program Underwriters
Underwriters of 529 savings plans or ABLE programs, or their agents, must make certain submissions to the MSRB under MSRB Rule G-45. Submissions must be made by August 29, 2018 through MSRB Form G-45, for the reporting period ending June 30, 2018. This is the first submission deadline for ABLE program submissions. Read MSRB Notice 2016-20 for more details.
August 13, 2018: Q&A on Supervisory and Compliance Obligations of MAs
In case you missed it, read answers to questions addressed during the MSRB compliance workshop conducted on May 24, 2018 to enhance understanding of the provisions of MSRB Rule G-44, on supervisory and compliance obligations of municipal advisors.
August 6, 2018: Cybercriminals Can Profit from Your Deal
Stay vigilant! Cybercriminals aren’t interested in municipal bonds for the public interest, they want to steal the closing funds. To that end, a cybercriminal will cast a wide net by sending phishing emails to multiple contacts at organizations involved in the deal, including issuers, municipal advisors, underwriters and bond counsel, hoping for just one person to take the bait and unknowingly give the cybercriminal access to an organization’s systems. Once in, the cybercriminal can view internal calendars and contact information for upcoming deal closings. As a closing nears, the cybercriminal can send a sophisticated and well-timed email from a fake account with new wiring information that will, unless detected, allow the cybercriminal to steal the funds.
July 30, 2018: Share Your Input on Underwriters’ Disclosures to Issuers
Submit your comments on the MSRB’s review of its interpretive guidance addressing the application of the MSRB’s fair-dealing rule to underwriters of municipal securities. The guidance, adopted in 2012, requires underwriters to disclose to issuers, among other information, the nature of their underwriting relationship, conflicts of interest and material aspects of the financing transaction. Read the request for comment and share your input by August 6, 2018.
July 23, 2018: Summertime and Disclosure Submission is Easy
Reminder: The deadline to submit quarterly disclosures about your municipal securities or municipal advisory business and any related political contributions under MSRB Rule G-37 is Tuesday, July 31, 2018. Read the manual on how to submit disclosures to the MSRB using electronic Form G-37.
July 16, 2018: Clarifying Case Studies and Client Lists for MAs
Submit your feedback on the MSRB’s draft answers to frequently asked questions related to municipal advisory client lists and case studies under new MSRB Rule G-40 on advertising by municipal advisors. Help ensure the FAQs include relevant examples to illustrate the potential application of MSRB rules. Read the request for comment and share your input by Friday, July 27, 2018.
July 9, 2018: Understand the Evolution of MSRB Rules
Municipal advisors and municipal securities dealers can easily access rule approval orders and see the amendment history for each MSRB rule. Visit the "Rules and Guidance" section of the homepage and select any MSRB rule. Then click on the “Amendment History” tab to follow the evolution of the rule. Each MSRB rule features links to approval orders for rule amendments for the past 13 years. Here you will also find the rule’s file number, which is helpful for anyone interested in searching the entire rule record.
July 2, 2018: Participate in the Rulemaking Process
Share your input regarding the MSRB’s draft proposal to re-establish a standalone rule governing the handling of transactions in discretionary accounts—those customer accounts in which a dealer is authorized to determine what municipal securities will be purchased or sold. Read the request for comment and submit your response by Monday, July 16, 2018.
June 25, 2018: School’s Out but Don’t Toss Your Books and Records!
School is out and summer is here. It’s time to clean out those lockers and dust off your beach gear, but don’t throw away your books and records! This may be a good time to review your books and records being maintained and preserved under MSRB Rules G-8 and G-9 and look for anything that might need to be updated or revised. It’s also a good idea to check if some items in record have been held for the required period of time.
June 18, 2018: Join a Compliance Workshop on Making Disclosures to Issuers
Register to attend the next virtual compliance workshop! Join MSRB staff this Friday, June 22, 2018 from 12:30 – 1:30 p.m. ET for an in-depth discussion about interpretive guidance issued under MSRB Rule G-17 related to underwriters' fair-dealing and disclosure obligations to issuers. The workshop will follow a question-and-answer format based on questions and suggestions from regulated entities and other stakeholders. Register for the workshop.
June 11, 2018: Suitable for Seniors – What’s in Your Policies and Procedures?
June 15 is World Elder Abuse Awareness Day. Firms may want to consider policies and procedures that address suitability risks specific to senior investors and ensure that customer profile information is up to date. MSRB Rule G-19 requires firms to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on information obtained through reasonable diligence into an individual’s investment profile, including, among other things, the customer’s age, investment time horizon and liquidity needs.
June 5, 2018: New CUSIP Requirements Effective June 14
Amended MSRB Rule G-34 becomes effective on June 14, 2018, and will require, among other things, that municipal advisors apply for a CUSIP number when advising on a competitive transaction in municipal securities. The application must be submitted no later than one business day after dissemination of a notice of sale or other such request for bids. Although the CUSIP number may not be assigned until the final award of the bond purchase agreement, the application requirement helps ensure that trading in the new issue can begin immediately upon award.
May 29, 2018: Priority of Orders
Underwriters must honor their commitments to the issuer with respect to the priority of orders in connection with negotiated primary offerings of municipal securities. MSRB Rule G-11 and related guidance under MSRB Rule G-17 issued in 2010 and 2012, address this obligation, which applies equally to a sole underwriter, a syndicate manager or a syndicate member. It would be inconsistent with the principles of fair dealing for an underwriter, absent the issuer’s consent, to allocate securities in a manner that is inconsistent with the priority provisions that have been agreed to with the issuer, including requirements related to retail orders.
May 21, 2018: Does Your Firm Underwrite 529 Savings Plans or ABLE Programs?
Underwriters of 529 savings plans or ABLE programs, or their agents, must make certain submissions to the MSRB under Rule G-45. When an underwriter first becomes associated with a 529 savings plan or ABLE program, it is important to keep in mind certain obligations under MSRB rules. For example, an underwriter may first become associated when a 529 savings plan’s contract with its prior program manager and its dealer-affiliated entity expires. If this occurs, the underwriter may have to update its registration information on MSRB Form A-12. Further, an underwriter that is the primary distributor for a 529 savings plan or ABLE program must submit to the MSRB, under MSRB Rule G-32, disclosure documents for the relevant 529 savings plan or ABLE program it underwrites.
May 14, 2018: Join a Compliance Workshop for Small Municipal Advisors
Small municipal advisor firms, you don’t want to miss this compliance workshop! Join us on Thursday, May 24, 2018 from 3:00 – 4:00 p.m. ET where staff from the MSRB and the Securities and Exchange Commission will explore considerations for small municipal advisors. The workshop will cover tailoring supervisory procedures to the nature and scope of a firm’s municipal advisory activities, and methods of documenting supervisory controls consistent with regulatory obligations under MSRB Rule G-44. Register for the workshop.
May 7, 2018: Dealers – Help Your Customers Understand the New Mark-up Changes
You may want help educating your retail customers about the mark-up disclosure requirements effective May 14, 2018. What is Mark-up? describes mark-ups and mark-downs for investors and explains how to review mark-up information on a trade confirmation. Understanding Your Confirmation provides an overview of information investors can expect to find on their trade confirmation, including a direct link to more information about the municipal security on the MSRB’s Electronic Municipal Market Access (EMMA®) website. Access these resources today from the “Buying and Selling Bonds” section of the MSRB’s free online Education Center.
April 30, 2018: Have You Seen EMMA Lately?
In the past 10 years, the MSRB’s Electronic Municipal Market Access (EMMA®) website has become a go-to source for material information about virtually every municipal security and for aiding dealers to meet their time-of-trade disclosure obligations under MSRB Rule G-47. Today, EMMA gets a fresh new look, with noticeable improvements to the homepage navigation and a more intuitive presentation of information about individual securities. Explore the new and improved EMMA at emma.msrb.org.
April 23, 2018: Think Before You Click!
Become cyber aware of suspicious emails. Phishing emails with malicious attachments are designed to look like legitimate emails. Clicking a link or opening an attachment from a phishing email is one of the leading root causes of data breaches. Recognizing that a cyber attack may have consequences that extend beyond the compromised firm, the Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations noted that cybersecurity will continue to be a priority in each of its examination programs. Read the SEC’s 2018 Examination Priorities.
April 16, 2018: Municipal Advisor Annual Certification for Your Records Only
On an annual basis, the chief executive officer (or equivalent officer) of each municipal advisor firm must certify in writing that the municipal advisor has in place processes to establish, maintain, review, test and modify written compliance policies and written supervisory procedures designed to achieve compliance with applicable rules. The certification should be maintained in the firm’s records and made available for review upon examination, but does not need to be submitted to the MSRB. See MSRB Rule G-44(d).
April 9, 2018: Make the Best of Best Ex
The Financial Industry Regulatory Authority identified best execution in its 2018 Regulatory and Examination Priorities. Dealers may want to consider, in addition to the annual requirement, undertaking a review of their policies and procedures under MSRB Rule G-18 for determining the best available market for the executions of customers’ transactions. See the MSRB’s interpretive guidance on Rule G-18 for answers to frequently asked questions on best execution.
April 2, 2018: Don’t Be an April Fool, Know the Rule!
March 26, 2018: Avoid Striking Out This Baseball Season
Baseball's opening day is almost here! Before heading to the stadium, consider reviewing your policies and procedures surrounding business entertainment. For example, taking a client to a baseball game is allowed under MSRB Rule G-20 on gifts, gratuities and non-cash compensation if such business entertainment is not so frequent or extensive that it raises questions of propriety. Read the MSRB’s FAQ on gift giving to learn more.
March 19, 2018: Happy First Day of Spring!
Welcome the end of winter with some spring cleaning. At least annually, each municipal advisor firm must conduct a review of its compliance policies and supervisory procedures to ensure they remain reasonably designed to achieve compliance with applicable rules. See MSRB Rule G-44(b).
March 12, 2018: Be Cyber-Confident
The Securities and Exchange Commission (SEC) notes that cybersecurity is a responsibility of every market participant and is making cybersecurity a priority of its National Exam Program. Explore the following resources to learn more:
March 5, 2018: Read Public Feedback on the MSRB’s Compliance Support Activities
We asked, you answered! The MSRB received 15 comment letters during our request for input on how we can most effectively facilitate compliance. Read the letters here. Missed the comment deadline? We welcome your feedback throughout the year. Email us at Compliance@msrb.org.
February 26, 2018: Join a Compliance Workshop for Municipal Advisors
Join the MSRB for the second in a series of virtual compliance workshops on Friday, March 9, 2018 at 12:30 p.m. – 1:30 p.m. ET. This workshop will explore MSRB Rule G-42 provisions related to documenting the municipal advisory relationship and making disclosures. Register for the workshop.
February 20, 2018: Systems Holiday Schedule
Happy President’s Day! Keep up with federal holidays that affect the operations of MSRB market transparency systems by viewing the Systems Holiday Schedule.
February 12, 2018: Subscribe to Compliance Corner
February 5, 2018: Tells Us How We Can Help
Share your feedback on how the MSRB can more effectively facilitate understanding of our rules. Respond to the MSRB’s request for comment on our compliance priorities through February 9, 2018.
January 22, 2018: Municipal Advisors – Review SEC Form MA-I
The MSRB recommends firms review the accuracy of their Forms MA-I on file with the Securities and Exchange Commission (SEC) before January 31, 2018 because professional fees assessed by the MSRB pursuant to MSRB Rule A-11 are calculated based on the number of associated persons qualified as a municipal advisor representative and for whom the municipal advisor firm maintains an active Form MA-I with SEC as of January 31 each year. See MSRB Rule A-11, on assessments for municipal advisor professionals.
January 16, 2018: Remember to Affirm or Update MSRB Form A-12
All MSRB-registered firms must review their information on MSRB Form A-12 and either affirm that the information remains accurate or update the information by January 25, 2018. Read more about the affirmation process.
January 8, 2018: Understanding the Impact of Tax Reform on Your WSPs
Have you started to review what, if any, changes to your written supervisory procedures (WSPs) may be necessary in light of the Tax Cuts and Jobs Act provisions applicable to the municipal securities market?
January 2, 2018: Resolve to Maintain a Culture of Compliance
Happy New Year from the Municipal Securities Rulemaking Board (MSRB). Resolve to maintain a culture of compliance at your firm in 2018. The MSRB can help with weekly compliance tips about important deadlines, resources and considerations for municipal market professionals.
This week’s tip: Access a library of compliance resources to support understanding of regulatory obligations in the MSRB’s online Compliance Center.