Federal Register: SEC Finds FINRA and MSRB "Pay to Play" Rules to Be Consistent with SEC Objectives

The SEC found that FINRA and the MSRB "Pay to Play" rules impose "substantially equivalent or more stringent restrictions on broker dealers than the SEC Pay to Play Rule imposes on investment advisers".

The MSRB filed an amendment to its rule for political contributions and prohibitions. The amendment clarifies that contributions made by persons who become associated with a dealer and become municipal finance professionals of the dealer, even if such contributions are made prior to August 17, 2016, are subject to the two-year look-back in Rule G-37.

The SEC requested that the U.S. Court of Appeals for the Sixth Circuit dismiss a petition for review of amendments to MSRB Rule G-37, which would extend a rule regarding political contributions to municipal advisors.

The SEC asked for comment on FINRA's proposed rule change to adopt "Pay-to-Play" rules. The SEC Notice was published in the Federal Register.

The SEC approved amendments to the MSRB Rules that will apply the same requirements for municipal dealers and their associated persons to municipal advisors and their associated persons. The amendments will become effective on August 17, 2016.

The SEC solicited comment on the MSRB's proposal to expand the scope of its "pay-to-play" rules to cover the activities of municipal advisors.

FINRA issued a Regulatory Notice requesting comment on a proposal to establish three "pay-to-play" rules.