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Contact: Jennifer A. Galloway, Chief Communications Officer
             (703) 797-6600
             jgalloway@msrb.org

MUNICIPAL SECURITIES RULEMAKING BOARD ISSUES STATEMENT
ON REGULATION OF MUNICIPAL ADVISORS

Alexandria, VA – Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which took effect October 1, 2010, broadened the mission of the Municipal Securities Rulemaking Board (MSRB) to include the protection of municipal entities and obligated persons in addition to the protection of investors and the public interest. The Dodd-Frank Act also expanded the MSRB’s regulatory jurisdiction to cover municipal advisors who advise state and local governments and other municipal entities on municipal financial products and municipal securities or solicit business from municipal entities on behalf of others.

In his statement in the Congressional Record, printed December 21, 2010, co-author of the Dodd-Frank Act and Senate Banking Committee Chairman Christopher Dodd reaffirmed the MSRB’s authority to regulate municipal advisors, citing the organization’s “accumulated knowledge and hired specialized expertise to write rules regulating the complex and varied municipal securities market.”

Chairman Dodd’s statement also clarified Congress’ intent with regard to the MSRB’s implementation of congressionally mandated regulation of swap advisors. His statement made clear the Dodd-Frank Act directed “the MSRB to write rules regulating municipal advisors -- “persons and firms that advise municipalities and public pension funds or solicit their business on behalf of others, which includes ‘financial advisors, placement agents, swap advisors’ and others.” Chairman Dodd made clear Congress’ intent that the limited exception under the law for commodity trading advisors registered under the Commodity Exchange Act “does not extend to independent swap advisors or other types of municipal advisors not explicitly exempted, which are meant to be subject to the MSRB rules.” The chairman also said that any rules governing municipal swap advisors ought to be consistent with each other.

The MSRB is committed to ensuring a fair and efficient municipal marketplace by creating rules to protect investors in municipal securities and the municipal entities that issue them. The MSRB is in the process of extending core MSRB rules of conduct to all municipal advisors and those who provide advice to municipal entities and obligated persons, including financial advisors, swap advisors, guaranteed investment contract brokers, and advisors on investment strategies. The MSRB looks forward to working with the Commodity Futures Trading Commission (CFTC) to ensure that MSRB rules for independent swap advisors are consistent with CFTC rules for swap dealers and major swap participants that provide swap advice.

Updated information about MSRB rulemaking for municipal advisors is provided at www.MSRB.org.

The Municipal Securities Rulemaking Board (MSRB) protects and strengthens the municipal bond market, enabling access to capital, economic growth, and societal progress in tens of thousands of communities across the country. The MSRB fulfills this mission by creating trust in our market through informed regulation of dealers and municipal advisors that protects investors, issuers and the public interest; building technology systems that power our market and provide transparency for issuers, institutions, and the investing public; and serving as the steward of market data that empowers better decisions and fuels innovation for the future. The MSRB is a self-regulatory organization governed by a board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.

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