Disqualification Rules and Disciplinary Actions
MSRB Rule G-4 disqualifies broker-dealers from conducting municipal securities business if they have been expelled or suspended by a national securities exchange (such as the New York Stock Exchange) or association (such as FINRA). Individuals who have been barred or suspended from being associated with an exchange or association are also prohibited from conducting municipals securities business. Any rule violation or omission that constitutes conduct inconsistent with just and equitable principles of trade is cause for disqualification.
In addition, municipal securities broker-dealers will not meet MSRB qualifications if they have been statutorily disqualified. A firm or individual can be statutorily disqualified as a result of a statutory disqualifying event. A statutory disqualification prevents a dealer or associated person from continuing to work or operate in the securities industry. Statutory disqualification can result for dealers and associated persons who:
• Have been expelled or suspended from membership in any self-regulatory organization, domestic or foreign, or denied trading privileges anywhere
• Have been barred or suspended from associating with a member of any self-regulatory organization
• Have been found by their conduct while associated with a broker-dealer to be a cause of any effective suspension or expulsion of another broker or dealer
• Have associated with any person known to have been expelled or suspended or to have caused the same of another