On August 17, 2016, MSRB Rule G-37, known as the “pay to play” rule, will be extended to apply to municipal advisors.
The rule has two main components. First, it prohibits municipal securities dealers and municipal advisors from engaging in certain types of business with a municipality if they have made political contributions to an official of the municipality. This ban on business lasts two years from the date of the triggering contribution. Second, the rule requires municipal securities dealers and municipal advisors to disclose specific information related to political contributions.
The pay to play rule does carve out an exception for small contributions in elections by municipal finance professionals (MFPs) and municipal advisory professionals (MAPs) who are entitled to vote for an elected official. MFPs and MAPs are allowed to contribute up to $250 per election in which they are entitled to vote.