In a letter to Congress, MSRB Chair Nathaniel Singer declared that the MSRB has "concluded [the] development of a core regulatory framework for municipal advisors, implementing a regime mandated by Congress under the Dodd-Frank [Act]." He outlined education and transparency initiatives that were designed to implement the MSRB's municipal entity protection mandate.
Mr. Singer detailed foundational rules for municipal advisors, including:
- Rule G-42, establishing core standards of fiduciary conduct for municipal advisors in their relationships with clients;
- Rule G-3, creating professional qualifications for municipal advisors;
- Rule G-44, establishing supervisory and compliance obligations for municipal advisor firms; and
- Rules G-20 and G-37, which create common gift-giving standards and restrictions for all municipal financial professionals and target "pay-to-play" practices in municipal advisory businesses.
Mr. Singer noted that the MSRB also implemented the first professional qualifying examination for municipal advisor representatives, the Municipal Advisor Representative Examination (Series 50), and a separate qualification exam for municipal advisor principals that is currently being developed.
He emphasized that:
The $3.7 trillion municipal securities market is vital to maintaining the nation's infrastructure and is essential to fostering both local and national economic growth. The MSRB has made rapid and transparent progress since the enactment of the Dodd-Frank Act in developing new rules that ensure that all regulated professionals operating in the municipal market conduct their work with integrity, fairness and transparency.
Commentary / Steven Lofchie
From a political standpoint, a big question remains: will municipal issuers and their employees and elected officials be held to the same standards of liability as private entities and their employees?
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