MRSB files proposed rule change to amend board membership with SEC

By Susanna Moon

Chicago, Nov. 8 - The Municipal Securities Rulemaking Board said it filed a proposed rule change for amendments on board membership with the Securities and Exchange Commission in order to establish a nominating committee that complies with an MSRB rule.

Consistent with Rule A-3(i), the nominating and governance committee would consist of 11 members, with six public members and five industry members. The committee chair would be a public member.

Establishing an 11-member committee will allow for fair representation of regulated entities by reserving five positions for brokers, dealers, municipal securities dealers and municipal advisors, the notice said.

Each constituency identified in the Dodd-Frank Act would be guaranteed a minimum of one seat on the nominating and governance committee, but the level of each constituency would be capped to avoid overweighting of any one over the others.

The board said it believes this formulation is consistent with the Dodd-Frank Act and Rule A-3(i) in that it provides for a majority of public members on the committee and fair representation of regulated companies.

The MSRB said it also believes the committee chair should be a public member, both as a governance best practice and in recognition of the majority of public members on the board, as mandated by the Dodd-Frank Act.

The board also proposes administrative amendments to reflect that members may have staggered terms and that may only hold consecutive terms by invitation due to special circumstances or after having filled a vacancy for a partial term.

Questions about the rule amendments may be directed to Lawrence P. Sandor, senior associate general counsel, at 703 797-6600 or at lsandor@msrb.org.

MSRB transitional Rule A-3(i) was established to comply with the board composition requirements of section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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