SIFMA Urges MSRB to Revise Its Rule A-3 Regarding Membership on the Board

SIFMA submitted a comment letter to the MSRB concerning its "Request for Comment on Draft Amendments and Other Issues Related to MSRB Rule A-3 on Membership on the Board."

SIFMA expressed its general support for the proposed amendments to MSRB Rule A-3, which it said would provide greater flexibility "in recruiting individuals to serve in the independent board seat required to be an investor representative." One of the existing tests of independence requires that a board member not be associated with a regulated entity that derives a substantial portion of its revenue from investment activities. Regarding this requirement, SIFMA urged the MSRB to revise the proposed rule to establish a more quantitative test for a "material portion of revenues," which it said should be defined by more than 20 percent of the revenues earned by the consolidated entity.

SIFMA also suggested that the MSRB consider allowing board members to serve for an additional year, with a lifetime cap of four years of board membership; i.e., a board member who had served one full term already could never serve another term again.

See: SIFMA Comment Letter; MSRB Regulatory Notice.