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MSRB aims to add municipal advisers to rule about business gift giving
By Susanna Moon
Chicago, Sept. 2 – The Municipal Securities Rulemaking Board said it is looking to extend the rules about business gift giving to municipal advisers that are in effect for municipal securities dealers.
The MSRB is seeking approval from the Securities and Exchange Commission for the proposed amendments to MSRB Rule G-20 that “aim to address conflicts of interest that may arise from the giving of gifts or gratuities in connection with municipal advisory activities,” according to a press release.
The proposed amendments also would prohibit both dealers and municipal advisers from seeking reimbursement for entertainment expenses from the proceeds of an offering of municipal securities, the press release noted.
In addition, the MSRB will ask to apply to municipal advisers related books and records requirements.
“Amending the MSRB’s existing gifts rule would ensure common standards for dealers and municipal advisors that all operate in the municipal securities market,” MSRB executive director Lynnette Kelly said in the press release.
“The principles of Rule G-20, together with the MSRB’s rules on fair dealing, help preserve the integrity of the municipal market.”
The Dodd-Frank Wall Street Reform and Consumer Protection Act charged the MSRB with developing a comprehensive regulatory framework for municipal advisers, the press release said.
The MSRB said it has implemented new supervision and compliance requirements for municipal advisers and has proposed a core rule to establish standards of conduct, including fiduciary duties.
The MSRB said it also plans to amend its existing rule on political contributions to address the potential for pay-to-play activities by municipal advisers.
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