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Being Regulated: An Introductory
Webinar for Municipal Advisors
Municipal Securities Rulemaking Board
November 21, 2013
Municipal Securities Rulemaking Board 1
Presentation Outline
• Registering with the SEC and MSRB
• Funding for the MSRB
• Participating in the Rulemaking Process
Municipal Securities Rulemaking Board 2
About the MSRB
• A self-regulatory organization created by Congress in 1975
• Promotes a fair and efficient municipal market
• Protects investors and issuers of municipal securities
Municipal Securities Rulemaking Board 3 Municipal Securities Rulemaking Board 3
• Regulating municipal securities dealers and
municipal advisors
• Operating market transparency systems including
the EMMA® website
• Engaging in education, outreach and market
leadership
How the MSRB Fulfills its Mission
Municipal Securities Rulemaking Board 4
Dodd-Frank and Municipal Advisors
• Dodd-Frank expanded the MSRB’s jurisdiction to
include regulation of municipal advisors
• Dodd-Frank defines municipal advisors broadly
– Advise on municipal securities transactions
– Advise on municipal financial products, including
derivatives, guaranteed investment contracts and
investment strategies
– Third-party marketers, placement agents, solicitors,
finders and certain swap advisors
Municipal Securities Rulemaking Board 5
SEC Registration Rule
for Municipal Advisors
• SEC approved final registration rule for municipal
advisors on September 18, 2013
• SEC rule assists potential municipal advisors in
determining whether they are subject to SEC and
MSRB registration requirements and other rules
• MSRB does not interpret or provide legal advice
on SEC rules
Municipal Advisor Registration
Municipal Securities Rulemaking Board 7
Municipal Advisor Registration
• Any municipal advisor that has engaged in municipal
advisory activities after December 31, 2010 is required to
be registered
– Register first with the SEC and then with the MSRB
– SEC temporary registration regime currently in effect
– Transition to permanent SEC registration regime
– Unregistered municipal advisors are in violation of federal law
Municipal Securities Rulemaking Board 8
MSRB Registration Process
• MSRB.org >
• Resources
for Municipal
Advisors >
• Municipal
Advisor
Registration
Municipal Securities Rulemaking Board 9
Primary Email Contact
• Receives email communications from MSRB
• MSRB email communications include, among others:
– Notification of requests for comment on MSRB rule
proposals
– Information on education events
– Updates on SEC approval of rules
Funding the MSRB
Municipal Securities Rulemaking Board 11
MSRB Fees
• One-time initial fee upon registration as municipal
securities dealer or municipal advisor » Current fee: $100
• Annual fee for each year in which the firm remains
registered » Current fee: $500
• Dually registered firms are required to pay only
one initial and one annual fee
Municipal Securities Rulemaking Board 12
Statutory Basis for Fees
• Securities Exchange Act Section 15B (J)
– Initial and annual fees fund less than 5 percent of
MSRB’s activities
Participating in the Rulemaking Process
Municipal Securities Rulemaking Board 14
Importance of Participation in
Rulemaking
• Inform development of rules that efficiently and
effectively:
– Protect state and local governments and other entities
that engage the services of a municipal advisor
– Protect investors
– Promote a fair and efficient market
Municipal Securities Rulemaking Board 15
MSRB Rulemaking Process
Identify an Issue
• Monitor market
• Engage with market stakeholders
• Does this issue warrant rulemaking?
• Economic analysis
• Reasonable alternatives
Rule Proposal
• Publish for comment
• May be preceded by concept proposal
• Comment letters published on MSRB’s website
Discussion of
Comments
• All comment letters reviewed
• Proposal may be amended in response to comments
Proposed Rule Filed
with SEC for Approval
• All points made by commenters must be addressed in filing
SEC Publishes Proposed
Rule in Federal Register
for Comment
• Additional comment period
• MSRB responds to comments received
SEC Approval
Order
• If approved, rule has the force and effect of federal law
• Goes into effect on specific date
Municipal Securities Rulemaking Board 16
Requests for Comment
• Published on MSRB website
as regulatory notices
• Sent by email to primary
contact of each registered
firm
• Sent by email to subscribers
of free MSRB email updates
on regulatory notices
Municipal Securities Rulemaking Board 17
Elements of an RFC
• Background on the regulatory issue
• Summary of rule proposal
– Outcomes proposal seeks to achieve
– Conduct the rule seeks to address
– Proposed new or amended obligations of regulated entities
• Justification for regulatory action
• How proposal supports market fairness, efficiency,
transparency or any of the MSRB’s other objectives
Municipal Securities Rulemaking Board 18
Concept Proposal
• Public input before determining whether to develop a
rule proposal
• No proposed rule language
• General in nature
Municipal Securities Rulemaking Board 19
Responding to Requests for Comment
• Consider addressing specific questions such as:
– Burdens proposal may impose on regulated entities
– Expected benefits to market fairness and efficiency
– How proposal supports MSRB’s mission to protect investors
and issuers
• Provide specific examples:
– Expected costs
– Anticipated benefits
– Data, studies or other supporting information
Municipal Securities Rulemaking Board 20
Submitting Comment Letters
• Public comment period generally 30 days or longer
• Submit comments electronically or by mail
• All comment letters received are published online
Rule Structure and Format
Municipal Securities Rulemaking Board 22
MSRB Rules Categories
• Administrative Rules
• Definitional Rules
• General Rules
Municipal Securities Rulemaking Board 23
Accessing MSRB Rules
msrb.org/Rules-and-Interpretations/MSRB-Rules.aspx
Outreach and Education
Municipal Securities Rulemaking Board 25
Upcoming Events
msrb.org/Home/News-and-Events/Upcoming-Events.aspx
Municipal Securities Rulemaking Board 26
Contact the MSRB
MSRB Online
msrb.org
emma.msrb.org
MSRB Main Phone
703-797-6600
MSRB Support
703-797-6668
Hours of Operation:
7:30 a.m. - 6:30 p.m. ET
MSRB Email Updates
– Subscribe at msrb.org
– EMMA enhancements
– Issuer education
Follow the MSRB on Twitter
@MSRB_News
Being Regulated: An Introductory
Webinar for Municipal Advisors
Municipal Securities Rulemaking Board
November 21, 2013
