MSRB wants advisers to create system to ensure compliance with rules

By Angela McDaniels

Tacoma, Wash., Aug. 22 - The Municipal Securities Rulemaking Board proposed a rule change that would require each municipal adviser to put in place a supervisory system designed to achieve compliance with MSRB rules, according to an MSRB notice.

The minimum requirements of a supervisory system would include:

• Establishing and maintaining written supervisory procedures;

• Designating one or more municipal adviser principal(s) qualified by virtue of experience or training to carry out their supervisory responsibilities;

• Maintaining a written record of the designation of the municipal adviser principals and their responsibilities regarding supervision; and

• Conducting an annual compliance interview or meeting to discuss compliance matters relevant to the municipal advisory activities of associated persons.

The change would require related amendments to the MSRB rules related to books and records and the preservation of records. The proposed amendments to these rules would require records to be kept of:

• The designations of municipal adviser principals and their responsibilities;

• The content of each annual compliance interview or meeting and a list of attendees;

• The written supervisory procedures;

• The results of the annual review by the designated principal(s) of the municipal advisory activities of the firm; and

• Correspondence and any other written and electronic communications of associated persons.

The rule change must be approved by the Securities and Exchange Commission.

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