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MSRB Notice The MSRB issued a notice to remind firms that its interpretive guidance on political contributions and prohibitions on municipal securities business became effective on December 12. The interpretation could result in a PAC formed by or otherwise maintaining a relationship with an affiliate of a broker, dealer, or municipal securities dealer being viewed as "controlled" being treated as a dealer-controlled PAC for purposes of MSRB Rule G-37. Document Number MSRB Notice 2010-57 Date December 17, 2010 Cross Reference (links require a Cabinet subscription) MSRB Notice 2010-45

PRESS/Article Issuers are fighting the proposed requirement that appointed board members of municipal entities register with both the SEC and the MSRB if they advise on the issuance of municipal ­securities. The argument is that registration would have a chilling effect on the ability to find volunteers willing to serve on the boards of bond-issuing authorities. The SEC is seeking comments on the proposal for 45 days after its publication in the Federal Register, possibly this week. Date January 6, 2011 Cross References (links may require a Cabinet subscription) Proposed Rule S7-45-10

MSRB Notice 2011-16 Feb. 22, 2011 The MSRB requested comment on proposed amendments to its Rule G-20 which would apply the rule to municipal advisors. Rule G-20 generally prohibits firms from attempting to induce others to engage in business by means of personal gifts or gratuities. The MSRB proposal would also make related changes to its recordkeeping rules. Cross References MSRB Rules G-8, G-9, G-20

MSRB Notice 2011-18 February 24, 2011 The MSRB published a notice to solicit comment on draft Rule G-43, regarding broker's brokers. The new rule would define a "broker's broker" as a broker, dealer, or municipal securities dealer that "principally effects transactions for other [such entities] or that holds itself out as a broker's broker." The proposed rule would set forth basic duties for broker's brokers that would be similar to the duties in current Rule G-18. Among other things, this would require a broker's broker to make reasonable efforts to obtain a price for the dealer that is fair

FINRA Enforcement Action March 7, 2011 FINRA announced a $500,000 fine against a Texas-based broker-dealer for using paid consultants to solicit municipal securities business and for related violations of the MSRB rules. The action alleges that the broker-dealer paid consultants to promote the firm's ability to work as a financial advisor and municipal underwriter for public entities. In addition, the action alleges violations of MSRB rules relating to the firm's failure to report certain municipal transactions and for failing to have adequate systems and procedures to supervise aspects of its