MSRB to Amend Its Rules to Create Professional Qualification Standards for Municipal Advisors (Notice 2015-04)

The MSRB issued a regulatory notice announcing that it received approval from the SEC to amend Rules G-1, G-2, G-3 and D-13 to establish professional qualification requirements for municipal advisors and to make related technical changes to the rules.

According to the MSRB, the amendments to Rule G-3 establish two new registration classifications for municipal advisors: (i) municipal advisor representatives and (ii) municipal advisor principals. To qualify as either of these, an individual must pass the Series 50 examination, which the MSRB will administer as a pilot test in the fall of 2015.

Additionally, the amendments to Rule G-2 specify that no municipal advisor may engage in municipal advisory activities unless such municipal advisor is qualified in accordance with the MSRB rules. The MSRB also revised the definition of "municipal advisory activities" in Rule D-13 to incorporate certain of the SEC's rules by reference, and amended Rule G-1 to provide that, for purposes of municipal advisory activities, the term "separately identifiable department or division of a bank" would have the same meaning as it does in Exchange Act Rule 15Ba1-1(d)(4).

The rule amendments will become effective on April 27, 2015. The MSRB scheduled a webinar on April 2, 2015 to provide more information on the municipal advisor representative professional qualifications test and related requirements.

See: MSRB Regulatory Notice 2015-04; MSRB Press Release. Related news: SIFMA Submits Comment Letter to SEC Regarding MSRB Professional Qualification Requirements for Municipal Advisors (January 5, 2015); MSRB-Proposed Professional Qualification Standards for Municipal Advisors Published (Fed. Reg.) (December 5, 2014); MSRB Proposes Professional Qualification Standards for Municipal Advisors (November 19, 2014).