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Compliance Tip of the Week 2019

Compliance Tip of the Week 2019

(A weekly newsletter providing compliance tips for regulated entities):

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.

Read the guide to printing a Certificate of Current MSRB Registration.


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.

Read the announcement notice.


November 4, 2019: Subscribe to Compliance Corner

Make sure you are signed up to receive the MSRB’s quarterly newsletter on compliance topics, Compliance Corner. Sign up here.


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

MSRB Rule G-37.
Read a summary of ban on business provisions under Rule G-37.


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.

Read MSRB Rule G-42(.01).


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.

See MSRB Rule G-18 Supplementary Material .08.


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.

Read MSRB Rule G-11 (f).


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

New MSRB Rule G-40, on advertising by municipal advisors, and amended MSRB Rule G-21, on advertising by brokers, dealers or municipal securities dealers, became effective on August 23, 2019.

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:


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.


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.

Register here.


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.

Explore the MSRB Rule Book.


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

Did you miss the municipal advisor compliance outreach program in San Francisco? You're in luck—an on-demand version of the webcast is now available . View additional MSRB compliance resources.


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. Learn more about the types of compliance information the MSRB provides.


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 hereLearn more about the Series 54 Exam.


February 25, 2019: Subscribe to Compliance Corner

Make sure you are signed up to receive the MSRB’s quarterly newsletter on compliance topics, Compliance Corner. Look out for the latest edition in early March. Sign up here.


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.

Still have questions? The MSRB and SEC are partnering to host a webinar answering 15c2-12 FAQs on February 27. You can also learn more with the MSRB’s 10 Things to Know document.


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 
Register here.

New Price Variance Feature on RTRS Web 
January 18, 2019 
12:00 PM - 1:00 PM ET 
Register here.

Municipal Advisor Principal Qualification Examination (Series 54) 
January 24, 2019 
3:00 PM - 4:00 PM ET 
Register here.


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.