Enforcement Agencies
While the MSRB drafts rules and regulations governing the behavior of municipal securities dealers and municipal advisors, it does not have the authority to enforce these rules. MSRB rules for dealers are generally enforced by the SEC and FINRA. But there are other enforcement agencies as well.
The Comptroller of the Currency enforces MSRB rules for national banks and their subsidiaries, departments, or divisions. The FDIC (Federal Deposit Insurance Corporation) enforces MSRB rules for state and local banks that are not part of the Federal Reserve System. The Federal Reserve Board enforces rules applying to state and local banks that are part of the Federal Reserve System. The enforcement of these rules for banks covers bank dealers and municipal dealers that operate within banks. The SEC is the enforcement agency for all other municipal securities dealers and municipal advisors. Look to Chapter 2 for definitions of broker-dealers, bank dealers, municipal securities dealers, and municipal advisors.
The SEC and the other governing regulatory agencies may censure or suspend any dealers for a period up to 12 months or revoke their registration for engaging in prohibited conduct if the regulators determine it is in the public interest. Prohibited conduct includes:
- • Making false or misleading statements to the SEC in an application for registration or any required report.
- • Willfully violating any provision of the Securities Act, Exchange Act, other securities laws or regulations, or any MSRB rules.
- • Willfully aiding or abetting the violation of any provision of these securities statutes, rules, or regulations, or for failing to supervise another person with a view