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MSRB proposes professional qualification standards for advisers
By Jennifer Chiou
New York, Nov. 19 – The Municipal Securities Rulemaking Board announced that it has filed a proposed rule change with the Securities and Exchange Commission to create baseline standards of professional qualification for municipal advisers.
According to a board release, the Dodd-Frank Act charged the MSRB with developing professional standards as part of a comprehensive regulatory framework for municipal advisers.
The board stated that proposed amendments to the MSRB’s existing Rule G-3 on professional qualifications establish two classifications of municipal adviser professionals: representative and principal.
Firms are required to designate at least one principal to oversee the municipal advisory activities, and the proposed rule change also will require each municipal adviser representative and principal to take and pass a qualification test, the MSRB said.
“The creation of uniform standards of competency will help ensure municipal advisers engaged in advisory work are qualified in their duties,” MSRB executive director Lynnette Kelly said in the release.
“The MSRB’s proposed standards aim to protect the interests of state and local governments and other municipal entities that rely on the services of municipal advisers, as well as the investing public.”
The MSRB is developing the content outline for the test and plans to administer a pilot exam in 2015.
The MSRB noted that it recently received SEC approval to create supervision and compliance obligations for municipal advisers. The MSRB also plans to file a proposal for SEC approval to create core standards of conduct for non-solicitor municipal advisers.
Additionally, the MSRB said it plans to file amendments to extend the MSRB’s pay-to-play rule for dealers to municipal advisers.
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