Comment Deadline Set for MSRB Proposal to Apply Reg. BI to Bank Muni Dealers

The SEC published in the Federal Register an MSRB proposal aimed at aligning Rule G-19 ("Suitability of Recommendations and Transactions") with SEA Rule 15l-1 ("Regulation Best Interest") for certain municipal securities activities of bank dealers. The MSRB also proposed to modify Rule G-48 ("Transactions with Sophisticated Municipal Market Professionals") to provide that the "quantitative suitability" (or anti-churning) aspect of the rule only applies where the relevant broker-dealer has actual or de facto control of the account. Comments on MSRB's proposed amendments are due by May 31, 2022.

As previously covered, the MSRB proposed these changes to eliminate the potential for regulatory arbitrage and establish a "uniform standard of investor protection" in the retail municipal space.

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