Being Regulated: An Introductory Webinar for Municipal ... · Being Regulated: An Introductory Webinar for Municipal Advisors Municipal Securities Rulemaking Board November 21, ...

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


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


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


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 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


MSRB Registration Process

• MSRB.org >

• Resources

for Municipal

Advisors >

• Municipal

Advisor

Registration


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


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


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


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


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


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


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


Concept Proposal

• Public input before determining whether to develop a

rule proposal

• No proposed rule language

• General in nature


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


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


MSRB Rules Categories

• Administrative Rules

• Definitional Rules

• General Rules


Accessing MSRB Rules

msrb.org/Rules-and-Interpretations/MSRB-Rules.aspx

http://www.msrb.org/rules-and-interpretations/msrb-rules.aspx







Outreach and Education


Upcoming Events

msrb.org/Home/News-and-Events/Upcoming-Events.aspx

http://www.msrb.org/Home/News-and-Events/Upcoming-Events.aspx
















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

[email protected]

MSRB Email Updates

– Subscribe at msrb.org

– EMMA enhancements

– Issuer education

Follow the MSRB on Twitter

@MSRB_News

http://www.msrb.org/

http://emma.msrb.org/

mailto:[email protected]

http://www.msrb.org/

Being Regulated: An Introductory

Webinar for Municipal Advisors

Municipal Securities Rulemaking Board

November 21, 2013

Being Regulated: An Introductory Webinar for Municipal ... · Being Regulated: An Introductory Webinar for Municipal Advisors Municipal Securities Rulemaking Board November 21, ...

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