Municipal Securities Rulemaking Board (MSRB)
The MSRB was established to promote a fair and efficient municipal securities market and conduct rulemaking for the municipal securities industry. It is a self-regulatory organization that is subject to oversight by the SEC.
The MSRB is composed of 21 members knowledgeable about municipal securities markets, each member serving a term of three years. Eleven members must be public representatives independent of the industry, and they must include at least one institutional or retail investor in municipal securities, one representative of municipal entities, and one knowledgeable member of the public. Of the ten regulated representatives, at least one non-bank broker-dealer, one bank dealer, and one municipal advisor must be in the mix.
MSRB rules fall into five general categories:
- • Professional qualification rules provide operational standards that broker-dealers must meet prior to executing any municipal securities transactions. Professional training and periodic compliance examinations are devised to test the competence of securities industry personnel. The Series 51 Limited Principal Examination falls into this category.
- • Fair practice rules protect investors, municipal entities, and the general public. They are designed to prevent fraudulent acts and practices by broker-dealers and municipal advisors, to promote just and equitable principles of trade, and to foster cooperation and coordination with regulators and other members of the industry.
- • Uniform practice