Tag: Rule G-3

Series 50 Pilot Exam

The Municipal Advisor Representative Qualification Exam (Series 50) is designed to test the minimum standards required of municipal advisor representatives and municipal advisor principals, two new classifications created when the MSRB revised Rule G-3 to meet the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Continue reading

The Municipal Advisor Representative Qualification Exam (Series 50) is designed to test the minimum standards required of municipal advisor representatives and municipal advisor principals, two new classifications created when the MSRB revised Rule G-3 to meet the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The exam covers basic knowledge of the internal workings and regulations of the municipal advisory system.  The MSRB intends to develop an additional exam for municipal advisor principals, but as of this writing no further information about the principal-level examination has been released.

The Series 50 will initially be rolled out as a pilot exam, and it will be available to anyone who works in a municipal advisory capacity.  The pilot exam is designed to help the MSRB evaluate its bank of test questions and determine an appropriate passing score.

There are a few good reasons to volunteer to take the pilot exam.  If you pass the pilot exam, you are not required to take the permanent exam.  While there is a fee for the pilot exam, if you do not pass, then your fee for the permanent exam will be waived the first time you take it.

Additionally, if you fail the permanent exam, you must wait thirty days before taking it again, and after your third attempt you must wait 180 days before another attempt.  However, the pilot exam will not count against these attempts.

And last but not least, a failure on the Series 50 pilot exam will not go on your CRD record.

Test takers will be allotted half an hour for an exam tutorial and four hours for the exam itself.  The exam will contain 100-125 questions, which will be drawn at random from the Series 50 question database.  You will be notified of your results about three months after taking the exam.

To register for the test, visit Pearson VUE at www.pearsonvue.com/finra or Prometric at www.prometric.com/finra.

Series 50 study materials now available: https://solomonexamprep.com/series50

MSRB Rule Changes: Series 51, 52, and 53

The MSRB has added two new rules effective July 9, 2014. They are Rule G-47 (Time of Trade Disclosure) and Rule G-48 (Transactions with Sophisticated Municipal Market Professionals). MSRB has also amended Rule G-3 (Classification of Principals and Representatives) and Rule G-19 (Suitability), effective September 30, 2014. These four changes coordinate MSRB rules with FINRA rules and remove regulatory redundancies. Continue reading

The MSRB has added two new rules effective July 9, 2014. They are Rule G-47 (Time of Trade Disclosure) and Rule G-48 (Transactions with Sophisticated Municipal Market Professionals). MSRB has also amended Rule G-3 (Classification of Principals and Representatives) and Rule G-19 (Suitability), effective September 30, 2014. These four changes coordinate MSRB rules with FINRA rules and remove regulatory redundancies.

MSRB Rule G-3.  MSRB narrows the definition of Limited Representative – Investment Company and Variable Contracts Products (Series 6). Under FINRA rules, a Series 6 license only allows individuals to be involved in the purchase and sale of funds and variable products. The new MSRB rule will now be consistent with the FINRA rules. Representatives who want to participate in broader activities, such as underwriting, research and investment advice must now take and pass the Municipal Securities Representative Qualification Examination (Series 52).

Amended Rule G-3 also eliminates the designation of Municipal Securities Financial and Operations Principal (FINOP). Since municipal securities dealers that require a FINOP are also FINRA members and since FINRA has similar FINOP requirements, Rule G-3 eliminates the redundancy by removing its separate FINOP designation.

MSRB Rule G-19.  MSRB’s amended suitability rule conforms to FINRA’s own recent changes to its rule. Specifically, the amended rule recognizes three components to a broker-dealer’s suitability obligations. First, a broker-dealer must understand the complexity and risks of a security or investment strategy and consciously decide its suitability for at least some investors. Second, it must reasonably believe that a recommendation is suitable for a particular customer based on the customer’s personal and investment profile. Third, when a broker-dealer has control over a customer account, it must reasonably believe that a series of recommended securities transactions are not excessive.

MSRB Rule G-47.  This new rule requires broker-dealers to disclose to its customers all material information about a transaction and the security at or prior to the time of trade. Information is considered “material” if a reasonable investor is likely to consider it important in making an investment decision. Disclosures must include a complete description of the security and any facts important to assessing the potential risks of the investment.

MSRB Rule G-48.  Rule G-48 exempts broker-dealers from any obligation to disclose material information to customers who are sophisticated municipal market professionals (SMMPSs). It also exempts broker-dealers from informing an SMMP that the price of a secondary market agency transaction is fair and reasonable, as long as the broker-dealer has not recommended the transaction or exercised discretion as to its execution. Finally, Rule G-48 exempts broker-dealers from the obligation to perform a customer-specific suitability analysis for an SMMP.