Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Granting Approval of a Proposed Rule Change To Amend MSRB Rule G-3 To Create an Exemption for Municipal Advisor Representatives From Requalification by Examination and Remove Waiver Provisions and To Amend MSRB Rule G-8 To Establish Related Books and Records Requirements, 63984-63993 [2023-20077]
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request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern Market Dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
Competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
SECURITIES AND EXCHANGE
COMMISSION
II. Docketed Proceeding(s)
1. Docket No(s).: CP2020–173; Filing
Title: Notice of the United States Postal
Service of Filing Modification Three to
Priority Mail Express International,
Priority Mail International, First-Class
Package International Service &
Commercial ePacket Contract 2
Negotiated Service Agreement; Filing
Acceptance Date: September 11, 2023;
Filing Authority: 39 CFR 3035.105;
Public Representative: Jennaca D.
Upperman; Comments Due: September
19, 2023.
2. Docket No(s).: CP2020–234; Filing
Title: Notice of the United States Postal
Service of Filing Modification Three to
Global Reseller Expedited Package 2
Negotiated Service Agreement; Filing
Acceptance Date: September 11, 2023;
Filing Authority: 39 CFR 3035.105;
Public Representative: Jennaca D.
Upperman; Comments Due: September
19, 2023.
This Notice will be published in the
Federal Register.
Electronic Statements
Erica A. Barker,
Secretary.
[FR Doc. 2023–20109 Filed 9–15–23; 8:45 am]
BILLING CODE 7710–FW–P
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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Sunshine Act Meetings
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, that the Securities and
Exchange Commission Investor
Advisory Committee will hold a public
meeting on Thursday, September 21,
2023. The meeting will begin at 10:00
a.m. (ET) and will be open to the public.
PLACE: The meeting will be conducted
in-person at 100 F Street NE,
Washington, DC 20549 in the
Multipurpose Room, and by remote
means. Members of the public may
attend in-person, or watch the webcast
of the meeting on the Commission’s
website at www.sec.gov.
STATUS: This Sunshine Act notice is
being issued because a majority of the
Commission may attend the meeting.
PUBLIC COMMENT: The public is invited
to submit written statements to the
Committee. Written statements should
be received on or before September 20,
2023.
Written statements may be submitted
by any of the following methods:
TIME AND DATE:
• Use the Commission’s internet
submission form (https://www.sec.gov/
rules/other.shtml); or
• Send an email message to rulescomments@sec.gov. Please include File
No. 265–28 on the subject line; or
Paper Electronic Statements
• Send paper statements to Vanessa
A. Countryman, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File No.
265–28. This file number should be
included on the subject line if email is
used. To help us process and review
your statement more efficiently, please
use only one method.
Statements also will be available for
website viewing and printing in the
Commission’s Public Reference Room,
100 F Street NE, Room 1503,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. All statements
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly.
MATTERS TO BE CONSIDERED: The agenda
for the meeting includes: welcome
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remarks; opening remarks; a panel
discussion regarding exempt offerings
under Regulation D Rule 506; a panel
discussion regarding accredited
investors; a discussion of a
recommendation regarding human
capital management disclosures; a
discussion of a recommendation
regarding open-end fund liquidity risk
management programs and swing
pricing; subcommittee and working
group reports; and a non-public
administrative session.
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: September 14, 2023.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023–20243 Filed 9–14–23; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98353; File No. SR–MSRB–
2023–05]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Order Granting Approval of a
Proposed Rule Change To Amend
MSRB Rule G–3 To Create an
Exemption for Municipal Advisor
Representatives From Requalification
by Examination and Remove Waiver
Provisions and To Amend MSRB Rule
G–8 To Establish Related Books and
Records Requirements
September 12, 2023.
I. Introduction
On July 21, 2023, the Municipal
Securities Rulemaking Board (‘‘MSRB’’
or ‘‘Board’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change to: (1) amend MSRB Rule G–3
(‘‘Rule G–3’’), on professional
qualification requirements, to (i) remove
the waiver provisions with respect to
municipal advisor representative and
municipal advisor principal
qualification requirements; (ii) establish
a new, criteria-based exemption to
permit certain individuals to requalify
as a municipal advisor representative
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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without reexamination; (iii) retitle and
replace Supplementary Material .02, on
extraordinary waivers, with text
specifying the means for electronic
delivery of the requisite notice to the
MSRB regarding satisfaction of the
criteria-based exemption; and (iv) make
technical changes to the rule to update
certain phrases and clauses; and (2)
amend MSRB Rule G–8 (‘‘Rule G–8’’),
on books and records, to establish
accompanying recordkeeping
requirements (collectively, the
‘‘proposed rule change’’).
The MSRB requested that the
proposed rule change be approved with
a compliance date of no more than 30
days following the Commission
approval date.3
The proposed rule change was
published for comment in the Federal
Register on July 31, 2023.4 The
Commission received one comment
letter on the proposed rule change.5 On
August 31, 2023, the MSRB responded
to the comment letter.6 As further
described below, the Commission is
approving the proposed rule change.
II. Description of the Proposed Rule
Change
A. Background
The MSRB explained that it is
charged with setting professional
qualification standards for brokers,
dealers, and municipal securities
dealers (collectively, ‘‘dealers,’’ and
each individually, a ‘‘dealer’’), as well
as municipal advisors.7 Specifically, the
MSRB stated that Section 15B(b)(2)(A)
of the Act 8 authorizes the Board to
prescribe standards of training,
experience, competence, and such other
qualifications as it finds necessary or
appropriate in the public interest or for
the protection of investors and
municipal entities or obligated persons.9
The MSRB also stated that Sections
15B(b)(2)(A)(i) 10 and 15B(b)(2)(A)(iii) 11
of the Act provide that the Board may
appropriately classify associated
persons of dealers and municipal
advisors and require persons in any
such class to pass tests prescribed by the
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3 See
Exchange Act Release No. 97984 (July 25,
2023), 88 FR 49528, 49529 (July 31, 2023) (File No.
SR–MSRB–2023–05) (‘‘Notice’’).
4 See id. at 49528.
5 See Letter from Susan Gaffney, Executive
Director, National Association of Municipal
Advisors, dated August 21, 2023 (‘‘NAMA Letter’’).
6 See Letter to Secretary, Commission, from
Ernesto A. Lanza, Chief Regulatory and Policy
Officer, MSRB, dated August 31, 2023 (‘‘MSRB
Letter’’).
7 Notice, 88 FR at 49529.
8 15 U.S.C. 78o–4(b)(2)(A).
9 Notice, 88 FR at 49529.
10 15 U.S.C. 78o–4(b)(2)(A)(i).
11 15 U.S.C. 78o–4(b)(2)(A)(iii).
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Board.12 The MSRB explained that,
accordingly, it has adopted professional
qualification standards to ensure that
associated persons of dealers and
municipal advisors attain and maintain
specified levels of competence and
knowledge for each qualification
category.13
With respect to associated persons of
municipal advisors, the MSRB noted
that Rule G–3(d)(i)(A) defines the term
‘‘municipal advisor representative’’ to
mean a natural person associated with
a municipal advisor who engages in
municipal advisory activities on the
municipal advisor’s behalf, other than a
person performing only clerical,
administrative, support, or similar
functions.14 The MSRB explained that
Rule G–3(d)(ii)(A) requires all persons
meeting the definition of a municipal
advisor representative to be qualified in
that capacity by taking and passing the
Municipal Advisor Representative
Qualification Examination (‘‘Series 50
examination’’) prior to being qualified
as a municipal advisor representative.15
The MSRB further explained that, under
current Rule G–3(d)(ii)(B), any person
who, after qualifying as a municipal
advisor representative, ceases to be
associated with a municipal advisor
firm for two or more years shall retake
and pass the Series 50 examination,
unless a waiver is granted from the
Board in ‘‘extraordinary cases’’ pursuant
to current Rule G–3(h)(ii).16
In contrast, as MSRB guidance
affirms, Rule G–3(e)(i) defines the term
‘‘municipal advisor principal’’ to mean
a natural person associated with a
municipal advisor who is directly
engaged in the management, direction,
or supervision of the municipal
advisory activities of the municipal
advisor and its associated persons; Rule
G–3(e)(ii) requires all persons meeting
the definition of municipal advisor
principal to be qualified in that position
by, among other things, taking and
passing both the Series 50 examination
and the Municipal Advisor Principal
Qualification Examination (‘‘Series 54
12 Notice,
88 FR at 49529.
13 Id.
14 Id. at 49529 n.3. The MSRB further stated that,
pursuant to Section 15B(e)(4)(A)(i) and (ii) of the
Exchange Act (15 U.S.C. 78o–4(e)(4)(A)(i) and (ii))
and MSRB Rules D–13, G–3(d)(i)(A), and G–
3(d)(ii)(A), municipal advisory activities requiring
qualification as a municipal advisor representative
include providing advice to or on behalf of a
municipal entity or obligated person with respect
to municipal financial products or the issuance of
municipal securities, including advice with respect
to the structure, timing, terms, and other similar
matters concerning such financial products or
issues; or undertaking a solicitation of a municipal
entity or obligated person. Id. at 49530 n.9.
15 Id. at 49529 n.3.
16 Id.
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63985
examination’’); and Rule G–3(e)(iii)
requires every municipal advisor firm to
have at least one municipal advisor
principal.17 In the Notice, the MSRB
stated that, under current Rule G–
3(e)(ii)(B), any person who ceases to be
associated with a municipal advisor for
two or more years after having qualified
as a municipal advisor principal, in
accordance with the rule, must retake
and pass both the Series 50 examination
and Series 54 examination prior to being
qualified as a municipal advisor
principal, unless a waiver is granted
from the Board in ‘‘extraordinary cases’’
pursuant to current Rule G–3(h)(ii).18
The MSRB also stated that Rule G–
3(e)(ii)(C) affords temporary relief to an
individual who is qualified as a
municipal advisor representative, but is
functioning in the capacity of a
municipal advisor principal, for a
period of 120 days after becoming
designated as a municipal advisor
principal, to take and pass the Series 54
examination.19
The MSRB indicated that, as part of
its rule book modernization initiative
and in light of an industry-wide
continuing education (‘‘CE’’)
transformation initiative for brokerdealers,20 it undertook a review of Rule
G–3 to identify opportunities to provide
individuals associated with municipal
advisor firms increased regulatory
flexibility with respect to maintaining
their professional qualifications.21 The
MSRB indicated that it filed the
proposed rule change to that end.22
B. Summary of the Proposed Rule
Change
The MSRB explained that the
proposed rule change would: (1) create
a one-time, criteria-based exemption,
under Rule G–3, for former municipal
advisor representatives to, without
reexamination, requalify in that capacity
17 See MSRB, ‘‘FAQs on Municipal Advisor
Professional Qualification and Examination
Requirements,’’ at Questions 3 & 19 (Dec. 2021),
available at https://www.msrb.org/sites/default/
files/FAQ-MSRB-Series-50-Exam.pdf (‘‘MSRB Series
50 Examination FAQs’’).
18 Notice, 88 FR at 49530.
19 Id. at 49537.
20 The MSRB indicated that, as industry and
market practices evolved in recent years, the MSRB,
in coordination with other self-regulatory
organizations, advanced rulemaking initiatives to
modernize applicable professional qualification and
continuing education program requirements for
dealers (‘‘CE Transformation’’). Id. at 49529 n.7
(citing, as an example, Exchange Act Release No.
95684 (Sept. 7, 2022), 87 FR 56137 (Sept. 13, 2022)
(Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change to Amend MSRB Rule G–3
Continuing Education Program Requirements to
Harmonize with Industry-Wide Transformation)
(File No. SR–MSRB–2022–07)).
21 Id. at 49529.
22 Id.
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no later than one year after their twoyear lapse in qualification; (2) remove
language from Rule G–3 that currently
permits the Board, in extraordinary
cases, to waive the reexamination
requirements for municipal advisor
representatives and municipal advisor
principals; (3) make certain clarifying
amendments to Rule G–3 to address an
interpretive question pertaining to a
lapse in qualification for an individual
associated with a dually registered firm
that is both a dealer and a municipal
advisor; (4) retitle and replace the
current text of Supplementary Material
.02 of Rule G–3 with text specifying the
means for electronic delivery of the
requisite notice to the MSRB regarding
satisfaction of the criteria-based
exemption; (5) make technical
amendments to Rule G–3 to update
certain phrases, clauses, and referenced
provisions to, among other things,
improve the overall readability of the
rule; and (6) amend Rule G–8 to require
municipal advisors to make and keep
certain books and records relating to the
exemption to be created under the
proposed rule change, as prescribed
under Rule G–3(h)(ii)(I).23
The MSRB explained that the
proposed rule change is intended to
offer flexibility, provide additional
certainty, and eliminate the
extraordinary nature of the waiver
process for individuals and municipal
advisor firms without reducing
protection for municipal entity and
obligated person clients who expect that
municipal advisor professionals have
satisfied professional qualification
standards.24
The MSRB further explained that the
proposed rule change is specific to the
professional qualification obligations of
municipal advisors, including
associated persons thereof, under Rule
G–3, and does not modify any
requirements to firms registered solely
as dealers, or associated persons
thereof.25
A more detailed description of the
proposed rule change follows.
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i. Proposed Amendments to Rule G–
3(d)(ii)(B)
The MSRB noted that currently,
pursuant to Rule G–3(d)(ii)(B), on
qualification requirements for
municipal advisor representatives, any
person who ceases to be associated with
a municipal advisor 26 for two or more
23 Id.
24 Id.
at 49535.
at 49529.
26 For purposes of this Order, when the term
‘‘municipal advisor’’ is used it refers only to the
firm and not associated persons of the firm. See also
25 Id.
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years after having qualified as a
municipal advisor representative, in
accordance with the rule, must take and
pass the Series 50 examination prior to
being qualified as a municipal advisor
representative, unless a waiver is
granted.27 The MSRB stated that its
proposed amendments to this provision
would provide that any person who
ceases to be associated with ‘‘or engaged
in municipal advisory activities on
behalf of’’ a municipal advisor for two
or more years after having qualified by
examination as a municipal advisor
representative (i.e., experiences a ‘‘lapse
in qualification’’) must take and pass the
Series 50 examination unless exempt
from such requirement pursuant to Rule
G–3(h)(ii), as amended by the proposed
rule change.28
The proposed amendments to Rule G–
3(d)(ii)(B) would add the new language
‘‘or engaged in municipal advisory
activities on behalf of,’’ which the
MSRB stated is intended to provide
clarity on the requirement for an
individual associated with a firm that is
dually registered as a dealer and
municipal advisor.29 The MSRB
explained that if an individual
associated with such firm ceases to be
engaged in activity requiring
qualification as a municipal advisor
representative and instead engages only
in municipal securities business on
behalf of the firm for a period of two or
more years, then that individual’s
municipal advisor representative
qualification would have lapsed,
notwithstanding the fact that such
person remains associated with a firm
that is also a registered municipal
advisor.30 The MSRB noted that the
proposed amendments to Rule G–
3(d)(ii)(B) also would delete the
mention of a waiver (i.e., the clause ‘‘a
waiver is granted’’) because, subsequent
to the proposed rule change, such
persons would need to qualify by
examination as municipal advisor
id. at 49529 n.8 (same, for purposes of the Notice
and Exhibit 5 thereto).
27 Id. at 49529.
28 Id. at 49529–30.
29 Id. at 49530.
30 Id. The MSRB stated that, under Exchange Act
Rule 15Ba1–2 (17 CFR 240.15Ba1–2), SEC Form
MA–I: Information Regarding Natural Persons Who
Engage in Municipal Advisory Activities (‘‘SEC
Form MA–I’’ or ‘‘Form MA–I’’) is filed with the
Commission to indicate natural persons who are
associated with the municipal advisor and engaged
in municipal advisory activities on its behalf. Id. at
49530 n.10. The MSRB further stated that firms are
required to promptly amend SEC Form MA–I,
pursuant to Exchange Act Rule 15Ba1–5 (17 CFR
240.15Ba1–5), in such cases where an individual
ceases to engage in municipal advisory activities on
behalf of a firm. Id.
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Sfmt 4703
representatives, unless obtaining the
one-time criteria-based exemption.31
ii. Proposed Amendments to Rule G–
3(e)(ii)(A) and (B)
The MSRB noted that currently,
pursuant to Rule G–3(e)(ii)(A), as a prerequisite to becoming qualified as a
municipal advisor principal a person
must take and pass the Series 50
examination.32 The MSRB stated that its
proposed amendments to this provision
would provide that taking and passing
the Series 50 examination is the prerequisite to becoming qualified as a
municipal advisor principal ‘‘unless
exempt from taking the Municipal
Advisor Representative Qualification
Examination pursuant to paragraph
(h)(ii) of this rule,’’ 33 which the MSRB
stated is intended to allow for
individuals previously qualified as
municipal advisor principals to use the
criteria-based exemption to obtain
requalification with the Series 50
examination and explicitly provide for
its application to such individuals.34
The MSRB explained that,
notwithstanding the availability of the
criteria-based exemption from
requalification with the Series 50
examination, such municipal advisor
principals would still need to take and
pass the Series 54 examination.35
In addition, the MSRB noted that
currently, pursuant to Rule G–3(e)(ii)(B),
any person who ceases to be associated
with a municipal advisor for two or
more years after having qualified as a
municipal advisor principal, in
accordance with the rule, must take and
pass the Series 50 examination and the
Series 54 examination prior to being
qualified as a municipal advisor
principal, unless a waiver is granted
under current subparagraph (h)(ii) of
this rule.36 The MSRB stated that its
proposed amendments to this provision
would provide that any person who
ceases to be associated with ‘‘or engaged
in municipal advisory activities on
behalf of’’ a municipal advisor for two
or more years after having qualified by
examination as a municipal advisor
principal must take and pass the Series
50 examination unless exempt from
such requirement pursuant to Rule G–
3(h)(ii), as amended by the proposed
rule change.37
The proposed amendments to Rule G–
3(e)(ii)(B) would add the new language
31 Id.
at 49530.
32 Id.
33 Id.
34 Id.
35 Id.
36 Id.
37 Id.
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‘‘or engaged in municipal advisory
activities on behalf of,’’ which the
MSRB stated is intended to provide
clarity on the requirement for an
individual associated with a firm that is
dually registered as a dealer and
municipal advisor.38 For example, the
MSRB explained that if an individual
associated with such firm ceases to be
engaged in activity requiring
qualification as a municipal advisor
principal and instead engages only in
municipal securities business on behalf
of the firm for a period of two or more
years, then that individual’s municipal
advisor representative and municipal
advisor principal qualifications would
have lapsed, notwithstanding the fact
that such person remains associated
with a firm that is also a registered
municipal advisor.39 The proposed
amendments to Rule G–3(e)(ii)(B) would
also delete the mention of a waiver (i.e.,
the clause ‘‘a waiver is granted’’), which
the MSRB stated is intended to specify
that such persons would need to qualify
by examination as municipal advisor
principals.40
iii. Proposed Removal of Extraordinary
Waiver Provisions Under Rule G–3(h)(ii)
The MSRB stated that its proposed
amendments to Rule G–3(h)(ii) would
remove references, in their entirety, to
the ability to obtain a waiver in
extraordinary cases for a former
municipal advisor representative or
municipal advisor principal and would
replace such language with a criteriabased exemption for former municipal
advisor representatives.41 The MSRB
indicated it believes that this standard
set forth within the four corners of the
rule would provide greater flexibility to
municipal advisor firms and their
associated persons while
simultaneously providing greater
certainty for firms and such individuals
who may wish to seek an exemption
from the obligation to requalify as a
municipal advisor representative by
reexamination.42 The MSRB also
indicated it believes, at this time, that
the objective nature of the criteria-based
exemption is preferable to the subjective
nature of the waiver provisions in
current Rule G–3(h)(ii).43 Additionally,
the MSRB stated that the removal of the
ability to seek and obtain a waiver for
municipal advisor principals furthers
municipal entity and obligated person
protection by ensuring, through
38 Id.
39 Id.
40 Id.
41 Id.
at 49531.
42 Id.
43 Id.
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requalification by reexamination, that
individuals have demonstrated
knowledge and skills necessary to
discharge the responsibilities of a
municipal advisor principal, including
the vested authority for the supervision,
oversight, and management of firms’
municipal advisory activities and that of
its associated persons.44
iv. Proposed Rule Change To Adopt
Rule G–3(h)(ii)(A)–(I) To Establish
Conditions for Obtaining the CriteriaBased Exemption
The MSRB stated that the proposed
rule change would amend Rule G–
3(h)(ii) to prescribe that an individual
shall be exempt from the requirements
of subparagraph (d)(ii)(B) if the
specified conditions under proposed
Rule G–3(h)(ii)(A)–(I) are met.45
Specifically, the MSRB stated that the
proposed amendments to adopt Rule G–
3(h)(ii)(A)–(I) would establish nine
specified criteria-based conditions that
must be met in order for an individual
(and the municipal advisor firm with
which such individual is associated 46
44 Id. The MSRB indicated it has previously stated
that the Series 54 examination is intended to ensure
that a person seeking to qualify as a municipal
advisor principal satisfies a specified level of
competency and knowledge by measuring a
candidate’s ability to apply the applicable federal
securities laws, including MSRB rules, to the
municipal advisory activities of a municipal
advisor. Id. at 49531 n.11 (citing Exchange Act
Release No. 84341 (Oct. 2, 2018), 83 FR 50708,
50710 (Oct. 9, 2018) (Notice of Filing of a Proposed
Rule Change To Amend MSRB Rule G–3, on
Professional Qualification Requirements, To
Require Municipal Advisor Principals To Become
Appropriately Qualified by Passing the Municipal
Advisor Principal Qualification Examination) (File
No. SR–MSRB–2018–07)). In contrast, the MSRB
indicated it has previously stated that the Series 50
examination ensures a minimum level of
knowledge of the job responsibilities and regulatory
requirements by passing the general qualification
examination. Id. (citing Exchange Act Release No.
73708 (Dec. 1, 2014), 79 FR 72225, 72227 (Dec. 5,
2014) (Notice of Filing of a Proposed Rule Change
Consisting of Proposed Amendments to MSRB
Rules G–1, on Separately Identifiable Department or
Division of a Bank; G–2, on Standards of
Professional Qualification; G–3, on Professional
Qualification Requirements; and D–13, on
Municipal Advisory Activities) (File No. SR–
MSRB–2014–08)).
45 Id. at 49531.
46 The MSRB noted that an individual who has
associated with a municipal advisor firm would be
prohibited from engaging in any municipal advisory
activities, as defined under Rule D–13 and
described in Section 15B(e)(4)(A)(i) and (ii) of the
Act (15 U.S.C. 78o–4(e)(4)(A)(i) and (ii)) and the
rules and regulations promulgated thereunder (i.e.,
activities involving the provision of advice to or on
behalf of a municipal entity or obligated person
with respect to municipal financial products or the
issuance of municipal securities or undertaking a
solicitation of a municipal entity or obligated
person), until such time that the individual has
satisfied the conditions set forth under the
proposed rule change. Id. at 49531 n.12.
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or seeks to be associated) to take
advantage of the exemption.47
The MSRB described the criteriabased conditions that would be required
to be met in order to qualify for the
exemption as follows: 48
(1) The individual was previously
qualified as a municipal advisor
representative by taking and passing the
Series 50 examination.
(2) The individual maintained the
municipal advisor representative
qualification for a period of at least
three consecutive years while associated
with and engaging in municipal
advisory activities on behalf of one or
more municipal advisor firm(s).
(3) Such qualification lapsed pursuant
to proposed amended Rule G–3(d)(ii)(B)
and no more than one year has passed
since such lapse in qualification.
(4) The individual has not engaged in
activities requiring qualification as a
municipal advisor representative 49
during the individual’s lapse in
qualification.
(5) The individual is not subject to
any events or proceedings that resulted
in a regulatory action disclosure report,
civil judicial action disclosure report,
customer complaint/arbitration/civil
litigation disclosure report, criminal
action disclosure report, or termination
disclosure report on SEC Form MA–I.50
(6) The individual has not previously
obtained the exemption from
requalification by examination
described in the proposed amended
Rule G–3(h)(ii).51
(7) Prior to engaging in municipal
advisory activities on behalf of the
municipal advisor firm with which the
individual is to associate (or
reassociate), as evidenced by the filing
of SEC Form MA–I, the municipal
advisor firm provided, and the
individual completed, CE covering, at
minimum, the subject areas of: (i) the
principles of fair dealing; (ii) the
applicable regulatory obligations under
MSRB Rules G–20, on gifts and
gratuities, G–37, on political
contributions and prohibitions on
municipal securities business and
47 Id.
at 49531.
at 49531–32.
49 See id. at 49531 n.13 (citing Rule G–3(d)(i)(A)).
50 The MSRB explained that it included these
types of disclosures in the proposed exemption
criteria, as opposed to other types of disclosures
required by SEC Form MA–I, because these relate
most closely to violations of municipal advisorrelated or investment-related regulations, rules, or
industry standards of conduct. Id. at 49531 n.14.
51 The MSRB noted that, should an individual’s
municipal advisor representative qualification lapse
again after such person obtains the criteria-based
exemption under the proposed rule change, that
individual would be required to requalify by taking
and passing the Series 50 examination. Id. at 49531
n.15.
48 Id.
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municipal advisory business, G–40, on
advertising by municipal advisors, and
G–8, on books and records to be made
and maintained; (iii) for non-solicitor
municipal advisors, the core conduct
standards under MSRB Rule G–42,
including the fiduciary duty obligations
owed to municipal entity clients, or for
solicitor municipal advisors, the core
obligations of MSRB Rule G–46; and (iv)
any changes to applicable securities
laws and regulations, including
applicable MSRB rules, that were
adopted since the individual was last
associated with a municipal advisor.
(8) Prior to engaging in municipal
advisory activities on behalf of the
municipal advisor firm with which the
individual is to associate (or
reassociate), as evidenced by the filing
of an SEC Form MA–I, the municipal
advisor firm provided, and the
individual reviewed, the compliance
policies and procedures of the
municipal advisor firm.
(9) Upon satisfaction of the conditions
set forth in the paragraphs above, the
municipal advisor firm filed a
completed SEC Form MA–I with the
Commission with respect to such
individual. Within 30 days of the
acceptance 52 of a completed SEC Form
MA–I identifying such individual as
engaging in municipal advisory
activities on behalf of the municipal
advisor firm, the municipal advisor firm
provided the notification (‘‘affirmation
notification’’) electronically to the
MSRB that the individual met the
criteria in order to be exempt from the
requalification requirements of Rule G–
3(d)(ii)(B) following a lapse in
qualification.
The MSRB stated that the affirmation
notification would be required to be on
firm letterhead and include the
following information: 53
1. The municipal advisor firm’s MSRB
ID number;
2. The first and last name of the
individual seeking to obtain the
exemption;
3. The individual’s Financial Industry
Regulatory Authority (‘‘FINRA’’) Central
Registration Depository (‘‘CRD’’)
number if applicable;
4. The start date of the individual’s
association (or reassociation) with the
municipal advisor firm;
5. An affirmative statement that the
municipal advisor has undertaken a
diligent effort to reasonably conclude
that the individual met the applicable
52 The
MSRB noted that the Commission
currently does not make the form acceptance date
publicly available, but this information is made
available to the form submitter as part of the form
filing process. Id. at 49532 n.16.
53 Id. at 49532.
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requirements set forth in proposed
amended Rule G–3(h)(ii);
6. An affirmative statement attesting
that the municipal advisor firm
provided both the requisite CE and the
municipal advisor’s compliance policies
and procedures to the individual for
review along with the date the
individual completed the CE and review
of the municipal advisor’s compliance
policies and procedures provided by the
municipal advisor firm;
7. The date the municipal advisor
firm filed SEC Form MA–I (and the date
of its acceptance) on behalf of the
individual as required under proposed
amended Rule G–3(h)(ii)(I); and
8. A signature by the individual
seeking to obtain the criteria-based
exemption and a signature by a
municipal advisor principal of the
municipal advisor firm each attesting
the accuracy of certain content set forth
in the affirmation notification.
Specifically, the individual must sign
the affirmation notification attesting that
the conditions outlined in proposed
amended Rule G–3(h)(ii)(A) through (H)
were met. And, a municipal advisor
principal must sign the affirmation
notification, on behalf of the municipal
advisor firm, attesting that, based on the
exercise of reasonable diligence, the
conditions outlined in proposed
amended Rule G–3(h)(ii)(A) through (I)
were met.54
According to the MSRB, the proposed
conditions were designed to ensure that
individuals seeking to obtain the
exemption (i.e., requalification without
reexamination) have obtained and
maintained the baseline level of
knowledge and experience, and have
exhibited conduct aligned with being a
fiduciary, which the MSRB indicated is
in furtherance of municipal entity and
obligated person protection.55 The
MSRB indicated it believes that the
criteria outlined above balance the goal
of providing reasonable regulatory
flexibility with the demands of the
fiduciary standard applicable to
municipal advisors.56 For example, the
MSRB explained that the requirement
that individuals be duly qualified as a
municipal advisor representative for at
least three consecutive years prior to, for
example, seeking other career
opportunities in related capacities (e.g.,
54 The
MSRB noted that the respective individual
and firm signature requirements are intended to
differentiate and confirm the distinct
responsibilities and obligations of the individual
seeking to obtain the criteria-based exemption and
those of the municipal advisor firm itself, as
evidenced by the signature of a municipal advisor
principal on behalf of the municipal advisor firm.
Id. at 49532 n.17.
55 Id. at 49532.
56 Id.
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working for a dealer or municipal
entity) or stepping away for family
obligations ensures that a reasonable
level of professional experience has
been established before an individual
can obtain the exemption.57 In contrast,
the MSRB noted that this period is not
so long as to hinder the ability, at a
given point, for an individual to, for
example, temporarily engage in other
meaningful roles within the municipal
securities industry or to step away from
their position due to family
obligations.58
According to the MSRB, these
conditions were also designed to
enhance an individual’s familiarity with
regulatory and business developments
that occurred while they were not
associated with a municipal advisor
firm, before reengaging in municipal
advisory activities, but not be so unduly
burdensome as to hinder
reassociation.59 The MSRB explained
that the proposed requirement to
provide the MSRB with notice of
individuals who have obtained the
exemption (i.e., by submitting the
affirmation notification to the MSRB) is
designed to facilitate transparency and
provide an audit trail regarding an
individual’s status as a municipal
advisor representative.60 The MSRB
indicated that it will use the affirmation
notification, as described in the
proposed amended Rule G–3(h)(ii)(I), to
help identify qualified municipal
advisor representatives and keep the list
of such representatives updated on its
website.61 Additionally, the MSRB
stated that the conditions pertaining to
requisite filings with the SEC would
also provide an audit trail and permit
the entities charged with examination
and enforcement authority to confirm
compliance with relevant obligations.62
v. Proposed Amendments to
Supplementary Material .02, on
Waivers, Under Rule G–3
Relatedly, the MSRB stated that the
proposed rule change would amend
Supplementary Material .02, on waivers,
under Rule G–3 to retitle the paragraph
header from ‘‘Waivers’’ to ‘‘Affirmation
Notification.’’ 63 The MSRB stated that
the proposed rule change would also
delete the entirety of that
57 Id.
58 Id.
59 Id.
60 Id.
61 The MSRB noted that it currently publishes a
list of registered municipal advisors and qualified
municipal advisor professionals at https://
www.msrb.org/Municipal-Advisors. Id. at 49532
n.18.
62 Id. at 49532.
63 Id. at 49531, 49532.
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supplementary material, which
currently pertains to extraordinary
waivers, and replace it with text that
specifies how the firm would be
required to submit to the MSRB the
affirmation notification asserting that
the criteria-based exemption has been
met.64 Specifically, the MSRB stated
that the affirmation notification would
be required to be sent to Compliance@
msrb.org.65
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vi. Proposed Amendments to Rule G–8,
on Books and Records To Be Made and
Maintained
The MSRB stated that its proposed
amendments to Rule G–8, on books and
records, would add recordkeeping
obligations designed to help facilitate
and document compliance with its
proposed amendments to Rule G–3.66
Specifically, the MSRB stated that the
proposed rule change would add new
paragraph (C) to subsection (h)(vii) of
Rule G–8 requiring municipal advisor
firms to make and maintain certain
records to evidence compliance with the
requirements of Rule G–3(h)(ii)(A)–(I).67
The MSRB described these records as
follows: 68
• A record evidencing that the
individual seeking to obtain the
exemption was previously duly
qualified as a municipal advisor
representative (e.g., a copy of the printout of the individual examination
results 69 or examination result
certification letter provided by the
MSRB);
• Documentation supporting the
municipal advisor firm’s exercise of
reasonable diligence in determining that
the conditions outlined in proposed
amended Rule G–3(h)(ii)(A) through (I)
were met in making the required
affirmation notification in accordance
with proposed amended Rule G–
3(h)(ii)(I)(8) (e.g., copies of relevant SEC
form filings reviewed; records related to
CE provided and completed;
compliance policies and procedures
provided and reviewed; and attestations
or other documentation to support such
a determination);
• A copy of the affirmation
notification sent to the MSRB as
required by proposed amended Rule G–
3(h)(ii)(I); and
• A record evidencing that the
affirmation notification was made in the
64 Id.
at 49531, 49532.
65 Id. at 49532.
66 Id. at 49533.
67 Id.
68 Id.
69 The MSRB stated that Question 11 of the MSRB
Series 50 Examination FAQs reminds individuals
that the test center will provide a print-out of their
examination results. Id. at 49533 n.23.
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prescribed manner and within the
required period of time as described in
proposed amended Rule G–3(h)(ii)(I)
(e.g., automatic email delivery receipt).
The MSRB noted that the proposed
rule change outlining the specific
recordkeeping requirements supports
the municipal advisor principal’s
supervision, review, and sign-off that
the conditions for the exemption have
been met, which supports regulatory
compliance.70
vii. Proposed Technical Amendments to
Rule G–3 and Rule G–8
Finally, the MSRB stated that the
proposed rule change would make the
following technical amendments to Rule
G–3 and Rule G–8 (the ‘‘technical
amendments’’):
• With respect to Rule G–3(d)(ii)(B),
the MSRB stated that the proposed rule
change would: (i) add the phrase ‘‘lapse
in qualification’’ to define for purposes
of the rule when a person ceases to be
associated with a municipal advisor for
two or more years at any time after
having qualified as a municipal advisor
representative; (ii) replace the phrase ‘‘a
waiver is granted’’ with ‘‘exempt’’ to
make clear that the waiver provision for
extraordinary cases is being deleted and
replaced with a criteria-based
exemption; (iii) change the word ‘‘shall’’
to ‘‘must,’’ which is intended to add
clarity without changing the meaning of
the term; and (iv) replace the reference
to ‘‘subparagraph’’ (h)(ii) with
‘‘paragraph’’ (h)(ii) to create better
uniformity across Rule G–3; 71
• With respect to Rules G–
3(e)(ii)(A)(1) and G–3(e)(ii)(B), the
MSRB stated that the proposed rule
change would: (i) to clarify the
qualification requirements specific to
municipal advisor principals, as
prescribed under Rule G–3(e)(ii)(A)(1),
add the phrase ‘‘unless exempt from
taking the Municipal Advisor
Representative Qualification
Examination pursuant to paragraph
(h)(ii) of this rule’’ to make clear
municipal advisor principals have to
requalify by reexamination unless such
individuals have obtained the one-time
exemption; (ii) delete the phrase ‘‘a
waiver is granted’’ and replace with the
clause ‘‘exempt from taking the
Municipal Advisor Representative
Qualification Examination’’ to make
clear that the waiver provision for
extraordinary cases is being deleted and
replaced with an exemption-based
criteria for municipal advisor principals
to use for requalification without
reexamination for the Series 50
70 Id.
71 Id.
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at 49530.
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examination; (iii) replace the word
‘‘shall’’ with ‘‘must’’ to promote clarity;
and (iv) replace the reference to
‘‘subparagraph’’ (h)(ii) with ‘‘paragraph’’
(h)(ii) to create better uniformity across
Rule G–3; 72
• With respect to Rule G–3(h), the
MSRB stated that the proposed rule
change would retitle the header from
‘‘Waiver of Qualification Requirements’’
to ‘‘Waiver of and Exemption from
Qualification Requirements’’ to promote
clarity; 73
• With respect to Rule G–3(h)(ii), the
MSRB stated that the proposed rule
change would replace the introductory
sentence ‘‘The requirements of
paragraph (d)(ii)(A) and (e)(ii)(A) may
be waived by the Board in extraordinary
cases for a municipal advisor
representative or municipal advisor
principal’’ with the new introductory
sentence ‘‘An individual shall be
exempt from the requirements of
subparagraph (d)(ii)(B) if all of the
following conditions are met’’ for
purposes of setting forth the enumerated
criteria outlined under the provision; 74
and
• With respect to Rule G–8(h)(vii), the
MSRB stated that the proposed rule
change would: (i) retitle the paragraph
header from ‘‘Records Concerning
Compliance with Continuing Education
Requirements’’ to ‘‘Records Concerning
Compliance with Professional
Qualification Requirements of Rule G–
3’’ to clarify the broader recordkeeping
obligations and documentation
requirements proposed in draft
amendments to Rule G–8(h)(vii) that are
accompanying proposed rule changes to
Rule G–3(h)(ii); and (ii) reposition the
word ‘‘and’’ and make other minor
grammatical changes to the items in the
series to aid readability.75
III. Summary of Comments Received to
the Proposed Rule Change
The Commission received one
comment letter 76 on the proposed rule
change, as well as a response 77 from the
MSRB to the comment letter. The
commenter expressed support for the
proposed rule change.78 Among other
things, the commenter stated that ‘‘the
requirements specified in the
amendments are reasonable and helpful
for MAs to navigate and implement.’’ 79
72 Id.
73 Id.
at 49530–31.
at 49532.
74 Id.
75 Id.
at 49533.
NAMA Letter.
77 See MSRB Letter.
78 NAMA Letter at 1.
79 Id. For purposes of the comment letter, the
commenter defined the term ‘‘MA’’ to include
76 See
Continued
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In addition to expressing support for
the proposed rule change, the
commenter addressed certain content
that it believes should be included in a
compliance resource that the MSRB
represented it anticipates publishing in
close proximity to the compliance date
of the rule which would highlight the
regulatory obligations for municipal
advisors (and dealers) with respect to
professional qualification standards, CE
requirements, and related registration
matters.80 The commenter stated that
this MSRB compliance resource should,
among other things: (i) address
remaining questions about ‘‘the
sequence of events that need to occur
for an MA to take advantage of the
amendments’’ in the proposed rule
change; (ii) address longstanding
questions on ‘‘how a MA new to the
profession and yet to be associated with
a firm can take the Series 50
exam[ination];’’ and (iii) because the
MSRB’s proposed exemption for the
Series 50 examination does not also
apply to the Series 54 examination as
the commenter desired, ‘‘clearly explain
how a MA will be able to utilize and
MA firms comply with the Series 50
exemption and meet the Series 54
requirements to engage in MA
activity.’’ 81
The MSRB responded that it had
outlined, within the Notice itself, the
sequence of events and timing for
satisfying the criteria-based exemption,
including as applied to solopractitioners.82 With respect to the
compliance resource that the MSRB
anticipates publishing in close
proximity to the rule’s compliance date,
the MSRB stated that the resource will:
(i) restate the sequence of events that
must be undertaken to satisfy the
criteria-based exemption; (ii) include
additional materials related to Rule G–
3(e)(ii)(C), which the MSRB stated
permits an individual who is duly
qualified as a municipal advisor
‘‘municipal advisory firms and individual
municipal advisors.’’ Id.
80 Id. See Notice, 88 FR at 49538.
81 NAMA Letter at 1.
82 MSRB Letter at 2. The MSRB also restated that
sequence of events in its response. See id. at 2–3.
With respect to solo-practitioners, the MSRB stated
in part that such individuals ‘‘should,’’ ‘‘in the
following order,’’ complete and file SEC Form MA–
I and then complete and file SEC Form MA:
Application for Municipal Advisor Registration
(‘‘SEC Form MA’’ or ‘‘Form MA’’). Notice, 88 FR at
49533; MSRB Letter at 2. Pursuant to Exchange Act
Rule 15Ba1–2(c) (17 CFR 250.15Ba1–2(c)), Form
MA shall be considered filed with the Commission
upon submission of a completed Form MA, together
with all additional required documents, including
all required filings of Form MA–I. However,
Exchange Act Rule 15Ba1–2(c) does not specify an
order in which Forms MA and MA–I must be
submitted.
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representative and has been designated
by the municipal advisor firm as a
municipal advisor principal a period of
120 days, after being designated, to take
and pass the Series 54 examination,
thereby allowing individuals qualified
as municipal advisor representatives,
including those seeking to be solopractitioners, to function in the
principal-level capacity for a limited
time before taking and passing the
Series 54 examination; and (iii) address
additional questions outside the scope
of the present proposal related to
professional qualification and CE
standards, and registration requirements
for municipal advisors and dealers.83
Finally, with respect to the commenter’s
desire to extend the MSRB’s proposed
exemption for the Series 50 examination
to the Series 54 examination, the MSRB
reiterated its belief that extending the
proposed rule change to municipal
advisor principals is not warranted
because, as set forth in the Notice: (i)
such an extension would be
inappropriate due to the heightened
supervisory, oversight, and management
responsibilities of municipal advisor
principals; and (ii) even if such relief
were appropriate, additional, more
stringent requirements would be
necessary in consideration of these
broader obligations, resulting in two
different standards and additional
regulatory complexity.84
IV. Discussion and Commission’s
Findings
The Commission has carefully
considered the proposed rule change,
the comment letter received, and the
MSRB’s response thereto. The
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
the MSRB.
In particular, the Commission has
reviewed Section 15B(b)(2)(A) of the
Act, which provides, in part, that: (1)
the MSRB’s rules shall provide that a
municipal advisor’s ability to provide
advice to or on behalf of a municipal
entity or obligated person with respect
to municipal financial products or the
issuance of municipal securities is
conditioned on meeting such standards
of training, experience, competence, and
such other qualifications as the Board
finds necessary or appropriate in the
public interest or for the protection of
investors and municipal entities or
obligated persons; and (2) in connection
with the definition and application of
such standards, the MSRB may
appropriately classify municipal
advisors and their associated persons,
specify that all or any portion of such
standards shall be applicable to any
such class, and require persons in any
such class to pass examinations.85 The
Commission also has reviewed Section
15B(b)(2)(C) of the Act, which provides,
in part, that the MSRB’s rules shall be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating municipal securities and
municipal financial products, and, in
general, to protect investors, municipal
entities, obligated persons, and the
public interest; and not be designed to
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.86
Additionally, the Commission has
considered Section 15B(b)(2)(G) of the
Act, which provides, in part, that the
MSRB’s rules shall prescribe records to
be made and kept by municipal
advisors.87 Finally, the Commission has
reviewed Section 15B(b)(2)(L)(iv) of the
Act, which provides that the MSRB’s
rules shall not impose a regulatory
burden on small municipal advisors that
is not necessary or appropriate in the
public interest and for the protection of
investors, municipal entities, and
obligated persons, provided that there is
robust protection of investors against
fraud.88
After such review, the Commission
believes that the proposed rule change
is appropriate in the public interest and
for the protection of municipal entities
and obligated persons consistent with
Section 15B(b)(2)(A) of the Act,
designed to prevent fraudulent and
manipulative acts and practices
consistent with Section 15B(b)(2)(C) of
the Act, and will: (i) foster cooperation
and coordination among regulators
consistent with Section 15B(b)(2)(C) of
the Act; (ii) promote just and equitable
principles of trade consistent with
Section 15B(b)(2)(C) of the Act; (iii)
protect municipal entities, obligated
persons, and the public interest
consistent with Section 15B(b)(2)(C) of
the Act; and (iv) not impose an
inappropriate impact or burden on
efficiency, competition, or capital
formation, including with respect to
small municipal advisors, consistent
with Sections 15B(b)(2)(C) and
15B(b)(2)(L)(iv) of the Act.
85 15
U.S.C. 78o–4(b)(2)(A).
U.S.C. 78o–4(b)(2)(C).
87 15 U.S.C. 78o–4(b)(2)(G).
88 15 U.S.C. 78o–4(b)(2)(L)(iv).
86 15
83 MSRB
84 Id.;
PO 00000
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see Notice, 88 FR at 49534, 49537, 49539.
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A. Appropriate in the Public Interest
and for the Protection of Municipal
Entities and Obligated Persons
The Commission believes that,
consistent with Section 15B(b)(2)(A) of
the Act,89 the proposed rule change is
appropriate in the public interest and
for the protection of municipal entities
and obligated persons. In particular, the
new, criteria-based exemption from
requalification by reexamination
applicable to municipal advisor
representatives (including the increase
in the amount of time in which an
individual may maintain their
qualification as a municipal advisor
representative without reexamination)
will likely result in fewer individuals
being required to retake the Series 50
examination, which would expand the
potential number of municipal advisor
representative candidates. A broader
municipal advisor representative
applicant pool is in the public interest
and may help protect municipal entities
and obligated persons by offering firms
a greater choice in hiring qualified
individuals who could potentially draw
upon their diverse perspectives,
experience, education, and/or
institutional knowledge to enhance the
informed advice provided to a
municipal advisor firm’s municipal
entity and obligated person clients.
For example, as the MSRB noted,
individuals that may disassociate with a
municipal advisor firm may determine
to associate with a dealer in a public
finance capacity or to work for a
municipal entity.90 Such individuals
may receive valuable and directly
applicable experience from a different
vantage point in the industry that would
augment their prior and future
experience as a municipal advisor
representative upon reassociating with a
municipal advisor firm.91 Similarly, the
proposed rule change provides
flexibility for certain individuals to step
away from their position to pursue
higher education and then return to the
municipal advisory industry. This
diversity of perspective, experience,
education, and/or institutional
knowledge could put such municipal
advisor representative candidates in a
position to provide more informed
advice than they may otherwise have
provided.
Furthermore, the proposed rule
change reduces uncertainty for
individuals seeking to requalify by
providing clarity on the specific criteria
needed to requalify without
reexamination, and therefore expedites
89 15
U.S.C. 78o–4(b)(2)(A).
88 FR at 49533.
91 Id. at 49533–34.
the process by which such individuals
can begin to engage in municipal
advisory activities. In addition,
municipal advisor firms would be better
positioned to assess a potential hire’s
qualifications by evaluating the
conditions specified in the proposed
rule change.
At the same time, and as further
described in Sections IV.B. and IV.E.
below, the proposed rule change
requires the satisfaction of conditions
that establish safeguards and help
ensure that only qualified candidates
may obtain the criteria-based exemption
from requalification, thereby furthering
municipal entity and obligated person
protection and the public interest.
Because the proposed rule change
would likely lead to a broader
municipal advisor representative
applicant pool, improve the quality of
municipal advisor representative
candidates, and increase diversity in the
municipal advisory industry—all while
requiring the satisfaction of conditions
that establish safeguards and help
ensure that only qualified candidates
may obtain the criteria-based exemption
from requalification—the Commission
finds that the proposed rule change is
appropriate in the public interest and
for the protection of municipal entities
and obligated persons consistent with
Section 15B(b)(2)(A) of the Act.
B. Prevention of Fraudulent and
Manipulative Acts and Practices
The Commission believes that,
consistent with Section 15B(b)(2)(C) of
the Act,92 Rule G–3 would continue to
prevent fraudulent and manipulative
acts and practices by ensuring that
municipal advisor representatives meet
competence, training, experience, and
qualification standards, and such
protections would not be diminished by
the proposed rule change. The stated
criteria of at least three years of
experience before eligibility for the
exemption, and no more than three
years since ceasing to be associated with
a municipal advisor firm, provide for a
baseline level of experience and
competence for individuals availing
themselves of the exemption. In
addition, the proposed rule change
would require individuals seeking to
obtain the exemption to, upon
associating (or reassociating) with a
municipal advisor firm, receive relevant
and updated core training pertaining to
regulatory obligations under applicable
securities laws and regulations,
including MSRB rules, which furthers
the prevention of manipulative acts and
practices because such trainings serve to
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educate individuals about the avoidance
of such manipulative acts and practices.
Because the three-year thresholds
coupled with the more robust CE
requirements would continue to support
municipal advisor representatives in
meeting competence, training,
experience, and qualification standards,
and such protections would not be
diminished by the proposed rule
change, the Commission finds that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices consistent with
Section 15B(b)(2)(C) of the Act.
C. Foster Cooperation and Coordination
Among Regulators
In accordance with Section
15B(b)(2)(G) of the Act,93 the proposed
amendments to Rule G–8(h)(vii)(C)
would prescribe specific records to be
made and kept by municipal advisors.
The Commission believes that,
consistent with Section 15B(b)(2)(C) of
the Act,94 those amendments would
foster cooperation and coordination
with persons engaged in regulating
municipal securities and municipal
financial products. In particular, they
would provide all relevant examining
and enforcement authorities with the
same documentation containing the
information necessary to assist them in
examining for, investigating, and
evaluating compliance with the new,
criteria-based exemption under Rule G–
3.
The Commission further believes that
an in-concert review by all relevant
examining and enforcement authorities
of the same documentation under the
prescribed recordkeeping obligations of
the proposed rule change would foster
municipal entity and obligated person
protection. In particular, municipal
advisor firms would be incentivized to
take due care to ensure compliance with
the qualification standards under the
criteria-based exemption and that only
such individuals that satisfy such
exemption are engaging in municipal
advisor activities.
Because the books and records
requirements would facilitate efficiency
among regulators by providing all
relevant examining and enforcement
authorities with the same
documentation containing the
information necessary to assist them in
examining for, investigating, and
evaluating compliance with the new,
criteria-based exemption, the
Commission finds that the proposed
rule change would foster cooperation
and coordination with persons engaged
93 15
90 Notice,
92 15
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63991
94 15
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U.S.C. 78o–4(b)(2)(C).
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in regulating municipal securities and
municipal financial products consistent
with Section 15B(b)(2)(C) of the Act.
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D. Promote Just and Equitable Principles
of Trade
The Commission also believes that,
consistent with Section 15B(b)(2)(C) of
the Act,95 the various technical
amendments enumerated above 96
promote just and equitable principles of
trade. Specifically, the Commission
believes the technical amendments
would ensure that Rules G–3 and G–8
remain accurate, clear, and
understandable for the municipal
advisory community. If the MSRB’s
rules are accurate, clear, and
understandable, MSRB registrants,
including municipal advisors and
associated persons, will better be able to
comply with the MSRB’s rules and
apply them in a consistent matter.
Accordingly, the Commission finds that
the technical amendments promote just
and equitable principles of trade
consistent with Section 15B(b)(2)(C) of
the Act.
E. Protect Municipal Entities, Obligated
Persons, and the Public Interest
The Commission believes that,
consistent with Section 15B(b)(2)(C) of
the Act 97 and the above discussion, the
proposed rule change would continue to
protect municipal entities, obligated
persons, and the public interest because
municipal advisor representatives
would be required to obtain CE
pertaining to specified topics and
regulatory obligations under applicable
securities laws and regulations,
including MSRB rules, in order to
requalify as a municipal advisor
professional. Additionally, such
individuals would not be able to obtain
the criteria-based exemption if they
either engaged in activities requiring
qualification as a municipal advisor
representative during their lapse in
qualification or they are subject to any
events or proceedings that resulted in a
regulatory action disclosure report, civil
judicial action disclosure report,
customer complaint/arbitration/civil
litigation disclosure report, criminal
action disclosure report, or termination
disclosure report on SEC Form MA–I.
These conditions help ensure that basic
municipal entity and obligated person
protections remain in place while also
providing municipal advisor
representatives flexibility to pursue
other meaningful roles within the
securities industry or to step away from
their position for other reasons; and
benefits municipal advisor firms by
providing the increased ability to attract
qualified talent.
Finally, as noted above, a broader
municipal advisor representative
applicant pool is in the public interest
and will help protect municipal entities
and obligated persons because it can
improve the quality of municipal
advisor representative candidates and
increase diversity in the municipal
advisory industry, both of which could
enhance the quality of advice provided
to municipal entity and obligated
person clients.
Because the proposed rule change
requires the satisfaction of conditions
that establish safeguards and ensure that
only qualified municipal advisor
representative candidates may obtain
the criteria-based exemption from
requalification—while also leading to a
broader municipal advisor
representative applicant pool,
improving the quality of municipal
advisor representative candidates, and
increasing diversity in the municipal
advisory industry—the Commission
finds that the proposed rule change
protects municipal entities, obligated
persons, and the public interest
consistent with Section 15B(b)(2)(C) of
the Act.
F. No Inappropriate Impact or Burden
on Efficiency, Competition, or Capital
Formation
In approving the proposed rule
change, the Commission has considered
the proposed rule change’s impact on
efficiency, competition, and capital
formation.98 Section 15B(b)(2)(C) of the
Act 99 requires that MSRB rules not be
designed to impose any burden on
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act. Furthermore,
Section 15B(b)(2)(L)(iv) of the Act 100
requires that MSRB rules not impose a
regulatory burden on small municipal
advisors that is not necessary or
appropriate in the public interest and
for the protection of investors,
municipal entities, and obligated
persons, provided that there is robust
protection of investors against fraud.
With respect to impact on efficiency,
the Commission believes that the
proposed rule change would improve
the municipal securities market’s
operational efficiency and promote
regulatory certainty by providing
individuals with a specific exemption
process to requalify as municipal
95 Id.
98 15
96 Supra,
99 15
U.S.C. 78c(f).
U.S.C. 78o–4(b)(2)(C).
100 15 U.S.C. 78o–4(b)(2)(L)(iv).
Section II.B.vii.
97 15 U.S.C. 78o–4(b)(2)(C).
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advisor representatives and to begin
engaging in municipal advisory
activities on behalf of municipal advisor
firms. Moreover, as discussed above,101
the Commission believes that the
proposed amendments to Rule G–8
would facilitate efficiency among
regulators by providing all relevant
examining and enforcement authorities
with the same documentation
containing the information necessary to
assist them in examining for,
investigating, and evaluating
compliance with the new, criteria-based
exemption under Rule G–3.
With respect to impact on capital
formation, as discussed above,102 the
proposed amendments to Rule G–3
would make it easier for individuals
seeking to requalify as municipal
advisor representatives to reassociate
with a municipal advisor firm and for
municipal advisor firms to recruit
experienced professionals. The
Commission believes that the potential
increased number of skilled
professionals furthers capital formation
because municipal entity and obligated
person clients would have ranging areas
of expertise to select from when
utilizing the services of municipal
advisor representatives.
Finally, with respect to competition,
the Commission does not believe that
the proposed amendments to Rule G–3
and Rule G–8 would impose any
unnecessary or inappropriate burden or
impact on competition, as they would
provide additional flexibility and
certainty to those seeking to associate
with municipal advisor firms as
municipal advisor representatives and
to municipal advisor firms, thereby
enhancing the hiring of qualified,
experienced individuals; and they
would also support evidencing
compliance with the criteria-based
exemption. The Commission notes that
individuals who are away from their
municipal advisor representative
capacity (or cease to be engaged in
activity requiring qualification as a
municipal advisor representative) for
more than three years would be required
to take and pass the Series 50
examination again under the proposed
rule change, as the waiver request
provisions, available only in
extraordinary cases, would no longer be
available; however, given the limited
use of the waiver process currently, the
Commission does not believe the
elimination of this option would have a
significant impact on individuals
seeking to reassociate in a municipal
advisor representative capacity.
101 Supra,
102 Supra,
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Section IV.C.
Section IV.A.
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Although the proposed amendments
to Rule G–3 and Rule G–8 would
benefit, and be applied equally to, all
individuals seeking to associate with
municipal advisor firms and all such
municipal advisor firms, the
Commission believes that there are
potential burdens on competition for
small municipal advisor firms, and solopractitioners in particular. However, as
described below, the Commission
believes that these potential burdens are
mitigated.
First, the Commission believes that
there is a potential burden on
competition for solo-practitioners
looking to establish a municipal advisor
firm because, unlike larger firms, such
solo-practitioners may not have
developed CE materials addressing all of
the prescribed subject matters necessary
to meet the exemption’s CE
requirements. However, the
Commission believes that this potential
burden is mitigated because the MSRB
has indicated that such firms would be
able to utilize ‘‘off-the-shelf content’’ or
widely available industry educational
materials (to the extent such materials
meet the requirements set forth in the
proposed rule change), which would be
a less burdensome approach than
creating new CE materials.103 The
MSRB noted that sources of such
educational materials may include
industry trade associations, in addition
to podcasts, webinars, and educational
materials developed by the MSRB.104
Second, the Commission believes that
there is a potential burden on
competition for solo-practitioners and
smaller municipal advisory firms
because the new, criteria-based
exemption would not extend to those
seeking to associate and function in a
municipal advisor principal capacity
and, as noted above, Rule G–3(e)(iii)
requires every municipal advisor firm to
have at least one municipal advisor
principal. Accordingly, individuals
seeking to act as a municipal advisor
principal (e.g., a solo-practitioner)
would still have to take and pass the
Series 54 examination in order to engage
in principal-level activities. As a result,
although all firms would benefit from
the proposed rule change for municipal
advisor representatives, smaller
municipal advisor firms and solopractitioners in particular may
experience a smaller benefit than larger
municipal advisor firms.
The Commission believes that this
potential burden is mitigated, however,
because the MSRB has indicated that
current Rule G–3(e)(ii)(C) permits solo103 Notice,
104 Id.
88 FR at 49537.
at 49537 n.43.
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practitioners (or individuals associating
or reassociating with a firm and
designated as a principal) who are
qualified as municipal advisor
representatives to function as municipal
advisor principals for up to 120 days
before having to take and pass the Series
54 examination.105 The MSRB noted
that, in concert with the proposed rule
change, these provisions would allow
such individuals to start their own firm,
requalify as municipal securities
representatives without reexamination,
and then qualify as municipal advisor
principals.106 As a result, all such
persons, including those persons
seeking to be solo-practitioners and
seeking to associate with small (or
larger) municipal advisor firms would
be able to function in the principal-level
capacity for several months before
having to take and pass the Series 54
examination.107
Ultimately, municipal advisor
principals are subject to additional
regulatory standards given their
supervisory, oversight, and management
duties. The process of reexamination for
municipal advisor principals helps to
ensure that the specified level of
competency and knowledge of the
applicable securities laws and
regulations, including MSRB rules, is
sufficiently demonstrated.
For the foregoing reasons, the
Commission finds that, consistent with
Sections 15B(b)(2)(C) and
15B(b)(2)(L)(iv) of the Act, the proposed
rule change would not impact or impose
any additional burdens on efficiency,
competition, or capital formation that
are not necessary or appropriate in
furtherance of the purposes of the Act.
As noted above, the Commission
received one comment letter on the
filing. The Commission believes that the
MSRB, through its response, addressed
the commenter’s concerns. For the
reasons noted above, the Commission
believes that the proposed rule change
is consistent with the Exchange Act.
105 Id.
at 49534 n.29; MSRB Letter at 3.
88 FR at 49534 n.29.
107 The Commission believes this potential
burden may also be mitigated, in part, because the
MSRB represented that it anticipates publishing a
compliance resource in close proximity to the
compliance date of the rule which would highlight
the regulatory obligations for municipal advisors
(and dealers) with respect to professional
qualification standards, CE requirements, and
related registration matters. See id. at 49538; MSRB
Letter at 3. In addition, in the Notice itself, the
MSRB addressed the timing and sequence of
satisfying the exemption’s criteria, the filing of SEC
Form MA–I (and SEC Form MA, as applicable), and
the submission of the affirmation notification to the
MSRB, including for solo-practitioners. See Notice,
88 FR at 49532–33; MSRB Letter at 2–3.
106 Notice,
PO 00000
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63993
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,108
that the proposed rule change (SR–
MSRB–2023–05) be, and hereby is,
approved.
For the Commission, pursuant to delegated
authority.109
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20077 Filed 9–15–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98355; File No. SR–
NYSEARCA–2023–61]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rule 5.3–O
(Criteria for Underlying Securities) To
Accelerate the Listing of Options on
Certain IPOs
September 12, 2023.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on August
31, 2023, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 5.3–O (Criteria for Underlying
Securities). The proposed rule change is
available on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
108 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
109 17
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]]>Agencies
[Federal Register Volume 88, Number 179 (Monday, September 18, 2023)]
[Notices]
[Pages 63984-63993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20077]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98353; File No. SR-MSRB-2023-05]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Order Granting Approval of a Proposed Rule Change To Amend MSRB
Rule G-3 To Create an Exemption for Municipal Advisor Representatives
From Requalification by Examination and Remove Waiver Provisions and To
Amend MSRB Rule G-8 To Establish Related Books and Records Requirements
September 12, 2023.
I. Introduction
On July 21, 2023, the Municipal Securities Rulemaking Board
(``MSRB'' or ``Board'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\
and Rule 19b-4 thereunder,\2\ a proposed rule change to: (1) amend MSRB
Rule G-3 (``Rule G-3''), on professional qualification requirements, to
(i) remove the waiver provisions with respect to municipal advisor
representative and municipal advisor principal qualification
requirements; (ii) establish a new, criteria-based exemption to permit
certain individuals to requalify as a municipal advisor representative
[[Page 63985]]
without reexamination; (iii) retitle and replace Supplementary Material
.02, on extraordinary waivers, with text specifying the means for
electronic delivery of the requisite notice to the MSRB regarding
satisfaction of the criteria-based exemption; and (iv) make technical
changes to the rule to update certain phrases and clauses; and (2)
amend MSRB Rule G-8 (``Rule G-8''), on books and records, to establish
accompanying recordkeeping requirements (collectively, the ``proposed
rule change'').
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The MSRB requested that the proposed rule change be approved with a
compliance date of no more than 30 days following the Commission
approval date.\3\
---------------------------------------------------------------------------
\3\ See Exchange Act Release No. 97984 (July 25, 2023), 88 FR
49528, 49529 (July 31, 2023) (File No. SR-MSRB-2023-05)
(``Notice'').
---------------------------------------------------------------------------
The proposed rule change was published for comment in the Federal
Register on July 31, 2023.\4\ The Commission received one comment
letter on the proposed rule change.\5\ On August 31, 2023, the MSRB
responded to the comment letter.\6\ As further described below, the
Commission is approving the proposed rule change.
---------------------------------------------------------------------------
\4\ See id. at 49528.
\5\ See Letter from Susan Gaffney, Executive Director, National
Association of Municipal Advisors, dated August 21, 2023 (``NAMA
Letter'').
\6\ See Letter to Secretary, Commission, from Ernesto A. Lanza,
Chief Regulatory and Policy Officer, MSRB, dated August 31, 2023
(``MSRB Letter'').
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II. Description of the Proposed Rule Change
A. Background
The MSRB explained that it is charged with setting professional
qualification standards for brokers, dealers, and municipal securities
dealers (collectively, ``dealers,'' and each individually, a
``dealer''), as well as municipal advisors.\7\ Specifically, the MSRB
stated that Section 15B(b)(2)(A) of the Act \8\ authorizes the Board to
prescribe standards of training, experience, competence, and such other
qualifications as it finds necessary or appropriate in the public
interest or for the protection of investors and municipal entities or
obligated persons.\9\ The MSRB also stated that Sections
15B(b)(2)(A)(i) \10\ and 15B(b)(2)(A)(iii) \11\ of the Act provide that
the Board may appropriately classify associated persons of dealers and
municipal advisors and require persons in any such class to pass tests
prescribed by the Board.\12\ The MSRB explained that, accordingly, it
has adopted professional qualification standards to ensure that
associated persons of dealers and municipal advisors attain and
maintain specified levels of competence and knowledge for each
qualification category.\13\
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\7\ Notice, 88 FR at 49529.
\8\ 15 U.S.C. 78o-4(b)(2)(A).
\9\ Notice, 88 FR at 49529.
\10\ 15 U.S.C. 78o-4(b)(2)(A)(i).
\11\ 15 U.S.C. 78o-4(b)(2)(A)(iii).
\12\ Notice, 88 FR at 49529.
\13\ Id.
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With respect to associated persons of municipal advisors, the MSRB
noted that Rule G-3(d)(i)(A) defines the term ``municipal advisor
representative'' to mean a natural person associated with a municipal
advisor who engages in municipal advisory activities on the municipal
advisor's behalf, other than a person performing only clerical,
administrative, support, or similar functions.\14\ The MSRB explained
that Rule G-3(d)(ii)(A) requires all persons meeting the definition of
a municipal advisor representative to be qualified in that capacity by
taking and passing the Municipal Advisor Representative Qualification
Examination (``Series 50 examination'') prior to being qualified as a
municipal advisor representative.\15\ The MSRB further explained that,
under current Rule G-3(d)(ii)(B), any person who, after qualifying as a
municipal advisor representative, ceases to be associated with a
municipal advisor firm for two or more years shall retake and pass the
Series 50 examination, unless a waiver is granted from the Board in
``extraordinary cases'' pursuant to current Rule G-3(h)(ii).\16\
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\14\ Id. at 49529 n.3. The MSRB further stated that, pursuant to
Section 15B(e)(4)(A)(i) and (ii) of the Exchange Act (15 U.S.C. 78o-
4(e)(4)(A)(i) and (ii)) and MSRB Rules D-13, G-3(d)(i)(A), and G-
3(d)(ii)(A), municipal advisory activities requiring qualification
as a municipal advisor representative include providing advice to or
on behalf of a municipal entity or obligated person with respect to
municipal financial products or the issuance of municipal
securities, including advice with respect to the structure, timing,
terms, and other similar matters concerning such financial products
or issues; or undertaking a solicitation of a municipal entity or
obligated person. Id. at 49530 n.9.
\15\ Id. at 49529 n.3.
\16\ Id.
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In contrast, as MSRB guidance affirms, Rule G-3(e)(i) defines the
term ``municipal advisor principal'' to mean a natural person
associated with a municipal advisor who is directly engaged in the
management, direction, or supervision of the municipal advisory
activities of the municipal advisor and its associated persons; Rule G-
3(e)(ii) requires all persons meeting the definition of municipal
advisor principal to be qualified in that position by, among other
things, taking and passing both the Series 50 examination and the
Municipal Advisor Principal Qualification Examination (``Series 54
examination''); and Rule G-3(e)(iii) requires every municipal advisor
firm to have at least one municipal advisor principal.\17\ In the
Notice, the MSRB stated that, under current Rule G-3(e)(ii)(B), any
person who ceases to be associated with a municipal advisor for two or
more years after having qualified as a municipal advisor principal, in
accordance with the rule, must retake and pass both the Series 50
examination and Series 54 examination prior to being qualified as a
municipal advisor principal, unless a waiver is granted from the Board
in ``extraordinary cases'' pursuant to current Rule G-3(h)(ii).\18\ The
MSRB also stated that Rule G-3(e)(ii)(C) affords temporary relief to an
individual who is qualified as a municipal advisor representative, but
is functioning in the capacity of a municipal advisor principal, for a
period of 120 days after becoming designated as a municipal advisor
principal, to take and pass the Series 54 examination.\19\
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\17\ See MSRB, ``FAQs on Municipal Advisor Professional
Qualification and Examination Requirements,'' at Questions 3 & 19
(Dec. 2021), available at https://www.msrb.org/sites/default/files/FAQ-MSRB-Series-50-Exam.pdf (``MSRB Series 50 Examination FAQs'').
\18\ Notice, 88 FR at 49530.
\19\ Id. at 49537.
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The MSRB indicated that, as part of its rule book modernization
initiative and in light of an industry-wide continuing education
(``CE'') transformation initiative for broker-dealers,\20\ it undertook
a review of Rule G-3 to identify opportunities to provide individuals
associated with municipal advisor firms increased regulatory
flexibility with respect to maintaining their professional
qualifications.\21\ The MSRB indicated that it filed the proposed rule
change to that end.\22\
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\20\ The MSRB indicated that, as industry and market practices
evolved in recent years, the MSRB, in coordination with other self-
regulatory organizations, advanced rulemaking initiatives to
modernize applicable professional qualification and continuing
education program requirements for dealers (``CE Transformation'').
Id. at 49529 n.7 (citing, as an example, Exchange Act Release No.
95684 (Sept. 7, 2022), 87 FR 56137 (Sept. 13, 2022) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to
Amend MSRB Rule G-3 Continuing Education Program Requirements to
Harmonize with Industry-Wide Transformation) (File No. SR-MSRB-2022-
07)).
\21\ Id. at 49529.
\22\ Id.
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B. Summary of the Proposed Rule Change
The MSRB explained that the proposed rule change would: (1) create
a one-time, criteria-based exemption, under Rule G-3, for former
municipal advisor representatives to, without reexamination, requalify
in that capacity
[[Page 63986]]
no later than one year after their two-year lapse in qualification; (2)
remove language from Rule G-3 that currently permits the Board, in
extraordinary cases, to waive the reexamination requirements for
municipal advisor representatives and municipal advisor principals; (3)
make certain clarifying amendments to Rule G-3 to address an
interpretive question pertaining to a lapse in qualification for an
individual associated with a dually registered firm that is both a
dealer and a municipal advisor; (4) retitle and replace the current
text of Supplementary Material .02 of Rule G-3 with text specifying the
means for electronic delivery of the requisite notice to the MSRB
regarding satisfaction of the criteria-based exemption; (5) make
technical amendments to Rule G-3 to update certain phrases, clauses,
and referenced provisions to, among other things, improve the overall
readability of the rule; and (6) amend Rule G-8 to require municipal
advisors to make and keep certain books and records relating to the
exemption to be created under the proposed rule change, as prescribed
under Rule G-3(h)(ii)(I).\23\
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\23\ Id.
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The MSRB explained that the proposed rule change is intended to
offer flexibility, provide additional certainty, and eliminate the
extraordinary nature of the waiver process for individuals and
municipal advisor firms without reducing protection for municipal
entity and obligated person clients who expect that municipal advisor
professionals have satisfied professional qualification standards.\24\
---------------------------------------------------------------------------
\24\ Id. at 49535.
---------------------------------------------------------------------------
The MSRB further explained that the proposed rule change is
specific to the professional qualification obligations of municipal
advisors, including associated persons thereof, under Rule G-3, and
does not modify any requirements to firms registered solely as dealers,
or associated persons thereof.\25\
---------------------------------------------------------------------------
\25\ Id. at 49529.
---------------------------------------------------------------------------
A more detailed description of the proposed rule change follows.
i. Proposed Amendments to Rule G-3(d)(ii)(B)
The MSRB noted that currently, pursuant to Rule G-3(d)(ii)(B), on
qualification requirements for municipal advisor representatives, any
person who ceases to be associated with a municipal advisor \26\ for
two or more years after having qualified as a municipal advisor
representative, in accordance with the rule, must take and pass the
Series 50 examination prior to being qualified as a municipal advisor
representative, unless a waiver is granted.\27\ The MSRB stated that
its proposed amendments to this provision would provide that any person
who ceases to be associated with ``or engaged in municipal advisory
activities on behalf of'' a municipal advisor for two or more years
after having qualified by examination as a municipal advisor
representative (i.e., experiences a ``lapse in qualification'') must
take and pass the Series 50 examination unless exempt from such
requirement pursuant to Rule G-3(h)(ii), as amended by the proposed
rule change.\28\
---------------------------------------------------------------------------
\26\ For purposes of this Order, when the term ``municipal
advisor'' is used it refers only to the firm and not associated
persons of the firm. See also id. at 49529 n.8 (same, for purposes
of the Notice and Exhibit 5 thereto).
\27\ Id. at 49529.
\28\ Id. at 49529-30.
---------------------------------------------------------------------------
The proposed amendments to Rule G-3(d)(ii)(B) would add the new
language ``or engaged in municipal advisory activities on behalf of,''
which the MSRB stated is intended to provide clarity on the requirement
for an individual associated with a firm that is dually registered as a
dealer and municipal advisor.\29\ The MSRB explained that if an
individual associated with such firm ceases to be engaged in activity
requiring qualification as a municipal advisor representative and
instead engages only in municipal securities business on behalf of the
firm for a period of two or more years, then that individual's
municipal advisor representative qualification would have lapsed,
notwithstanding the fact that such person remains associated with a
firm that is also a registered municipal advisor.\30\ The MSRB noted
that the proposed amendments to Rule G-3(d)(ii)(B) also would delete
the mention of a waiver (i.e., the clause ``a waiver is granted'')
because, subsequent to the proposed rule change, such persons would
need to qualify by examination as municipal advisor representatives,
unless obtaining the one-time criteria-based exemption.\31\
---------------------------------------------------------------------------
\29\ Id. at 49530.
\30\ Id. The MSRB stated that, under Exchange Act Rule 15Ba1-2
(17 CFR 240.15Ba1-2), SEC Form MA-I: Information Regarding Natural
Persons Who Engage in Municipal Advisory Activities (``SEC Form MA-
I'' or ``Form MA-I'') is filed with the Commission to indicate
natural persons who are associated with the municipal advisor and
engaged in municipal advisory activities on its behalf. Id. at 49530
n.10. The MSRB further stated that firms are required to promptly
amend SEC Form MA-I, pursuant to Exchange Act Rule 15Ba1-5 (17 CFR
240.15Ba1-5), in such cases where an individual ceases to engage in
municipal advisory activities on behalf of a firm. Id.
\31\ Id. at 49530.
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ii. Proposed Amendments to Rule G-3(e)(ii)(A) and (B)
The MSRB noted that currently, pursuant to Rule G-3(e)(ii)(A), as a
pre-requisite to becoming qualified as a municipal advisor principal a
person must take and pass the Series 50 examination.\32\ The MSRB
stated that its proposed amendments to this provision would provide
that taking and passing the Series 50 examination is the pre-requisite
to becoming qualified as a municipal advisor principal ``unless exempt
from taking the Municipal Advisor Representative Qualification
Examination pursuant to paragraph (h)(ii) of this rule,'' \33\ which
the MSRB stated is intended to allow for individuals previously
qualified as municipal advisor principals to use the criteria-based
exemption to obtain requalification with the Series 50 examination and
explicitly provide for its application to such individuals.\34\ The
MSRB explained that, notwithstanding the availability of the criteria-
based exemption from requalification with the Series 50 examination,
such municipal advisor principals would still need to take and pass the
Series 54 examination.\35\
---------------------------------------------------------------------------
\32\ Id.
\33\ Id.
\34\ Id.
\35\ Id.
---------------------------------------------------------------------------
In addition, the MSRB noted that currently, pursuant to Rule G-
3(e)(ii)(B), any person who ceases to be associated with a municipal
advisor for two or more years after having qualified as a municipal
advisor principal, in accordance with the rule, must take and pass the
Series 50 examination and the Series 54 examination prior to being
qualified as a municipal advisor principal, unless a waiver is granted
under current subparagraph (h)(ii) of this rule.\36\ The MSRB stated
that its proposed amendments to this provision would provide that any
person who ceases to be associated with ``or engaged in municipal
advisory activities on behalf of'' a municipal advisor for two or more
years after having qualified by examination as a municipal advisor
principal must take and pass the Series 50 examination unless exempt
from such requirement pursuant to Rule G-3(h)(ii), as amended by the
proposed rule change.\37\
---------------------------------------------------------------------------
\36\ Id.
\37\ Id.
---------------------------------------------------------------------------
The proposed amendments to Rule G-3(e)(ii)(B) would add the new
language
[[Page 63987]]
``or engaged in municipal advisory activities on behalf of,'' which the
MSRB stated is intended to provide clarity on the requirement for an
individual associated with a firm that is dually registered as a dealer
and municipal advisor.\38\ For example, the MSRB explained that if an
individual associated with such firm ceases to be engaged in activity
requiring qualification as a municipal advisor principal and instead
engages only in municipal securities business on behalf of the firm for
a period of two or more years, then that individual's municipal advisor
representative and municipal advisor principal qualifications would
have lapsed, notwithstanding the fact that such person remains
associated with a firm that is also a registered municipal advisor.\39\
The proposed amendments to Rule G-3(e)(ii)(B) would also delete the
mention of a waiver (i.e., the clause ``a waiver is granted''), which
the MSRB stated is intended to specify that such persons would need to
qualify by examination as municipal advisor principals.\40\
---------------------------------------------------------------------------
\38\ Id.
\39\ Id.
\40\ Id.
---------------------------------------------------------------------------
iii. Proposed Removal of Extraordinary Waiver Provisions Under Rule G-
3(h)(ii)
The MSRB stated that its proposed amendments to Rule G-3(h)(ii)
would remove references, in their entirety, to the ability to obtain a
waiver in extraordinary cases for a former municipal advisor
representative or municipal advisor principal and would replace such
language with a criteria-based exemption for former municipal advisor
representatives.\41\ The MSRB indicated it believes that this standard
set forth within the four corners of the rule would provide greater
flexibility to municipal advisor firms and their associated persons
while simultaneously providing greater certainty for firms and such
individuals who may wish to seek an exemption from the obligation to
requalify as a municipal advisor representative by reexamination.\42\
The MSRB also indicated it believes, at this time, that the objective
nature of the criteria-based exemption is preferable to the subjective
nature of the waiver provisions in current Rule G-3(h)(ii).\43\
Additionally, the MSRB stated that the removal of the ability to seek
and obtain a waiver for municipal advisor principals furthers municipal
entity and obligated person protection by ensuring, through
requalification by reexamination, that individuals have demonstrated
knowledge and skills necessary to discharge the responsibilities of a
municipal advisor principal, including the vested authority for the
supervision, oversight, and management of firms' municipal advisory
activities and that of its associated persons.\44\
---------------------------------------------------------------------------
\41\ Id. at 49531.
\42\ Id.
\43\ Id.
\44\ Id. The MSRB indicated it has previously stated that the
Series 54 examination is intended to ensure that a person seeking to
qualify as a municipal advisor principal satisfies a specified level
of competency and knowledge by measuring a candidate's ability to
apply the applicable federal securities laws, including MSRB rules,
to the municipal advisory activities of a municipal advisor. Id. at
49531 n.11 (citing Exchange Act Release No. 84341 (Oct. 2, 2018), 83
FR 50708, 50710 (Oct. 9, 2018) (Notice of Filing of a Proposed Rule
Change To Amend MSRB Rule G-3, on Professional Qualification
Requirements, To Require Municipal Advisor Principals To Become
Appropriately Qualified by Passing the Municipal Advisor Principal
Qualification Examination) (File No. SR-MSRB-2018-07)). In contrast,
the MSRB indicated it has previously stated that the Series 50
examination ensures a minimum level of knowledge of the job
responsibilities and regulatory requirements by passing the general
qualification examination. Id. (citing Exchange Act Release No.
73708 (Dec. 1, 2014), 79 FR 72225, 72227 (Dec. 5, 2014) (Notice of
Filing of a Proposed Rule Change Consisting of Proposed Amendments
to MSRB Rules G-1, on Separately Identifiable Department or Division
of a Bank; G-2, on Standards of Professional Qualification; G-3, on
Professional Qualification Requirements; and D-13, on Municipal
Advisory Activities) (File No. SR-MSRB-2014-08)).
---------------------------------------------------------------------------
iv. Proposed Rule Change To Adopt Rule G-3(h)(ii)(A)-(I) To Establish
Conditions for Obtaining the Criteria-Based Exemption
The MSRB stated that the proposed rule change would amend Rule G-
3(h)(ii) to prescribe that an individual shall be exempt from the
requirements of subparagraph (d)(ii)(B) if the specified conditions
under proposed Rule G-3(h)(ii)(A)-(I) are met.\45\ Specifically, the
MSRB stated that the proposed amendments to adopt Rule G-3(h)(ii)(A)-
(I) would establish nine specified criteria-based conditions that must
be met in order for an individual (and the municipal advisor firm with
which such individual is associated \46\ or seeks to be associated) to
take advantage of the exemption.\47\
---------------------------------------------------------------------------
\45\ Id. at 49531.
\46\ The MSRB noted that an individual who has associated with a
municipal advisor firm would be prohibited from engaging in any
municipal advisory activities, as defined under Rule D-13 and
described in Section 15B(e)(4)(A)(i) and (ii) of the Act (15 U.S.C.
78o-4(e)(4)(A)(i) and (ii)) and the rules and regulations
promulgated thereunder (i.e., activities involving the provision of
advice to or on behalf of a municipal entity or obligated person
with respect to municipal financial products or the issuance of
municipal securities or undertaking a solicitation of a municipal
entity or obligated person), until such time that the individual has
satisfied the conditions set forth under the proposed rule change.
Id. at 49531 n.12.
\47\ Id. at 49531.
---------------------------------------------------------------------------
The MSRB described the criteria-based conditions that would be
required to be met in order to qualify for the exemption as follows:
\48\
---------------------------------------------------------------------------
\48\ Id. at 49531-32.
---------------------------------------------------------------------------
(1) The individual was previously qualified as a municipal advisor
representative by taking and passing the Series 50 examination.
(2) The individual maintained the municipal advisor representative
qualification for a period of at least three consecutive years while
associated with and engaging in municipal advisory activities on behalf
of one or more municipal advisor firm(s).
(3) Such qualification lapsed pursuant to proposed amended Rule G-
3(d)(ii)(B) and no more than one year has passed since such lapse in
qualification.
(4) The individual has not engaged in activities requiring
qualification as a municipal advisor representative \49\ during the
individual's lapse in qualification.
---------------------------------------------------------------------------
\49\ See id. at 49531 n.13 (citing Rule G-3(d)(i)(A)).
---------------------------------------------------------------------------
(5) The individual is not subject to any events or proceedings that
resulted in a regulatory action disclosure report, civil judicial
action disclosure report, customer complaint/arbitration/civil
litigation disclosure report, criminal action disclosure report, or
termination disclosure report on SEC Form MA-I.\50\
---------------------------------------------------------------------------
\50\ The MSRB explained that it included these types of
disclosures in the proposed exemption criteria, as opposed to other
types of disclosures required by SEC Form MA-I, because these relate
most closely to violations of municipal advisor-related or
investment-related regulations, rules, or industry standards of
conduct. Id. at 49531 n.14.
---------------------------------------------------------------------------
(6) The individual has not previously obtained the exemption from
requalification by examination described in the proposed amended Rule
G-3(h)(ii).\51\
---------------------------------------------------------------------------
\51\ The MSRB noted that, should an individual's municipal
advisor representative qualification lapse again after such person
obtains the criteria-based exemption under the proposed rule change,
that individual would be required to requalify by taking and passing
the Series 50 examination. Id. at 49531 n.15.
---------------------------------------------------------------------------
(7) Prior to engaging in municipal advisory activities on behalf of
the municipal advisor firm with which the individual is to associate
(or reassociate), as evidenced by the filing of SEC Form MA-I, the
municipal advisor firm provided, and the individual completed, CE
covering, at minimum, the subject areas of: (i) the principles of fair
dealing; (ii) the applicable regulatory obligations under MSRB Rules G-
20, on gifts and gratuities, G-37, on political contributions and
prohibitions on municipal securities business and
[[Page 63988]]
municipal advisory business, G-40, on advertising by municipal
advisors, and G-8, on books and records to be made and maintained;
(iii) for non-solicitor municipal advisors, the core conduct standards
under MSRB Rule G-42, including the fiduciary duty obligations owed to
municipal entity clients, or for solicitor municipal advisors, the core
obligations of MSRB Rule G-46; and (iv) any changes to applicable
securities laws and regulations, including applicable MSRB rules, that
were adopted since the individual was last associated with a municipal
advisor.
(8) Prior to engaging in municipal advisory activities on behalf of
the municipal advisor firm with which the individual is to associate
(or reassociate), as evidenced by the filing of an SEC Form MA-I, the
municipal advisor firm provided, and the individual reviewed, the
compliance policies and procedures of the municipal advisor firm.
(9) Upon satisfaction of the conditions set forth in the paragraphs
above, the municipal advisor firm filed a completed SEC Form MA-I with
the Commission with respect to such individual. Within 30 days of the
acceptance \52\ of a completed SEC Form MA-I identifying such
individual as engaging in municipal advisory activities on behalf of
the municipal advisor firm, the municipal advisor firm provided the
notification (``affirmation notification'') electronically to the MSRB
that the individual met the criteria in order to be exempt from the
requalification requirements of Rule G-3(d)(ii)(B) following a lapse in
qualification.
---------------------------------------------------------------------------
\52\ The MSRB noted that the Commission currently does not make
the form acceptance date publicly available, but this information is
made available to the form submitter as part of the form filing
process. Id. at 49532 n.16.
---------------------------------------------------------------------------
The MSRB stated that the affirmation notification would be required
to be on firm letterhead and include the following information: \53\
---------------------------------------------------------------------------
\53\ Id. at 49532.
---------------------------------------------------------------------------
1. The municipal advisor firm's MSRB ID number;
2. The first and last name of the individual seeking to obtain the
exemption;
3. The individual's Financial Industry Regulatory Authority
(``FINRA'') Central Registration Depository (``CRD'') number if
applicable;
4. The start date of the individual's association (or
reassociation) with the municipal advisor firm;
5. An affirmative statement that the municipal advisor has
undertaken a diligent effort to reasonably conclude that the individual
met the applicable requirements set forth in proposed amended Rule G-
3(h)(ii);
6. An affirmative statement attesting that the municipal advisor
firm provided both the requisite CE and the municipal advisor's
compliance policies and procedures to the individual for review along
with the date the individual completed the CE and review of the
municipal advisor's compliance policies and procedures provided by the
municipal advisor firm;
7. The date the municipal advisor firm filed SEC Form MA-I (and the
date of its acceptance) on behalf of the individual as required under
proposed amended Rule G-3(h)(ii)(I); and
8. A signature by the individual seeking to obtain the criteria-
based exemption and a signature by a municipal advisor principal of the
municipal advisor firm each attesting the accuracy of certain content
set forth in the affirmation notification. Specifically, the individual
must sign the affirmation notification attesting that the conditions
outlined in proposed amended Rule G-3(h)(ii)(A) through (H) were met.
And, a municipal advisor principal must sign the affirmation
notification, on behalf of the municipal advisor firm, attesting that,
based on the exercise of reasonable diligence, the conditions outlined
in proposed amended Rule G-3(h)(ii)(A) through (I) were met.\54\
---------------------------------------------------------------------------
\54\ The MSRB noted that the respective individual and firm
signature requirements are intended to differentiate and confirm the
distinct responsibilities and obligations of the individual seeking
to obtain the criteria-based exemption and those of the municipal
advisor firm itself, as evidenced by the signature of a municipal
advisor principal on behalf of the municipal advisor firm. Id. at
49532 n.17.
---------------------------------------------------------------------------
According to the MSRB, the proposed conditions were designed to
ensure that individuals seeking to obtain the exemption (i.e.,
requalification without reexamination) have obtained and maintained the
baseline level of knowledge and experience, and have exhibited conduct
aligned with being a fiduciary, which the MSRB indicated is in
furtherance of municipal entity and obligated person protection.\55\
The MSRB indicated it believes that the criteria outlined above balance
the goal of providing reasonable regulatory flexibility with the
demands of the fiduciary standard applicable to municipal advisors.\56\
For example, the MSRB explained that the requirement that individuals
be duly qualified as a municipal advisor representative for at least
three consecutive years prior to, for example, seeking other career
opportunities in related capacities (e.g., working for a dealer or
municipal entity) or stepping away for family obligations ensures that
a reasonable level of professional experience has been established
before an individual can obtain the exemption.\57\ In contrast, the
MSRB noted that this period is not so long as to hinder the ability, at
a given point, for an individual to, for example, temporarily engage in
other meaningful roles within the municipal securities industry or to
step away from their position due to family obligations.\58\
---------------------------------------------------------------------------
\55\ Id. at 49532.
\56\ Id.
\57\ Id.
\58\ Id.
---------------------------------------------------------------------------
According to the MSRB, these conditions were also designed to
enhance an individual's familiarity with regulatory and business
developments that occurred while they were not associated with a
municipal advisor firm, before reengaging in municipal advisory
activities, but not be so unduly burdensome as to hinder
reassociation.\59\ The MSRB explained that the proposed requirement to
provide the MSRB with notice of individuals who have obtained the
exemption (i.e., by submitting the affirmation notification to the
MSRB) is designed to facilitate transparency and provide an audit trail
regarding an individual's status as a municipal advisor
representative.\60\ The MSRB indicated that it will use the affirmation
notification, as described in the proposed amended Rule G-3(h)(ii)(I),
to help identify qualified municipal advisor representatives and keep
the list of such representatives updated on its website.\61\
Additionally, the MSRB stated that the conditions pertaining to
requisite filings with the SEC would also provide an audit trail and
permit the entities charged with examination and enforcement authority
to confirm compliance with relevant obligations.\62\
---------------------------------------------------------------------------
\59\ Id.
\60\ Id.
\61\ The MSRB noted that it currently publishes a list of
registered municipal advisors and qualified municipal advisor
professionals at https://www.msrb.org/Municipal-Advisors. Id. at
49532 n.18.
\62\ Id. at 49532.
---------------------------------------------------------------------------
v. Proposed Amendments to Supplementary Material .02, on Waivers, Under
Rule G-3
Relatedly, the MSRB stated that the proposed rule change would
amend Supplementary Material .02, on waivers, under Rule G-3 to retitle
the paragraph header from ``Waivers'' to ``Affirmation Notification.''
\63\ The MSRB stated that the proposed rule change would also delete
the entirety of that
[[Page 63989]]
supplementary material, which currently pertains to extraordinary
waivers, and replace it with text that specifies how the firm would be
required to submit to the MSRB the affirmation notification asserting
that the criteria-based exemption has been met.\64\ Specifically, the
MSRB stated that the affirmation notification would be required to be
sent to [email protected].\65\
---------------------------------------------------------------------------
\63\ Id. at 49531, 49532.
\64\ Id. at 49531, 49532.
\65\ Id. at 49532.
---------------------------------------------------------------------------
vi. Proposed Amendments to Rule G-8, on Books and Records To Be Made
and Maintained
The MSRB stated that its proposed amendments to Rule G-8, on books
and records, would add recordkeeping obligations designed to help
facilitate and document compliance with its proposed amendments to Rule
G-3.\66\ Specifically, the MSRB stated that the proposed rule change
would add new paragraph (C) to subsection (h)(vii) of Rule G-8
requiring municipal advisor firms to make and maintain certain records
to evidence compliance with the requirements of Rule G-3(h)(ii)(A)-
(I).\67\ The MSRB described these records as follows: \68\
---------------------------------------------------------------------------
\66\ Id. at 49533.
\67\ Id.
\68\ Id.
---------------------------------------------------------------------------
A record evidencing that the individual seeking to obtain
the exemption was previously duly qualified as a municipal advisor
representative (e.g., a copy of the print-out of the individual
examination results \69\ or examination result certification letter
provided by the MSRB);
---------------------------------------------------------------------------
\69\ The MSRB stated that Question 11 of the MSRB Series 50
Examination FAQs reminds individuals that the test center will
provide a print-out of their examination results. Id. at 49533 n.23.
---------------------------------------------------------------------------
Documentation supporting the municipal advisor firm's
exercise of reasonable diligence in determining that the conditions
outlined in proposed amended Rule G-3(h)(ii)(A) through (I) were met in
making the required affirmation notification in accordance with
proposed amended Rule G-3(h)(ii)(I)(8) (e.g., copies of relevant SEC
form filings reviewed; records related to CE provided and completed;
compliance policies and procedures provided and reviewed; and
attestations or other documentation to support such a determination);
A copy of the affirmation notification sent to the MSRB as
required by proposed amended Rule G-3(h)(ii)(I); and
A record evidencing that the affirmation notification was
made in the prescribed manner and within the required period of time as
described in proposed amended Rule G-3(h)(ii)(I) (e.g., automatic email
delivery receipt).
The MSRB noted that the proposed rule change outlining the specific
recordkeeping requirements supports the municipal advisor principal's
supervision, review, and sign-off that the conditions for the exemption
have been met, which supports regulatory compliance.\70\
---------------------------------------------------------------------------
\70\ Id. at 49533.
---------------------------------------------------------------------------
vii. Proposed Technical Amendments to Rule G-3 and Rule G-8
Finally, the MSRB stated that the proposed rule change would make
the following technical amendments to Rule G-3 and Rule G-8 (the
``technical amendments''):
With respect to Rule G-3(d)(ii)(B), the MSRB stated that
the proposed rule change would: (i) add the phrase ``lapse in
qualification'' to define for purposes of the rule when a person ceases
to be associated with a municipal advisor for two or more years at any
time after having qualified as a municipal advisor representative; (ii)
replace the phrase ``a waiver is granted'' with ``exempt'' to make
clear that the waiver provision for extraordinary cases is being
deleted and replaced with a criteria-based exemption; (iii) change the
word ``shall'' to ``must,'' which is intended to add clarity without
changing the meaning of the term; and (iv) replace the reference to
``subparagraph'' (h)(ii) with ``paragraph'' (h)(ii) to create better
uniformity across Rule G-3; \71\
---------------------------------------------------------------------------
\71\ Id. at 49530.
---------------------------------------------------------------------------
With respect to Rules G-3(e)(ii)(A)(1) and G-3(e)(ii)(B),
the MSRB stated that the proposed rule change would: (i) to clarify the
qualification requirements specific to municipal advisor principals, as
prescribed under Rule G-3(e)(ii)(A)(1), add the phrase ``unless exempt
from taking the Municipal Advisor Representative Qualification
Examination pursuant to paragraph (h)(ii) of this rule'' to make clear
municipal advisor principals have to requalify by reexamination unless
such individuals have obtained the one-time exemption; (ii) delete the
phrase ``a waiver is granted'' and replace with the clause ``exempt
from taking the Municipal Advisor Representative Qualification
Examination'' to make clear that the waiver provision for extraordinary
cases is being deleted and replaced with an exemption-based criteria
for municipal advisor principals to use for requalification without
reexamination for the Series 50 examination; (iii) replace the word
``shall'' with ``must'' to promote clarity; and (iv) replace the
reference to ``subparagraph'' (h)(ii) with ``paragraph'' (h)(ii) to
create better uniformity across Rule G-3; \72\
---------------------------------------------------------------------------
\72\ Id. at 49530-31.
---------------------------------------------------------------------------
With respect to Rule G-3(h), the MSRB stated that the
proposed rule change would retitle the header from ``Waiver of
Qualification Requirements'' to ``Waiver of and Exemption from
Qualification Requirements'' to promote clarity; \73\
---------------------------------------------------------------------------
\73\ Id. at 49532.
---------------------------------------------------------------------------
With respect to Rule G-3(h)(ii), the MSRB stated that the
proposed rule change would replace the introductory sentence ``The
requirements of paragraph (d)(ii)(A) and (e)(ii)(A) may be waived by
the Board in extraordinary cases for a municipal advisor representative
or municipal advisor principal'' with the new introductory sentence
``An individual shall be exempt from the requirements of subparagraph
(d)(ii)(B) if all of the following conditions are met'' for purposes of
setting forth the enumerated criteria outlined under the provision;
\74\ and
---------------------------------------------------------------------------
\74\ Id.
---------------------------------------------------------------------------
With respect to Rule G-8(h)(vii), the MSRB stated that the
proposed rule change would: (i) retitle the paragraph header from
``Records Concerning Compliance with Continuing Education
Requirements'' to ``Records Concerning Compliance with Professional
Qualification Requirements of Rule G-3'' to clarify the broader
recordkeeping obligations and documentation requirements proposed in
draft amendments to Rule G-8(h)(vii) that are accompanying proposed
rule changes to Rule G-3(h)(ii); and (ii) reposition the word ``and''
and make other minor grammatical changes to the items in the series to
aid readability.\75\
---------------------------------------------------------------------------
\75\ Id. at 49533.
---------------------------------------------------------------------------
III. Summary of Comments Received to the Proposed Rule Change
The Commission received one comment letter \76\ on the proposed
rule change, as well as a response \77\ from the MSRB to the comment
letter. The commenter expressed support for the proposed rule
change.\78\ Among other things, the commenter stated that ``the
requirements specified in the amendments are reasonable and helpful for
MAs to navigate and implement.'' \79\
---------------------------------------------------------------------------
\76\ See NAMA Letter.
\77\ See MSRB Letter.
\78\ NAMA Letter at 1.
\79\ Id. For purposes of the comment letter, the commenter
defined the term ``MA'' to include ``municipal advisory firms and
individual municipal advisors.'' Id.
---------------------------------------------------------------------------
[[Page 63990]]
In addition to expressing support for the proposed rule change, the
commenter addressed certain content that it believes should be included
in a compliance resource that the MSRB represented it anticipates
publishing in close proximity to the compliance date of the rule which
would highlight the regulatory obligations for municipal advisors (and
dealers) with respect to professional qualification standards, CE
requirements, and related registration matters.\80\ The commenter
stated that this MSRB compliance resource should, among other things:
(i) address remaining questions about ``the sequence of events that
need to occur for an MA to take advantage of the amendments'' in the
proposed rule change; (ii) address longstanding questions on ``how a MA
new to the profession and yet to be associated with a firm can take the
Series 50 exam[ination];'' and (iii) because the MSRB's proposed
exemption for the Series 50 examination does not also apply to the
Series 54 examination as the commenter desired, ``clearly explain how a
MA will be able to utilize and MA firms comply with the Series 50
exemption and meet the Series 54 requirements to engage in MA
activity.'' \81\
---------------------------------------------------------------------------
\80\ Id. See Notice, 88 FR at 49538.
\81\ NAMA Letter at 1.
---------------------------------------------------------------------------
The MSRB responded that it had outlined, within the Notice itself,
the sequence of events and timing for satisfying the criteria-based
exemption, including as applied to solo-practitioners.\82\ With respect
to the compliance resource that the MSRB anticipates publishing in
close proximity to the rule's compliance date, the MSRB stated that the
resource will: (i) restate the sequence of events that must be
undertaken to satisfy the criteria-based exemption; (ii) include
additional materials related to Rule G-3(e)(ii)(C), which the MSRB
stated permits an individual who is duly qualified as a municipal
advisor representative and has been designated by the municipal advisor
firm as a municipal advisor principal a period of 120 days, after being
designated, to take and pass the Series 54 examination, thereby
allowing individuals qualified as municipal advisor representatives,
including those seeking to be solo-practitioners, to function in the
principal-level capacity for a limited time before taking and passing
the Series 54 examination; and (iii) address additional questions
outside the scope of the present proposal related to professional
qualification and CE standards, and registration requirements for
municipal advisors and dealers.\83\ Finally, with respect to the
commenter's desire to extend the MSRB's proposed exemption for the
Series 50 examination to the Series 54 examination, the MSRB reiterated
its belief that extending the proposed rule change to municipal advisor
principals is not warranted because, as set forth in the Notice: (i)
such an extension would be inappropriate due to the heightened
supervisory, oversight, and management responsibilities of municipal
advisor principals; and (ii) even if such relief were appropriate,
additional, more stringent requirements would be necessary in
consideration of these broader obligations, resulting in two different
standards and additional regulatory complexity.\84\
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\82\ MSRB Letter at 2. The MSRB also restated that sequence of
events in its response. See id. at 2-3. With respect to solo-
practitioners, the MSRB stated in part that such individuals
``should,'' ``in the following order,'' complete and file SEC Form
MA-I and then complete and file SEC Form MA: Application for
Municipal Advisor Registration (``SEC Form MA'' or ``Form MA'').
Notice, 88 FR at 49533; MSRB Letter at 2. Pursuant to Exchange Act
Rule 15Ba1-2(c) (17 CFR 250.15Ba1-2(c)), Form MA shall be considered
filed with the Commission upon submission of a completed Form MA,
together with all additional required documents, including all
required filings of Form MA-I. However, Exchange Act Rule 15Ba1-2(c)
does not specify an order in which Forms MA and MA-I must be
submitted.
\83\ MSRB Letter at 3.
\84\ Id.; see Notice, 88 FR at 49534, 49537, 49539.
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IV. Discussion and Commission's Findings
The Commission has carefully considered the proposed rule change,
the comment letter received, and the MSRB's response thereto. The
Commission finds that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to the MSRB.
In particular, the Commission has reviewed Section 15B(b)(2)(A) of
the Act, which provides, in part, that: (1) the MSRB's rules shall
provide that a municipal advisor's ability to provide advice to or on
behalf of a municipal entity or obligated person with respect to
municipal financial products or the issuance of municipal securities is
conditioned on meeting such standards of training, experience,
competence, and such other qualifications as the Board finds necessary
or appropriate in the public interest or for the protection of
investors and municipal entities or obligated persons; and (2) in
connection with the definition and application of such standards, the
MSRB may appropriately classify municipal advisors and their associated
persons, specify that all or any portion of such standards shall be
applicable to any such class, and require persons in any such class to
pass examinations.\85\ The Commission also has reviewed Section
15B(b)(2)(C) of the Act, which provides, in part, that the MSRB's rules
shall be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating
municipal securities and municipal financial products, and, in general,
to protect investors, municipal entities, obligated persons, and the
public interest; and not be designed to impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.\86\ Additionally, the Commission has considered
Section 15B(b)(2)(G) of the Act, which provides, in part, that the
MSRB's rules shall prescribe records to be made and kept by municipal
advisors.\87\ Finally, the Commission has reviewed Section
15B(b)(2)(L)(iv) of the Act, which provides that the MSRB's rules shall
not impose a regulatory burden on small municipal advisors that is not
necessary or appropriate in the public interest and for the protection
of investors, municipal entities, and obligated persons, provided that
there is robust protection of investors against fraud.\88\
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\85\ 15 U.S.C. 78o-4(b)(2)(A).
\86\ 15 U.S.C. 78o-4(b)(2)(C).
\87\ 15 U.S.C. 78o-4(b)(2)(G).
\88\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
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After such review, the Commission believes that the proposed rule
change is appropriate in the public interest and for the protection of
municipal entities and obligated persons consistent with Section
15B(b)(2)(A) of the Act, designed to prevent fraudulent and
manipulative acts and practices consistent with Section 15B(b)(2)(C) of
the Act, and will: (i) foster cooperation and coordination among
regulators consistent with Section 15B(b)(2)(C) of the Act; (ii)
promote just and equitable principles of trade consistent with Section
15B(b)(2)(C) of the Act; (iii) protect municipal entities, obligated
persons, and the public interest consistent with Section 15B(b)(2)(C)
of the Act; and (iv) not impose an inappropriate impact or burden on
efficiency, competition, or capital formation, including with respect
to small municipal advisors, consistent with Sections 15B(b)(2)(C) and
15B(b)(2)(L)(iv) of the Act.
[[Page 63991]]
A. Appropriate in the Public Interest and for the Protection of
Municipal Entities and Obligated Persons
The Commission believes that, consistent with Section 15B(b)(2)(A)
of the Act,\89\ the proposed rule change is appropriate in the public
interest and for the protection of municipal entities and obligated
persons. In particular, the new, criteria-based exemption from
requalification by reexamination applicable to municipal advisor
representatives (including the increase in the amount of time in which
an individual may maintain their qualification as a municipal advisor
representative without reexamination) will likely result in fewer
individuals being required to retake the Series 50 examination, which
would expand the potential number of municipal advisor representative
candidates. A broader municipal advisor representative applicant pool
is in the public interest and may help protect municipal entities and
obligated persons by offering firms a greater choice in hiring
qualified individuals who could potentially draw upon their diverse
perspectives, experience, education, and/or institutional knowledge to
enhance the informed advice provided to a municipal advisor firm's
municipal entity and obligated person clients.
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\89\ 15 U.S.C. 78o-4(b)(2)(A).
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For example, as the MSRB noted, individuals that may disassociate
with a municipal advisor firm may determine to associate with a dealer
in a public finance capacity or to work for a municipal entity.\90\
Such individuals may receive valuable and directly applicable
experience from a different vantage point in the industry that would
augment their prior and future experience as a municipal advisor
representative upon reassociating with a municipal advisor firm.\91\
Similarly, the proposed rule change provides flexibility for certain
individuals to step away from their position to pursue higher education
and then return to the municipal advisory industry. This diversity of
perspective, experience, education, and/or institutional knowledge
could put such municipal advisor representative candidates in a
position to provide more informed advice than they may otherwise have
provided.
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\90\ Notice, 88 FR at 49533.
\91\ Id. at 49533-34.
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Furthermore, the proposed rule change reduces uncertainty for
individuals seeking to requalify by providing clarity on the specific
criteria needed to requalify without reexamination, and therefore
expedites the process by which such individuals can begin to engage in
municipal advisory activities. In addition, municipal advisor firms
would be better positioned to assess a potential hire's qualifications
by evaluating the conditions specified in the proposed rule change.
At the same time, and as further described in Sections IV.B. and
IV.E. below, the proposed rule change requires the satisfaction of
conditions that establish safeguards and help ensure that only
qualified candidates may obtain the criteria-based exemption from
requalification, thereby furthering municipal entity and obligated
person protection and the public interest.
Because the proposed rule change would likely lead to a broader
municipal advisor representative applicant pool, improve the quality of
municipal advisor representative candidates, and increase diversity in
the municipal advisory industry--all while requiring the satisfaction
of conditions that establish safeguards and help ensure that only
qualified candidates may obtain the criteria-based exemption from
requalification--the Commission finds that the proposed rule change is
appropriate in the public interest and for the protection of municipal
entities and obligated persons consistent with Section 15B(b)(2)(A) of
the Act.
B. Prevention of Fraudulent and Manipulative Acts and Practices
The Commission believes that, consistent with Section 15B(b)(2)(C)
of the Act,\92\ Rule G-3 would continue to prevent fraudulent and
manipulative acts and practices by ensuring that municipal advisor
representatives meet competence, training, experience, and
qualification standards, and such protections would not be diminished
by the proposed rule change. The stated criteria of at least three
years of experience before eligibility for the exemption, and no more
than three years since ceasing to be associated with a municipal
advisor firm, provide for a baseline level of experience and competence
for individuals availing themselves of the exemption. In addition, the
proposed rule change would require individuals seeking to obtain the
exemption to, upon associating (or reassociating) with a municipal
advisor firm, receive relevant and updated core training pertaining to
regulatory obligations under applicable securities laws and
regulations, including MSRB rules, which furthers the prevention of
manipulative acts and practices because such trainings serve to educate
individuals about the avoidance of such manipulative acts and
practices.
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\92\ 15 U.S.C. 78o-4(b)(2)(C).
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Because the three-year thresholds coupled with the more robust CE
requirements would continue to support municipal advisor
representatives in meeting competence, training, experience, and
qualification standards, and such protections would not be diminished
by the proposed rule change, the Commission finds that the proposed
rule change is designed to prevent fraudulent and manipulative acts and
practices consistent with Section 15B(b)(2)(C) of the Act.
C. Foster Cooperation and Coordination Among Regulators
In accordance with Section 15B(b)(2)(G) of the Act,\93\ the
proposed amendments to Rule G-8(h)(vii)(C) would prescribe specific
records to be made and kept by municipal advisors. The Commission
believes that, consistent with Section 15B(b)(2)(C) of the Act,\94\
those amendments would foster cooperation and coordination with persons
engaged in regulating municipal securities and municipal financial
products. In particular, they would provide all relevant examining and
enforcement authorities with the same documentation containing the
information necessary to assist them in examining for, investigating,
and evaluating compliance with the new, criteria-based exemption under
Rule G-3.
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\93\ 15 U.S.C. 78o-4(b)(2)(G).
\94\ 15 U.S.C. 78o-4(b)(2)(C).
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The Commission further believes that an in-concert review by all
relevant examining and enforcement authorities of the same
documentation under the prescribed recordkeeping obligations of the
proposed rule change would foster municipal entity and obligated person
protection. In particular, municipal advisor firms would be
incentivized to take due care to ensure compliance with the
qualification standards under the criteria-based exemption and that
only such individuals that satisfy such exemption are engaging in
municipal advisor activities.
Because the books and records requirements would facilitate
efficiency among regulators by providing all relevant examining and
enforcement authorities with the same documentation containing the
information necessary to assist them in examining for, investigating,
and evaluating compliance with the new, criteria-based exemption, the
Commission finds that the proposed rule change would foster cooperation
and coordination with persons engaged
[[Page 63992]]
in regulating municipal securities and municipal financial products
consistent with Section 15B(b)(2)(C) of the Act.
D. Promote Just and Equitable Principles of Trade
The Commission also believes that, consistent with Section
15B(b)(2)(C) of the Act,\95\ the various technical amendments
enumerated above \96\ promote just and equitable principles of trade.
Specifically, the Commission believes the technical amendments would
ensure that Rules G-3 and G-8 remain accurate, clear, and
understandable for the municipal advisory community. If the MSRB's
rules are accurate, clear, and understandable, MSRB registrants,
including municipal advisors and associated persons, will better be
able to comply with the MSRB's rules and apply them in a consistent
matter. Accordingly, the Commission finds that the technical amendments
promote just and equitable principles of trade consistent with Section
15B(b)(2)(C) of the Act.
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\95\ Id.
\96\ Supra, Section II.B.vii.
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E. Protect Municipal Entities, Obligated Persons, and the Public
Interest
The Commission believes that, consistent with Section 15B(b)(2)(C)
of the Act \97\ and the above discussion, the proposed rule change
would continue to protect municipal entities, obligated persons, and
the public interest because municipal advisor representatives would be
required to obtain CE pertaining to specified topics and regulatory
obligations under applicable securities laws and regulations, including
MSRB rules, in order to requalify as a municipal advisor professional.
Additionally, such individuals would not be able to obtain the
criteria-based exemption if they either engaged in activities requiring
qualification as a municipal advisor representative during their lapse
in qualification or they are subject to any events or proceedings that
resulted in a regulatory action disclosure report, civil judicial
action disclosure report, customer complaint/arbitration/civil
litigation disclosure report, criminal action disclosure report, or
termination disclosure report on SEC Form MA-I. These conditions help
ensure that basic municipal entity and obligated person protections
remain in place while also providing municipal advisor representatives
flexibility to pursue other meaningful roles within the securities
industry or to step away from their position for other reasons; and
benefits municipal advisor firms by providing the increased ability to
attract qualified talent.
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\97\ 15 U.S.C. 78o-4(b)(2)(C).
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Finally, as noted above, a broader municipal advisor representative
applicant pool is in the public interest and will help protect
municipal entities and obligated persons because it can improve the
quality of municipal advisor representative candidates and increase
diversity in the municipal advisory industry, both of which could
enhance the quality of advice provided to municipal entity and
obligated person clients.
Because the proposed rule change requires the satisfaction of
conditions that establish safeguards and ensure that only qualified
municipal advisor representative candidates may obtain the criteria-
based exemption from requalification--while also leading to a broader
municipal advisor representative applicant pool, improving the quality
of municipal advisor representative candidates, and increasing
diversity in the municipal advisory industry--the Commission finds that
the proposed rule change protects municipal entities, obligated
persons, and the public interest consistent with Section 15B(b)(2)(C)
of the Act.
F. No Inappropriate Impact or Burden on Efficiency, Competition, or
Capital Formation
In approving the proposed rule change, the Commission has
considered the proposed rule change's impact on efficiency,
competition, and capital formation.\98\ Section 15B(b)(2)(C) of the Act
\99\ requires that MSRB rules not be designed to impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Furthermore, Section 15B(b)(2)(L)(iv) of the Act
\100\ requires that MSRB rules not impose a regulatory burden on small
municipal advisors that is not necessary or appropriate in the public
interest and for the protection of investors, municipal entities, and
obligated persons, provided that there is robust protection of
investors against fraud.
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\98\ 15 U.S.C. 78c(f).
\99\ 15 U.S.C. 78o-4(b)(2)(C).
\100\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
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With respect to impact on efficiency, the Commission believes that
the proposed rule change would improve the municipal securities
market's operational efficiency and promote regulatory certainty by
providing individuals with a specific exemption process to requalify as
municipal advisor representatives and to begin engaging in municipal
advisory activities on behalf of municipal advisor firms. Moreover, as
discussed above,\101\ the Commission believes that the proposed
amendments to Rule G-8 would facilitate efficiency among regulators by
providing all relevant examining and enforcement authorities with the
same documentation containing the information necessary to assist them
in examining for, investigating, and evaluating compliance with the
new, criteria-based exemption under Rule G-3.
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\101\ Supra, Section IV.C.
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With respect to impact on capital formation, as discussed
above,\102\ the proposed amendments to Rule G-3 would make it easier
for individuals seeking to requalify as municipal advisor
representatives to reassociate with a municipal advisor firm and for
municipal advisor firms to recruit experienced professionals. The
Commission believes that the potential increased number of skilled
professionals furthers capital formation because municipal entity and
obligated person clients would have ranging areas of expertise to
select from when utilizing the services of municipal advisor
representatives.
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\102\ Supra, Section IV.A.
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Finally, with respect to competition, the Commission does not
believe that the proposed amendments to Rule G-3 and Rule G-8 would
impose any unnecessary or inappropriate burden or impact on
competition, as they would provide additional flexibility and certainty
to those seeking to associate with municipal advisor firms as municipal
advisor representatives and to municipal advisor firms, thereby
enhancing the hiring of qualified, experienced individuals; and they
would also support evidencing compliance with the criteria-based
exemption. The Commission notes that individuals who are away from
their municipal advisor representative capacity (or cease to be engaged
in activity requiring qualification as a municipal advisor
representative) for more than three years would be required to take and
pass the Series 50 examination again under the proposed rule change, as
the waiver request provisions, available only in extraordinary cases,
would no longer be available; however, given the limited use of the
waiver process currently, the Commission does not believe the
elimination of this option would have a significant impact on
individuals seeking to reassociate in a municipal advisor
representative capacity.
[[Page 63993]]
Although the proposed amendments to Rule G-3 and Rule G-8 would
benefit, and be applied equally to, all individuals seeking to
associate with municipal advisor firms and all such municipal advisor
firms, the Commission believes that there are potential burdens on
competition for small municipal advisor firms, and solo-practitioners
in particular. However, as described below, the Commission believes
that these potential burdens are mitigated.
First, the Commission believes that there is a potential burden on
competition for solo-practitioners looking to establish a municipal
advisor firm because, unlike larger firms, such solo-practitioners may
not have developed CE materials addressing all of the prescribed
subject matters necessary to meet the exemption's CE requirements.
However, the Commission believes that this potential burden is
mitigated because the MSRB has indicated that such firms would be able
to utilize ``off-the-shelf content'' or widely available industry
educational materials (to the extent such materials meet the
requirements set forth in the proposed rule change), which would be a
less burdensome approach than creating new CE materials.\103\ The MSRB
noted that sources of such educational materials may include industry
trade associations, in addition to podcasts, webinars, and educational
materials developed by the MSRB.\104\
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\103\ Notice, 88 FR at 49537.
\104\ Id. at 49537 n.43.
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Second, the Commission believes that there is a potential burden on
competition for solo-practitioners and smaller municipal advisory firms
because the new, criteria-based exemption would not extend to those
seeking to associate and function in a municipal advisor principal
capacity and, as noted above, Rule G-3(e)(iii) requires every municipal
advisor firm to have at least one municipal advisor principal.
Accordingly, individuals seeking to act as a municipal advisor
principal (e.g., a solo-practitioner) would still have to take and pass
the Series 54 examination in order to engage in principal-level
activities. As a result, although all firms would benefit from the
proposed rule change for municipal advisor representatives, smaller
municipal advisor firms and solo-practitioners in particular may
experience a smaller benefit than larger municipal advisor firms.
The Commission believes that this potential burden is mitigated,
however, because the MSRB has indicated that current Rule G-3(e)(ii)(C)
permits solo-practitioners (or individuals associating or reassociating
with a firm and designated as a principal) who are qualified as
municipal advisor representatives to function as municipal advisor
principals for up to 120 days before having to take and pass the Series
54 examination.\105\ The MSRB noted that, in concert with the proposed
rule change, these provisions would allow such individuals to start
their own firm, requalify as municipal securities representatives
without reexamination, and then qualify as municipal advisor
principals.\106\ As a result, all such persons, including those persons
seeking to be solo-practitioners and seeking to associate with small
(or larger) municipal advisor firms would be able to function in the
principal-level capacity for several months before having to take and
pass the Series 54 examination.\107\
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\105\ Id. at 49534 n.29; MSRB Letter at 3.
\106\ Notice, 88 FR at 49534 n.29.
\107\ The Commission believes this potential burden may also be
mitigated, in part, because the MSRB represented that it anticipates
publishing a compliance resource in close proximity to the
compliance date of the rule which would highlight the regulatory
obligations for municipal advisors (and dealers) with respect to
professional qualification standards, CE requirements, and related
registration matters. See id. at 49538; MSRB Letter at 3. In
addition, in the Notice itself, the MSRB addressed the timing and
sequence of satisfying the exemption's criteria, the filing of SEC
Form MA-I (and SEC Form MA, as applicable), and the submission of
the affirmation notification to the MSRB, including for solo-
practitioners. See Notice, 88 FR at 49532-33; MSRB Letter at 2-3.
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Ultimately, municipal advisor principals are subject to additional
regulatory standards given their supervisory, oversight, and management
duties. The process of reexamination for municipal advisor principals
helps to ensure that the specified level of competency and knowledge of
the applicable securities laws and regulations, including MSRB rules,
is sufficiently demonstrated.
For the foregoing reasons, the Commission finds that, consistent
with Sections 15B(b)(2)(C) and 15B(b)(2)(L)(iv) of the Act, the
proposed rule change would not impact or impose any additional burdens
on efficiency, competition, or capital formation that are not necessary
or appropriate in furtherance of the purposes of the Act.
As noted above, the Commission received one comment letter on the
filing. The Commission believes that the MSRB, through its response,
addressed the commenter's concerns. For the reasons noted above, the
Commission believes that the proposed rule change is consistent with
the Exchange Act.
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\108\ that the proposed rule change (SR-MSRB-2023-05) be,
and hereby is, approved.
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\108\ 15 U.S.C. 78s(b)(2).
For the Commission, pursuant to delegated authority.\109\
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\109\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-20077 Filed 9-15-23; 8:45 am]
BILLING CODE 8011-01-P
