MSRB Issues Guidance Regarding Revisions to Its Supervisory Rules
PDF version On November 8, 2007, the Municipal Securities Rulemaking Board (MSRB) issued Notice 2007-32 with guidance pertaining to amendments to its supervision rule, Rule G-27. The Notice stated that the amendments, which become effective on February 29, 2008, are intended to ensure a coordinated regulatory approach with, and facilitate inspection and enforcement in the area by, the Financial Industry Regulatory Authority (FINRA). The amendments to Rule G-27 incorporate most of the requirements of NASD Rules 3010 and 3012, which are now rules of FINRA.
The amendments to Rule G-27 were approved by the SEC on May 30, 2007, and add a number of requirements from Rules 3010 and 3012 into MSRB’s supervision rule. These amendments include, among other things, providing for offices of supervisory jurisdiction (OSJs), tape recording of phone calls, internal inspections, and adding certain aspects of a supervisory control system found in Rules 3010 and 3012.
In the Notice, the MSRB indicated that it intends generally that the provisions of Rule G-27 be read consistently with the analogous FINRA provisions, unless the MSRB specifically indicates otherwise. In a notable distinction from FINRA rules and interpretations, the Notice states that mere solicitation of municipal securities business, without additional substantive involvement in the structuring of an offering of municipal securities, would not trigger the MSRB’s OSJ definition.
Securities Industry FYI is a service of the Broker-Dealer Practice of Morgan Lewis. If you have any questions concerning these important legal developments, please contact any of the following Morgan Lewis attorneys:
Washington, D.C.
Mark D. Fitterman
202.739.5019
mfitterman@morganlewis.com
Jared D. Minsk
202.739.5066
jminsk@morganlewis.com