Enforcement Agencies
Broker-dealers. While the MSRB drafts rules and regulations governing the behavior of municipal broker-dealers and municipal advisors, it does not have the authority to enforce these rules. MSRB rules for broker-dealers are generally enforced by the SEC and FINRA.
Bank dealers. Bank dealers have a different set of regulators. The Comptroller of the Currency enforces MSRB rules for national banks and their subsidiaries, departments, or divisions. The Federal Deposit Insurance Corporation (FDIC) 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.
Other municipal securities dealers. The SEC is the enforcement agency for all other municipal securities dealers.
The SEC and the other governing regulatory agencies may censure or suspend any municipal securities dealers or municipal advisors 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 statutory disqualifying events. 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 broker or dealer
• Have been sub