MSRB Requests Comment on Extending Gifts Rule to Municipal Advisors

The MSRB requested comment on a proposal to establish limitations on gifts given by municipal advisors in their professional capacity. The draft amendments to MSRB Rule G-20, which is the existing gifts rule for dealers, are designed to extend the provisions of the rule to municipal advisors.

Currently, MSRB Rule G-20 establishes a $100 limit for gifts given by dealers to employees of entities engaged in municipal securities activities, subject to certain exceptions. The proposed amendments would hold municipal advisor gift-giving to this same limit. Additionally, as part of the MSRB's broad initiative to streamline its rulebook and facilitate compliance, the MSRB proposes to codify its guidance on the application of the rule - in particular, situations that are currently contained in several MSRB and MSRB-referenced FINRA interpretive materials.

The proposed amendments for municipal advisors would also prohibit dealers and municipal advisors explicitly from receiving reimbursement for certain entertainment expenses from the proceeds of an offering of municipal securities. According to the MSRB, this provision would address a regulatory gap that was highlighted recently by a FINRA enforcement action.

Comments on the proposal are due by December 8, 2014. The MSRB also will hold a webinar on the proposed change on November 13, 2014.

See: MSRB Notice.