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Contact: Jennifer A. Galloway, Chief Communications Officer
               202-838-1500
               jgalloway@msrb.org

MSRB SEEKS COMMENT ON CLARIFYING EXCEPTIONS TO MINIMUM DENOMINATION RULE

Washington, DC – The Municipal Securities Rulemaking Board (MSRB) is seeking comment on draft rule amendments to support the practical implementation of its rule that generally prohibits dealers from selling bonds below a stated minimum denomination. The amendments seek to clarify exceptions that are consistent with the rule’s original intent to protect investors.

The MSRB’s minimum denomination rule – a provision of MSRB Rule G-15 on customer transactions – is designed to protect investors in cases where municipal securities issuers determine that the complexity, risks, lack of disclosure or other factors make the securities inappropriate for a retail customer. The rule generally prohibits municipal securities dealers from trading such securities with customers below the minimum denomination specified in the official statement; however, the rule contains certain exceptions intended to preserve liquidity for investors.

“The MSRB understands that both firms and enforcement agencies could benefit from greater clarity about circumstances in which sales below the minimum denomination could be permissible,” said MSRB Executive Director Lynnette Kelly. “The proposed additional exceptions to the rule would facilitate regulatory efficiency and enhance liquidity for investors that currently hold positions below the minimum denomination while preserving the spirit of the rule.”

Comments should be submitted no later than May 25, 2016.

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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