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

MSRB SEEKS APPROVAL TO CONSOLIDATE AND HARMONIZE FAIR DEALING OBLIGATIONS FOR MUNICIPAL SECURITIES DEALERS

Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) today asked the Securities and Exchange Commission (SEC) to approve a package of rule proposals to consolidate existing interpretive guidance under MSRB Rule G-17 related to three key fair dealing obligations for municipal securities dealers. The proposals establish or revise stand-alone rules for time-of-trade disclosures to investors, sophisticated municipal market participants and suitability.

“A year ago the MSRB promised to look for ways to make our rules easier to understand and more consistent with other regulators,” said MSRB Chair Jay Goldstone. “We have been doing so in several areas, and the focus on these three key principles of fair dealing will help dealers more easily identify and comply with their obligations.”

The package of rule proposals filed with the SEC includes a proposed Rule G-47 on time-of-trade disclosures that consolidates existing requirements for dealers to disclose material information to customers in connection with the purchase or sale of a municipal security. Another proposal seeks to consolidate municipal securities dealers’ obligations to experienced investors called sophisticated municipal market professionals (SMMPs).

The MSRB is also asking the SEC to approve its proposal to harmonize proposed MSRB Rule G-19 on suitability with that of the Financial Industry Regulatory Authority’s suitability provisions by adding additional considerations for analyzing the suitability of a recommendation to a customer.

All of the proposed rules are presented in a new, simplified format consisting of rule language followed by supplementary material. This format is the same as that used by FINRA and other self-regulatory organizations (SROs). The MSRB intends generally to transition to this structure for all of its rules going forward in order to streamline the rules, harmonize the format with that of other SROs and make the rules easier for dealers and municipal advisors to understand and follow.

The Municipal Securities Rulemaking Board (MSRB) was established by Congress in 1975 with the mission to protect investors, issuers and the public interest and to promote efficiency, competition and capital formation. MSRB is a private, self-regulatory organization governed by an independent board of directors with market knowledge and expertise. MSRB does not receive federal appropriations and is funded primarily through fees paid by regulated entities. MSRB is overseen by Congress and the Securities and Exchange Commission.

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