MSRB Seeks Approval to Apply Its Gifts Rule to Municipal Advisors

The MSRB submitted for SEC approval from a proposal apply limitations on business-related gift-giving and recordkeeping requirements to municipal advisors (the rule currently applies to municipal securities dealers). The MSRB said that the proposed amendments to MSRB Rule G-20 would (i) extend the relevant existing provisions of the rule to municipal advisors and their associated persons and to gifts given in relation to municipal advisory activities, (ii) consolidate and codify interpretive guidance, and delete prior interpretive guidance that would be codified by proposed amended Rule G-20 and (iii) add a new provision to prohibit seeking or obtaining reimbursement by a regulated entity of certain entertainment expenses from the proceeds of an offering of municipal securities. The MSRB stipulated that the proposed amendments to MSRB Rule G-20 would (i) extend the relevant existing provisions of the rule to municipal advisors and their associated persons and to gifts given in relation to municipal advisory activities, (ii) consolidate and codify interpretive guidance, including that which was published by FINRA and adopted by the MSRB, to ease the compliance burden on regulated entities that must understand and comply with these obligations, and delete prior interpretive guidance that would be codified by proposed amended Rule G-20 and (iii) add a new provision to prohibit seeking or obtaining reimbursement by a regulated entity of certain entertainment expenses from the proceeds of an offering of municipal securities.

The MSRB's proposed amendments to MSRB Rule G-8 would require regulated entities to create and maintain records of (i) any gifts that are subject to the $100 limit in proposed amended Rule G-20(c) and (ii) all agreements for services referred to in the proposed amendments to Rule G-20(f), along with the compensation paid as a result of such agreements.