MSRB Files with the SEC Rule Changes to Establish Term and Composition of Next Board Class
On January 25, 2011, the MSRB filed with the Securities and Exchange Commission (the “SEC”) amendments to MSRB Rule A-3(i), on membership on the Board, to provide for a three year term for the class of five Board members – two public and three representing MSRB regulated entities – who will commence service on October 1, 2011. The filing amends MSRB transitional Rule A-3(i), adopted on September 30, 2010 to comply with the Board composition requirements of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010) (the “Dodd-Frank Act”). The amendments provide that the next class of Board members will consist of two public members and three members representing any category of regulated entity, including broker-dealers, bank dealers and municipal advisors. Further, the transitional rule is amended to provide that the new class of five members of the Board of Directors will serve a three year term. The MSRB has filed the proposed rule change with the SEC for immediate effectiveness. The text of the proposed rule change may be found below.
On January 25, 2011, the MSRB also filed with the SEC a related, proposed rule change consisting of an Amended and Restated Articles of Incorporation, in order to permit the MSRB to maintain a majority public Board of Directors with 21 members, consistent with the Dodd-Frank Act and MSRB transitional Rule A-3(i). The MSRB has filed the proposed rule change with the SEC for immediate effectiveness. The text of the proposed rule change may be found below.
The MSRB established transitional Rule A-3(i) in order to comply with the Dodd-Frank Act. The transitional rule sets forth a two-year transitional period, commencing on October 1, 2010 and concluding on September 30, 2012. During this transitional period, the MSRB will maintain a Board of Directors of 21 members, including 11 public members and 10 members representing MSRB-regulated entities. The proposed amendments to the Articles of Incorporation provide that the new Board of Director class that will commence service on October 1, 2011, shall consist of five members who will serve three-year terms. On January 18, 2011, the MSRB issued an announcement seeking applicants for these Board positions that will begin service on October 1, 2011.
Questions about the rule amendments should be directed to Lawrence P. Sandor, Senior Associate General Counsel at (703) 797-6600.
January 25, 2011[*]
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TEXT OF RULE AMENDMENTS 
Rule A-3: Membership on the Board
(a) – (h) No change
(i) Transitional Provision for the Board’s Fiscal Years
Commencing October 1, 2010 2011 and 2012.
(i) No change
(ii) Prior to October 1, 2010, the Board shall elect 11 new Board members – eight public representatives and three municipal advisor representatives – with terms expiring on September 30, 2012. Prior to October 1, 2011, the Board shall elect five new Board members – two public representatives and three representatives associated with brokers, dealers, municipal securities dealers or municipal advisors – with terms expiring on September 30, 2014.
(iii) – (v) No change
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TEXT OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
MUNICIPAL SECURITIES RULEMAKING BOARD
1 – 4. No change.
5. Directors, Terms of Office.
(a) No change.
(b) Terms of Office. Directors shall be elected by the Board and shall serve staggered terms, with eleven Directors elected for fiscal year 2011 serving two year terms, five Directors elected for fiscal year
20092012 serving three year terms, and five Directors elected for fiscal year 2010 serving three year terms, as provided by the Corporation's By-Laws.
6 – 9. No change.
The effective date of this Amended and Restated Articles of Incorporation shall be February 1, 2011.
IN WITNESS THEREOF, I have signed my name this ___ day of January, 2011.
MUNICIPAL SECURITIES RULEMAKING BOARD
Lynnette Kelly Hotchkiss
Municipal Securities Rulemaking Board
 File No. SR-MSRB-2011-02. Comments on the amendments should be submitted to the SEC and should reference this file number.
 File No. SR-MSRB-2011-01. Comments on the amendments should be submitted to the SEC and should reference this file number.