MSRB Proposes Professional Qualification Standards for Municipal Advisors

The MSRB filed a proposed rule change with the SEC to create baseline standards of professional qualification for municipal advisors.

The proposed rule change would amend MSRB Rule G-3 ("Professional Qualification Requirements") to establish two classifications of municipal advisor professionals – representative and principal – with firms that are required to designate at least one principal to oversee their municipal advisory activities. Additionally, the proposed rule change would require each municipal advisor representative and principal to take and pass a qualification test. The MSRB currently is developing the content outline for the test and plans to administer a pilot exam in 2015.

According to the press release, the MSRB also plans to file a proposal for SEC approval to create core standards of conduct for non-solicitor municipal advisors, as well as amendments to extend the MSRB's pay-to-play rule for dealers to municipal advisors. The MSRB also has proposed extending its existing gifts rule for dealers to include municipal advisors.

See: Text of Proposed Rule; MSRB Press Release.Related news: MSRB Requests Comment on Revisions to Draft Rule on Municipal Advisor Standards of Conduct (Notice 2014-12) (July 23, 2014); MSRB Requests Comments on Extending Pay-to-Play Rule to Municipal Advisors (Notice 2014-15) (August 18, 2014); MSRB Requests Comment on Extending Gifts Rule to Municipal Advisors (October 23, 2014).