礼德律师事务所

Reed Smith Client Alerts

MSRB Antes-Up: Proposes 'Pay to Play' Rule for Municipal Advisors

Subscribe
主页 观点 MSRB Antes-Up: Proposes 'Pay to Play' Rule for Municipal Advisors

In MSRB Notice 2011-04 ("Notice 2011-04"), dated January 14, 2011, the Municipal Securities Rulemaking Board ("MSRB") proposed for comment:

  • MSRB Rule G-42, a "pay to play" rule for municipal advisors ("Proposed MSRB Rule");  
  • Changes to MSRB Rule G-37, the existing MSRB "pay to play" rule for brokers, dealers and municipal securities dealers (collectively, "dealers"); and 
  • Changes to MSRB Rules G-8 and G-9, which relate to recordkeeping requirements.

As discussed in more detail below, the Proposed MSRB Rule would, among other restrictions, prohibit municipal advisors from engaging in municipal advisory business with municipal entities for compensation for two years after a triggering political contribution is made to a state or local government official with authority to hire the municipal advisors, and prohibit compensation for soliciting certain types of third-party business from municipal entities.

In addition, the MSRB also requested comment on whether MSRB Rule G-38 (which relates to solicitation of municipal securities business) should be eliminated or amended, and on whether electronic filing of Forms G-42 and G-37 should be required. Finally, the MSRB also proposed to restate its Interpretation of Prohibition on Municipal Securities Business Pursuant to Rule G-37 (the "Rule G-37 Interpretative Notice") in light of the Proposed MSRB Rule. Comments on these MSRB proposals are due by February 25, 2011.

The following discussion explores the interaction between Rule 206(4)-5 ("SEC Pay to Play Rule") under the Investment Advisers Act of 1940 ("Advisers Act") and the Proposed MSRB Rule, and the requirements of the Proposed MSRB Rule as compared to the SEC Pay to Play Rule. The other MSRB proposals noted above also are briefly discussed.

Download the .PDF to learn more!

 

Client Alert 2011-031